NORTH SPRINGS IMPROVEMENT DISTRICT (Broward County, Florida)

Transcription

1 NEW ISSUES - BOOK-ENTRY ONLY LIMITED OFFERING NOT RATED In the opinion of Bond Counsel, under existing statutes, regulations, rulings and court decisions and assuming compliance with the tax covenants described herein, interest on the Series 2006 Bonds is excluded from gross income for federal income tax purposes, and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. Such interest, however, will be includable in the calculation of a corporation s alternative minimum taxable income. See TAX MATTERS herein regarding certain other tax considerations. Bond Counsel is further of the opinion that pursuant to the Special Act (hereinafter defined), the Series 2006 Bonds and the interest thereon are exempt from taxation under the laws of the State of Florida, except as to estate taxes and taxes imposed by Chapter 220, Florida Statutes, on interest, income or profits on debt obligations owned by corporations, as defined in Chapter 220. Dated: October 1, 2006 NORTH SPRINGS IMPROVEMENT DISTRICT (Broward County, Florida) $6,930,000 Special Assessment Bonds, Series 2006A (Heron Bay North Assessment Area) $2,165,000 Special Assessment Bonds, Series 2006B (Heron Bay North Assessment Area) Due: May 1, as shown below North Springs Improvement District (Broward County, Florida) (the Issuer ) is issuing its Special Assessment Bonds, Series 2006A (Heron Bay North Assessment Area) (the Series 2006A Bonds ) and Special Assessment Bonds, Series 2006B (Heron Bay North Assessment Area) (the Series 2006B Bonds and, together with the Series 2006A Bonds, the Series 2006 Bonds ). The Series 2006 Bonds are being issued only in fully registered form, without coupons, in denominations of $5,000 or integral multiples thereof; provided, however, that the Series 2006 Bonds will be deliverable to the initial purchasers only in denominations of $100,000 or integral multiples of $5,000 in excess of $100,000. The Series 2006 Bonds will bear interest at the fixed rates set forth below, calculated on the basis of a 360-day year comprised of twelve thirty-day months, payable semi-annually on each May 1 and November 1, commencing May 1, The Series 2006 Bonds, when issued, will be registered in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company ( DTC ), New York, New York. Purchases of beneficial interests in the Series 2006 Bonds will be made in book-entry only form. Accordingly, principal of and interest on the Series 2006 Bonds will be paid from the sources provided below by the Trustee (hereinafter defined), directly to DTC as the registered owner thereof. Disbursement of such payments to the DTC Participants is the responsibility of DTC and disbursement of such payments to the beneficial owners is the responsibility of DTC Participants and the Indirect Participants, as more fully described herein. Any purchaser as a beneficial owner of a Series 2006 Bond must maintain an account with a broker or dealer who is, or acts through, a DTC Participant to receive payment of the principal of and interest on such Series 2006 Bonds. See DESCRIPTION OF THE SERIES 2006 BONDS Book-Entry Only System herein. The Issuer was established in 1971 by Chapter , Laws of Florida, as supplemented and amended, as restated in its entirety by Chapter , Laws of Florida, as supplemented and amended (the Special Act ). The Issuer s boundaries include approximately 7,031 acres of land located in the cities of Parkland and Coral Springs, within Broward County, Florida. See THE ISSUER AND THE DISTRICT herein. Pursuant to resolutions adopted by the Issuer on August 4, 2005, the Issuer has established within its boundaries the Heron Bay North Assessment Area (the Assessment Area ), which is comprised of approximately acres and includes a portion of the residential development known as Heron Bay. The Assessment Area is within the jurisdictional boundaries of the City of Parkland. See PLAN OF FINANCE The Development herein and the map attached hereto as Appendix F. The Series 2006 Bonds are being issued pursuant to the Special Act, Chapter 298, Florida Statutes, the Florida Constitution and other applicable provisions of law (collectively, the Act ) and a Master Trust Indenture (the Master Indenture ) dated as of December 1, 2005 between the Issuer and U.S. Bank National Association, as successor in interest to Wachovia Bank, National Association, as trustee (the Trustee ), as supplemented by a Third Supplemental Trust Indenture relating to the Series 2006 Bonds (the Supplemental Indenture and together with the Master Indenture, the Indenture ) to be dated as of October 1, 2006 and entered into between the Issuer and the Trustee. Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Indenture. See APPENDIX B Form of the Indenture. Pursuant to the Special Act, the Issuer has the authority to undertake Assessable Improvements, including, without limitation, public stormwater improvements, water and sewer improvements and roads, benefiting the Assessment Area. See THE ISSUER AND THE DISTRICT and PLAN OF FINANCE The Series 2006 Project herein. The Issuer has approved Series Projects comprising Assessable Improvements benefiting the Assessment Area (the Series 2006 Project ). The Series 2006 Project is more fully described in the report of the Issuer s Consulting Engineers attached hereto as Appendix A. The developer of the residential development within the Assessment Area has heretofore advanced funds (the Advances ) to the Issuer which have been applied by the Issuer to pay certain costs of the Series 2006 Project. See PLAN OF FINANCE The Series 2006 Project herein. The Series 2006 Bonds are being issued for the principal purpose of financing, and refinancing through the repayment of related Advances, a portion of the Cost of the Series 2006 Project. Proceeds of the Series 2006 Bonds will also be used to (a) pay Capitalized Interest on the Series 2006 Bonds, (b) make deposits to the Series 2006A Reserve Subaccount established for the Series 2006A Bonds in an amount equal to the Series 2006A Reserve Requirement and to the Series 2006B Reserve Subaccount established for the Series 2006B Bonds in an amount equal to the Series 2006B Reserve Requirement, and (c) pay costs of issuance of the Series 2006 Bonds. See ESTIMATED SOURCES AND USES OF THE PROCEEDS OF THE SERIES 2006 BONDS. The Series 2006 are secured by a lien on and pledge of the Series 2006 Trust Estate. The Series 2006 Trust Estate consists primarily of the revenues derived by the Issuer from the collection of the Series 2006 Special Assessments, which are the non-ad valorem special assessments levied on certain lands in the Assessment Area subject to assessment as a result of the Series 2006 Project or any portion thereof. See SECURITY FOR AND SOURCES OF PAYMENT OF THE SERIES 2006 BONDS. The Series 2006A Bonds are subject to optional, mandatory sinking fund and extraordinary mandatory redemption, as more fully described herein. The Series 2006B Bonds are not subject to optional or mandatory sinking fund redemption, however, they are subject to extraordinary mandatory redemption, as more fully described herein. See DESCRIPTION OF THE SERIES 2006 BONDS Redemption Provisions. MATURITY SCHEDULE $6,930, % 2006A Bonds Due May 1, 2027 Priced at 99.75% CUSIP No AJ6* $2,165, % 2006B Bonds Due May 1, 2014 Priced at 100% CUSIP No AK3* (accrued interest from October 1, 2006 to be added) NEITHER THE SERIES 2006 BONDS NOR THE INTEREST PAYABLE THEREON SHALL CONSTITUTE A GENERAL OBLIGATION OR GENERAL INDEBTEDNESS OF THE ISSUER WITHIN THE MEANING OF THE CONSTITUTION AND LAWS OF THE STATE OF FLORIDA. THE SERIES 2006 BONDS AND THE INTEREST THEREON DO NOT CONSTITUTE EITHER A PLEDGE OF THE FULL FAITH AND CREDIT OF THE ISSUER OR A LIEN UPON ANY PROPERTY OF THE ISSUER OTHER THAN AS PROVIDED IN THE INDENTURE. NO OWNER OR ANY OTHER PERSON SHALL EVER HAVE THE RIGHT TO COMPEL THE EXERCISE OF ANY AD VALOREM TAXING POWER OF THE ISSUER OR OF ANY OTHER PUBLIC AUTHORITY OR GOVERNMENTAL BODY, INCLUDING, WITHOUT LIMITATION, BROWARD COUNTY, FLORIDA OR THE CITY OF PARKLAND, FLORIDA TO PAY DEBT SERVICE OR ANY OTHER AMOUNTS REQUIRED TO BE PAID PURSUANT TO THE INDENTURE ON THE SERIES 2006 BONDS. RATHER, DEBT SERVICE AND ANY OTHER AMOUNTS REQUIRED TO BE PAID PURSUANT TO THE INDENTURE ON THE SERIES 2006 BONDS SHALL BE PAYABLE SOLELY FROM, AND SHALL BE SECURED SOLELY BY, THE PLEDGED REVENUES AND FUNDS AND ACCOUNTS PLEDGED TO THE SERIES 2006 BONDS, ALL AS PROVIDED IN THE INDENTURE AND THE SERIES 2006 BONDS. No application has been made for a rating with respect to the Series 2006 Bonds. This offering is limited by the Underwriter to accredited investors within the meaning of the rules of the Florida Department of Financial Services. This limitation of the initial offering to accredited investors does not denote restrictions on transfer in any secondary market for the Series 2006 Bonds. POTENTIAL INVESTORS ARE SOLELY RESPONSIBLE FOR EVALUATING THE MERITS AND RISKS OF AN INVESTMENT IN THE SERIES 2006 BONDS. SEE SUITABILITY FOR INVESTMENT HEREIN. This cover page contains certain information for quick reference only. It is not a summary of the Series 2006 Bonds. Investors must read this entire Limited Offering Memorandum to obtain information essential to the making of an informed investment decision. The Series 2006 Bonds are offered for delivery when, as and if issued by the Issuer and accepted by the Underwriter, subject to prior sale, withdrawal or modification of the offer without notice and the receipt of the opinion of Ruden, McClosky, Smith, Schuster & Russell, P.A., Fort Lauderdale, Florida, Bond Counsel, as to the validity of the Series 2006 Bonds and the excludability of interest thereon from gross income for federal income tax purposes. Ruden, McClosky, Smith, Schuster & Russell, P.A., Fort Lauderdale, Florida is also acting as Disclosure Counsel to the Issuer. The Underwriter is being represented by Akerman Senterfitt, Orlando, Florida. Billing, Cochran, Heath, Lyles, Mauro & Anderson, P.A., Fort Lauderdale, Florida is serving as Counsel to the Issuer. It is expected that the Series 2006 Bonds will be delivered in book-entry form through the facilities of DTC, New York, New York on or about October 24, PRAGER, SEALY & CO., LLC Dated: October 12, 2006 * The Issuer is not responsible for the use of CUSIP numbers, nor is any representation made as to their correctness. They are included solely for the convenience of the readers of this Limited Offering Memorandum.

2 No dealer, broker, salesperson, or other person has been authorized by the North Springs Improvement District (the Issuer ), the Developer (hereinafter defined) or the Underwriter reflected on the cover page hereof to give any information or make any representations, other than those contained in this Limited Offering Memorandum, and if given or made, such other information or representations must not be relied upon as having been authorized by either of the foregoing. This Limited Offering Memorandum does not constitute an offer to sell or the solicitation of an offer to buy and there shall be no offer, solicitation, or sale of the Series 2006 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from public documents, records and other sources, including the Issuer, the Issuer s Consulting Engineers, the District Manager, the Developer and other sources which are believed to be reliable. The Underwriter has provided the following sentence for inclusion in this Limited Offering Memorandum. The Underwriter has reviewed the information in this Limited Offering Memorandum in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Limited Offering Memorandum, nor any sale made hereunder, shall, under any circumstances, create any implication that there has been no change in the affairs of the Issuer since the date hereof. The Series 2006 Bonds have not been registered under the Securities Act of 1933, nor has the Indenture (hereinafter defined), been qualified under the Trust Indenture Act of The registration or qualification of the Series 2006 Bonds under the securities laws of any jurisdiction in which they may have been registered or qualified, if any, shall not be regarded as a recommendation thereof. Neither the Issuer, the State of Florida, Broward County, Florida or the City of Parkland, Florida, nor any of their agencies have passed upon the merits of the Series 2006 Bonds. Neither the State of Florida, Broward County, Florida or the City of Parkland, Florida, nor any of their agencies have passed upon the accuracy or completeness of this Limited Offering Memorandum. Statements contained herein that are not purely historical, are forward-looking statements, including statements regarding the Issuer s expectations, hopes, intentions, or strategies regarding the future. Readers should not place undue reliance on forward-looking statements. All forwardlooking statements included herein are based on information available on the date hereof, and the Issuer assumes no obligation to update any such forward-looking statements. Such forward-looking statements are necessarily based on various assumptions and estimates and are inherently subject to various risks and uncertainties, including risks and uncertainties relating to the possible invalidity of the underlying assumptions and estimates and possible changes or developments in social, economic, business, industry, market, legal, and regulatory circumstances and conditions and actions taken or omitted to be taken by third parties. Assumptions related to the foregoing involve judgments with respect to, among other things, future economic, competitive, and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Issuer. Actual results could differ materially from those discussed in such forward-looking statements and, therefore, there can be no assurance that the forward-looking statements included herein will prove to be accurate.

3 TABLE OF CONTENTS Page DEVELOPMENTS SINCE THE DATE OF THE PRELIMINARY LIMITED OFFERING MEMORANDUM... 1 INTRODUCTION... 1 DESCRIPTION OF THE SERIES 2006 BONDS... 3 General Description... 3 Book-Entry Only System... 4 Redemption Provisions... 6 Authority to Purchase Series 2006 Bonds... 9 SECURITY FOR AND SOURCES OF PAYMENT OF THE SERIES 2006 BONDS... 9 General... 9 Additional Bonds and Refunding Bonds Additional Assessments Deferred Obligations Debt Service Reserve Fund Enforcement of Payment of Special Assessments Prepayment of Special Assessments ENFORCEMENT OF ASSESSMENT COLLECTIONS General Alternative Uniform Tax Collection Procedure for Series 2006 Special Assessments Foreclosure Tax Levies and Collections BONDHOLDERS RISKS ESTIMATED SOURCES AND USES OF PROCEEDS OF THE SERIES 2006 BONDS DEBT SERVICE REQUIREMENTS ON THE SERIES 2006A BONDS DEBT SERVICE REQUIREMENTS ON THE SERIES 2006B BONDS THE ISSUER AND THE DISTRICT General Legal Powers and Authority Board of Supervisors The District Manager and Other Consultants Outstanding and Future Indebtedness PLAN OF FINANCE General The Development The Series 2006 Project Special Assessment Methodology The Developer TAX MATTERS General Tax Treatment of Original Issue Discount AGREEMENT BY THE STATE LEGALITY FOR INVESTMENT SUITABILITY FOR INVESTMENT DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS... 50

4 ENFORCEABILITY OF REMEDIES LITIGATION NO RATING FINANCIAL STATEMENTS VALIDATION CONTINUING DISCLOSURE General Compliance with Prior Undertakings UNDERWRITING EXPERTS LEGAL MATTERS MISCELLANEOUS APPENDICES APPENDIX A: Consulting Engineers Report... A-1 APPENDIX B: Form of the Indenture...B-1 APPENDIX C: Proposed Form of Opinion of Bond Counsel...C-1 APPENDIX D: Continuing Disclosure Agreement... D-1 APPENDIX E: Audited Financial Statements...E-1 APPENDIX F: Map...F-1

5 LIMITED OFFERING MEMORANDUM NORTH SPRINGS IMPROVEMENT DISTRICT (Broward County, Florida) $6,930,000 Special Assessment Bonds, Series 2006A (Heron Bay North Assessment Area) $2,165,000 Special Assessment Bonds, Series 2006B (Heron Bay North Assessment Area) DEVELOPMENTS SINCE THE DATE OF THE PRELIMINARY LIMITED OFFERING MEMORANDUM Subsequent to the date of the Preliminary Limited Offering Memorandum relating to the Series 2006 Bonds (herein defined) the audited financial statements of the Issuer (herein defined) for the fiscal year ending September 30, 2005 were approved by the Issuer. Such financial statements are included herein as Appendix E, in lieu of the audited financial statements of the Issuer for the fiscal year ending September 30, 2004, which were included in the Preliminary Limited Offering Memorandum. INTRODUCTION The purpose of this Limited Offering Memorandum, including the cover page and Appendices hereto, is to provide certain information in connection with the offer for sale by the North Springs Improvement District (the Issuer ) of its Special Assessment Bonds, Series 2006A (Heron Bay North Assessment Area) (the Series 2006A Bonds ) and Special Assessment Bonds, Series 2006B (Heron Bay North Assessment Area) (the Series 2006B Bonds and, together with the Series 2006A Bonds, the Series 2006 Bonds ). The Series 2006 Bonds are being issued pursuant to the Special Act, Chapter 298, Florida Statutes, the Florida Constitution and other applicable provisions of law (collectively, the Act ) and a Master Trust Indenture (the Master Indenture ) dated as of December 1, 2005 between the Issuer and U.S. Bank National Association, as successor in interest to Wachovia Bank, National Association, as trustee (the Trustee ), as supplemented by a Third Supplemental Trust Indenture relating to the Series 2006 Bonds (the Supplemental Indenture and together with the Master Indenture, the Indenture ) to be dated as of October 1, 2006 and entered into between the Issuer and the Trustee. Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Indenture. Reference is made to the Indenture for a full statement of the authority for, and the terms and provisions of, the Series 2006 Bonds. All capitalized terms used in this Limited Offering Memorandum that are defined in the Indenture and not defined herein shall have the respective meanings set forth in Indenture. See APPENDIX B Form of the Indenture herein. The Issuer was established in 1971 pursuant to Chapter , Laws of Florida, as amended and supplemented, as restated, in its entirety, by Chapter , Laws of Florida, as supplemented and amended (the Special Act ). The Issuer s boundaries include approximately 7,031 acres of land located in the cities of Parkland, Florida and Coral Springs, Florida, within Broward County, Florida (the District Lands ). See THE ISSUER AND THE DISTRICT herein. 1

6 Pursuant to resolutions adopted by the Issuer on August 4, 2005, the Issuer has established within its boundaries the Heron Bay North Assessment Area (the Assessment Area ), which is comprised of approximately acres and includes a portion of the residential development known as Heron Bay (the Development ). The Assessment Area is within the jurisdictional boundaries of the City of Parkland. See PLAN OF FINANCE The Development herein and the map attached hereto as Appendix F. WCI Communities, Inc., a Delaware corporation listed on the New York Stock Exchange ( WCI Communities ) is the developer of the Development and currently plans to build and sell the homes in the Development. WCI Communities, directly and through its affiliates, has a history of developing a number of master-planned communities in the State of Florida. See PLAN OF FINANCE The Developer herein. Pursuant to the Special Act, the Issuer has the authority to undertake Assessable Improvements, including, without limitation, public stormwater improvements, water and sewer improvements and roads, benefiting the Assessment Area. See THE ISSUER AND THE DISTRICT and PLAN OF FINANCE The Series 2006 Project herein. The Issuer has approved Series Projects comprising Assessable Improvements benefiting the Assessment Area (the Series 2006 Project ). The Series 2006 Project is more fully described in the report of the Issuer s Consulting Engineers attached hereto as Appendix A. The Developer has heretofore advanced funds (the Advances ) to the Issuer which have been applied by the Issuer to pay certain costs of the Series 2006 Project. See THE ISSUER AND THE DISTRICT and PLAN OF FINANCE The Series 2006 Project herein. The Series 2006 Bonds are being issued for the principal purpose of financing, and refinancing through the repayment of related Advances, a portion of the Cost of the Series 2006 Project. Proceeds of each Series of the Series 2006 Bonds will also be used to (a) pay Capitalized Interest on the Series 2006 Bonds, (b) make deposits to the Series 2006A Reserve Subaccount established for the Series 2006A Bonds in an amount equal to the Series 2006A Reserve Requirement and to the Series 2006B Reserve Subaccount established for the Series 2006B Bonds in an amount equal to the Series 2006B Reserve Requirement, and (c) pay costs of issuance of the Series 2006 Bonds. See ESTIMATED SOURCES AND USES OF THE PROCEEDS OF THE SERIES 2006 BONDS. The Series 2006 are secured by a lien on and pledge of the Series 2006 Trust Estate. The Series 2006 Trust Estate consists primarily of the revenues derived by the Issuer from the collection of the Series 2006 Special Assessments, which are the non-ad valorem special assessments levied on certain lands in the Assessment Area subject to assessment as a result of the Series 2006 Project or any portion thereof. See SECURITY FOR AND SOURCES OF PAYMENT OF THE SERIES 2006 BONDS and PLAN OF FINANCE The Development The Assessment Area, Fees and Assessments, and Special Assessment Methodology herein. The District Lands in the Assessment Area are subject to taxes and non-ad valorem assessments levied by other governmental entities, and which may be levied by the Issuer, which are payable on a parity with the Series 2006 Special Assessments, to the extent such Series 2006 Special Assessments are collected by the Uniform Method (as defined herein). See SECURITY FOR AND SOURCE OF PAYMENT OF THE SERIES 2006 BONDS Additional Bonds and Refunding 2

7 Bonds and Additional Assessments and BONDHOLDER S RISKS Items No. 4 and No. 6 herein. POTENTIAL INVESTORS ARE SOLELY RESPONSIBLE FOR EVALUATING THE MERITS AND RISKS OF AN INVESTMENT IN ANY SERIES OF THE SERIES 2006 BONDS. SEE SUITABILITY FOR INVESTMENT HEREIN. No person has been authorized by the Issuer or the Underwriter to give any information or to make any representations, other than those contained in this Limited Offering Memorandum and, if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. Prospective investors in the Series 2006 Bonds are invited to visit the Issuer, ask questions of representatives of the Issuer, and request documents, instruments and information which may not necessarily be referred to, summarized or described herein. Prospective investors should rely upon the information appearing in this Limited Offering Memorandum within the context of the availability of such additional information and the sources thereof. There follows in this Limited Offering Memorandum a brief description of the Issuer, the Assessment Area, the Developer, the Development, and the Series 2006 Project, together with summaries of terms of the Series 2006 Bonds, the Indenture and certain provisions of the Act. All references herein to the Indenture and the Act are qualified in their entirety by reference to such documents and all references to the Series 2006 Bonds are qualified by reference to the definitive forms thereof and the information with respect thereto contained in the Indenture. The full text of the form of the Indenture appears as Appendix B hereto. General Description DESCRIPTION OF THE SERIES 2006 BONDS The Series 2006 Bonds will be dated, will bear interest at the rates per annum and, subject to the redemption provisions set forth below, will mature on the dates and in the amounts set forth on the cover page of this Limited Offering Memorandum. Interest on the Series 2006 Bonds is to be computed on the basis of a 360-day year consisting of twelve thirty-day months and will be payable semi-annually on May 1 and November 1, commencing May 1, 2007, until maturity or prior redemption. As noted above, U.S. Bank National Association, Miami, Florida, as successor in interest to Wachovia Bank, National Association, is the Trustee, Registrar and Paying Agent for the Series 2006 Bonds. The Series 2006 Bonds are issuable as fully registered bonds, without coupons, in denominations of $5,000; provided, however, that the Series 2006 Bonds will be deliverable to the initial purchasers only in denominations of $100,000 or integral multiples of $5,000 in excess of $100,000. The Series 2006 Bonds will be initially issued in the form of a single fully-registered certificate for each maturity. Upon initial issuance, the ownership of the Series 2006 Bonds will be registered in the bond register kept by the Trustee in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ( DTC ). See DESCRIPTION OF THE SERIES 2006 BONDS Book-Entry Only System below. 3

8 Book-Entry Only System The following contains a description of the procedures and operations of DTC and is based upon information provided by DTC. The Issuer has not independently investigated or verified such procedures and operations and assumes no responsibility for the accuracy or completeness of the description thereof. DTC, New York, New York, will act as securities depository for the Series 2006 Bonds. The Series 2006 Bonds will be issued as fully registered bonds, registered in the name of Cede &Co. (DTC s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered certificate for each Series of the Series 2006 Bonds will be issued in the aggregate principal amount of the applicable Series of the Series 2006 Bonds and will be deposited with DTC. DTC, the world s largest depository, is a limited purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 2.2 million issues of U.S. and non-u.s. equity issues, corporate and municipal debt issues and money market instruments from over one hundred (100) countries that DTC s Participants ( Direct Participants ) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ( DTCC ). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Fixed Income Clearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, FICC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( Indirect Participants ). DTC has Standard & Poor s highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at and Purchases of Series 2006 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2006 Bonds on DTC s records. The ownership interest of each actual purchaser of each Series 2006 Bond ( Beneficial Owner ) is in turn to be recorded on the Direct and Indirect Participant s records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmation providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2006 Bonds are to be accomplished by entries made on the books Direct and Indirect of Participants acting on behalf of 4

9 Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Series 2006 Bonds, except in the event that use of the book-entry system for the Series 2006 Bonds is discontinued. To facilitate subsequent transfers, all Series 2006 Bonds deposited by Direct Participants with DTC are registered in the name of DTC s partnership nominee, Cede & Co. or such other name as may be requested by an authorized representative of DTC. The deposit of Series 2006 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2006 Bonds, DTC s records reflect only the identity of the Direct Participants to whose accounts such Series 2006 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, andbydirectparticipantsandindirectparticipantstobeneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Series 2006 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2006 Bonds, such as redemptions, tenders, defaults, and proposed amendments to the security documents. For example, Beneficial Owners of Series 2006 Bonds may wish to ascertain that the nominee holding the Series 2006 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Series 2006 Bonds are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Series 2006 Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. s consenting or voting rights to those Direct Participants to whose accounts the Series 2006 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). The redemption price and principal and interest payments on the Series 2006 Bonds will be made to Cede & Co. or such other nominee as may be requested by an authorized representative of DTC. DTC s practice is to credit Direct Participants accounts upon DTC s receipt of funds and corresponding detail information from the Issuer or the Paying Agent on the payable date in accordance with their respective holdings shown on DTC s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participant and not of DTC, the Paying Agent, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption price and principal and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Issuer or the Paying 5

10 Agent, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Series 2006 Bonds at any time by giving reasonable notice to the Issuer or the Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, Series 2006 Bond certificates are required to be printed and delivered. Subject to the policies and procedures of DTC (or any successor securities depository), the Issuer may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event Series 2006 Bond certificates will be printed and delivered. SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE SERIES 2006 BONDS, AS NOMINEE OF DTC, REFERENCES HEREIN TO THE HOLDER OF THE SERIES 2006 BOND OR REGISTERED OWNERS OF THE SERIES 2006 BONDS SHALL MEAN DTC AND SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE SERIES 2006 BONDS. The Issuer can make no assurances that DTC will distribute payments of principal of, redemption price, if any, or interest on the Series 2006 Bonds to the Direct Participants, or that Direct and Indirect Participants will distribute payments of principal of, redemption price, if any, or interest on the Series 2006 Bonds or redemption notices to the Beneficial Owners of such Series 2006 Bonds or that they will do so on a timely basis, or that DTC or any of its Participants will act in a manner described in this Limited Offering Memorandum. The Issuer is not responsible or liable for the failure of DTC to make any payment to any Direct Participant or failure of any Direct or Indirect Participant to give any notice or make any payment to a Beneficial Owner in respect to the Series 2006 Bonds or any error or delay relating thereto. The rights of holders of beneficial interests in the Series 2006 Bonds and the manner of transferring or pledging those interests is subject to applicable state law. Holders of beneficial interests in the Series 2006 Bonds may want to discuss the manner of transferring or pledging their interest in the Series 2006 Bonds with their legal advisors. NEITHER THE ISSUER NOR THE TRUSTEE SHALL HAVE ANY OBLIGATION WITH RESPECT TO ANY DEPOSITORY PARTICIPANT OR BENEFICIAL OWNER OF THE SERIES 2006 BONDS DURING SUCH TIME AS THE SERIES 2006 BONDS ARE REGISTERED IN THE NAME OF A SECURITIES DEPOSITORY PURSUANT TO A BOOK-ENTRY ONLY SYSTEM OF REGISTRATION. Redemption Provisions Optional Redemption Series 2006A Bonds. The Series 2006A Bonds are subject to redemption prior to maturity at the option of the Issuer, in whole or in part at any time on or after May 1, 2016, at a Redemption 6

11 Price equal to 100% of the principal amount of the Series 2006A Bonds or portions thereof to be redeemed, in each case together with accrued interest to the redemption date. Series 2006B Bonds. The Series 2006B Bonds are not subject to optional redemption prior to maturity. Mandatory Sinking Fund Redemption Series 2006A Bonds. The Series 2006A Bonds are subject to mandatory sinking fund redemption in part prior to maturity, by lot, at the Redemption Price of one hundred percent (100%) of the principal amount redeemed or paid, without premium, together with accrued interest to the redemption date, in the years and in the principal amounts set forth below: Year Beginning May 1 Principal Amount 2008 $200, , , , , , , , , , , , , , , , , , , * 545,000 * Final Maturity In connection with such mandatory sinking fund redemption of the Series 2006A Bonds, amounts shall be transferred from the Series 2006 Revenue Account, all as more particularly set forth in the Indenture. Upon any redemption of Series 2006A Bonds (other than Series 2006A Bonds redeemed in accordance with the mandatory sinking fund redemption provisions set forth above), the Issuer shall cause to be recalculated and delivered to the Trustee a revised schedule of mandatory sinking fund redemption for the Series 2006A Bonds so as to re-amortize the remaining Outstanding Series 7

12 2006A Bonds in substantially equal annual installments of principal and interest (subject to rounding to Authorized Denominations of principal) over the remaining term of the Series 2006A Bonds. Series 2006B Bonds. The Series 2006B Bonds are not subject to mandatory sinking fund redemption prior to maturity. Extraordinary Mandatory Redemption Series 2006A Bonds. The Series 2006A Bonds are subject to extraordinary mandatory redemption by the Issuer prior to maturity, in whole, on any date, or in part, on any Interest Payment Date, at an extraordinary mandatory redemption price equal to 100% of the principal amount of the Series 2006A Bonds to be redeemed, plus interest accrued to the redemption date as follows: (i) from moneys transferred from the Series 2006 Project Account and deposited into the Series 2006A Prepayment Subaccount of the Series 2006 Redemption Subaccount; (ii) from Series 2006A Prepayment Principal deposited into the Series 2006A Prepayment Subaccount of the Series 2006 Redemption Subaccount; (iii) from amounts in the Series 2006A Reserve Subaccount transferred to the Series 2006A Prepayment Subaccount as a result of a decrease in the Series 2006A Reserve Requirement (after payment of any Series 2006 Deferred Obligations); and (iv) when amounts on deposit in the Series 2006A Reserve Subaccount, together with other moneys available therefore, are sufficient to pay and redeem all of the Series 2006A Bonds then outstanding and any unpaid Series 2006 Deferred Obligations and are transferred to the Series 2006A Prepayment Subaccount. Series 2006B Bonds. The Series 2006B Bonds are subject to extraordinary mandatory redemption by the Issuer prior to maturity, in whole, on any date, or in part, on any Interest Payment Date, at an extraordinary mandatory redemption price equal to 100% of the principal amount of the Series 2006B Bonds to be redeemed, plus interest accrued to the redemption date as follows: (i) from moneys transferred from the Series 2006 Project Account and deposited into the Series 2006B Prepayment Subaccount of the Series 2006 Redemption Subaccount; (ii) from Series 2006B Prepayment Principal deposited into the Series 2006B Prepayment Subaccount of the Series 2006 Redemption Subaccount; (iii) from amounts in the Series 2006B Reserve Subaccount transferred to the Series 2006B Prepayment Subaccount as a result of a decrease in the Series 2006B Reserve Requirement (after payment of any Series 2006 Deferred Obligations); and (iv) when amounts on deposit in the Series 2006B Reserve Subaccount, together with other moneys available therefore, are sufficient to pay and redeem all of the Series 2006B Bonds then outstanding and any unpaid Series 2006 Deferred Obligations and are transferred to the Series 2006B Prepayment Subaccount. 8

13 IT IS ANTICIPATED THAT THE SERIES 2006 SPECIAL ASSESSMENTS ALLOCABLE TO THE SERIES 2006B BONDS WILL BE PREPAID AT THE TIME PROPERTY SUBJECT TO SUCH SERIES 2006 SPECIAL ASSESSMENTS IS SOLD BY THE DEVELOPER TO RETAIL END USERS, BUILDERS OR OTHER DEVELOPERS. Partial Redemption Except as otherwise provided in the Indenture, if less than all of the Series 2006 Bonds are to be redeemed, the Trustee shall select the Series 2006 Bonds or portions thereof to be redeemed by lot. Partial redemptions of any Series 2006 Bonds shall be made in such a manner that the remaining Series 2006 Bonds held by each Bondholder shall be in Authorized Denominations. Notice of Redemption Notice of each redemption, either in whole or in part, of any Series 2006 Bonds is required to be mailed by the Registrar, postage prepaid, at least thirty (30) but not more than sixty (60) days prior to the redemption date to all Owners of the Series 2006 Bonds to be redeemed (as such Owners appear on the Bond Register on the fifth (5 th ) day prior to such mailing) at their registered address and also to any Credit Facility Issuer. On the date designated for redemption, notice having been given and money for the payment of the Redemption Price being held by the Paying Agent, all as provided in the Indenture, any Series 2006 Bonds or such portions thereof so called for redemption shall become and be due and payable at the Redemption Price plus accrued interest, if any, to the Redemption Date. Any Series 2006 Bonds or such portions thereof so called for redemption will cease to bear interest on the specified redemption date, shall no longer be entitled to any benefit or security under the Indenture, and shall not be deemed to be Outstanding under the provisions thereof. Failure to mail any such notice or defect in the notice or in the mailing thereof shall not affect the validity of the redemption of the Series 2006 Bonds for which notice was duly mailed in accordance with the Indenture. Authority to Purchase Series 2006 Bonds The Issuer has the option to purchase any Series 2006 Bonds for cancellation, all as more fully provided in the Indenture. See APPENDIX B Form of the Indenture. SECURITY FOR AND SOURCES OF PAYMENT OF THE SERIES 2006 BONDS General The Series 2006 Bonds are secured by a lien on and pledge of the Series 2006 Trust Estate. The Series 2006 Trust Estate consists primarily of the revenues derived by the Issuer from the collection of the Series 2006 Special Assessments, which are the non-ad valorem special assessments levied on certain lands in the Assessment Area subject to assessment as a result of the Series 2006 Project or any portion thereof. See PLAN OF FINANCE The Development The Assessment Area, Fees and Assessments, and Special Assessment Methodology herein. The Issuer is authorized by the Act and other applicable law to finance and refinance acquisition and construction of the Series 2006 Project by levying the Series 2006 Special 9

14 Assessments upon certain District Lands in the Assessment Area benefited by the Series 2006 Project. Non-ad valorem special assessments are not based on millage and become a lien against the homestead as permitted by Section 4, Article X of the Florida State Constitution. See PLAN OF FINANCE The Development The Assessment Area and Special Assessment Methodology herein and APPENDIX A Consulting Engineers Report for a description of the lands in the Assessment Area expected to be subject to the Series 2006 Special Assessments. The Consulting Engineers Report sets forth an overall method for allocating the nonad valorem special assessments to be levied and collected by the Issuer as a result of the Series 2006 Project on specially benefited lands in the Assessment Area. See the Supplement To Master Engineer s Report included in APPENDIX A Consulting Engineers Report, which sets forth the expected allocation of the Series 2006 Special Assessments to the land in the Assessment Area. NEITHER THE SERIES 2006 BONDS NOR THE INTEREST PAYABLE THEREON SHALL CONSTITUTE A GENERAL OBLIGATION OR GENERAL INDEBTEDNESS OF THE ISSUER WITHIN THE MEANING OF THE CONSTITUTION AND LAWS OF THE STATE OF FLORIDA. THE SERIES 2006 BONDS AND THE INTEREST THEREON DO NOT CONSTITUTE EITHER A PLEDGE OF THE FULL FAITH AND CREDIT OF THE ISSUER OR A LIEN UPON ANY PROPERTY OF THE ISSUER OTHER THAN AS PROVIDED IN THE INDENTURE. NO OWNER OR ANY OTHER PERSON SHALL EVER HAVE THE RIGHT TO COMPEL THE EXERCISE OF ANY AD VALOREM TAXING POWER OF THE ISSUER OR OF ANY OTHER PUBLIC AUTHORITY OR GOVERNMENTAL BODY, INCLUDING, WITHOUT LIMITATION, BROWARD COUNTY, FLORIDA OR THE CITY OF PARKLAND, FLORIDA, TO PAY DEBT SERVICE OR ANY OTHER AMOUNTS REQUIRED TO BE PAID PURSUANT TO THE INDENTURE ON ANY SERIES 2006 BONDS. RATHER, DEBT SERVICE AND ANY OTHER AMOUNTS REQUIRED TO BE PAID PURSUANT TO INDENTURE ON THE SERIES 2006 BONDS SHALL BE PAYABLE SOLELY FROM, AND SHALL BE SECURED SOLELY BY, THE PLEDGED REVENUES AND FUNDS AND ACCOUNTS PLEDGED TO THE SERIES 2006 BONDS, ALL AS PROVIDED IN THE INDENTURE AND THE SERIES 2006 BONDS. The District Lands in the Assessment Area are subject to taxes and non-ad valorem assessments levied by other governmental entities, and taxes and non-ad valorem assessments which are, and may be, levied by the Issuer, all of which are payable on a parity with the Series 2006 Special Assessments, to the extent such Series 2006 Special Assessments are collected by the Uniform Method (as defined herein). See SECURITY FOR AND SOURCE OF PAYMENT OF THE SERIES 2006 BONDS Additional Bonds and Refunding Bonds and Additional Assessments and BONDHOLDER S RISKS Items No. 4 and No. 6 herein. The Indenture provides that Series 2006 Special Assessments pledged to secure Series 2006A Bonds levied on platted lots may be collected and enforced by the uniform method for the collection and enforcement of Assessments afforded by Sections , and , Florida Statutes (the Uniform Method ). Under the Uniform Method for collecting non-ad valorem special assessments, the Issuer will list and certify the assessment roll to the Tax Collector for each of the relevant collection years and will include on the tax notice issued pursuant to Sections and , Florida Statutes, the dollar amount of such Series 2006 Special Assessments. Under the Indenture, the Series 2006 Special Assessments pledged to secure Series 2006A Bonds levied on unplatted lots and the Series 2006 Special Assessments pledged to secure Series 2006B Bonds are 10

15 expected to be collected and enforced by the Issuer, in accordance with the provisions of the Act, rather than by using the Uniform Method. The Issuer will covenant in the Indenture to cause any Series 2006 Special Assessments securing Series 2006 Bonds to be collected or otherwise received by it to be deposited with the Trustee as soon as reasonably practicable after receipt thereof for deposit into the related Series Revenue Account of the Revenue Fund (provided that amounts received as prepayments of Series 2006A Special Assessments shall be deposited directly into the Series 2006A Prepayment Subaccount and amounts received as prepayments of Series 2006 Special Assessments securing the Series 2006B Bonds shall be deposited directly into the Series 2006B Prepayment Subaccount). For a discussion of the manner in which payments of the Series 2006 Special Assessments are enforced, see SECURITY FOR AND SOURCES OF PAYMENT OF THE SERIES 2006 BONDS Enforcement of Payment of Special Assessments and ENFORCEMENT OF ASSESSMENT COLLECTIONS herein. The Issuer has further covenanted in the Indenture that if any Series 2006 Special Assessments shall be either in whole or in part annulled, vacated or set aside by the judgment of any court, or if the Issuer shall be satisfied that any such Series 2006 Special Assessments are so irregular or defective that the same cannot be enforced or collected, or if the Issuer shall have omitted to make such Series 2006 Special Assessments when it might have done so, the Issuer shall either: (i) take all necessary steps to cause new Series 2006 Special Assessments to be made for the whole or any part of the Series 2006 Project or against any property benefited thereby; or (ii) in its sole discretion, make up the amount of such Series 2006 Special Assessments from legally available moneys, which moneys shall be deposited into the appropriate Accounts in the Revenue Fund. In case such second Series 2006 Special Assessments shall be annulled, the Issuer shall obtain and make other Special Assessments until valid Series 2006 Special Assessments are made. Additional Bonds and Refunding Bonds Subsequent to the issuance of the Series 2006 Bonds, the Issuer may cause one or more Series of Additional Bonds or Refunding Bonds to be issued pursuant to the Master Indenture, subject to the terms and conditions thereof. Additional Bonds may be issued for the purpose of paying or completing payment of the Cost of any Series Project or Additional Series Project any portion thereof. Refunding Bonds may be issued for the purpose of refunding (including advance refunding) all or part of the Outstanding Bonds of a Series. In the Indenture the Issuer covenants that it will not issue Additional Bonds payable from Series 2006 Pledged Revenues on a parity with the Series 2006 Bonds, nor voluntarily create or cause to be created any other debt, lien, pledge, assignment, encumbrance or other charge payable from Series 2006 Pledged Revenues. The Issuer may issue Refunding Bonds for the purpose of refinancing the Series 2006 Project and in connection therewith refunding the related Series of Series 2006 Bonds, in part, providing for any necessary reserves, and paying the costs of issuance of such Refunding Bonds. Such Refunding Bonds would be payable from the Series 2006 Pledged Revenues on a parity with the Series 2006 Bonds, provided that such Refunding Bonds shall not require the levy of additional Series 2006 Special Assessments. The Issuer may also issue Subordinated Debt secured by the Series 2006 Pledged Revenues. The Issuer has issued Bonds pursuant to the Master Indenture to finance Assessable Improvements for the benefit of assessment areas within its boundaries, outside the boundaries of the 11

16 Assessment Area, designated as the Parkland Golf and Country Club Assessment Area and the Parkland Golf and Country Club Assessment Area A to finance certain Assessable Improvements for the benefit of the Parkland Golf and Country Club Assessment Area and the Parkland Golf and Country Club Assessment Area A, respectively. Such Bonds are separately secured from the Series 2006 Bonds by revenues derived by the Issuer from Special Assessments levied on certain property in the Parkland Golf and Country Club Assessment Area and the Parkland Golf and Country Club Assessment Area A, respectively. See THE ISSUER AND THE DISTRICT Outstanding and Future Indebtedness. In addition, the Issuer may issue bonds under instruments other than the Master Indenture (and has previously issued such bonds and plans to issue bonds in the future); however, such bonds may not be secured by the Series 2006 Special Assessments. See THE ISSUER AND THE DISTRICT and BONDHOLDERS RISKS Item No. 4 herein. Additional Assessments In the event the Issuer issues Additional Bonds in connection with the financing or completion of any Series Project or Additional Series Project, or issues bonds pursuant to an instrument other than the Master Indenture, these obligations would not be secured by the Series 2006 Special Assessments. However, such obligations could be secured by non-ad valorem assessments or taxes levied on District Lands in the Assessment Area that are already subject to the Series 2006 Special Assessments. In the event that the Issuer collects the Series 2006 Special Assessments and any other assessments or taxes levied by it on District Lands in the Assessment Area by the Uniform Method, such assessments will be collected on a single tax bill and must be paid all at one time or not at all. See ENFORCEMENT OF ASSESSMENT COLLECTIONS Alternative Uniform Tax Collection Procedure for Special Assessments herein and BONDHOLDERS RISKS Item No. 4 herein. The District Lands in the Assessment Area are subject to taxes and assessments levied by other governmental entities, and which are or may be levied by the Issuer, which are payable on a parity with the Series 2006 Special Assessments to the extent the Series 2006 Special Assessments are collected by the Uniform Method. See SECURITY FOR AND SOURCE OF PAYMENT OF THE SERIES 2006 BONDS Additional Bonds and Refunding Bonds and Additional Assessments and BONDHOLDER S RISKS Items No. 4 and No. 6 herein. The Issuer has previously issued its Special Assessment Bonds, Series 1997 (Heron Bay Project) (the 1997 Bonds ), of which $6,305,000 in aggregate principal amount is currently outstanding, to finance the recreational facilities located in the Development known as the Commons, as more fully described under PLAN OF FINANCE The Development Amenities. Land in the Development, including in the Assessment Area, is subject to assessments levied by the Issuer to pay for debt service on the 1997 Bonds and the operation and maintenance of the Commons facilities. See PLAN OF FINANCE The Development Fees and Assessments for information regarding the current annual amount of these assessments. In addition, the Issuer has the authority to levy non-ad valorem assessments on District Lands in the Assessment Area for its general administrative, maintenance and operation functions and 12

17 annually levies such assessments. See THE ISSUER AND THE DISTRICT Legal Powers and Authority herein. See also PLAN OF FINANCE The Development Fees and Assessments. Deferred Obligations The Developer and the Issuer will enter into a separate acquisition agreement with respect to the Series 2006 Project (the Acquisition Agreement ) and a separate completion agreement with respect to the Series 2006 Project (the Completion Agreement ). The Acquisition Agreement will provide for the Developer to convey certain completed components of the Series 2006 Project to the Issuer and the Completion Agreement will provide for the Developer to complete portions of the Series 2006 Project not conveyed pursuant to the Acquisition Agreement and/or provide funds to the Issuer to complete portions of the Series 2006 Project not conveyed pursuant to the Acquisition Agreement. Pursuant to the Acquisition Agreement and the Completion Agreement, the Issuer shall be obligated to pay to the Developer, without interest, the amount by which the Cost of any of portion of the Series 2006 Project conveyed to the Issuer exceeds the amount paid by the Issuer to the Developer with proceeds of the Series 2006 Bonds and the amount of any funds provided by the Developer to the Issuer pursuant to the Completion Agreement to complete the Series 2006 Project (the Series 2006 Deferred Obligations ). The Series 2006 Deferred Obligations are subordinate to the payment of the Debt Service Requirements on the Series 2006 Bonds. Any Series 2006 Deferred Obligations will be paid, if ever, solely as provided in the Indenture. The Indenture provides, generally, for the Series 2006 Deferred Obligations to be paid from (i) excess amounts in the Series 2006 Project Account following the date on which an amount equal to the proceeds of the Series 2006 Bonds initially deposited in the Series 2006 Project Account have been fully disbursed (the Initial Series 2006 Project Account Deposit ), (ii) excess amounts in the Series 2006A Reserve Subaccount as a result of a decrease in the Series 2006A Reserve Requirement, (iii) investment earnings on amounts in the Series 2006A Reserve Subaccount that are available to be applied for that purpose after November 1, 2007; and (iv) from excess amounts in the Series 2006 Revenue Account after the last Interest Payment Date for the Series 2006 Bonds in any calendar year. See DESCRIPTION OF THE SERIES 2006 BONDS Redemption Provisions Extraordinary Mandatory Redemption, SECURITY FOR AND SOURCES OF PAYMENT OF THE SERIES 2006 BONDS Debt Service Reserve Fund and APPENDIX B Form of the Indenture. Debt Service Reserve Fund General Pursuant to the Indenture, there is established in the Debt Service Reserve Fund created by the Master Indenture a Series 2006 Reserve Account with respect to the Series 2006 Bonds and therein a Series 2006A Reserve Subaccount and a Series 2006B Reserve Subaccount. The subaccount in the Series 2006A Reserve Subaccount established for the Series 2006A Bonds shall be funded from proceeds of the Series 2006A Bonds in an amount equal to the Series 2006A Reserve Requirement. The subaccount in the Series 2006B Reserve Account established for the Series 2006B Bonds shall be funded from proceeds of the Series 2006B Bonds in an amount equal to the Series 2006B Reserve Requirement. Monies held for the credit of a Series Reserve Account shall be used for the purpose paying any Debt Service Requirements on the Series of Series 2006 Bonds secured thereby whenever 13

18 amounts on deposit in the related Accounts or subaccounts in the Series Debt Service Fund are insufficient for that purpose, as more fully provided in the Indenture. See APPENDIX B Form of the Indenture and BONDHOLDER S RISKS Item No. 14. As more fully described in the Indenture, the Issuer may cause to be deposited to the Series 2006 Reserve Account a Debt Service Reserve Insurance Policy or Debt Service Reserve Letter of Credit, either in lieu of any cash amount required to be deposited therein or in substitution for the full amounts then on deposit therein or in an amount equal to the difference between the amount required to be deposited and the sum, if any, then on deposit in the Series 2006 Reserve Account. See APPENDIX B Form of the Indenture. The Indenture provides that earnings on investments in the Series 2006 Reserve Account shall be applied as follows: As long as there exists no default under the Indenture and the amount in the Series 2006A Reserve Subaccount is not reduced below the Series 2006A Reserve Requirement, earnings on investments in the Series 2006A Reserve Subaccount shall be transferred first, through November 1, 2007, to the credit of the Series 2006A Capitalized Interest Subaccount, then second, prior to the date the Initial Series 2006 Project Account Deposit is fully disbursed, to the Series 2006 Project Account, then third, following the date the Initial Series 2006 Project Account Deposit is fully disbursed, to the Series 2006 Rebate Account in the amount, and to the extent necessary, so the amount on deposit therein equals the accrued rebate obligation under Section 148(f) of the Code, if the Trustee has received a certification from the Issuer by such date detailing the amount of such obligation which shall be deposited, then, fourth, to the Series 2006 Deferred Obligations Subaccount to pay any unpaid Series 2006 Deferred Obligations, upon receipt by the Trustee of a Requisition relating to such payment; provided, that, upon receipt by the Trustee of a written certification from the Issuer signed by a Responsible Officer to the effect that there are no remaining unpaid Series 2006 Deferred Obligations, any remaining amounts shall be transferred to the Series 2006 Revenue Account. Otherwise, earnings on investments in the Series 2006A Reserve Subaccount shall be retained therein until applied as set forth as set forth in the Indenture. As long as there exists no default under the Indenture and the amount in the Series 2006B Reserve Subaccount is not reduced below the Series 2006B Reserve Requirement, earnings on investments in the Series 2006B Reserve Subaccount shall be transferred to first, through November 1, 2007, to the credit of the Series 2006B Capitalized Interest Subaccount, then second, prior to the date the Initial Series 2006 Project Account Deposit is fully disbursed, to the Series 2006 Project Account, then third, following the date the Initial Series 2006 Project Account Deposit is fully disbursed, to the Series 2006 Rebate Account in the amount, and to the extent necessary, so the amount on deposit therein equals the accrued rebate obligation under Section 148(f) of the Code, if the Trustee has received a certification from the Issuer by such date detailing the amount of such obligation which shall be deposited, then, fourth, to the Series 2006 Deferred Obligations Subaccount to pay any unpaid Series 2006 Deferred Obligations, upon receipt by the Trustee of a Requisition relating to such payment; provided, that, upon receipt by the Trustee of a written certification from the Issuer signed by a Responsible Officer to the effect that there are no remaining unpaid Series 2006 Deferred Obligations, any remaining amounts shall be transferred to the Series 2006 Revenue Account. Otherwise, earnings on investments in the Series 2006B Reserve Subaccount shall be retained therein until applied as set forth in the Indenture. 14

19 Series 2006A Bonds The Series 2006A Reserve Requirement means (A) on the date of issuance of the Series 2006A Bonds $559,900, representing the lesser of (i) the maximum annual Debt Service Requirements for Outstanding Series 2006A Bonds determined on the date of initial issuance of the Series 2006A Bonds; (ii) 125% of the average annual Debt Service Requirements for Outstanding Series 2006A Bonds determined on the date of initial issuance of the Series 2006A Bonds; or (iii) 10% of the proceeds of the Series 2006A Bonds determined on the date of initial issuance of the Series 2006A Bonds, and (B) at any time thereafter, the Series 2006A Reserve Account Percentage times the Deemed Outstanding principal amount of the Series 2006A Bonds, as of the time of any such calculation. For purposes of the foregoing: The term Series 2006A Reserve Account Percentage, means (A) on the date of issuance of the Series 2006A Bonds the result of dividing (i) the Series 2006A Reserve Requirement on the date of initial issuance and delivery of the Series 2006A Bonds ($559,900) by (ii) the initial Outstanding aggregate principal amount of the Series 2006A Bonds (which equals 8.079%) and (B) subsequent to the earlier of (i) the date that the Series 2006A Bonds have received an Investment Grade Rating or (ii) the Series 2006A Assessment Principal has been Substantially Absorbed (as hereinafter defined), in each case as evidenced by a certificate to such effect delivered to the Trustee from a Responsible Officer on which the Trustee may conclusively rely, the term Series 2006A Reserve Account Percentage shall mean the result of dividing (x) fifty percent (50%) of the maximum annual Debt Service Requirements on the Series 2006A Bonds by (y) the then Outstanding principal amount of the Series 2006A Bonds, but only if the amount so determined is less than the amount determined in clause (A); The term Investment Grade Rating is defined to mean a rating on the Series 2006 Bonds of BBB- or higher by S&P or a rating on the Series 2006 Bonds or Baa3 or higher by Moody s or a rating of BBB- or higher by Fitch Ratings; and The term Deemed Outstanding is defined to mean the aggregate Outstanding principal amount of Series 2006A Bonds, reduced by the result of dividing (x) the amount on deposit in the Series 2006A Prepayment Subaccount in the Series 2006 Redemption Subaccount by (y) 1- the Series 2006A Reserve Account Percentage. The term Substantially Absorbed means, with respect to Series 2006A Assessment Principal, the date on which at least seventy-five percent (75%) of the then outstanding Series 2006A Assessment Principal has been allocated to land within the boundaries of the Issuer with respect to which a certificate of occupancy has issued for a structure thereon. Upon a decrease in the Series 2006A Reserve Requirement as a result of the Series 2006A Bonds being irrevocably called for redemption or as otherwise provided in the Indenture, the excess amount in the Series 2006A Reserve Subaccount resulting from such decrease shall be transferred from the Series 2006A Reserve Subaccount first, to the credit of the Series 2006 Rebate Account in the amount, and to the extent necessary, so the amount on deposit therein equals the accrued rebate 15

20 obligation under Section 148(f) of the Code, if the Trustee has received a certification from the Issuer by such date detailing the amount of such obligation which shall be deposited and shall next be transferred to the Series 2006 Deferred Obligations Subaccount to be applied to pay any unpaid Series 2006 Deferred Obligations, if the Trustee has received a Requisition relating to such payment. Upon receipt by the Trustee of a written certification from the Issuer signed by a Responsible Officer to the effect that there are no remaining unpaid Series 2006 Deferred Obligations, any remaining funds after making the required deposit to the Series 2006 Rebate Account as aforesaid shall be deposited to the Series 2006A Prepayment Subaccount, in any event, no later than the date on which the Series 2006A Bonds irrevocably called for redemption are to be redeemed. Simultaneously with the deposit by the Trustee of Series 2006A Prepayment Principal into the Series 2006A Prepayment Subaccount the Trustee is hereby authorized and directed to recalculate the Series 2006A Reserve Requirement and to transfer any resulting excess on deposit in the Series 2006A Reserve Subaccount first, to the credit of the Series 2006 Rebate Account in the amount, and to the extent necessary, so the amount on deposit therein equals the accrued rebate obligation under Section 148(f) of the Code, if the Trustee has received a certification from the Issuer by such date detailing the amount of such obligation which shall be deposited and shall next be transferred to the Series 2006 Deferred Obligations Subaccount to be applied to pay any unpaid Series 2006 Deferred Obligations, if the Trustee has received a Requisition relating to such payment. Upon receipt by the Trustee of a written certification from the Issuer signed by a Responsible Officer to the effect that there are no remaining unpaid Series 2006 Deferred Obligations, any remaining funds after making the required deposit to the Series 2006 Rebate Account as aforesaid shall be transferred to the Series 2006A Prepayment Subaccount. On the earliest date on which there is on deposit in the Series 2006A Reserve Subaccount, sufficient moneys, taking into account other moneys available therefore (other than amounts on deposit in the Series 2006 Project Account), to pay and redeem all of the Outstanding Series 2006A Bonds, together with accrued interest and redemption premium, if any, on such Series 2006A Bonds to the earliest date of redemption permitted herein, and to pay any unpaid Series 2006 Deferred Obligations, the Trustee shall transfer the amount on deposit in the Series 2006A Reserve Subaccount into the Series 2006A Prepayment Subaccount to pay and redeem all of the Outstanding Series 2006A Bonds on the earliest date permitted for redemption. Series 2006B Bonds The Series 2006B Reserve Requirement means (A) on the date of initial issuance of the Series 2006B Bonds an amount ($54,125) equal to six months of interest on the Series 2006B Bonds as of the date of issuance, and (B) at any time after the date of initial issuance of the Series 2006B Bonds, shall mean the Series 2006B Reserve Account Percentage times the Deemed Outstanding principal amount of the Series 2006B Bonds as of any time of calculation. For purposes of the foregoing: The term Series 2006B Reserve Account Percentage is defined to mean the result of dividing (a) the Series 2006B Reserve Requirement on the date of initial issuance and delivery of the Series 2006B Bonds ($54,125) by (b) the initial Outstanding aggregate principal amount of the Series 2006B Bonds (which equals 2.5%); and 16

21 The term Deemed Outstanding means the aggregate Outstanding principal amount of Series 2006B Bonds, reduced by the result of dividing (x) the amount on deposit in the Series 2006B Prepayment Subaccount in the Series 2006 Redemption Subaccount by (y) 1- the Series 2006B Reserve Account Percentage. Upon a decrease in the Series 2006B Reserve Requirement as a result of the Series 2006B Bonds being irrevocably called for redemption, the excess amount in the Series 2006B Reserve Subaccount resulting from such decrease shall be transferred from the Series 2006B Reserve Subaccount and deposited to the Series 2006B Prepayment Subaccount, in any event, no later than the date on which the Series 2006B Bonds irrevocably called for redemption are to be redeemed. Simultaneously with the deposit by the Trustee of Series 2006B Prepayment Principal into the Series 2006B Prepayment Subaccount the Trustee is hereby authorized and directed to recalculate the Series 2006B Reserve Requirement and to transfer any resulting excess on deposit in the Series 2006B Reserve Subaccount to the Series 2006B Prepayment Subaccount. On the earliest date on which there is on deposit in the Series 2006B Reserve Subaccount, sufficient moneys, taking into account other moneys available therefore (other than amounts on deposit in the Series 2006 Project Account), to pay and redeem all of the Outstanding Series 2006B Bonds, together with accrued interest and redemption premium, if any, on such Series 2006B Bonds to the earliest date of redemption permitted herein, the Trustee shall transfer the amount on deposit in the Series 2006B Reserve Subaccount into the Series 2006B Prepayment Subaccount to pay and redeem all of the Outstanding Series 2006B Bonds on the earliest date permitted for redemption. Enforcement of Payment of Special Assessments The lien of the Series 2006 Special Assessments on the assessable lands in the Assessment Area subject thereto as a result of the Series 2006 Project is of equal dignity with the liens for county taxes upon land, and thus is a first lien, superior to all other liens, including mortgages (except for ad valorem taxes and non-ad valorem special assessments that are of equal dignity). The Issuer may enforce the payment of the Series 2006 Special Assessments securing the Series 2006 Bonds in the manner described herein under the heading ENFORCEMENT OF ASSESSMENT COLLECTIONS. Prepayment of Special Assessments Pursuant to the terms of Section , Florida Statutes, the Act, the Indenture and the proceedings relating to the levy of the Series 2006 Special Assessments adopted by the Issuer prior to the issuance of the Series 2006 Bonds, at any time from the date of levy of Series 2006 Special Assessments on a parcel of land in the District through the date that is thirty (30) days after the Series 2006 Project has been completed and accepted by the Issuer, any owner of property subject to the Series 2006 Special Assessments may, at its option, require the Issuer to release and extinguish the lien upon its property by virtue of the levy of the Series 2006 Special Assessments that relate to the Series 2006 Bonds by paying to the Issuer the entire amount of the Series 2006 Special Assessments on such property, without interest. This prepayment right under Section , Florida Statutes will be waived by the Developer on behalf itself and future landowners in the Assessment Area, although 17

22 homeowners in the Assessment Area as of the date of issuance of the Series 2006 Bonds will retain this prepayment right. Any owner of property subject to the Series 2006 Special Assessments may pay the entire principal balance of such Series 2006 Special Assessments remaining due with respect to the property at any time, or a portion of the principal balance due with respect to the property in whole at any time, or in part, one time, if there is also paid an amount equal to accrued interest to the next succeeding Quarterly Redemption Date (or the second succeeding Quarterly Redemption Date if such prepayment is made within 45 calendar days before a Quarterly Redemption Date). The Series 2006B Bonds are subject to extraordinary mandatory redemption as indicated under DESCRIPTION OF THE SERIES 2006 BONDS Redemption Provisions Extraordinary Mandatory Redemption from optional prepayments of Series 2006 Special Assessments by property owners. The prepayment of Series 2006 Special Assessments does not entitle the owner of the property to a discount for early payment. IT IS ANTICIPATED THAT THE SERIES 2006 SPECIAL ASSESSMENTS ALLOCABLE TO THE SERIES 2006B BONDS WILL BE PREPAID AT THE TIME PROPERTY SUBJECT TO SUCH SERIES 2006 SPECIAL ASSESSMENTS IS SOLD BY THE DEVELOPER TO RETAIL END USERS, BUILDERS OR DEVELOPERS. General ENFORCEMENT OF ASSESSMENT COLLECTIONS As described earlier herein, the Series 2006 Special Assessments secure only the Series 2006 Bonds and are the non-ad valorem special assessments levied on certain lands in the Assessment Area subject to assessment as a result of the Series 2006 Project or any portion thereof. The determination, order, levy, and collection of Series 2006 Special Assessments must be done in compliance with procedural requirements and guidelines provided by State law. Failure by the Issuer to comply with such requirements could result in delay in the collection of, or the complete inability to collect Series 2006 Special Assessments, during any year. Such delays in the collection of Series 2006 Special Assessments, or complete inability to collect any Series 2006 Special Assessments, would have a material adverse effect on the ability of the Issuer to make full or punctual payment of debt service requirements on the Series of the Series 2006 Bonds secured thereby. To the extent that landowners fail to pay the Series 2006 Special Assessments, delay payments, or are unable to pay the same, the successful pursuance of collection procedures available to the Issuer is essential to continued payment of principal of and interest on the Series 2006 Bonds secured thereby. The Act provides for various methods of collection of delinquent Series 2006 Special Assessments by reference to other provisions of the Florida Statutes. The following is a description of certain statutory provisions of assessment payment and collection procedures appearing in the Florida Statutes, but is qualified in its entirety by reference to such statutes. Alternative Uniform Tax Collection Procedure for Series 2006 Special Assessments The Florida Statutes provide that, subject to certain conditions, non-ad valorem Series 2006 Special Assessments may be collected by using the Uniform Method. The Uniform Method of 18

23 collection is available only in the event the Issuer complies with statutory and regulatory requirements and enters into agreements with the Tax Collector and Property Appraiser providing for the Series 2006 Special Assessments to be levied and then collected in this manner. The Issuer will collect Series 2006 Special Assessments levied on platted lots pledged to secure the Series 2006A Bonds through the Uniform Method of collection. Under the Uniform Method, such portion of the Series 2006 Special Assessments will be collected together with Broward County (the County ) and other ad valorem taxes and will appear on the tax bill (also referred to as a tax notice ) issued to each landowner in the District. The statutes relating to enforcement of ad valorem taxes provide that ad valorem taxes become due and payable on November 1 of the year when assessed or as soon thereafter as the certified tax roll is received by the Tax Collector and constitute a lien upon the land from January 1 of such year until paid or barred by operation of law. Such taxes (together with any assessments, including the Series 2006 Special Assessments, being collected by the Uniform Method) are to be billed, and landowners in the District are required to pay all such taxes and assessments, without preference in payment of any particular increment of the tax bill, such as the increment owing for the Series 2006 Special Assessments. Upon any receipt of moneys by the Tax Collector from the Series 2006 Special Assessments, the Tax Collector is supposed to deliver such moneys to the Issuer, which will remit such Series 2006 Special Assessments to the Trustee for deposit to the applicable accounts and subaccounts established for the Series of Series 2006 Bonds secured thereby in the Revenue Fund created under the Indenture and applied in accordance therewith. All county, school and special district ad valorem taxes, non-ad valorem Series 2006 Special Assessments and voter-approved ad valorem taxes levied to pay principal of and interest on bonds, including the Series 2006 Special Assessments securing the Series 2006 Bonds levied by the Issuer, to the extent collected by the Uniform Method, are payable at one time. If a taxpayer does not make complete payment of the total amount, he or she cannot designate specific line items on his or her tax bill as deemed paid in full. Such partial payment is not to be accepted and any partial payment is to be returned to the taxpayer. Therefore, in the event the Series 2006 Special Assessments are collected pursuant to the Uniform Method, any failure to pay any one line item, whether it be the Series 2006 Special Assessments or not, would cause the Series 2006 Special Assessments to not be collected to that extent on that parcel of property whose owner does not pay this bill in full, which could have a significant adverse effect on the ability of the Issuer to make full or punctual payment of Debt Service Requirements on the Series 2006 Bonds secured thereby. Under the Uniform Method, if the Series 2006 Special Assessments are paid during November when due or during the following three months, the taxpayer is granted a variable discount equal to 4% in November and decreasing one percentage point per month to 1% in February. All unpaid taxes and assessments become delinquent on April 1 of the year following assessment, and the Tax Collector is required to collect the ad valorem taxes and non-ad valorem Series 2006 Special Assessments on the tax bill prior to April 1 and after that date to institute statutory procedures upon delinquency to collect such taxes and assessments through the sale of tax certificates, as discussed below. Delay in the mailing of tax notices to taxpayers may result in a delay throughout this process. Collection of delinquent Series 2006 Special Assessments under the Uniform Method is, in essence, based upon the sale by the Tax Collector of tax certificates and remittance of the proceeds of such sale to the Issuer for payment of the Series 2006 Special Assessments due. In the event of a 19

24 delinquency in the payment of taxes and assessments on real property, the landowner may, prior to the sale of tax certificates, pay the total amount of delinquent ad valorem taxes and non-ad valorem assessments plus the applicable interest charge on the amount of such delinquent taxes and assessments. If the landowner does not pay, the Tax Collector is required to attempt to sell tax certificates on such property to the person who pays the delinquent taxes and assessments owing and interest thereon and certain costs, and who accepts the lowest interest rate per annum to be borne by the certificates (but not more than 18%). Tax certificates are sold by public bid. If there are no bidders, the tax certificate is issued to the county in which the assessed lands are located, which, in the case of the Series 2006 Special Assessments, is the County. The County is to hold, but not pay for, the tax certificate with respect to the property, bearing interest at the maximum legal rate of interest (currently 18%). The Tax Collector does not collect any money if tax certificates are struck off (issued) to the County. The County may sell such certificates to the public at any time at the principal amount thereof plus interest at the rate of not more than 18% per annum and a fee. Proceeds from the sale of tax certificates are required to be used to pay taxes and assessments (including the Series 2006 Special Assessments), interest, costs and charges on the real property described in the certificate. The demand for such certificates is dependent upon various factors, which include the rate of interest that can be earned by ownership of such certificates and the underlying value of the land that is the subject of such certificates and which may be subject to sale at the demand of the certificate holder. Therefore, the underlying market value of the property within the Assessment Area may affect the demand for certificates and the successful collection of the Series 2006 Special Assessments securing the Series 2006 Bonds, which are the primary source of payment of such Series. Any tax certificate in the hands of a person other than the County may be redeemed and canceled, in whole or in part, by the person owning or claiming an interest in the underlying land, or a creditor thereof, at any time before a tax deed is issued or the property is placed on the list of lands available for sale, at a price equal to the face amount of the certificate or portion thereof together with all interest, costs, charges and omitted taxes due. Regardless of the interest rate actually borne by the certificates, persons redeeming tax certificates must pay a minimum interest rate of 5%, unless the rate borne by the certificates is zero percent. The proceeds of such a redemption are paid to the Tax Collector who transmits to the holder of the tax certificate such proceeds less service charges, and the certificate is canceled. Redemption of tax certificates held by the County is effected by purchase of such certificates from the County, as described in the preceding paragraph. Any holder, other than the County, of a tax certificate that has not been redeemed has seven years from the date of delinquency during which to act against the land that is the subject of the tax certificate. After an initial period ending two years from April 1 of the year of issuance of a certificate, during which period actions against the land are held in abeyance to allow for sales and redemptions of tax certificates, and before the expiration of seven years from the date of issuance, the holder of a certificate may apply for a tax deed to the subject land. The applicant is required to pay to the Tax Collector at the time of application all amounts required to redeem or purchase all outstanding tax certificates covering the land, plus interest, any omitted taxes or delinquent taxes and interest, and current taxes, if due. If the County holds a tax certificate on property valued at $500 or more and has not succeeded in selling it, the County must apply for a tax deed two years after April 1 of the year of issuance. The County pays costs and fees to the Tax Collector but not any amount to redeem any other outstanding certificates covering the land. Thereafter, the property is advertised for public sale. 20

25 In any such public sale conducted by the Clerk of the Circuit Court, the private holder of the tax certificate who is seeking a tax deed for non-homestead property is deemed to submit a minimum bid equal to the amount required to redeem the tax certificate, charges for the cost of sale, redemption of other tax certificates on the land, and the amount paid by such holder in applying for the tax deed, plus interest thereon. In the case of homestead property, the minimum bid is also deemed to include, in addition to the amount of money required for the minimum bid on nonhomestead property, an amount equal to one-half of the latest assessed value of the homestead. If there are no higher bids, the holder receives title to the land, and the amounts paid for the certificate and in applying for a tax deed are credited toward the purchase price. If there are other bids, the holder may enter the bidding. The highest bidder is awarded title to the land. The portion of proceeds of such sale needed to redeem the tax certificate, and all other amounts paid by such person in applying for a tax deed, are forwarded to the holder thereof or credited to such holder if such holder is the successful bidder. Excess proceeds are distributed first to satisfy governmental liens against the land and then to the former title holder of the property (less service charges), lienholder of record, mortgagees of record, vendees of recorded contracts for deeds, and other lienholder and any other person to whom the land was last assessed on the tax roll for the year in which the land was assessed, all as their interest may appear. Except for certain governmental liens and certain restrictive covenants and restrictions, no right, interest, restriction or other covenant survives the issuance of a tax deed. Thus, for example, outstanding mortgages on property subject to a tax deed would be extinguished. If there are no bidders at the public sale, the County may at any time within ninety (90) days from the date of offering for public sale, purchase the land without further notice or advertising for a statutorily prescribed opening bid. After ninety (90) days have passed, any person or governmental unit may purchase the land by paying the amount of the opening bid. Ad valorem taxes and non- ad valorem assessments accruing after the date of public sale do not require repetition of the bidding process but are added to the minimum bid. Three years from the date the land was offered for public sale, unsold lands escheat to the county in which they are located and all tax certificates and liens against the property are canceled and a deed is executed vesting title in the County Commission. Pursuant to the Indenture if any property is offered for sale for the nonpayment of any Series 2006 Special Assessments, and no person purchases the same for an amount at least equal to the full amount due on such Series 2006 Special Assessments, the Issuer may purchase the property for an amount equal to the balance due on such Series 2006 Special Assessments (principal, interest, penalties and costs, plus attorneys fees, if any) from any legally available funds of the Issuer. The Issuer will thereupon receive title to the subject property for the benefit of the Owners of the Series 2006 Bonds and, either through its own actions or the actions of the Trustee, shall lease or sell such property and deposit all of the net proceeds of any such sale or lease into the applicable Accounts and subaccounts created for the Series 2006 Bonds in the Revenue Fund created under the Indentures and applied in accordance therewith. It should be noted that it is unlikely the Issuer will ever have sufficient funds to complete a significant number of purchases of property offered for sale for the nonpayment of Series 2006 Special Assessments. 21

26 Foreclosure The Issuer anticipates that pursuant to the Act it will, itself, directly levy and enforce the collection of the Series 2006 Special Assessments levied on unplatted acres that are pledged to secure the Series 2006A Bonds and the collection of the Series 2006 Special Assessments pledged to secure the Series 2006B Bonds. The Special Act provides that upon the failure of any property owner to pay all or any part of the principal of a special assessment or the interest thereon, when due, the governing body of the Issuer is authorized to commence legal proceedings for the enforcement of the payment thereof, including commencement of proceedings in equity to foreclosure the lien in accordance with Florida law. Any foreclosure proceedings to enforce payment of the Series 2006 Special Assessments may proceed under the provisions of Chapter 173, Florida Statutes, which provides that after the expiration of one year from the date any special assessment or installment thereof becomes due, the Issuer may commence a foreclosure proceeding against the lands upon which the assessments are liens. Such a proceeding is in rem, meaning that it is brought against the land and not against the owner. The determination, order, levy, and collection of Series 2006 Special Assessments must be done in compliance with procedural requirements and guidelines provided by State law. Failure by the Issuer to comply with such requirements could result in delay in the collection of, or the complete inability to collect, Series 2006 Special Assessments during any year. Such delays in the collection of, or complete inability to collect, Series 2006 Special Assessments would have a material adverse effect on the ability of the Issuer to make full or punctual payment of Debt Service Requirements on the Series 2006 Bonds secured thereby. Tax Levies and Collections The following table summarizes real property taxes levied and collected for the County for the ten (10) fiscal years ending September 30, Fiscal Year ended September 30 BROWARD, FLORIDA PROPERTY TAX LEVIES AND COLLECTIONS (IN THOUSANDS OF DOLLARS) LAST TEN FISCAL YEARS 22 Percent of Current Tax Collections to Net Tax Levy Percent of Total Tax Collected to Net Tax Levy Property Tax Levy (1) Property Tax Discount Net Tax Levy Current Tax Collection Total Tax Collected (2) 1996 $439,016 $14,828 $424,188 $416,009 $417, % 98.44% ,902 14, , , , ,675 16, , , , ,183 16, , , , ,795 18, , , , ,866 19, , , , ,170 20, , , , ,307 22, , , , ,945 25, , , , ,840 27, , , , (1) Net of certified adjustments (2) Taxes are collected in the year following assessment, and include delinquencies for the prior year. Source: Broward County, Florida Comprehensive Annual Financial Report for the Fiscal Year ended September 30, 2005.

27 Neither the Issuer nor the Underwriter can give any assurance to the registered owners of the Series 2006 Bonds: (i) that the past experience of the County with regard to tax delinquencies as shown above is indicative in any way of future delinquencies in payment of Series 2006 Special Assessments; and (ii) that future landowners and taxpayers in the Assessment Area will pay such Series 2006 Special Assessments. Enforcement of the obligation to pay Series 2006 Special Assessments and the ability to foreclose the lien created by the failure to pay Series 2006 Special Assessments may not be readily available or may be limited as such enforcement is dependent upon judicial action which is often subject to discretion and delay. BONDHOLDERS RISKS Certain risks are inherent in an investment in obligations secured by non-ad valorem special assessments issued by a public authority or governmental body in the State. Certain of these risks are described in the preceding section entitled ENFORCEMENT OF ASSESSMENT COLLECTIONS, however, certain additional risks are associated with the Series 2006 Bonds offered hereby. This section does not purport to summarize all risks that may be associated with purchasing or owning the Series 2006 Bonds and prospective purchasers are advised to read this Limited Offering Memorandum in its entirety for a more complete description of investment considerations relating to the Series 2006 Bonds. 1. Until further development takes place on the benefited land within the Assessment Area, payment of a significant portion of the Series 2006 Special Assessments securing the Series 2006 Bonds is dependent upon their timely payment by the parties owning the property in the Assessment Area subject to the Series 2006 Special Assessments. At closing of the sale of the Series 2006 Bonds it is expected that the majority of the land within the Assessment Area burdened by the Series 2006 Special Assessments will continue to be owned by the Developer. In the event of the institution of bankruptcy or similar proceedings with respect to the Developer or any other subsequent significant owner of property within the Assessment Area, delays will most likely occur in the payment of the Debt Service Requirements on the Series 2006 Bonds. As such, bankruptcy could negatively impact the ability of: (i) the Developer and any other landowner being able to pay the Series 2006 Special Assessments; (ii) the Issuer to foreclose the lien on the Series 2006 Special Assessments if tax certificates are not sold, and (iii) the County to sell tax certificates in relation to such property (in the case of (ii) and (iii) to the extent that any portion of the Series 2006 Special Assessments are being collected by the Uniform Method). In addition, the remedies available to the Beneficial Owners of the Series 2006 Bonds upon an Event of Default under the Indenture are in many respects dependent upon judicial actions which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, during a bankruptcy of the Developer, the remedies specified by federal, state and local law and in the Indenture and the Series 2006 Bonds, including, without, limitation, enforcement of the obligation to pay the Series 2006 Special Assessments may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Series 2006 Bonds (including Bond Counsel s approving opinion) will be qualified as to the enforceability of the various legal instruments by limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors enacted before or after such delivery. The inability, either partially or fully, to 23

28 enforce remedies available respecting the Series 2006 Bonds could have a material adverse impact on the interest of the Beneficial Owners thereof. 2. The principal security for the payment of the principal of and interest on the Series 2006 Bonds is the timely collection of the Series 2006 Special Assessments. The Series 2006 Special Assessments do not constitute a personal indebtedness of the owners of the land subject thereto, but are secured only by a lien on such land. There is no assurance that the Developer or any other or subsequent owners of the District Lands in the Assessment Area will be able to pay the Series 2006 Special Assessments or that they will pay such Series 2006 Special Assessments even though financially able to do so. Beyond legal delays that could result from bankruptcy, the ability of the County to sell tax certificates, to the extent the Series 2006 Special Assessments are collected by the Uniform Method, will be dependent upon various factors, including the interest rate which can be earned by ownership of such certificates and the value of the land which is the subject of such certificates and which may be subject to sale at the demand of the certificate holder after two years. The determination of the benefits to be received by the land within the Assessment Area as a result of implementation and development of the Series 2006 Project is not indicative of the realizable or market value of the land, which value may actually be higher or lower than the assessment of benefits. In other words, the value of the land could potentially be ultimately less than the Series 2006 Special Assessments levied thereon. To the extent that the realizable or market value of the land is lower than the assessment of benefits, the ability of the County to sell tax certificates relating to such land may be adversely affected. Such adverse effect could render the Issuer unable to collect delinquent Series 2006 Special Assessments, if any, and could negatively impact the ability of the Issuer to make the full or punctual payment of the Debt Service Requirements on the Series 2006 Bonds. The payment of the annual Series 2006 Special Assessments and the ability of the Tax Collector to sell tax certificates or the Issuer to foreclose the lien of the unpaid taxes, including the Series 2006 Special Assessments, may be limited by bankruptcy, insolvency, or other laws generally affecting creditors rights or by the laws of the State relating to court foreclosure. Bankruptcy of a property owner will most likely also result in a delay by the Tax Collector or the Issuer in prosecuting court foreclosure proceedings. Such delay would increase the likelihood of a delay or default in payment of and interest on the Series 2006 Bonds. 3. The development of the Assessment Area may be affected by changes in general economic conditions, fluctuations in the real estate market and other factors beyond the control of the Developer. In addition, the development of the Assessment Area is subject to comprehensive federal, state, and local regulations and future changes to such regulations. Approval is required from various public agencies in connection with, among other things, the design, nature and extent of required public improvements, both public and private, and construction of the Series 2006 Project in accordance with applicable zoning, land use and environmental regulations for the development of the Assessment Area. Although no delays are anticipated, failure to obtain any such approvals in a timely manner could delay or adversely affect the development of the Assessment Area, which may negatively impact the Developer s desire or ability to develop the Assessment Area as contemplated. See the Consulting Engineers Report attached hereto as Appendix A for a discussion of permits and approvals that have been received and those that are pending with respect to the Series 2006 Project. 4. The willingness and/or ability of any owner of land within the Assessment Area, including the Developer, to pay the Series 2006 Special Assessments could be affected by the existence of other taxes and assessments imposed upon the land by the Issuer, the City of Parkland or 24

29 the County, or by other public entities, which may be affected by the value of the land subjected to such taxation and assessment. Under the Uniform Method, County, municipal, school, special district taxes and assessments, and voter-approved ad valorem taxes levied to pay principal of and interest on bonds, including the Series 2006 Special Assessments if collected pursuant to the Uniform Method, are payable at one time. As referenced above, if a taxpayer does not make complete payment, he or she cannot designate specific line items on the tax bill as deemed paid in full. In such case, the Tax Collector does not accept such partial payment. Therefore, any failure to pay any one line item, whether or not it be the Series 2006 Special Assessments, would cause the Series 2006 Special Assessments not to be collected to that extent, which could have a significant adverse impact on the Issuer s ability to make full or punctual payment of the Debt Service Requirements on the Series 2006 Bonds. Public entities whose boundaries overlap those of the Assessment Area, such as the County and the County school district, could, without the consent of the owners of the land within the Assessment Area, impose additional taxes or assessments on the property within the Assessment Area. The Issuer has no control over the amount of taxes or assessments levied by governmental entities other than the Issuer. The lien of the Series 2006 Special Assessments is, however, of equal dignity with the liens for State and County and certain taxes upon land. As referenced herein, the Issuer and other governments have, and may in the future, also impose additional assessments or taxes which could encumber the property burdened by the Series 2006 Special Assessments. 5. There is no assurance that a liquid secondary market will exist for the Series 2006 Bonds in the event a Beneficial Owner thereof determines to solicit purchasers of the Series 2006 Bonds. Even if a liquid secondary market exists, as with any marketable securities, there can be no assurance as to the price for which any Series of the Series 2006 Bonds may be sold. Such price may be lower than that paid by the current Beneficial Owner of the Series 2006 Bonds, depending on the progress of the development of the Assessment Area, existing real estate and financial market conditions and other factors. 6. The Issuer may issue bonds pursuant to the Master Indenture or instruments other than under the Master Indenture for purposes permitted by the Act which are secured by non-ad valorem special assessments levied on the lands in the Assessment Area subject to the Series 2006 Special Assessments. See SECURITY FOR AND SOURCES OF PAYMENT OF THE SERIES 2006 BONDS Additional Bonds and Refunding Bonds and Additional Assessments. The proceeds of the Series 2006 Bonds will finance and refinance only a portion of the Cost of the Series 2006 Project. The Completion Agreement to be entered into between the Issuer and the Developer prior to the issuance of the Series 2006 Bonds will include an agreement from the Developer to complete and convey the Series 2006 Project to the Issuer to the extent the proceeds of the Series 2006 Bonds are insufficient for that purpose. See PLAN OF FINANCE The Series 2006 Project herein. However, the Developer s obligation is unsecured and there is no assurance that the Developer will be able to pay for the cost of these improvements. It is unlikely that the Issuer will have sufficient funds to complete the improvements in the event the Developer does not fulfill its obligations to complete the Series 2006 Project. 7. The cost of the infrastructure improvements not included in the Series 2006 Project needed for the portion of the Development in the Assessment Area will be paid for by operating funds of, or through the proceeds of financing arranged by, Developer. There is no assurance that the Developer will be able to pay, or arrange to pay, for the cost of any of these improvements. In 25

30 addition, water and sewer utility service to the lands within the Assessment Area is provided by the Issuer. The Issuer has indicated that water and sewer service is available to the portion of the Development in the Assessment Area, including, with respect to sewer service, through a bulk user agreement with Broward County. 8. As set forth herein, the structure of payment for the Series 2006B Bonds is interest only with principal payable at maturity (a balloon ). To the extent that property subject to the Series 2006 Special Assessments securing the Series 2006B Bonds has not been sold to third parties and the Series 2006 Special Assessments securing the Series 2006B Bonds paid, and in the event that such Series 2006 Special Assessments were not refinanced, the landowner of such property would be subject to a significant one-time balloon payment. No assurance can be given that the landowner of such property will be sufficiently liquid in order to make such a balloon payment when due. 9. It should be noted that several mortgage lenders have, in the past, raised legal challenges to the primacy of the liens similar to those of the Series 2006 Special Assessments in relation to the liens of mortgages burdening the same real property; to the best knowledge of the Issuer (without investigation), in all such cases to date, the applicable courts have held that the assessment liens (like those of the Series 2006 Special Assessments) are superior to those of the commercial mortgage lenders. 10. The interest rate borne by the Series 2006 Bonds is, in general, higher than interest rates borne by other bonds of political subdivisions that do not involve the same degree of risk as investment in the Series 2006 Bonds. These higher interest rates are intended to compensate investors in the Series 2006 Bonds for the risk inherent in a purchase of the Series 2006 Bonds. However, such higher interest rates, in and of themselves, increase the amount of Series 2006 Special Assessments that the Issuer must initiallylevyin order to provideforpaymentsofdebtserviceonthe Series 2006 Bonds, and, in turn, may increase the burden upon owners of lands within the Assessment Area. 11. The value of the land within the Assessment Area, the success of the portion of the Development in the Assessment Area and the likelihood of timely payment of principal and interest on the Series 2006 Bonds could be affected by environmental factors with respect to the land in the Assessment Area. Should the land in the Assessment Area be contaminated by hazardous materials, this could materially and adversely affect the value of the land in such Assessment Area, which could materially and adversely affect the success of the portion of the Development therein and the likelihood of timely payment of the Series 2006 Bonds. The Issuer has not performed, nor has the Issuer requested that there be performed on its behalf, any independent assessment of the environmental conditions within the Assessment Area. The Developer obtained environmental site assessment reports for the land within the Development and is currently undertaking remedial action with respect to certain portions of the land in the Assessment Area. See PLAN OF FINANCE The Development Environmental Matters. 12. Various proposals are mentioned from time to time by members of the Congress of the United States of America and others concerning reform of the internal revenue (tax) laws of the United States. Certain of these proposals, if implemented, could have the effect of diminishing the value of obligations of states and their political subdivisions, such as the Series 2006 Bonds, by eliminating or changing the tax-exempt status of interest on certain of such bonds. Whether any of 26

31 such proposals will ultimately become law, and if so, what effect such proposals could have upon the value of bonds such as the Series 2006 Bonds, cannot be predicted. The Indenture does not provide for any adjustment to the interest rates borne by the Series 2006 Bonds in the event of a change in the tax-exempt status of the Series 2006 Bonds. 13. The Issuer is required to comply with statutory procedures in levying the Series 2006 Special Assessments. Failure of the Issuer to follow these procedures could result in the Series 2006 Special Assessments not being levied or potential future challenges to such levy. Counsel to the Issuer will, however, render a legal opinion at the closing of the Series 2006 Bonds as to the levy process and the enforceability of the Series 2006 Special Assessments. See SECURITY FOR AND SOURCE OF PAYMENT FOR THE SERIES 2006 BONDS herein. 14. It should be noted that although the Indenture obligates the Issuer to replenish the Series 2006 Reserve Account to an amount equal to the Series 2006A Reserve Requirement and Series 2006B Reserve Requirement, respectively, in the event amounts on deposit therein are withdrawn to pay the Debt Service Requirements on the related Series of the Series 2006 Bonds, secured thereby the Issuer does not have a designated revenue source for replenishing those accounts. Moreover, the Issuer may not re-assess real property then burdened by the Series 2006 Special Assessments to fund deficiencies in the related Series 2006 Reserve Account. 15. While the Issuer has represented to the Underwriter that it has selected its District Manager, financial advisor, counsel, Consulting Engineers, Trustee and other professionals with the appropriate due diligence and care, and while the foregoing parties have each represented in their respective areas as having the requisite experience to accurately and timely perform the duties assigned to them in such roles, the Underwriter does not guaranty any portion of the performance of these parties. Failure on the part of these parties to perform their obligations could result in a delay in payment on the Series 2006 Bonds and in the worst possible situation, the non-payment of the Series 2006 Bonds. This section does not purport to summarize all risks that may be associated with purchasing or owning the Series 2006 Bonds and prospective purchasers are advised to read this Limited Offering Memorandum in its entirety for a more complete description of investment considerations relating to the Series 2006 Bonds. [This Space Intentionally Left Blank] 27

32 ESTIMATED SOURCES AND USES OF PROCEEDS OF THE SERIES 2006 BONDS Sources of Funds Principal Amount of Series 2006A Bonds $6,930, Principal Amount of Series 2006B Bonds 2,165, Less: Original Issue Discount on Series 2006A Bonds (17,325.00) Plus: Aggregate Accrued Interest (1) 29, Use of Funds Total Sources $9,107, Deposit to Series 2006 Project Account $7,728, Deposit to Series 2006A Interest Account 23, Deposit to Series 2006B Interest Account 6, Deposit to Series 2006A Capitalized Interest Account 334, Deposit to Series 2006B Capitalized Interest Account 104, Deposit to Series 2006A Reserve Account 559, Deposit to Series 2006B Reserve Account 54, Costs of Issuance (including Underwriter s Discount) 296, Total Uses $9,107, [This Space Intentionally Left Blank] 28

33 DEBT SERVICE REQUIREMENTS ON THE SERIES 2006A BONDS Period Ending Principal Interest* Period Total 05/01/07 $ 210,210 $ 210,210 11/01/07 180, ,180 05/01/08 $ 200, , ,180 11/01/08 174, ,980 05/01/09 215, , ,980 11/01/09 169, ,390 05/01/10 225, , ,390 11/01/10 163, ,540 05/01/11 235, , ,540 11/01/11 157, ,430 05/01/12 250, , ,430 11/01/12 150, ,930 05/01/13 260, , ,930 11/01/13 144, ,170 05/01/14 275, , ,170 11/01/14 137, ,020 05/01/15 290, , ,020 11/01/15 129, ,480 05/01/16 305, , ,480 11/01/16 121, ,550 05/01/17 325, , ,550 11/01/17 113, ,100 05/01/18 340, , ,100 11/01/18 104, ,260 05/01/19 360, , ,260 11/01/19 94,900 94,900 05/01/20 375,000 94, ,900 11/01/20 85,150 85,150 05/01/21 400,000 85, ,150 11/01/21 74,750 74,750 05/01/22 420,000 74, ,750 11/01/22 63,830 63,830 05/01/23 440,000 63, ,830 11/01/23 52,390 52,390 05/01/24 465,000 52, ,390 11/01/24 40,300 40,300 05/01/25 490,000 40, ,300 11/01/25 27,560 27,560 05/01/26 515,000 27, ,560 11/01/26 14,170 14,170 05/01/27 545,000 14, ,170 $6,930,000 $4,608,370 $11,538,370 * Inclusive of accrued interest and Capitalized Interest. 29

34 DEBT SERVICE REQUIREMENTS ON THE SERIES 2006B BONDS Period Ending Principal Interest* Period Total 05/01/07 $ 63, $ 63, /01/07 54, , /01/08 54, , /01/08 54, , /01/09 54, , /01/09 54, , /01/10 54, , /01/10 54, , /01/11 54, , /01/11 54, , /01/12 54, , /01/12 54, , /01/13 54, , /01/13 54, , /01/14 $2,165, , ,219, $2,165, $820, $2,985, * Inclusive of accrued interest and Capitalized Interest. General THE ISSUER AND THE DISTRICT The District Lands currently encompass approximately 7,031 acres. Approximately 2,744 of these acres are within the jurisdictional boundaries of the City of Coral Springs, Florida and the balance is within the jurisdictional boundaries of the City of Parkland, all within Broward County, Florida. The District Lands are located in the northwestern portion of Broward County, Florida, approximately eight miles west of the Atlantic Ocean. Land use plans for the Cities of Coral Springs and Parkland have been approved by these cities and Broward County. These land use approvals also cover the District Lands within the two municipalities. Legal Powers and Authority The Issuer was established by the Special Act in 1971 and the Special Act has been subsequently amended to expand the Issuer s boundaries to their present size. The Issuer was created by the State Legislature to undertake a variety of improvements including the reclamation and drainage of land, to establish roads and highways, to provide access thereto and to provide water and sewage facilities to promote and create favorable conditions for the development of the District Lands. Among the primary powers which the Special Act provides is the power to own, acquire, construct, reconstruct, equip, operate, maintain, extend and improve water management systems and water and sewer subject to the approval of applicable State administrative agencies. 30

35 The Special Act provides that, subject to the provisions of Florida law, the Issuer has power to issue general obligation bonds, revenue bonds, assessment bonds or any combination thereof to pay all or part of the cost of construction, maintenance or operation of any project or combination of projects of the Issuer. The Special Act further provides, subject to the provisions of the Florida law, that the Issuer has power to levy and assess ad valorem taxes on all taxable real and tangible personal property in its boundaries to pay the principal of and interest on any general obligation bonds of the Issuer and to provide for any sinking or other funds established in connection with any such bonds and that such taxes shall be assessed, levied and collected in the same manner and time as county taxes. In addition to the Assessment Area, the District Lands are divided into areas known as Supplement No. 1, Supplement No. 2 and Supplement No. 3, respectively, and also include certain lands not included in any supplement. The Issuer owns and operates master water management systems for each of the supplement areas and provides, and will provide, master water management facilities for the other non-supplement areas in its boundaries. The Issuer has financed the master water management systems for its three supplement areas through the issuance of long-term bonds secured by benefit taxes levied in the applicable supplement area. The Assessment Area is located outside the boundaries of Supplement No. 1, Supplement No. 2 and Supplement No. 3 and the land in the Assessment Area is not subject to benefit assessments levied by the Issuer to secure its water management bonds. The Issuer also has the authority to provide Assessable Improvements (as defined in the Special Act) for District Lands, which includes master and secondary water management systems, roads and parks, and has the authority to levy and collect non-ad valorem special assessments on District Lands specially benefited by such Assessable Improvements. The Issuer has issued, and in calendar year 2006 plans to issue, long-term bonds in addition to the Series 2006 Bonds secured by non-ad valorem special assessments levied outside the Assessment Area, including Bonds heretofore issued pursuant to the Master Indenture for the benefit of certain lands in the Parkland Golf and Country Club Assessment Area and Parkland Golf and Country Club Assessment Area A, respectively, and bonds expected to be issued by the Issuer in 2006 pursuant to a separate master indenture for the benefit of an assessment area designated as the Parkland Village Assessment Area. The land in the Assessment Area is not subject to special assessments levied by the Issuer to secure these other bond issues. As noted under SECURITY FOR AND SOURCES OF PAYMENT OF THE SERIES 2006 BONDS Additional Assessments, the land in the Assessment Area is subject to assessments levied by the Issuer to pay debt service on the 1997 Bonds issued by it to finance the Heron Bay Commons facilities and to pay operation and maintenance expenses associated therewith. See PLAN OF FINANCE The Development Fees and Assessments for information regarding the current annual amount of these assessments. See Outstanding and Future Indebtedness below for a description of the Issuer s existing long-term indebtedness secured by non-ad valorem benefit and special assessments, including the 1997 Bonds, and anticipated non-ad valorem assessment bonds planned for See also SECURITY FOR AND SOURCES OF PAYMENT OF THE SERIES 2006 BONDS Additional Bonds and Refunding Bonds and Additional Assessments. Other than in connection with the 31

36 Series 2006 Bonds and the 1997 Bonds, the land in the Assessment Area is not currently subject to assessments levied by the Issuer to pay debt service on any of these existing or planned bond issues. The Issuer also owns and operates a water and sewer system that serves the District Lands (providing sewer service through a bulk user agreement with Broward County, Florida) (the Water and Sewer System ). See Outstanding and Future Indebtedness below for a description of the Issuer s existing long-term indebtedness secured by revenues of the Water and Sewer System. THE SERIES 2006 BONDS ARE NOT SECURED BY REVENUES OF THE ISSUER DERIVED FROM ANY SOURCE OTHER THAN THE SERIES 2006 SPECIAL ASSESSMENTS. The Issuer imposes non-ad valorem special assessments on District Lands in connection with its administrative, operation and maintenance functions, including in the Assessment Area. For fiscal year , the annual assessment for administrative, operation and maintenance functions is $65.04 per unplatted acre and assessable unit, respectively, in the Assessment Area. This assessment will vary annually depending on the Issuer s budget each year for its administrative, operation and maintenance functions. Board of Supervisors The Special Act provides for a three-member Board of Supervisors (the Board ) to serve as the governing body of the Issuer. A majority of the members of the Board ( Supervisors ) must be residents of Broward County and all Supervisors must be residents of the State of Florida and landowners within the boundaries of the Issuer. Each Supervisor holds office for a term of four years and until his or her successor shall be chosen and shall qualify. Supervisors are elected by landowners within the boundaries of the Issuer. One Supervisor is elected solely by those landowners owning property within the city limits of the City of Parkland, and this Supervisor must be a landowner who owns property within the city of limits of the City of Parkland. One Supervisor is elected solely by those landowners owning property within the city limits of the City of Coral Springs, and this Supervisor must be a landowner who owns property within the city of limits of the City of Coral Springs. Once Supervisor is elected at large by all landowners within the boundaries of the Issuer, regardless of where their property is located. Each landowner is entitled to cast one vote per acre of land owned by such landowner, with fractions of an acre being treated as one acre. If, during a term of office, a vacancy occurs, the remaining Supervisors may fill the vacancy by an appointment of an interim Supervisor for the remainder of the unexpired term. The current members of the Board and the term of each member are set forth below: Name Title Seat Member of the Board Since Expiration of Term Salvatore Mendolia President At Large Vacant Supervisor Parkland Steve Mendelson Supervisor Coral Springs A majority of the Supervisors constitutes a quorum for the purposes of conducting the business of the Issuer and exercising its powers and for all other purposes. Action taken by the 32

37 Issuer shall be upon a vote of the majority of the Supervisors present unless general law or a rule of the Issuer requires a greater number. All meetings of the Board are open to the public under Florida s sunshine or open meetings law. The District Manager and Other Consultants The Special Act authorizes the Board to hire a District Manager as the chief administrative official of the Issuer. The Special Act provides that the District Manager shall have charge and supervision of the works of the Issuer and shall be responsible for: (i) preserving and maintaining any improvement or facility constructed or erected pursuant to the provision of the Special Act; (ii) maintaining and operating the equipment owned by the Issuer; and (iii) performing such other duties as may be prescribed by the Board. The Issuer has retained Severn Trent Services, Coral Springs, Florida, to serve as District Manager. The District Manager s office is located at NW 11th Manor, Coral Springs, Florida and the District Manager s telephone number is (954) The Special Act further authorizes the Board to hire such employees and agents as it deems necessary. Thus, Billing, Cochran, Heath, Lyles, Mauro & Anderson, P.A., Fort Lauderdale, Florida, is serving as Counsel to the Issuer; CH2M Hill, Coral Springs, Florida is serving as Consulting Engineers to the Issuer; and Ruden, McClosky, Smith, Schuster & Russell, P.A. is serving as Bond Counsel and Disclosure Counsel to the Issuer. Outstanding and Future Indebtedness The tables below depict all outstanding long-term debt obligations of the Issuer as of May 1, 2006 and the long-term debt obligations expected to be issued by the Issuer in 2006 (the Future Bonds ). In addition to the existing long-term debt obligations set forth in the table below and the Advances made by the Developer for the Series 2006 Project (approximately $1.080 million in the aggregate as of August 31, 2006), the Issuer (i) has received, and may continue to receive, advances from the Developer and others to enable the Issuer to construct assessable improvements outside of the Assessment Area in the Parkland Village development which are expected to be repaid with proceeds of certain of the Future Bonds, (ii) has received advances from the Developer to enable the Issuer to construct master water management improvements in the portion of the District Lands designated as Supplement No. 2 and Supplement No. 3, respectively, which are expected to be repaid from proceeds of water management bonds previously issued by the Issuer and secured by benefit taxes levied in Supplement No. 2 and Supplement No. 3, as applicable, and (iii) has received, and will continue to receive, advances from developers of District Lands for construction of major water mains and lift stations related to the Issuer s water and sewer system, both within and without the boundaries of the Assessment Area, which are expected to be repaid from proceeds of water and sewer revenue bonds issued by the Issuer in the future (collectively, the Additional Developer Advances ). As noted earlier herein, the Advances relating to the Series 2006 Project are to be repaid with a portion of the proceeds of the Series 2006 Bonds. In addition to the Advances and the Additional Developer Advances, the District obtains advances from developers of land within its boundaries in connection with the construction of water and sewer lines related to its water and sewer system; 33

38 however these advances are short-term in nature and are repaid from proceeds of connection fees received by the District. [This Space Intentionally Left Blank] 34

39 Existing Long-Term Indebtedness of the Issuer (As of May 1, 2006) Name of Issue Original Principal Amount Principal Amount Outstanding Security Source Water Management Bonds, Series 1990A $ 955,000 $335,000 Benefit Taxes levied in Supplement No. 1 Water Management Bonds, Series ,490,000 10,860,000 Benefit Taxes levied in Supplement No. 2 Special Assessment Revenue Bonds, Series 1997 (TPC of Heron Bay) 3,780, ,000 Non-ad valorem special assessments levied on certain District Lands in Supplement No. 2 Special Assessment Bonds, Series 1997 (Heron Bay Project) 7,945,000 6,305,000 Non-ad valorem special assessments levied on certain District Lands in Supplement No. 3, Supplement No. 2 and non-supplement areas, including the Assessment Area Special Assessment Bonds, Series 1997A and Series 1997B (Parkland Isles Project) 22,635,000 2,070,000 Non-ad valorem special assessments levied on certain District Lands in Supplement No. 2 Water and Sewer Revenue Refunding Bonds, 12,795,000 6,945,000 Revenues of the Issuer s Water and Sewer System Series 1994A and Series 1994B Water and Sewer Revenue Bonds, Series ,785,000 17,785,000 Revenues of the Issuer s Water and Sewer System Water Management Refunding Bonds, Series 2005A 2,925,000 2,835,000 Benefit Taxes levied annually in Supplement No. 3 Water Management Bonds, Series 2005B 6,365,000 6,365,000 Benefit Taxes levied annually in Supplement No. 3 Special Assessment Bonds, Series 2005A and Series 2005B (Parkland Golf and Country Club Assessment Area) Special Assessment Bonds, Series 2005A and Series 2005B (Parkland Golf and Country Club Assessment Area A) Source: The Issuer. 25,145,000 25,145,000 Non-ad valorem special assessments levied on certain District Lands in the Parkland Golf and Country Club Assessment Area 5,645,000 5,645,000 Non-ad valorem special assessments levied on certain District Lands in the Parkland Golf and Country Club Assessment Area A Future Bonds Expected To Be Issued in 2006* Name of Bond Issue Special Assessment Bonds, Series 2006A (Parkland Village Assessment Area) * In addition to Series 2006 Bonds ** Preliminary, subject to change. Source: The Issuer Anticipated Original Principal Amount** Security Source $8,500,000 Non-ad valorem special assessments levied on certain District Lands in Supplement No. 2, Supplement No. 3 and non-supplement areas comprising the Parkland Village development 35

40 PLAN OF FINANCE General The information provided below under the caption The Development and The Series 2006 Project has been provided, respectively, by the Developer and by CH2M Hill, in its capacity as the Issuer s Consulting Engineers. The Developer has furnished the information appearing below under the caption The Developer. CH2M Hill has provided the information provided below under the caption Special Assessment Methodology. Although believed to be reliable, neither the Issuer, the Underwriter, nor their counsels have independently verified the information provided by such parties. As noted above under BONDHOLDER S RISKS Item No. 2, the Developer is not a guarantor of payment of the Series 2006 Special Assessments. Moreover, the Series 2006 Special Assessments do not constitute a personal indebtedness of the Developer or any other landowner in the Assessment Area, but are secured solely by a lien on the District Lands in the Assessment Area subject to the Series 2006 Special Assessments. The land and units in the Assessment Area subject to the Series 2006 Special Assessments as a result of the Series 2006 Project are described herein under the captions The Development The Assessment Area and Special Assessment Methodology below. The Development General Heron Bay (also referred to as the Development ) is located partly within the City of Coral Springs and partly within the City of Parkland. The Development is a master planned residential community that is expected to include a total of approximately 3,111 homes, of which approximately 852 are planned for the Assessment Area. The Developer currently builds and sells all residential units in the Development. Heron Bay includes an 18-hole Tournament Players Club (TPC) golf course and an approximately 18,500 square foot golf clubhouse facility and associated clubhouse amenities, which is owned by Tournament Players Club at Heron Bay, Inc. Also located within the boundaries of the Development is an approximately 10,000 square foot fitness and activity center owned by the Issuer known as the Commons, the construction of which was financed through the proceeds of the Issuer s 1997 Bonds. A second recreational center to be owned by the Heron Bay Community Association is expected to open by November, See The Development Amenities below. The Developer commenced selling parcels, lots, and homes in the Development in 1996 from its on-site sales center. The portion of the Development located in the Assessment Area represents the final portion of development of the overall Development. The portion of the Development outside the boundaries of the Assessment Area is planned to include a total of approximately 2,259 homes. As of August 31, 2006, with respect to the portion of the Development outside the Assessment Area, the Developer has closed the sale of approximately 2,172 homes (or 96% of these homes) to end-users and approximately 13 homes are under contract. Information relating to sales and closings of homes in the Assessment Area is set forth below under The Development The Assessment Area. 36

41 Although certain information is presented herein regarding the entire Development, only the portion of the Development located in the Assessment Area is subject to the Series 2006 Special Assessments securing the Series 2006 Bonds. The Assessment Area The portion of the Development located in the Assessment Area is comprised of approximately acres and is expected to consist of approximately 482 single family and 370 multi-family homes. The Assessment Area is within the jurisdictional boundaries of the City of Parkland. A map depicting the Assessment Area is attached hereto as Appendix F. Property in the Assessment Area will be subject to the Series 2006 Special Assessments as a result of the Series 2006 Project or any portion thereof. Property in the Assessment Area is also subject to non-ad valorem special assessments levied by the Issuer for its general operation and maintenance expenses, operation and maintenance expenses associated with the Commons and debt service related to the 1997 Bonds issued to finance the construction of the Commons. See The Development Amenities, and Fees and Assessments, The Series 2006 Project and Special Assessment Methodology below. The table below shows the different product types expected to be offered by the Developer in the portion of the Development in the Assessment Area, available floor plans, living area, lot size, unit count and target home/lot, all of which are subject to change. Avg. SF of Home (Living Area) Typical Home Site Size (w x d) Targeted Home/Lot Price Unit Count Neighborhood Floor Plans Cypress Pointe 6 plans 1,463 6-plex condo $302, Sable Pointe 5 plans 2, x 120 $634, Banyan Isles 5 plans 3, x 130 $793, Neighborhood* 5-7 plans 2, x 120 $650, Neighborhood* 5-7 plans 3, x 130 $800, Neighborhood* 5-7 plans 3, x 130 $975, Neighborhood* 3-5 plans 1, plex condo $400, Total Units 852 *Neighborhood name to be determined. The following table illustrates the closing and sales activity in the portion of the Development located in the Assessment Area. The sales contracts relating to the units shown below as being sold as of August 31, 2006 contain various contingencies and conditions to closing and there can be no assurance that all such contracts will result in closings. [This Space Intentionally Left Blank] 37

42 Product Total Unit Count Closed as of 8/31/06 Contracts as of 8/31/06 Cypress Pointe (condos) Sable Pointe (50 x120 ) Banyan Isles (65 x130 ) homesites homesites homesites Condos Total The Developer commenced sales of residential units in the Assessment Area in December, Due to delays in obtaining U.S. Army Corps permit approval for development of the land in the Assessment Area, the Developer temporarily suspended sales of residential units in the Assessment Area beginning in the third quarter of Sales activity resumed in February, Of the 164 residential units under contract as of August 31, 2006, as shown in the table above, 43 contracts were entered into between February 1, 2006 and August 31, The Developer anticipates that the balance of the residential units in the Assessment Area will be closed over an estimated 5-year period. This anticipated absorption rate is based upon estimates and assumptions made by the Developer that are inherently uncertain, though considered reasonable by the Developer, and are subject to significant business, economic and competitive uncertainties and contingencies, all of which are difficult to predict and many of which are beyond the control of the Developer. As a result, there can be no assurance such absorption rate will occur or be realized in the time frames anticipated. Land Acquisition and Equity in the Assessment Area The Developer acquired the property in the Assessment Area in a series of purchases from approximately 2001 through 2005 at an average purchase price of approximately $73,000 per acre. As of August 31, 2006, the Advances made by the Developer with respect to the Series 2006 Project total approximately $1.080 million. These Advances, together with any additional Advances made through the date of issuance of the Series 2006 Bonds, will be repaid with proceeds of the Series 2006 Bonds. Any infrastructure needed to serve the Assessment Area that is not included in the Series 2006 Project will be financed by the Developer. The Developer has expended approximately $90 million in connection with the site development of the portion of the Development outside the Assessment Area. The Developer will also pay for the cost of the second recreational facility for the Development currently under construction, as described below under Amenities. The total cost of this recreational facility is estimated to be $10 million, of which the Developer has expended approximately $7.5 million as of August 31, The first recreational facility for the Development, the Commons, was financed by the Issuer through the issuance of the 1997 Bonds. The Developer expects to expend in excess of $50 million for the site development in the Assessment Area, which includes the Advances and other costs of the Series 2006 Project to be funded with proceeds of the Series 2006 Bonds. As of August 31, 2006, the Developer has expended 38

43 over $18 million on site development for the Assessment Area, including portions of the Series 2006 Project. As noted elsewhere herein, the proceeds of the Series 2006 Bonds will finance only a portion of the Series 2006 Project. Pursuant to the Acquisition Agreement and the Completion Agreement, the Developer will be obligated to complete and convey to the Issuer the portion of the Series 2006 Project not financed by the Series 2006 Bonds and/or provide funds to the Issuer to permit the Issuer to complete the Series 2006 Project. The Series 2006 Project comprises substantially all of the master public infrastructure needed to serve the Assessment Area, other than water and sewer utility lines, which will be provided by the Issuer through written arrangements with the Developer. As of August 31, 2006, approximately 50% of the water and sewer lines needed to serve the Assessment Area have been constructed, with construction of the balance of such lines expected to be complete by December, The total cost of these water and sewer lines is approximately $4.7 million. The Developer has advanced, and will continue to advance, to the Issuer amounts necessary to construct the water and sewer lines needed for the Assessment Area. The Issuer anticipates repaying these advances with proceeds of connection fees received by the Issuer. The Developer has heretofore paid for costs, including land acquisition, and expects to continue to pay for costs, associated with the Development with its own internal operating funds and with proceeds of revolving bank loan facilities which are available to finance various projects of the Developer, including the Development. As of the date hereof, there are no mortgages on the property in the Assessment Area owned by the Developer. Development Approvals and Permits As of the date hereof, the land in the Assessment Area has the appropriate land use and zoning to permit the portion of the Development to be located therein to be undertaken as described herein. The current City land use designation for the property in the Assessment Area is R3, which permits three residential units per net acre. The City s zoning classifications for the property in the Assessment Area are RS6 and RM8. These zoning classifications permit single-family and multifamily residential development in the Assessment Area, subject to the limitations of the R3 land use designation. The Developer has obtained all governmental approvals and entered into necessary development agreements with the Cityof Parkland to permit the land in the Assessment Area to be developed as described herein. The Developer has indicated that it has obtained, or can obtain in the ordinary course, the governmental permits needed to construct infrastructure serving the land in the Assessment Area that is not included in the Series 2006 Project, such as private roads and landscaping. The governmental approvals and permits needed for the Series 2006 Project are described herein under The Series 2006 Project. Environmental Matters The Developer has obtained both phase one and phase two environmental site assessment studies from an independent consultant (the Environmental Studies ) with respect to the property in the Development. To the extent remedial action was recommended by the Environmental Studies with respect to the portion of the Development outside of the Assessment Area, the same has been 39

44 completed. The Environmental Studies indicated that arsenic levels in the soil in certain portions of the Assessment Area (the Affected Areas ) exceeded permitted residential direct exposure levels. Subsequent to the date of the aforementioned Environmental Studies, the Florida Department of Environmental Protection, by rule, increased the permitted residential direct exposure levels for arsenic in soil. The Developer has engaged an independent environmental consultant (the Environmental Engineer ) to conduct the remediation needed for the Affected Areas, which remediation is intended to result in arsenic levels in the soil being within permitted residential direct exposure levels. The Affected Areas are approximately 25 acres located in various sites within the northeast portion of the Assessment Area. The Environmental Engineer has indicated that the remediation needed for the Affected Areas will be undertaken in three phases, with the first phase corresponding to work required in portions of the southwest portion of the Affected Areas, the second phase corresponding to remedial work required in portions of the northwest portion of the Affected Areas and the third phase corresponding to remedial work required in portions of the northeast portion of the Affected Areas. Approximately 40 residential units are planned to be constructed in the Affected Areas. Each phase of remediation requires that the Broward County Department of Environmental Protection ( BCDEP ) approve both a remediation plan and a final report of the Environmental Engineer indicating that the required remediation has been completed. As of the date hereof, the BCDEP has approved the remediation plan for the first and second phases of remediation and the remediation work with respect to the first phase is nearing completion. The Environmental Engineer has indicated that the remediation for the entire Affected Area is expected to have an aggregate cost of not greater than $1 million, that all necessary approvals for the required remediation can be obtained from the BCDEP in the ordinary course, and that all remediation for the Affected Areas is expected to be complete and approved by the BCDEP by the end of the first quarter of Until the BCDEP approves a final report of the Environmental Engineer with respect to a specific phase of remediation within the AffectedAreas, site development for, and construction of, residential units to be physically located in that portion of the Affected Areas cannot commence. The Developer has indicated that it does not expect any delay in the development of the Assessment Area as contemplated as a result of this matter. In addition, the Issuer s Consulting Engineer has indicated that the remediation being undertaken does not impact the Series 2006 Project. Amenities The Development includes an 18-hole Tournament Players Club championship golf course designed by PGA Tour professional and golf course architect Mark McCumber. Opened to the public in 1996, this golf course hosted the PGA Tour s Honda Classic from 1997 to Associated with the golf course is a clubhouse facility of approximately 18,500 square feet, which includes a Pro Shop, dining room and locker facilities. Use of the golf course and clubhouse is available to the public either on a daily fee basis or an annual membership. The golf course and clubhouse are owned and operated by Tournament Players Club at Heron Bay, Inc., which entity acquired these facilities from the Developer. 40

45 All residents of the Development are automatically members of the fitness and activity center known as the Commons. This approximately 10,000 square foot facility includes a billiards room, indoor racquetball court, fitness/training, and a tennis shop. Outdoor facilities include a pool, ten clay tennis courts, two hard tennis courts, and a full time tennis professional to teach residents and offer group clinics, as well as a basketball court and playground area Constructed in 1998, the Commons is owned by the Issuer and pursuant to agreement operated by the Heron Bay Community Association. Landowners in the Development, including those in the Assessment Area, are assessed annually by the Issuer for the cost of the operation, maintenance and debt service related to this facility. Opening by November, 2006 will be Heron Bay s second recreational center, which is located within the Development outside of the Assessment Area. The approximately 19,675 square foot facility will include a clubhouse offering fitness and exercise equipment/training rooms, aerobic areas, meeting/card rooms and a library. Several pools and Jacuzzis and a volleyball court will be located outside this facility. All residents of the Development will be entitled to use the facility and its costs will become part of the Heron Bay Community Association assessments. This recreational facility will be owned and operated by the Heron Bay Community Association. Included in the Development is an integrated common path system that links neighborhoods and is available for biking, jogging and walking. The Development is a registered member of the Audubon International Cooperative Sanctuary Program. The City of Parkland has a comprehensive parks and recreation program at its seven Citywide park facilities. Nearest to the Development is the City s Pine Trail Park, less than 1½ miles away on Trail s End. This 71 acre park is currently being developed by the City, but the first phase currently offers 4 lighted soccer fields and two lighted basketball courts. In addition to on-site amenities, residents of the Development have local neighborhood shopping at the Sawgrass Center. The center is anchored with a Publix Supermarket and is located approximately three miles from the Development. Coral Square, a regional mall, is located in the City of Coral Springs, to the south of the Development. The mall has four department stores (Dillards, J.C. Penney, Sears and Macy s) as well as 120 specialty stores and fine eateries. Additional upscale shopping is along the coastal areas of Boca Raton and Fort Lauderdale. Marinas, boating opportunities, and the Atlantic Ocean beaches are less than ten miles east of the Development. Sales and Marketing The Developer is currently responsible for the marketing of the Development. Typical buyer profiles are empty nesters, retirees and families, with buyers predominantly comprising families. The Developer s marketing staff is responsible for the design and development of most of the Developer s marketing materials and advertising messages, including newspaper and magazine print, direct mail and bill boards. The marketing program reaches prospective purchasers, locally, regionally and nationally through advertisements placed in demographic specific periodicals and other media. 41

46 As noted above, sales in the Development are conducted from an on-site sales center. No model homes are planned for the Development. Competition Provided below are communities in the vicinity of the Development that may be in competition with the development. Parkland Golf and Country Club. Located in the City of Parkland and adjacent to the Development, Parkland Golf and Country Club is within the boundaries of the Issuer. Parkland Golf and Country Club is situated on 801 acres and is planned to include approximately 820 residential units and is being developed by WCI Communities, Inc. Amenities include an 18-hole golf course and an approximately 18,000 square foot golf clubhouse. The clubhouse facility is planned to include formal and casual gourmet restaurants, grille and lounge facilities, pro shop, fitness/spa facilities, and locker rooms. The approximately43,000 square foot Sports Club will include a fitness center and locker rooms, spa treatment areas, indoor children s activity center, formal and causal dining, bar and lounge, and tennis/fitness shop. Outside the facility, amenities will include tennis courts, resort-style pool, hot tub, cabanas, outdoor dining, children s wading pool and playground. This development currently offers numerous residential neighborhoods, including: The Bella Flor villa homes range from 2,259 square feet to 3,339 square feet and are priced from $981,990 to $1,298,990. The Alahambra Collection homes range from 2,811 square feet to 3,716 square feet and are priced from $1,201,990 to $1,454,990. The Gables Estates offers homes from 3,127 square feet to 4,766 square feet with prices from $1,420,990 to $1,764,990. The Club Estates homes range from 4,227 square feet to 5,881 square feet and are priced from $2,055,990 to $2,295,990. Additional information on Parkland Golf and Country Club may be found at Developer s website: Sales in this community commenced in January, 2003 and as of August 31, 2006 the sale of 179 units have been closed with end users. Build-out of this community, in terms of closings with end users, is expected in Heron Preserve. Located in the City of Coral Springs and adjacent to the Development, Heron Preserve is within the boundaries of the Issuer. Heron Preserve is planned for 84 townhomes and is being developed by WCI Communities, Inc. These are one or two-story units in a 4-plex building. There are four different models available with a price range from $466,400 to $544,900. Living area of the homes range from 1,403 square feet up to 2,230 square feet. Although Heron Preserve is not part of Heron Bay, it does offer its residents an on-site pool and cabana facility, which includes a multi-purpose fitness room. Sales in this community commenced in February, 2006, and as of August 31, 2006 there are 67 units sold, with the initial unit closings scheduled for early in Additional information on Heron Preserve may be found at Developer s website: Build-out of this community, in terms of closings with end users, is expected in Parkland Estates. Located in the City of Parkland and adjacent to the Development, Parkland Estates is within the boundaries of the Issuer. Parkland Estates is planned for 35 estate homes in a gated subdivision being developed by Lennar Homes, Inc. There are 6 different models available with home and lot package prices that range from $1,099,990 to $1,629,990. Living area of the homes range from 3,114 square feet up to 4,398 square feet. Representatives of Lennar Homes, Inc. have indicated to the Issuer that sales of 17 homes have closed as of the date hereof 42

47 (closings commenced December, 2005) and that build-out of this community, in terms of closings with end users, is expected by the end of Additional information on Parkland Estates may be found at Lennar s website: Canyon Lakes, Canyon Isles & Canyon Springs. Located in the City of Boynton Beach, Palm Beach County, this community is approximately 20 miles north to the Development. Canyon Lakes/Isles/Springs are successive phases of a master planned community planned for 1,500 homes with each phase having privacy gate houses and its own amenity complex. Canyon Lakes is platted with 500 lots/homes, Canyon Isles has 500 homes and Canyon Springs is proposed to have 500 homes. Canyon is being developed by GL Homes, Inc. Each phase offers 4 different neighborhoods with 24 different models to choose from. Home and lot package prices range from $507,900 for a 2,214 square foot home up to $1,032,900 for a 5,772 square foot home. Public records indicate that 548 homes have closed between January, 2005 and July 13, Additional information on Canyon Lakes/Isles/Springs may be found at GL Homes website: Build-out of this community, in terms of closings with end users, is expected in Educational Facilities Park Trails Elementary School is the public elementary school serving the Development and is located adjacent to the western boundary of the Development. Westglades Middle School and Stoneman Douglas High School are the public middle and high schools serving the Development and are located within three miles south of the Development. All three schools are part of The Broward County School District. Utilities Electric utilities are provided to the Development by Florida Power & Light. Cable service is provided by Comcast. Telephone service is provided bybell South. Potable water and wastewater service is provided by the Issuer. Fees and Assessments It is currently anticipated that in addition to the Series 2006 Special Assessments, each homeowner in the Assessment Area will pay the following taxes, assessments and fees on an ongoing basis as a result of ownership of a home within the Assessment Area: City of Parkland and Broward County ad valorem property taxes on an annual basis, assessments levied by the Issuer for administrative, operations and maintenance costs on an annual basis, assessments levied by the Issuer for operation, maintenance and debt service associated with the Commons, and master property owner s association fees on a monthly or quarterly basis. The foregoing indicates the taxes, fees and assessments of which the Issuer is aware, but there is no guaranty that no other fees and assessments are or may be imposed on land in the Assessment Area. Assuming an $800,000 home on a 65 by 130 lot with a $25,000 homestead exemption ($775,000 taxable value), based on the mileage rates applicable during the 2005 fiscal year ( mills for homes within the City of Parkland according to the Broward County Property Appraiser), the estimated annual cost of the taxes, fees and assessments in the Assessment Area for a home with the above value is as follows: 43

48 Estimated Average Annual Taxes, Assessments and Fees City and County Ad Valorem Property Taxes $17, (1) Series 2006 Special Assessments 1, (2) Assessments for the Commons (3) Issuer O&M Assessments (4) Master HOA Assessments 1, (5) Total: $20, (1) Source: Broward County Property Appraiser for 2005 fiscal year; will vary annually. (2) Source: Methodology. Reflects only Series 2006 Special Assessments securing Series 2006A Bonds, as Series 2006 Special Assessments securing Series 2006B Bonds are expected to be prepaid prior to the sale of a residential unit to an end user. See Special Assessment Methodology and the Supplement to Master Engineer s Report included as part of Appendix A for information relating to the amount of Series 2006 Special Assessments securing the Series 2006B Bonds. In addition, the amount reflected includes an additional $ of Series 2006 Special Assessments levied on only approximately 425 residential units in the Assessment Area as a result of parcel specific improvements included in the Series 2006 Project. (3) Source: Issuer, for fiscal year Includes operation, maintenance and debt service. The debt service assessment is $ annually; operation and maintenance assessment will vary annually. (4) Source: Issuer, for fiscal year ; will vary annually. (5) Source: The Developer; will vary annually. In addition, it should be noted that the Master HOA is expected to increase assessments by an additional $63.95 per quarter in calendar year 2007 in connection with the second recreational center expected to open in November, Individual condominium associations will also impose condominium association fees on condominium units, which fees are initially expected to be $1,475. The foregoing fees are subject to change and will vary annually. The Series 2006 Project Reference is made to the Consulting Engineer s Report attached hereto as Appendix A for a complete description of the Series 2006 Project. The Consulting Engineer s Report is comprised of a Master Engineer s Report dated August 4, 2005, updated October 5, 2005 Assessment Areas (the Master Report ) and a Supplement To Master Engineer s Report (the Supplement ) which updates information in the Master Report relating to the Series 2006 Project. It should also be noted that the Master Report includes information relating to assessable improvements relating to certain assessment areas within the boundaries of the Issuer, but outside the boundaries of the Assessment Area. Only the assessable improvements relating to the Assessment Area are included in the Series 2006 Project being financed by the Series 2006 Bonds. As noted earlier, the Series 2006 Project comprises substantially all of the master public infrastructure needed to serve the Assessment Area, other than water and sewer utility lines, which will be provided by the Issuer through arrangements with the Developer. The Series 2006 Project includes certain public Assessable Improvements needed to serve the Assessment Area, including waterway and lake construction, underground utilities, public roadway construction, landscaping, irrigation, sidewalks and street lighting adjacent to public roadways and the repayment of Advances 44

49 related to the Series 2006 Project. As noted in Table 1 of the Supplement, certain of the improvements included in the Series 2006 Project are master water management improvements that will benefit all of the developable property in the Assessment Area, for which 852 residential units are currently planned, and certain of the improvements included in the Series 2006 Project are parcel specific improvements that will benefit only certain developable property in the Assessment Area, for which 425 residential units are currently planned. All of the Series 2006 Project is or will be located on public property and will be owned and maintained by the Issuer, the County or the City of Parkland. The Consulting Engineer s Report states all permits, consents or licenses required by governmental authorities in order to construct the Series 2006 Project have been obtained, other than certain Broward County construction permits required for the County Line Road improvements included in the Series 2006 Project, which may be obtained in the ordinary course. Construction of the Series 2006 Project commenced in February, 2005 and the Series 2006 Project is expected to be substantially complete by December, As of August 31, 2006, the Series 2006 Project is approximately 30% complete. The Series 2006 Project has an estimated cost of $13,401,542. Proceeds of the Series 2006 Bonds will finance and refinance only a portion of the cost of the Series 2006 Project, in the amount, exclusive of interest earnings, of approximately $7.73 million. Pursuant to the Completion Agreement, the Developer will agree, on an unsecured basis, to complete and convey the balance of the Series 2006 Project to the Issuer. See BONDHOLDERS RISKS Item No. 6. Special Assessment Methodology As noted above, the Consulting Engineer s Report is comprised of the Master Report and the Supplement, which updates information in the Master Report relating to the allocation of the Series 2006 Special Assessments to the Assessment Area. Reference is made to the Supplement for a complete description of the Methodology for allocating the Series 2006 Special Assessments to District Lands in the Assessment Area as a result of the Series 2006 Project or any portion thereof. It should also be noted that the Master Report includes information relating to the allocation of assessments to certain assessment areas within the boundaries of the Issuer, but outside the boundaries of the Assessment Area. Only the revenues derived by the Issuer from Series 2006 Special Assessments described in the Supplement secure the Series 2006 Bonds. The apportionment methodology in the Master Report allocates the benefit from the improvements included in the Series 2006 Project on an equal residential unit (ERU) basis, so that all residential units in the Assessment Area are allocated benefit on an ERU unit basis. Accordingly, all planned residential units in the Assessment Area are assigned an ERU factor of 1. The Series 2006A Bonds will contain two (2) components based on the allocation of the debt service for the Series 2006A Bonds to different areas of the Assessment Area. Certain of the improvements included in the Series 2006 Project (as shown on Table 1 of the Supplement included in Appendix A hereto) are master water management improvements that will benefit all of the developable property with the Assessment Area. Accordingly, each of the currently planned 852 residential units within the Assessment Area will benefit equally from these master water 45

50 management improvements and each unit will pay 1/852 nd of the total annual Series 2006 Special Assessments securing the Series 2006A Bonds, estimated at the rate of $400 per unit for the master water management improvements included in the Series 2006 Project. Certain of the improvements included in the Series 2006 Project (as shown on Table 1 of the Supplement included in Appendix A hereto) are parcel specific improvements that will benefit only certain property in the Assessment Area, for which 425 residential units are currently planned. Accordingly, these 425 residential units in the Assessment Area will additionally pay 1/425 th of the total annual Series 2006 Special Assessments securing the Series 2006A Bonds, estimated at the rate of $600 per unit for the parcel specific improvements included in the Series 2006 Project. To ensure that residential units sold to end-users as of the date of issuance of the Series 2006 Bonds will not be subject to the Series 2006 Special Assessments securing the Series 2006B Bonds, the Developer will contribute to the Issuer completed components of the Series 2006 Project having a value sufficient to prepay a portion of the costs of the Series 2006 Project specially benefiting such residential units (the Developer Contribution ). The value of the Developer Contribution is currently expected to be in the approximate amount of $121,603.87, based on the assumption that 102 units will be sold to end-users in the Assessment Area as of October 31, The remaining ERUs in the Assessment Area (as shown in Table 4 of the Supplement) will be subject to the Series 2006 Special Assessments securing the Series 2006B Bonds, which Series 2006 Special Assessments are expected to be prepaid at the time property subject thereto is sold by the Developer to retail end users, builders or developers. Taking into account the Developer Contribution associated with the number of residential units expected to be sold to end-users in the Assessment Area as of October 31, 2006, (i) Series 2006 Special Assessments securing the Series 2006B Bonds are expected to be allocated in the principal amount of $1, to 325 residential units currently planned for the Assessment Area benefiting only from the master water management improvements included in the Series 2006 Project; and (ii) Series 2006 Special Assessments securing the Series 2006B Bonds are expected to be allocated in the principal amount of $4, to 425 residential units currently planned for the Assessment Area benefiting from both the master water management and parcel specific improvements included in the Series 2006 Project. The Developer WCI Communities, Inc. (NYSE: WCI) has been creating amenity-rich, master-planned lifestyle communities since WCI caters to primary, retirement, and second-home buyers in Florida, New York, New Jersey, Connecticut, Virginia, Maryland and Washington, D.C. The company offers traditional and tower home choices with prices from the low-$200,000s to more than $10 million and feature a wide array of recreational amenities. The Developer is subject to the informational and reporting requirements of the Securities Exchange Act of 1934, as amended, (the Exchange Act ) and in accordance therewith files reports, proxy statements, and other information with the Securities and Exchange Commission (the SEC ). The file number of the Developer with the SEC is No Such reports, proxy statements and other information can be inspected and copied at the Public Reference Section of the SEC in Washington, D.C., and at the SEC s regional offices in Chicago and New York City. Copies of such materials can be obtained by mail from the Public Reference Section of the SEC at prescribed rates. 46

51 The most recent Annual Report on Form 10-K of the Developer on file with the SEC and any other documents and reports filed with the SEC by the Developer subsequent to the date of such Annual Report (including Forms 10-Q, 8-K and 10-K) through and including the end of the underwriting period (as defined in SEC Rule 15c2-12) are hereby incorporated herein by reference. All documents subsequently filed by the Developer pursuant to the requirements of the Exchange Act after the date of this Limited Offering Memorandum will be available for inspection in the same manner as described above. General TAX MATTERS The Internal Revenue Code of 1986, as amended (the Code ), includes requirements which the Issuer must continue to meet after the issuance of the Series 2006 Bonds in order that interest on the Series 2006 Bonds not be included in gross income for federal income tax purposes. Examples include: the requirement that the Issuer rebate certain excess earnings on proceeds and amounts treated as proceeds of the Series 2006 Bonds to the United States Treasury; restrictions on investments of such proceeds and other amounts; and restrictions on the ownership and use of the facilities financed with the proceeds of the Series 2006 Bonds. The Issuer s failure to comply with these requirements may cause interest on the Series 2006 Bonds to be included in gross income for federal income tax purposes retroactive to their date of issuance. The Issuer has covenanted in the Indenture to take all actions required by the Code in order to maintain the exclusion from gross income for federal income tax purposes of interest on the Series 2006 Bonds. The opinion of Bond Counsel, the form of which is attached hereto as Appendix C, will be based upon and assume the accuracy of certain representations and certifications and is conditioned on compliance by the Issuer with such requirements, and Bond Counsel has not been retained to monitor compliance with requirements such as described above subsequent to the issuance of the Series 2006 Bonds. The Indenture does not require the Issuer to redeem the Series 2006 Bonds or to pay any additional interest or penalty in the event the interest on the Series 2006 Bonds becomes taxable. In the opinion of Bond Counsel, assuming continuing compliance by the Issuer with the tax covenants referred to above, under existing statutes, regulations, rulings and court decisions, interest on the Series 2006 Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, such interest is taken into account in determining adjusted current earnings for purposes of computing the alternative minimum tax imposed on corporations under the Code. Bond Counsel is further of the opinion that the Series 2006 Bonds and the interest thereon are exempt from taxation under the laws of the State of Florida, except as to estate taxes and taxes imposed by Chapter 220, Florida Statutes, on interest, income and profits on debt obligations owned by corporations as defined therein. Except as described above, Bond Counsel will express no opinion regarding the federal income tax consequences resulting from the ownership of, receipt or accrual of interest on, or disposition of the Series 2006 Bonds. Prospective purchasers of Series 2006 Bonds should be aware that the ownership of Series 2006 Bonds may result in other collateral federal tax consequences, including (i) the denial of a deduction of interest on indebtedness incurred or continued to purchase 47

52 or carry Series 2006 Bonds or, in the case of a financial institution, that portion of the owner s interest expense allocable to interest on a Series 2006 Bond; (ii) the reduction of the loss reserve deduction for property and casualty insurance companies by 15 percent of certain items, including interest on the Series 2006 Bonds ; (iii) the inclusion of interest on Series 2006 Bonds in earnings of certain foreign corporations doing business in the United States for purposes of a branch profits tax; (iv) the inclusion of interest on Series 2006 Bonds in the passive income subject to federal income taxation of certain Subchapter C earnings and profits at the close of the taxable year; and (v) interest on the Series 2006 Bonds is taken into account in determining whether recipients of Social Security and Railroad Retirements benefits must include a portion of those benefits in gross income. During recent years, legislative proposals have been introduced in Congress, and in some cases enacted, that altered certain federal tax consequences resulting from the ownership of obligations that are similar to the Series 2006 Bonds. In some cases, these proposals have contained provisions that altered these consequences on a retroactive basis. Such alteration of federal tax consequences may have affected the market value of obligations similar to the Series 2006 Bonds. From time to time, legislative proposals are pending which could have an effect on both the federal tax consequences resulting from ownership of the Series 2006 Bonds and their market value. No assurance can be given that additional legislative proposals will not be introduced or enacted that would or might apply to, or have an adverse effect upon, the Series 2006 Bonds. The Internal Revenue Service (the IRS ) has established an on-going program to audit taxexempt obligations to determine whether interest on such obligations is includiblein gross income for federal income tax purposes. Bond Counsel cannot predict whether the IRS will commence an audit of the Series 2006 Bonds. Owners of the Series 2006 Bonds are advised that, if the IRS does audit the Series 2006 Bonds, under current IRS procedures, at least during the early stages of an audit, the IRS will treat the Issuer as the taxpayer, and the owners of the Series 2006 Bonds may have limited rights to participate in such procedure. The commencement of audit could adversely affect the market value and liquidity of the Series 2006 Bonds until the audit is concluded, regardless of the ultimate outcome. Tax Treatment of Original Issue Discount The Series 2006A Bonds were sold at prices less than the stated principal amounts thereof (the Discount Bonds ). The difference between the principal amount of the Discount Bonds and the initial offering price to the public, excluding bond houses and brokers, at which price a substantial amount of such Discount Bonds of the same maturity was sold, is original issue discount. Original issue discount represents interest which is excluded from gross income for federal income tax purposes to the same extent and subject to the same considerations discussed above as to stated interest on the Series 2006 Bonds. Such interest is taken into account for purposes of determining the alternative minimum tax liability, and other collateral tax consequences, although the owner of such Discount Bonds may not have received cash in such year. Original issue discount will accrue over the term of a Discount Bond at a constant interest rate compounded on interest payment dates. A purchaser who acquires a Discount Bond in the initial offering at a price equal to the initial offering price thereof will be treated as receiving an amount of interest excludable from gross income for federal income tax purposes equal to the original issue discount accruing during the period such purchaser holds such Discount Bond and will increase its adjusted basis in such Discount Bond by the amount of such accruing discount for purposes of determining taxable gain or loss on the sale or 48

53 other disposition of such Discount Bond. The federal income tax consequences of the purchase, ownership and redemption, sale or other disposition of Discount Bonds which are not purchased in the initial offering price may be determined according to rules which differ from those described above. Prospective purchasers of Discount Bonds should consult their own tax advisors with respect to the precise determination for federal income tax purposes of interest accrued upon sale, redemption or the disposition of Discount Bonds and with respect to the state and local tax consequences of owning and disposing of Discount Bonds. AGREEMENT BY THE STATE Under the Special Act, the State of Florida pledges to the holders of any bonds issued thereunder, including the Series 2006 Bonds, that it will not limit or alter the rights of the Issuer to own, acquire, construct, reconstruct, improve, maintain, operate or furnish the projects or to levy and collect the taxes, assessments, rentals, rates, fees and other charges provided for in the Special Act and to fulfill the terms of any agreement made with the holders of such bonds and that it will not in any way impair the rights or remedies of such holders. LEGALITY FOR INVESTMENT The Special Act provides that bonds issued by the Issuer are legal investments for savings banks, banks, trust companies, insurance companies, executors, administrators, trustees, guardians, and other fiduciaries, and for any board, body, agency, instrumentality, county, municipality or other political subdivision of the State of Florida, and constitute securities that may be deposited by banks or trust companies as security for deposits of state, county, municipal or other public funds, or by insurance companies as required or voluntary statutory deposits. SUITABILITY FOR INVESTMENT This offering is limited by the Underwriter to accredited investors within the meaning of the rules of the Florida Department of Financial Services. This limitation of the initial offering to accredited investors does not denote restrictions on transfer in any secondary market for the Series 2006 Bonds. Investment in the Series 2006 Bonds poses certain economic risks. Prospective investors in the Series 2006 Bonds should have such knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of an investment in the Series 2006 Bonds and have the ability to bear the economic risks of such prospective investment, including a complete loss of such investment. Although no dealer, broker, salesman or other person has been authorized by the Issuer or the Underwriter to give any information or make any representations, other than those contained in this Limited Offering Memorandum, and, if given or made, such other information or representations must not be relied upon as having been authorized by either of the foregoing, each prospective investor will be given access to such additional information, including the benefit of a site visit of the Issuer and the opportunity to ask questions of the Developer as such investor deems necessary in order to make an informed decision with respect to the purchase of the Series 2006 Bonds. Prospective investors are encouraged to request such additional information, visit the Issuer and ask such questions. Such requests should be directed to: 49

54 Doug Sealy Managing Director Prager, Sealy & Co., LLC 200 South Orange Avenue, Suite 1900 Orlando, Florida Telephone: (407) DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS Section , Florida Statutes, and the regulations promulgated thereunder (the Disclosure Act ) requires that the Issuer make a full and fair disclosure of any bonds or other debt obligations that it has issued or guaranteed and that are or have been in default as to principal or interest at any time after December 31, 1975 (including bonds or other debt obligations for which it has served on as a conduit issuer such as industrial development or private activity bonds issued on behalf of private businesses). The Issuer is not and has not ever been in default as to principal and interest on its bonds or other debt obligations. ENFORCEABILITY OF REMEDIES The remedies available to the owners of the Series 2006 Bonds upon an event of default under the Resolution are in many respects dependent upon judicial actions, which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, including the federal bankruptcy code, the remedies specified by the Resolution and the Series 2006 Bonds may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Series 2006 Bonds will be qualified, as to the enforceability of the remedies provided in the various legal instruments, by limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors and enacted before or after such delivery. LITIGATION There is no litigation of any nature now pending or threatened restraining or enjoining the issuance, sale, execution or delivery of the Series 2006 Bonds, or in any way contesting or affecting the validity of the Series 2006 Bonds or any proceedings of the Issuer taken with respect to the issuance or sale thereof, or the pledge or application of any moneys or security provided for the payment of the Series 2006 Bonds, or the existence or powers of the Issuer. NO RATING No application for a rating has been made to any rating agency. FINANCIAL STATEMENTS Audited financial statements of the Issuer for the period ending September 30, 2005 are included herein as Appendix E. 50

55 VALIDATION The Series 2006 Bonds were validated and confirmed by a final judgment of the Circuit Court of the State of Florida in and for the County on September 26, The time for taking an appeal from such judgment has expired without an appeal being taken. General CONTINUING DISCLOSURE The Act requires that financial statements of the Issuer be audited by an independent certified public accountant at least once a year. The current fiscal year of the Issuer commences October 1 and the audited financial statements are generally available within 180 days after the end of each fiscal year. The Act further provides that the Issuer s budget for the following fiscal year be adopted prior to October 1 of each year. Meetings of the Issuer s Board of Supervisors are open to the public, and a proposed schedule of meetings for the year is published at the beginning of each year. Notice of meetings is published and the agenda for meetings are made available to the public prior to each meeting. The Issuer and the Developer has covenanted in the Continuing Disclosure Agreement for the benefit of Bondholders in accordance with Rule 15(c)(2)(12)(b)(5) of the Securities and Exchange Commission to provide certain financial information and operating data relating to the Issuer and the Developer by certain dates prescribed in the Continuing Disclosure Agreement (the Annual Report ) and to provide notices of the occurrence of certain enumerated material events. The Annual Report will be filed by the Issuer or a dissemination agent on behalf of the Issuer with each Nationally Recognized Municipal Securities Information Repository ( NRMSIR ). The notices of material events will be filed by the Issuer or a dissemination agent on behalf of the Issuer with the Municipal Securities Rulemaking Board (and with each NRMSIR). The specific nature of the information to be contained in the Annual Report and the notices of material events is set forth in Appendix D Continuing Disclosure Agreement. Compliance with Prior Undertakings The Issuer has undertaken continuing disclosure obligations in prior continuing disclosure agreements in connection with certain of its outstanding bond issues, which include the requirement that the Issuer file audited financial statements (each, an Audit ) and other information (each, an Annual Report ) by the dates specified in the prior continuing disclosure agreements. All of the prior continuing disclosure agreements require filing of the Annual Report with the NRMSIRs by March 31 of each year. However, certain of the prior continuing disclosure agreements require the Issuer to file its Audit for the fiscal year then ended with the NRMSIRs by March 31 of the following year and certain of the prior continuing disclosure agreements require the Issuer to file its Audit for the fiscal year then ended with the NRMSIRs no later than 365 days following the fiscal year end. Under Florida law, the Issuer is required to complete its Audit for the fiscal year then ended within 365 days of the end of such fiscal year. In calendar year 2005, the Issuer failed to file with the NRMSIRs its Audit and Annual Report for the fiscal year ended September 30, 2004 within the time frames required by the prior continuing disclosure agreements. The Annual Report for the fiscal year 51

56 ended September 30, 2004 was filed with the NRMSIRs on September 6, The Audit for the fiscal year ended September 30, 2004 was filed with the NRMSIRs on November 2, In calendar year 2006, although the Issuer filed its Annual Report for the fiscal year September 30, 2005 within the time frames required by the prior continuing disclosure agreements, it failed to file its Audit for the fiscal year ended September 30, 2005 with the NRMSIRs by March 31, as required by certain of the prior continuing disclosure agreements. The Issuer anticipates filing its Audit for the fiscal year ended September 30, 2005 with the NRMSIRs by October 16, The Issuer believes that the failure to make the required filings with the NRMSIRs was not due to any conscious disregard for its duties and responsibilities, but resulted from, among other items, turnover in key management staff, a change in financial systems software of the District Manager and the limited time frame for furnishing such information to the NRMSIRS set forth in certain of the prior continuing disclosure agreements. The Issuer has determined to commence the process of seeking to amend certain of the prior continuing disclosure agreements as necessary to extend the time frame for providing its Audit to a date no later than 365 days following the Issuer s fiscal year end, although there is no assurance such amendments will be implemented. UNDERWRITING Prager, Sealy & Co., LLC (the Underwriter ) has agreed pursuant to a contract with the Issuer, subject to certain conditions, to purchase the Series 2006 Bonds from the Issuer at a purchase price of $8,941, (representing the $9,095, aggregate par amount of the Series 2006 Bonds, less original issue discount on the Series 2006A Bonds of $17, and less $136, of aggregate Underwriter s discount), plus accrued interest from October 1, The Underwriter s obligations are subject to certain conditions precedent and the Underwriter will be obligated to purchase all the Series 2006 Bonds if any are purchased. The Series 2006 Bonds may be offered and sold to certain dealers, banks and others at prices lower than the initial offering prices, and such initial offering prices may be changed from time to time by the Underwriter. Until February, 2005, Rhonda Mossing was an employee of Severn Trent Environmental Services, Inc., the District Manager of the Issuer. In April, 2005 Ms. Mossing, acting through Mossing Management Consulting Services, Inc. ( MMCS ), was engaged by WCI to assist in compiling and reviewing financial and statistical information required to structure the Bonds issued by the Issuer in connection with the Parkland Golf and Country Club Assessment Area and the Parkland Golf and Country Club Assessment Area A. Effective October 1, 2005, Ms. Mossing became an employee of the Underwriter, Prager, Sealy & Co., LLC. EXPERTS The references herein to CH2M Hill, as the Issuer s Consulting Engineers, have been approved by said firm, and the Consulting Engineers Report, included in Appendix A to this Limited Offering Memorandum, should be read in its entirety for complete information with respect to the subjects discussed therein. 52

57 LEGAL MATTERS Certain legal matters related to the authorization, sale and delivery of the Series 2006 Bonds are subject to the approval of Ruden, McClosky, Smith,Schuster &Russell,P.A., Fort Lauderdale, Bond Counsel. The Underwriter is being represented by Akerman Senterfitt, Orlando, Florida. Akerman Senterfitt will not render an opinion with respect to the matters contained in this Limited Offering Memorandum. Certain legal matters will be passed upon for the Issuer by Ruden, McClosky, Smith, Schuster & Russell, P.A., Fort Lauderdale, Florida as Disclosure Counsel to the Issuer. Ruden, McClosky, Smith, Schuster & Russell, P.A., Fort Lauderdale, in its capacity as bond counsel to the Issuer, has not undertaken to verify and therefore expresses no opinion as to the accuracy, completeness or sufficiency of any of the information or statements contained herein or in any appendices hereto, other than to the extent of its supplemental opinion to be delivered in connection with the issuance of the Series 2006 Bonds relating to certain statements herein summarizing certain provisions of the Indenture, the Series 2006 Bonds, the Code and applicable Florida law. Certain legal matters will be passed upon by Billing, Cochran, Heath, Lyles, Mauro & Anderson, P.A., Fort Lauderdale, Counsel to the Issuer. Certain legal matters will be passed upon for the Trustee by its counsel, Holland & Knight, LLP, Miami, Florida. Ruden, McClosky, Smith, Schuster & Russell, P.A. has also represented the Developer in certain matters relating to the Development. MISCELLANEOUS Any statements made in this Limited Offering Memorandum involving matters of opinion or estimates, whether or not expressly so stated, are set forth as such and not as representations of fact, and no representations are made that any of the estimates will be realized. The references herein to the Series 2006 Bonds and other documents referred to herein are brief summaries of certain provisions thereof. Such summaries do not purport to be complete and reference is made to such documents for full and complete statements of such provisions. Contemporaneously with the issuance of the Series 2006 Bonds, Bond Counsel will deliver its opinion to the effect that the summary of the Indenture, the Series 2006 Bonds, the Continuing Disclosure Agreement and the provisions of the Code are fair and accurate summaries of such provisions and the President of the Issuer will furnish a certificate to the effect that nothing has come to his attention that would lead him to believe that this Limited Offering Memorandum (excluding the information under the caption DESCRIPTION OF THE SERIES 2006 BONDS Book-Entry Only ), as of its date and as of the date of delivery of the Series 2006 Bonds, contains an untrue statement of a material fact or omits to state a material fact which should be included herein for the purposes for which the Limited Offering Memorandum is to be used, or which is necessary to make the statements herein, in the light of the circumstances under which they were made, not misleading. This Limited Offering Memorandum has been prepared in connection with the sale of the Series 2006 Bonds and may not be reproduced or used, as a whole or as a part, for any purpose. This Limited Offering Memorandum is not to be construed as a contract with the purchaser or the Holders or Beneficial Owners of any of the Series 2006 Bonds. 53

58 Issuer. This Limited Offering Memorandum has been duly authorized, executed and delivered by the NORTH SPRINGS IMPROVEMENT DISTRICT By: /s/ Salvatore Mendolia President, Board of Supervisors 54

59 APPENDIX A CONSULTING ENGINEERS REPORT

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119 SUPPLEMENT TO MASTER ENGINEER S REPORT-- ASSESSMENT AREAS Prepared By: CH2MHILL Heron Bay Blvd., Suite 106 Coral Springs, FL Tel Prepared For: North Springs Improvement District Northwest 11 th Manor Coral Springs, FL Tel September 15, 2006 Updated October 12, 2006

120 CONTENTS Introduction... 1 Update to Summary of Construction Costs... 2 Update to Recommendations... 3 H.B.N. Assessment Area Proposed Improvements... 3 Update to Permits and Construction Status... 5 Update to Apportionment of Estimated Total Costs of Series 2006 Project... 6 Conclusions... 9 TABLES Page

121 Introduction The purpose of this report is to supplement the Master Engineer s Report Assessment Areas prepared by CH2MHill dated August 4, 2005, as updated October 5, 2005, October 20, 2005 and December 16, 2005 (the Master Report ) previously approved by the North Springs Improvement District (the District ). All capitalized terms not otherwise defined herein shall have the meaning ascribed thereto in the Master Report. Among other matters, the Master Report detailed various assessable improvements (as defined in the Special Act establishing the District) for the benefit of three distinct assessment areas within the District s boundaries (collectively, the Assessment Areas ), designated as Heron Bay North Assessment Area (the HBN Assessment Area ), Parkland Golf and Country Club Assessment Area A (the PG&CC Assessment Area A ) and the Parkland Golf and Country Club Assessment Area (the PG&CC Assessment Area ), respectively. The Master Report also provided for an apportionment of the estimated total cost of the assessable improvements described in the Master Report to the specially benefited land within the applicable Assessment Areas. Subsequent to the date of the Master Report, the District issued its special assessment bonds in various series to finance the assessable improvements described in the Master Report related to the PG&CC Assessment Area A and the PG&CC Assessment Area (the PG&CC Improvements ). The PG&CC Improvements did not include assessable improvements specially benefiting the HBN Assessment Area. The District now desires to issue its special assessment bonds in two series, referred to herein as the Series 2006A Bonds and the Series 2006B Bonds, respectively, and collectively, as the Series 2006 Bonds, to finance certain assessable improvements for the special benefit of certain lands in the HBN Assessment Area. There follows in this supplement to the Master Report: (a) a further update to the Master Report of the description of the assessable improvements needed to serve the HBN Assessment Area (collectively, the Series 2006 Project ), including the costs and the status of permitting thereof; and (b) a further update to the Master Report of the apportionment of the estimated total cost, including but not limited to financing costs, of the Series 2006 Project to the specially benefited land in the HBN Assessment Area. The improvements included in the Series 2006 Project do not specially benefit any lands in the PG&CC Assessment Area A or the PG&CC Assessment Area. Except to the extent expressly supplemented hereby, the Master Report remains in effect. 1

122 Update to Summary of Construction Costs The estimated costs reflected on page 8 of the Master Report for the HBN Assessment Area are revised as follows: HBN Assessment Area (see A-7) $13,401,542 (includes water management and other public infrastructure costs) 2

123 Update to Recommendations The following updates the section of the Master Report entitled Recommendations--- H.B.N. Assessment Area Proposed Improvements (pages 11 and 12 of the Master Report). The improvements listed below all fall within the same categories of improvements listed in the Master Report for the HBN Assessment Area. HBN Assessment Area Series 2006 Project The proposed improvements included in the Series 2006 Project for the HBN Assessment Area are listed below. Certain of these improvements, as reflected on Table 1 to this supplemental report, provide special benefit to all assessable property in the HBN Assessment Area. Certain other of these improvements, as reflected on Table 1 to this supplemental report, provide special benefit to less than all of the assessable property in the H.B.N. assessment area, as more fully described in the section of this report entitled Update to Apportionment of Estimated Total Cost of Series 2006 Project. A written agreement to be entered into between the District and the developer of the land within the HBN Assessment Area (the Developer ) will provide that to the extent proceeds of bonds issued by the District to finance the Series 2006 Project are insufficient to fund the actual cost of the improvements included therein as a result of cost increases or otherwise, the Developer will be required to complete such improvements and convey the same to the District. 1. Clearing and grubbing of all project lands included within the project drainage system and areas required for placement of suitable material stockpiles. 2. Waterway and lake construction required as components of the project drainage systems to a depth of (-)5.00 NGVD. 3. Culverts / interconnects and bank shaping construction. 4. Project acceptance and cleanup. 5. Proposed improvements include acquisition of previously constructed landscaping, lighting, sidewalks and power differential improvements located on public properties. 6. Waterway and lake construction required as components of the project drainage systems to a depth below (-)5.00 NGVD % of the construction of Nob Hill Road (rural cross section, 2 lane embankment and surface with curbing) from the existing Nob Hill Road to County Line Road, a distance of feet, 8. Landscaping, irrigation and berm construction adjacent to major public roadways. 3

124 9. Sidewalks and street lighting construction adjacent to major public roadways. 10. Construction of County Line Road (rural cross section, two (2) lanes embankment and surface with curbing) from Nob Hill Road to the western limits of Plat 3, a distance of 7,605 feet. 11. Projected costs for certain of the above-listed improvements include the repayment of Developer advances for previously constructed surface water management facilities and roadways located on public properties. 4

125 Update to Permits and Construction Status The following updates the section of the Master Report entitled Permits (page 15 of the Master Report): All permits, consents or licenses required by governmental authorities in order to construct the Series 2006 Project have been obtained, other than certain Broward County construction permits required for County Line Road, which may be obtained in the ordinary course. The Series 2006 Project comprises substantially all of the master public infrastructure needed to serve the HBN Assessment Area, other than water and sewer utility lines, which will be provided by the District through arrangements with the Developer. Construction of the Series 2006 Project commenced in February, 2005 and the Series 2006 Project is expected to be substantially complete by December, As of August 31, 2006, the Series 2006 Project is approximately 30% complete. 5

126 Update to Apportionment of Estimated Total Costs of Series 2006 Project The following updates the section of the Master Report entitled Apportionment of Estimated Total Costs of Improvements Heron Bay North Assessment Area Master Water Management Improvements and Parcel Specific Assessable Improvements (pages 19 through 22 of the Master Report) to reflect an increase in the planned number of residential units in the HBN Assessment Area to 852 (from 800 residential units reflected in the Master Report) and the current estimated total cost of the Series 2006 Project, including estimated financing costs associated with the Series 2006 Bonds. The apportionment methodology in the Master Report allocated the benefit from the improvements included in the Series 2006 Project on an equal residential unit (ERU) basis, so that all residential units in the HBN Assessment Area are allocated benefit on an ERU unit basis. Accordingly, all planned residential units in the HBN Assessment Area are assigned an ERU factor of 1. The total par amount of Series 2006 Bonds to be issued is $9,095,000, which will fund a total of approximately $7,728, in estimated construction costs of the Series 2006 Project (which includes repayment of advances received by the District to defray certain construction costs of the Series 2006 Project incurred prior to issuance of the Series 2006 Bonds), plus financing costs, including funding of necessary reserves and paying costs of issuance of the Series 2006 Bonds. The Series 2006 Bonds will be issued as Series 2006A Bonds and Series 2006B Bonds. The Series 2006A Bonds will be issued in the par amount of $6,930,000 and will have principal amortized over a period of twenty (20) years, with interest due and payable semiannually. The Series 2006B Bonds will be issued in the par amount of $2,165,000 and are expected to have principal due on May 1, 2014, with interest payable semi-annually. The District will levy and collect annual installments of non-ad valorem special assessments (the Series 2006 Special Assessments ) to pay debt service on the Series 2006 Bonds when due. The portion of the Series 2006 Special Assessments securing the Series 2006B Bonds will be due and payable in full, together with accrued interest, upon initial transfer of property ownership or the date(s) of maturity, whichever is earlier, for a given residential unit. The Series 2006A Bonds will contain two (2) components based on the allocation of the debt service for the Series 2006A Bonds to different areas of the HBN Assessment Area. Certain of the improvements included in the Series 2006 Project (as shown on Table 1 of this supplemental report) are master water management improvements that will benefit all of the developable property with the HBN Assessment Area. Accordingly, each of the currently planned 852 residential units within the HBN Assessment Area will benefit equally from these master water management improvements and each unit will pay 1/852nd of the total annual debt service requirement for the Series 2006A Bonds, plus costs of discounts and collections (the Series 2006A-I Assessments ), estimated at the rate of $400 per unit for the master water management improvements included in the Series 2006 Project. 6

127 Certain of the improvements included in the Series 2006 Project (as shown on Table 1 of this supplemental report) are parcel specific improvements that will benefit only those properties in the HBN Assessment Area for which 425 residential units are currently planned. Accordingly, these 425 residential units in the HBN Assessment Area will additionally pay 1/425 th of the total annual debt service requirement for the Series 2006A Bonds, plus costs of discounts and collections (the Series 2006A-II Assessments ), estimated at the rate of $600 per unit for the parcel specific improvements included in the Series 2006 Project. SERIES 2006A BONDS/ASSESSMENTS Series 2006A-I Assessments Per Unit Series 2006A-II Assessments Per Unit Total Series 2006A Assessments Per Unit Heron Bay North Assessable Units Area $400 $0 $400 Area $400 $600 $1,000 Totals 852 Until maturity, the portion of the Series 2006 Special Assessments levied to secure the Series 2006B Bonds are as set forth in Table 4 to this supplemental report, except for those units expected to be sold to end-users as of the date of closing of the Series 2006 Bonds, with respect to which the Developer will contribute portions of the Series 2006 Project as hereafter described. The tables related to the HBN Assessment Area in Appendix A to the Master Report are supplemented, and, as applicable, superseded by Tables 1 through 5 attached hereto, which reflect the current cost estimates for the Series 2006 Project, together with related current estimated financing costs of the Series 2006 Bonds, the current development plan for the HBN Assessment Area and the resulting allocation of the related par debt associated with the Series 2006 Bonds. The maximum amount of the Series 2006 Special Assessments levied on each of the various specially benefited properties in the HBN Assessment Area pursuant to the Master Report is not exceeded in connection with the apportionment of the estimated total cost of the Series 2006 Project reflected in the attached tables. To ensure that residential units sold to end-users as of the date of issuance of the Series 2006 Bonds will not be subject to the Series 2006 Special Assessments securing the Series 2006B Bonds, the Developer will contribute to the District completed components of the Series 2006 Project having a value sufficient to prepay a portion of the costs of the Series 2006 Project specially benefiting such residential units (the Developer Contribution ). The value of the Developer Contribution is currently expected to be in the approximate amount of $121,603.87, based on the assumption that 102 units will be sold to end-users in the HBN Assessment Area as of October 31, 2006 ($1, x 102 units). The remaining ERUs in the Assessment Area (as shown in Table 4) will be subject to the Series 2006 Special Assessments securing the Series 2006B Bonds, which Series 2006 Special 7

128 Assessments are expected to be prepaid at the time property subject thereto is sold by the Developer to retail end users, builders or developers. Taking into account the Developer Contribution associated with the number of residential units expected to be sold to end-users in the Assessment Area as of October 31, 2006, Series 2006 Special Assessments securing the Series 2006B Bonds are expected to be allocated to 325 residential units currently planned for the HBN Assessment Area benefiting only from the master water management improvements included in the Series 2006 Project and to 425 residential units currently planned for the HBN Assessment Area benefiting from both the master water management and parcel specific improvements included in the Series 2006 Project. Should more ERUs be developed than the number of ERUs, by area, currently expected in this supplemental report, then the per-eru methodology of the Master Report, as summarized herein, will be re-applied and the Series 2006 Special Assessments pro-rated accordingly. This pro-ration will produce no less than the amount of annual debt service sufficient to repay the Series 2006 Bonds. Correspondingly, should fewer ERUs be developed than currently expected, the Developer, its successors and assigns will be obligated to make a true-up payment to prepay the portion of Series 2006 Special Assessments described in this supplemental report that would have been levied against any and all of those ERUs that were contemplated but not developed. 8

129 Conclusions It is our opinion that (a) the Series 2006 Project complies with the requirements of the City of Parkland and Broward County; and (b) the Series 2006 Project provides special benefit to the HBN Assessment Area, is needed for the development of the lands within the HBN Assessment Area and constitutes assessable improvements within the meaning of the Special Act establishing the District for which the Series 2006 Special Assessments are fairly and reasonably allocated. 9

130 TABLES

131 TABLE 1 NORTH SPRINGS IMPROVEMENT DISTRICT HERON BAY NORTH ASSESSMENT AREA ESTIMATED CONSTRUCTION COSTS INFRASTRUCTURE PROGRAM MASTER WATER MANAGEMENT IMPROVEMENTS PARCEL SPECIFIC IMPROVEMENTS (1) TOTAL ESTIMATED COSTS* Lakes $ 2,686,130 $ 2,686,130 Major Culverts $ 985,600 $ 985,600 Roadways $ 5,156,603 $ 5,156,603 Landscape Buffers $ 4,177,057 $ 4,177,057 Sidewalks $ 396,152 $ 396,152 TOTAL ESTIMATED COSTS $ 8,828,333 $ 4,573,209 $ 13,401,542 (1) Parcel Specific Improvements benefit only the 425 residential units in Area 2 of the Heron Bay North Special Assessment Area. *Excludes financing costs

132 TABLE 2 HERON BAY NORTH ASSESSMENT AREA APPORTIONMENT OF ESTIMATED COSTS OF IMPROVEMENTS POD PRODUCT TOTAL ASSESSABLE LOTS APPORTIONMENT OF ESTIMATED COST OF WATER MANAGEMENT IMPROVEMENTS APPORTIONMENT OF PARCEL SPECIFIC IMPROVEMENTS APPORTIONMENT OF TOTAL ESTIMATED COSTS OF IMPROVEMENTS AREA I: HBN POD #1 Cypress Pointe 6-plex 240 $ 2,486,854 $ 2,486,854 HBN POD #2 Sable Pointe 95 $ 984,380 $ 984,380 Banyan Isles 92 $ 953,294 $ 953,294 TOTAL AREA I 427 $ 4,424,528 $ 4,424,528 AREA 2: HERON BAY NORTH PODS 3&4: HBN POD # $ 1,191,618 $ 1,237,457 $ 2,429,074 HBN POD # $ 839,313 $ 871,600 $ 1,710,913 HBN POD # $ 652,799 $ 677,911 $ 1,330,710 HBN POD #4 6-plex 130 $ 1,347,046 $ 1,398,864 $ 2,745,910 HBN POD # $ 373,028 $ 387,378 $ 760,406 TOTAL AREA II 425 $ 4,403,805 $ 4,573,209 $ 8,977,014 TOTAL AREAS I & II 852 $ 8,828,333 $ 4,573,209 $ 13,401,542

133 TABLE 3 HERON BAY NORTH ASSESSMENT AREA ALLOCATION OF CONSTRUCTION COSTS AND SERIES A DEBT POD TOTAL ASSESSABLE LOTS-SERIES A APPORTIONMENT OF TOTAL ESTIMATED COSTS OF IMPROVEMENTS TOTAL SERIES A ADOPTED ANNUAL ASSESSMENTS PER UNIT TOTAL SERIES A ANNUAL ASSMT REVENUES ALLOCATION OF SERIES A PAR DEBT SERIES A PAR DEBT PER UNIT AREA I: HBN POD #1 Cypress Pointe 240 $ 2,486,854 $ $96,000 $ 1,116,616 $ 4, HBN POD #2 Sable Pointe 95 $ 984,380 $ $38,000 $ 441,994 $ 4, Banyan Isles 92 $ 953,294 $ $36,800 $ 428,036 $ 4, TOTAL AREA I 427 $ 4,424,528 $170,800 $ 1,986,647 AREA 2: HERON BAY NORTH PODS 3&4: HBN POD #3 115 $ 2,429,074 $1, $115,000 $ 1,337,613 $ 11, HBN POD #3 81 $ 1,710,913 $1, $81,000 $ 942,145 $ 11, HBN POD #3 63 $ 1,330,710 $1, $63,000 $ 732,779 $ 11, HBN POD #4 130 $ 2,745,910 $1, $130,000 $ 1,512,085 $ 11, HBN POD #4 36 $ 760,406 $1, $36,000 $ 418,731 $ 11, TOTAL AREA II 425 $ 8,977,014 $425,000 $ 4,943,353 TOTAL AREAS I & II 852 $ 13,401,542 $595,800 $ 6,930,000 AMOUNT AVAILABLE FOR DEBT SERVICE (94%): $560,052 (excludes 4% for early payment discount and 2% for collection costs)

134 TABLE 4 HERON BAY NORTH ASSESSMENT AREA ALLOCATION OF SERIES A & B DEBT POD TOTAL ASSESSABLE LOTS-SERIES B ALLOCATION OF SERIES A PAR DEBT ALLOCATION OF SERIES B DEBT PROJECTED PAR AMOUNT OF TOTAL SERIES 2006 DEBT SERIES B PAR DEBT PER UNIT (1) SERIES B ADOPTED ANNUAL ASSMTS PER UNIT TOTAL ANNUAL SERIES B ASSMT REVENUE AREA I: HBN POD #1 Cypress Pointe 138 $ 1,116,616 $ 184,042 $ 1,300,658 $ 1, $ $ 9, HBN POD #2 Sable Pointe 95 $ 441,994 $ 126,695 $ 568,689 $ 1, $ $ 6, Banyan Isles 92 $ 428,036 $ 122,695 $ 550,731 $ 1, $ $ 6, TOTAL AREA I 325 $ 1,986,647 $ 433,432 $ 2,420,078 $ 21, AREA 2: HERON BAY NORTH PODS 3&4: HBN POD #3 115 $ 1,337,613 $ 468,542 $ 1,806,155 $ 4, $ $ 23, HBN POD #3 81 $ 942,145 $ 330,017 $ 1,272,162 $ 4, $ $ 16, HBN POD #3 63 $ 732,779 $ 256,680 $ 989,459 $ 4, $ $ 12, HBN POD #4 130 $ 1,512,085 $ 529,656 $ 2,041,741 $ 4, $ $ 26, HBN POD #4 36 $ 418,731 $ 146,674 $ 565,405 $ 4, $ $ 7, TOTAL AREA II 425 $ 4,943,353 $ 1,731,568 $ 6,674,922 $ 86, TOTAL AREAS I & II 750* $ 6,930,000 $ 2,165,000 $ 9,095,000 $ 108, AMOUNT AVAILABLE FOR DEBT SERVICE (100%): $ 108, (1) Includes debt service reserve fund allocation. *Assuming Developer Contribution with respect to 102 units.

135 TABLE 5 HERON BAY NORTH ASSESSMENT AREA BOND SIZING AND STRUCTURE SERIES 2006A BONDS SERIES 2006B BONDS TOTAL SERIES 2006 BONDS Sources of Funds: Bond Proceeds $ 6,930,000 $ 2,165,000 $ 9,095,000 Uses of Funds: Original Issue Discount $ 17,325 $ - $ 17,325 Reserve Fund $ 559,900 $ 54,125 $ 614,025 Capitalized Interest to 11/1/2007 $ 334,274 $ 104,927 $ 439,201 Costs of Issuance $ 121,913 $ 38,087 $ 160,000 Underwriter s Discount $ 103,950 $ 32,475 $ 136,425 Project Funds $ 5,792,638 $ 1,935,386 $ 7,728,024 $ 6,930,000 $ 2,165,000 $ 9,095,000 Coupon Rate 5.2% 5.0% No. of Years 20 7 Final Maturity 5/1/2027 5/1/2014 Maximum Annual Debt Service* $559,900 $108,250 $668,150 Annual Net Assessment Revenues $560,052 $108,296 $668,348 *Series B Bonds are amortized as interest only, semi-annually, with a balloon payment due on 5/1/2014.

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137 APPENDIX B FORM OF THE INDENTURE

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139 TABLE OF CONTENTS PAGE ARTICLE I DEFINITIONS... 4 MASTER TRUST INDENTURE between NORTH SPRINGS IMPROVEMENT DISTRICT and WACHOVIA BANK, NATIONAL ASSOCIATION, As Trustee Dated as of December 1, 2005 relating to NORTH SPRINGS IMPROVEMENT DISTRICT (BROWARD COUNTY, FLORIDA) SPECIAL ASSESSMENT BONDS (Various Assessment Areas) ARTICLE II THE BONDS SECTION Issue of Bonds...23 SECTION Details of Bonds...23 SECTION Execution and Form of Bonds...24 SECTION Authentication...24 SECTION Registration and Registrar...25 SECTION Mutilated, Destroyed, Lost or Stolen Bonds...25 SECTION Temporary Bonds...26 SECTION Cancellation and Destruction of Surrendered Bonds...26 SECTION Registration, Transfer and Exchange...26 SECTION Persons Deemed Owners...27 SECTION Pari Passu Obligations Under Credit Agreements...27 SECTION Qualification for The Depository Trust Company...27 SECTION Credit Enhancement...29 SECTION Special Obligations...29 SECTION Tax Status of Bonds...29 SECTION Bond Anticipation Notes...29 ARTICLE III ISSUE OF BONDS SECTION Issue of Bonds...31 SECTION Disposition of Proceeds and Other Funds...32 SECTION Additional Requirements for Refunding Bonds...33 ARTICLE IV PROJECT FUND; COSTS OF ISSUANCE FUND SECTION Project Fund...34 SECTION Payments From Project Fund...34 SECTION Costs of Issuance Fund...35 ARTICLE V LIEN OF INDENTURE; ESTABLISHMENT AND APPLICATION OF FUNDS AND ACCOUNTS SECTION Lien of Indenture...36 SECTION Funds and Accounts Relating to the Bonds...36 SECTION Revenue Fund and Series Revenue Accounts...37 SECTION Debt Service Fund and Series Debt Service Funds and Accounts.37 SECTION Drawings on Credit Facility...40 SECTION Procedure When Funds Are Sufficient to Pay All Bonds...40 SECTION Trust Funds. All amounts on deposit in Series Funds and Series Accounts for the benefit of a Series of Bonds shall:...40 (i) ARTICLE VI SECURITY FOR AND INVESTMENT OR DEPOSIT OF FUNDS SECTION Deposits and Security...42 SECTION Investment or Deposit of Funds...42 SECTION Valuation of Funds...43 ARTICLE VII REDEMPTION AND PURCHASE OF BONDS SECTION Redemption Generally...44 SECTION Notice of Redemption...44 SECTION Payment of Redemption Price...45 SECTION Purchase of Bonds of a Series...46 ARTICLE VIII COVENANTS OF THE ISSUER SECTION Power to Issue Bonds and Create Lien SECTION Payment of Principal and Interest on Bonds...48 SECTION Pledged Revenues SECTION Method of Collection...48 SECTION Delinquent Assessments...49 SECTION Sale of Tax Certificates and Issuance of Tax Deeds; Foreclosure of Assessment Liens...49 SECTION Construction to be on District Lands...50 SECTION Operation, Use and Maintenance...50 SECTION Observance of and Compliance with Valid Requirements...50 SECTION Payment of Operating or Maintenance Costs by State or Others...51 SECTION Use of Revenues for Authorized Purposes Only...51 SECTION Books and Records...51 SECTION Observance of Accounting Standards...51 SECTION Employment of Certified Public Accountant...51 SECTION Establishment of Fiscal Year, Annual Budget...51 SECTION Employment of Consulting Engineer...52 SECTION Audit Reports...52 SECTION Information to Be Filed with Trustee...52 SECTION Covenant Against Sale or Encumbrance...52 SECTION No Loss of Lien on Pledged Revenues...52 SECTION Compliance With Other Contracts and Agreements...53 SECTION Issuance of Additional Obligations...53 SECTION Extension of Time for Payment of Interest Prohibited...53 SECTION Further Assurances...53 SECTION Investments and Use of Proceeds to Comply with Internal Revenue Code of 1986, as amended SECTION Corporate Existence and Maintenance of Properties...54 SECTION Continuing Disclosure SECTION Arbitrage Rebate Covenants...54 SECTION Insurance ARTICLE IX EVENTS OF DEFAULT AND REMEDIES SECTION Events of Default Defined...56 SECTION No Acceleration...56 SECTION Legal Proceedings by Trustee...57 SECTION Discontinuance of Proceedings by Trustee...57 SECTION Bondholders May Direct Proceedings...57 SECTION Limitations on Actions by Bondholders SECTION Trustee May Enforce Rights Without Possession of Bonds...58 SECTION Remedies Not Exclusive...58 SECTION Delays and Omissions Not to Impair Rights...58 SECTION Application of Moneys in Event of Default...58 SECTION Trustee s Right to Receiver; Compliance with Act...59 SECTION Trustee and Bondholders Entitled to all Remedies under Act...59 SECTION Credit Facility Issuer s Rights Upon Events of Default...59 SECTION No Cross Default...60 ARTICLE X THE TRUSTEE; THE PAYING AGENT AND REGISTRAR SECTION Acceptance of Trust...61 SECTION No Responsibility for Recitals...61 SECTION Trustee May Act Through Agents; Answerable Only for Willful Misconduct or Negligence...61 SECTION Compensation and Indemnity...61 SECTION No Duty to Renew Insurance...61 SECTION Notice of Default; Right to Investigate...61 SECTION Obligation to Act on Defaults...62 SECTION Reliance by Trustee...62 SECTION Trustee May Deal in Bonds...62 SECTION Construction of Ambiguous Provisions...62 SECTION Resignation of Trustee...62 SECTION Removal of Trustee...63 SECTION Appointment of Successor Trustee...63 SECTION Qualification of Successor Trustee SECTION Instruments of Succession...64 SECTION Merger of Trustee...64 SECTION Extension of Rights and Duties of Trustee to Paying Agent and Registrar...64 SECTION Resignation of Paying Agent or Registrar...64 SECTION Removal of Paying Agent or Registrar...65 SECTION Appointment of Successor Paying Agent or Registrar...65 SECTION Qualifications of Successor Paying Agent or Registrar...65 SECTION Judicial Appointment of Successor Paying Agent or Registrar...65 SECTION Acceptance of Duties by Successor Paying Agent or Registrar...66 SECTION Successor by Merger or Consolidation...66 (ii) B-1 (iii)

140 ARTICLE XI ACTS OF BONDHOLDERS; EVIDENCE OF OWNERSHIP OF BONDS SECTION Acts of Bondholders; Evidence of Ownership of Bonds...67 ARTICLE XII AMENDMENTS AND SUPPLEMENTS SECTION Amendments and Supplements Without Bondholders Consent...68 SECTION Amendments With Bondholders Consent SECTION Trustee Authorized to Join in Amendments and Supplements; Reliance on Counsel...69 SECTION Credit Facility Issuer as Owner...69 ARTICLE XIII DEFEASANCE SECTION Defeasance SECTION Moneys Held in Trust...73 ARTICLE XIV MISCELLANEOUS PROVISIONS SECTION Limitations on Recourse...74 SECTION Payment Dates...74 SECTION No Rights Conferred on Others...74 SECTION Illegal Provisions Disregarded...74 SECTION Substitute Notice...74 SECTION Notices...74 SECTION Controlling Law...75 SECTION Successors and Assigns...75 SECTION Headings for Convenience Only...75 SECTION Counterparts...75 SECTION Appendices and Exhibits...75 EXHIBIT A Form of Bond... A-1 THIS MASTER TRUST INDENTURE dated as of December 1, 2005 (the Master Indenture ) is entered into by and between NORTH SPRINGS IMPROVEMENT DISTRICT (the Issuer ), a public corporation and independentspecialdistrictorganizedandexistingunderthelaws of the State of Florida, and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association dulyorganized and existing under the laws of the United States of America and having corporate trust offices in Miami, Florida (said national banking association and any bank or trust company becoming successor trustee under this Master Indenture being hereinafter referred to as the Trustee ). Except to the extent the context clearly indicates otherwise, terms defined (i.e. capitalized) in this Indenture shall have the meaning ascribed thereto herein. WITNESSETH: WHEREAS, the Issuer is a public corporationandindependentspecialdistrictofthestateof Florida, dulyorganized, created, established and existing under the provisionsofchapter , Laws of Florida, as amended and supplemented, for the purpose, among other things, of financing and managing the acquisition, construction, maintenance, andoperationofassessableimprovements authorized by the Act; and WHEREAS, the Issuer has heretofore approved the Master Engineer s Report, which describes the Assessable Improvements for each Assessment Area and the estimated costs thereof; and WHEREAS, the Issuer has heretofore approved the Master Assessment Methodology, which allocates the estimated costs of the applicable Assessable Improvements and related financing costs to the Assessment Area specially benefited thereby; and WHEREAS, the Issuer has the powerandauthorityundertheacttoissuespecialassessment bonds and to use the proceeds thereof to finance the cost of acquiring and constructing assessable improvements (as defined in the Act) and to levy and collect Special Assessments; and WHEREAS, pursuant to the Authorizing Resolution, the Issuer has found and determined that acquisition and construction of each Series Project and Additional Series Project is and will be necessary and desirable in serving the goal of the Issuer of properly managing the acquisition, construction, and operation of the Assessable Improvements specially benefiting each Assessment Area and desires to provide herein for the issuance of Bonds in various Series for the purpose financing each such Series Project and Additional Series Project; NOW, THEREFORE, THIS MASTER TRUST INDENTURE WITNESSETH: GRANTING CLAUSES (iv) That the Issuer, in consideration of the premises and acceptance by the Trustee of the trusts hereby created and the purchase and acceptance of the Bonds by the Owners, and of the sum of ten dollars ($10.00), lawful money of the United States of America, to it duly paid by the Trustee at or before the execution and delivery of this Master Indenture, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, in order to secure the 1 payment of the principal of, premium, if any, and interest on the Bonds of a Series issued hereunder according to their tenor and effect and to secure the performance and observance bythe Issuer of all of the covenants expressed or implied herein, inthesupplementalindentureauthorizingtheissuance of such Series of Bonds and in the Bonds of such Series, does hereby assign and grant a security interest in the following (herein called the Trust Estate ) to the Trustee and its successors in trust, and assigns forever, for the securing of the performance of the obligations of the Issuer herein set forth: (i) the Pledged Revenues and Pledged Funds; and (ii) any and all property of every kind or description which may from time to time hereafter be sold, transferred, conveyed, assigned, hypothecated, endorsed, deposited, pledged, mortgaged, granted or delivered to, or deposited with, the Trustee as securityfor anyseries of Bonds issued pursuant to this Master Indenture bytheissuer or anyone on its behalf or with its consent, or which pursuant to anyof theprovisionshereoforofthe Supplemental Indenture securing such Series of Bonds may come into the possession or control of the Trustee or of a lawfullyappointed receiver, as such additional security, and the Trustee ishereby authorized to receive any and all such property as and for security for the payment of such Series of Bonds and the interest and premium, if any, thereon, and to hold and applyall such propertysubject to the terms hereof, it being expressly understood and agreed that the Trust Estate established and held hereunder for Bonds of a Series shall be held separate and in trust solely for the benefit of the Owners of the Bonds of such Series, Additional Bonds of such Series and other obligations issued expressly on parity therewith and for no other Series; Issuer covenants and agrees with the Trustee, for the equal and proportionate benefit of the respective Owners from time to time of the Bonds of each respective Series, as follows: [This Space Intentionally Left Blank] TO HAVE AND TO HOLD the Trust Estate, whether now owned or held or hereafter acquired, forever; IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth (a) for the equal and proportionate benefit and security of all present and future Owners of the Bonds of a Series, without preference of any Bond of such Series over any other Bond of such Series, (b) for enforcement of the payment of the Bonds of a Series, in accordance with their termsandthetermsof this Master Indenture and the Supplemental Indenture authorizing the issuance of such Series of Bonds, and all other sums payable hereunder, under the Supplemental Indenture authorizing such Series of Bonds or on the Bonds of such Series, and (c) for the enforcement of and compliance with the obligations, covenants and conditions of this Master Indenture except as otherwise expressly provided herein, as if all the Bonds at any time Outstanding had been authenticated, executed and delivered simultaneously with the execution and delivery of this Master Indenture, all as herein set forth. IT IS HEREBY COVENANTED, DECLARED AND AGREED (a) that this Master Indenture creates a continuing lien equally and ratably to secure the payment in full of the principal of, premium, if any, and interest on all Bonds of a Series which may from time to time be Outstanding hereunder, except as otherwise expressly provided herein or in a Supplemental Indenture, (b) that the Trust Estate shall immediately be subject to the lien of this pledge and assignment without any physical delivery thereof or further act, (c) that the lien of this pledge and assignment shall be a first lien and shall be valid and binding against all parties having anyclaimsof any kind in tort, contract or otherwise against the Issuer, irrespective of whether such parties have notice thereof, and (d) that the Bonds of a Series are to be issued, authenticated and delivered, and that the Trust Estate is to be held, dealt with, and disposed of by the Trustee, upon and subject to the terms, covenants, conditions, uses, agreements and trusts set forth in this Master Indenture and the 2 B-2 3

141 ARTICLE I DEFINITIONS In this Master Indenture and any Supplemental Indenture (except as otherwise expressly provided or unless the context otherwise requires) the following terms shall have the meanings specified below: Account shall mean any account established pursuant to this Master Indenture and any Supplemental Indenture. Accreted Value shall mean, as of the date of computation with respect to any Capital Appreciation Bonds, an amount (truncated to three (3) decimal places) equaltotheoriginalprincipal amount of such Capital Appreciation Bonds at the date of issuance plus the interest accrued on such Bonds from the date of original issuance of such Capital Appreciation Bonds to the date of computation, such interest to accrue at the rate of interest per annum of the Capital Appreciation Bonds (or in accordance with a table of compound accreted values set forth in such Capital Appreciation Bonds), compounded semi-annually on each Interest Payment Date; provided, however, that if the date with respect to which any such computation is made is not an Interest Payment Date, the Accreted Value of any Bond as of such date shall be the amount determined by compounding the Accreted Value of such Bond as of the immediately preceding Interest Payment Date (or the date of original issuance if the date of computation is prior to the first Interest Payment Date succeeding the date of original issuance) at the rate of interest per annum of the Capital Appreciation Bonds for the partial semi-annual compounding period determined bydividing (x) the number of days elapsed (determined on the basis of a three hundred sixty (360) day year comprised of twelve (12) thirty (30) daymonths) from the immediatelypreceding InterestPaymentDate (orthe date of original issuance if the date of computation is prior to the first Interest Payment Date succeeding the date of original issuance), by (y) one hundred eighty (180). A table of Accreted Values for the Capital Appreciation Bonds shall be incorporated in a Supplemental Indenture executed by the Issuer at or prior to the time of issuance of any Capital Appreciation Bonds. Act shall mean Chapter , Laws of Florida, as amended and supplemented, Chapter 298, Florida Statutes, as amended, any successor laws or statutes thereto, the Florida Constitution and other applicable provisions of law. Additional Bonds shall mean Bonds of a Series, including Completion Bonds, authenticated and delivered in accordance with the terms hereof and of anysupplemental Indenture relating to the Series of Bonds with which the Additional Bonds are being issued on a pari passu basis. Additional Series Project shall mean the acquisition, construction, equipping and/or improving of any additions, extensions, improvements and betterments to and reconstructions of a Series Project to be financed, in whole or in part, from the proceeds of any Additional Bonds or Subordinated Debt. Amortization Installments shall mean the moneys required to be deposited in the Series Principal Account within the Debt Service Fund for the purpose of redeeming when due any Term Bonds of a Series, the specific amounts and dates of such deposits to be set forth in a Supplemental Indenture. Annual Budget shall mean the Issuer s budget of current operating and maintenance expenses for each Series Project and Additional Series Project for a Fiscal Year, adoptedpursuantto the provisions of Section 8.15 of this Master Indenture, as the same may be amended from time to time. Assessable Improvements shall mean all infrastructure facilities, improvements and services authorized by the Act, including those described in the Master Engineer s Report. Assessment Area shall mean the lands within the District designated byresolution of the Board as an assessment area speciallybenefited bya Series Project or Additional Series Project and subject to Special Assessments as a result thereof, as such Assessment Area is more fullydescribed in the Supplemental Indenture authorizing the issuance of a Series of Bonds to finance the Series Project or Additional Series Project specially benefiting such Assessment Area. Assessments shall mean Special Assessments. Authenticating Agent shall mean the agent so described in, and appointed pursuant to, Section 2.04 hereof. Authorized Denomination shall mean, with respect to a Series of Bonds, initially (i.e., at the time of sale by the Participating Underwriters to the initial purchasers of the Bonds of such Series) a denomination of $100,000 and integral multiples of $5,000 in excess thereof and, thereafter, a denomination of $5,000 and integral multiples thereof, provided, however, so long as the Bonds of such Series carry an investment grade rating from Moody s or S&P, Authorized Denominations shall mean a denomination of $5,000 and integral multiples thereof. Authorized Newspaper shall mean a newspaper printed in English and customarily published at least once a day at least five days a week and generally circulated in New York, New York, or such other cities as the Issuer from time to time may determine by written notice provided to the Trustee. When successive publications in an AuthorizedNewspaperarerequired, theymaybe made in the same or different Authorized Newspapers. Authorizing Resolution shall mean Resolution No of the Board adopted on August 4, Board shall mean the Board of Supervisors of the Issuer. Bond Counsel shall mean legal counsel of nationally recognized standing in matters pertaining to the exclusion from gross income for federal income tax purposes of interest on obligations issued by states and their political subdivisions. 4 5 Bond Year shall mean unless otherwise provided in the Supplemental Indenture authorizing a Series of Bonds, the period commencing on the first day of May in each year and ending on the last day of April of the following year. Bondholder, Holder of Bonds, Holder or Owner or anysimilar term shall mean any Person or Persons who shall be the registered owner of any Outstanding Bond or Bonds of a Series, as evidenced on the Bond Register of the Issuer kept by the Registrar for such Series. Bond Register shall have the meaning specified in Section 2.05 of this Master Indenture. Bonds or Bond shall mean the Outstanding Bonds of all Series, or anybonds thereafter authenticated and delivered in lieu of or in substitution for such Bonds pursuant to Article IIhereof, regardless of variations of maturity, interest rate or other provisions and, except where the context clearly requires otherwise, shall include bond anticipation notes issued in anticipation thereof. Business Day shall mean anydayother than a Saturdayor Sundayor legal holidayoraday on which the principal office of the Issuer, the Trustee, anyregistrar or anypaying Agent is closed. Capital Appreciation Bonds shall mean Bonds issued under this Master Indenture andany Supplemental Indenture as to which interest is compounded periodically on each of the applicable periodic dates designated for compounding and payable in an amount equal to the then-current Accreted Value only at the maturity or earlier redemption thereof, all as so designated in a Supplemental Indenture of the Issuer providing for the issuance thereof. Capitalized Interest shall mean the amountofproceedsofaseriesofbondssetasidetopay interest costs on that Series of Bonds, in such amount and for such period as is specified in the Supplemental Indenture authorizing the issuance of such Series of Bonds. Certified Public Accountant shall mean a Person, who shall be Independent, appointed by the Board, actively engaged in the business of public accounting and duly certified as a certified public accountant under the laws of the State. Certified Resolution or Certified Resolution of the Issuer shall mean a copy of one or more resolutions certified bythe Secretaryor an Assistant Secretaryof theboardoftheissuer, under its seal, to have been duly adopted by the Board and to be in full force and effect as of the date of such certification. Code shall mean the Internal Revenue Code of 1986, as amended, and the applicable United States Treasury Department regulations promulgated thereunder. Consultant shall mean a Person, who shall be Independent, appointed by the Board, qualified to pass upon questions relating to local government entities and having a favorable reputation for skill and experience in the financial affairs of local government entities. Consultant s Certificate shall mean a certificate or a report prepared in accordance with then applicable professional standards duly executed by a Consultant. 6 B-3 Consulting Engineer shall mean the Independent engineer or engineering firm or corporation at the time employed by the Issuer under the provisions of Section 8.16 of this Master Indenture to perform and carry out duties imposed on the Consulting Engineer by this Master Indenture. The Independent engineer or engineering firm or corporation at the time serving as the engineer to the Issuer may serve as Consulting Engineer under this Master Indenture. Completion Bonds shall mean Bonds issued pursuant toasupplementalindentureranking on a parity with the Series of Bonds issued under such Supplemental Indenture, the proceeds of which are to be used to complete a Series Project or Additional Series Project. Continuing Disclosure Agreement shall mean a ContinuingDisclosureAgreemententered into between the Issuer and the dissemination agent thereunder (and which may also obligate additional parties) pursuant to the requirements of the Rule in connection with the issuance of a Series of Bonds hereunder. Cost or Costs in connection with a Series Project or anyportion thereof oranadditional Series Project or any portion thereof shall mean all expenses which are properly chargeable thereto under GenerallyAccepted Accounting Principles or which are incidental to the planning, financing, funding, acquisition, construction, reconstruction, equipping and installation thereof, including, without limiting the generality of the foregoing: (a) expenses of determining the feasibility or practicality of acquisition, construction or reconstruction; (b) (c) cost of surveys, estimates, plans and specifications; cost of improvements; (d) engineering, architectural, fiscal, legal, accounting and other professional and advisory expenses and charges; (e) cost of all labor, materials, machinery and equipment (including, without limitation, (i) amounts payable to contractors, builders andmaterialmenandcostsincidentto the award of contracts and (ii) the cost of labor, facilities and services furnishedbytheissuer and its employees, materials and supplies purchased by the Issuer); (f) cost of all lands and properties, rights, easements and franchises acquired including, without limitation, any and all costs associated with acquiring the lands, properties, rights, easements or franchises through eminent domain proceedings; (g) (h) (i) financing charges; creation of initial reserves and debt service funds; working capital; 7

142 (j) interest charges incurredorestimatedtobeincurredonmoneyborrowedprior to and during construction and acquisition and for such reasonable period of time after completion of construction or acquisition as the Board may determine; (k) the cost of issuance of the Bonds issued to finance the Series Project or Additional Series Project, including, without limitation, advertisements and printing; (l) the cost of any election held pursuant to the Act and all other expenses of issuance of the Bonds issued to finance the Series Project or Additional Series Project; (m) the discount, if any, on the sale or exchange of Bonds issued to finance the Series Project or Additional Series Project; (n) amounts required to repay temporary or bond anticipation loans made to finance any costs permitted under the Act; (o) costs of prior improvements made or acquired bythe Issuer in anticipationof the Series Project or Additional Series Project; (p) taxes, assessments and similar governmental charges during construction or reconstruction of a Series Project or Additional Series Project; (q) costs incurred to enforce remedies against contractors, subcontractors, any provider of labor, material, services, or any other Person, for a default or breach under the corresponding contract, or in connection with any other dispute; (r) premiums for contract bonds and insurance during construction and costs on account of personal injuries and propertydamage in the course ofconstructionandinsurance against the same; (s) payments, contributions, dedications and any other exactions required as a condition to receive any government approval or permit; (t) (u) (v) cost of permits and licenses obtained by the Issuer; mitigation costs; administrative expenses; (w) such other expenses as may be necessary or incidental to the acquisition, construction, or to the repair, restoration, replacement or reconstruction of the SeriesProject or Additional Series Project or to the financing thereof, or to the developmentofanylandsin the District; and (x) any other cost or expense as provided by the Act. In connection with the refunding or redeeming of any Bonds, Cost includes, without limiting the generality of the foregoing, the items listed in (d), (k), (l), (m) and (n) above, and other expenses related to the redemption of the Bonds to be redeemed and the Redemption Price of such Bonds (and the accrued interest payable on redemption to the extent not otherwise provided for). Whenever Costs are required to be itemized, such itemization shall, to the extent practicable, correspond with the items listed above. Whenever Costs are to be paid hereunder, such payment may be made by way of reimbursement to the Issuer or any other Person who has paid the same. Costs of Issuance Fund shall mean the fund so designated in and created pursuant to Section 4.03 hereof. Counsel shall mean an attorney-at-law or law firm (who maybe counsel for theissuer) not unsatisfactory to the Trustee. County shall mean Broward County, Florida. Credit Facility shall mean anycredit enhancement mechanismsuchasanirrevocableletter of credit, a surety bond, a policy of municipal bond insurance, a corporate or other guaranty, a repurchase agreement, a liquidity agreement, a credit agreement or deficiency agreement or other similar facility applicable to a Series of Bonds, pursuant to which the entity providing such facility agrees to provide funds to make payment of the principal of and interest on such Series of Bonds. Notwithstanding anything to the contrary contained in this Master Indenture, any Series of Bonds may be issued without a Credit Facility; the decision to provide a Credit Facility in respect of any Series of Bonds shall be within the absolute discretion of the Issuer. Credit Facility Agreement shall mean any agreement pursuant to which a Credit Facility Issuer issues a Credit Facility. Credit Facility Issuer shall mean the issuer or guarantor of any Credit Facility. Date of Completion shall mean, with respect to a Series Project or Additional Series Project, (i) the date on which such Series Project or Additional Series Project, and all components thereof, have been acquired or constructed and are capable of performing the functions for which they were intended, as evidenced by a certificate of the Consulting Engineer filed with the Trustee and the Issuer; or (ii) the date on which the Issuer determines, upon the recommendation of, or in consultation with, the Consulting Engineer, that it cannot complete the Series Project or Additional Series Project, in a sound and economical manner withinareasonableperiodoftimeasevidencedby a certificate of the Consulting Engineer filed with the Trustee and the Issuer; provided that in each case such certificate of the Consulting Engineer shall set forth the amount of all Costs of suchseries Project or Additional Series Project, which has theretofore been incurred, but which on the Date of Completion are or will be unpaid or unreimbursed. Debt Service Fund shall mean the Fund so designated which is established pursuant to Section 5.02 hereof. 8 9 Debt Service Requirements, shall mean with respect to a Series of Bonds and with reference to a specified period: (a) interest payable on all Outstanding Bonds of such Series during such period, subject to reduction for amounts held as Capitalized Interest for such Series of Bonds in the Funds and Accounts established under this Master Indenture; and (b) Amortization Installments required to be paid into any mandatory sinking fund account with respect to all Term Bonds during such period; and (c) amounts required to paythe principal or MaturityAmount of all Outstanding Series of Serial Bonds maturing during such period and not to be redeemed prior to or at maturity through any sinking fund account. Debt Service Reserve Fund shall mean the Fund so designated which is established pursuant to Section 5.02 hereof. Debt Service Reserve Insurance Policy shall mean the insurance policy, surety bond or other evidence of insurance, if any, deposited to the credit of a Series Reserve Account in lieu of or in partial substitution for cash or securities on deposit therein, which policy, bond or the evidenceof insurance constitutes an unconditional senior obligation of the issuer thereof. The issuer thereof shall be a municipal bond insurer whose obligations ranking pari passu with its obligations under such policy, bond or other evidence of insurance are rated at the time of deposit of such policy, bond or other evidence of insurance to the credit of a Series ReserveAccountinthehighestratingcategory of both Moody s and S&P, unless otherwise approved bythe Credit FacilityIssuer who has issued a municipal bond insurance policy with respect to the Series of Bonds secured by the Series Reserve Account. Debt Service Reserve Letter of Credit shall mean the irrevocable, transferableletterorline of credit, if any, deposited for the credit of a Series Reserve Account in lieu of or in partial substitution for cash or securities on deposit therein, which letter or line of credit constitutes an unconditional senior obligation of the issuer thereof. The issuer of such letter or line of credit shall be a banking association, bank or trust company or branch thereof whose senior debt obligations ranking pari passu with its obligations under such letter or line of credit are rated at the time of deposit of the letter or line of credit to the credit of a Series Reserve Account in the highest rating categoryof both Moody s and S&P, unless otherwise approved bythe Credit FacilityIssuerwhohas issued a municipal bond insurance policy with respect to the Series of Bonds secured by the Series Reserve Account. Defeasance Securities shall mean, to the extent permitted by law, (a) cash or (b) noncallable Government Obligations. Delinquent Assessment Interest shall mean interestontheassessmentspledgedtoaseries of Bonds deposited with the Trustee on or after May 1 of the year in which such interest has, or would have, become delinquent under State law applicable thereto. Delinquent Assessments shall mean, collectively, any and all installments of any Assessments which are not paid within thirty (30) days of the date on which such installments are due and payable. District Manager shall mean the then District Manager or acting District Manager of the Issuer. Event of Default shall mean, with respect to a Series of Bonds, anyof the events described in Section 9.01 hereof. Fiscal Year shall mean the period of twelve (12) months beginning December 1 of each calendar year and ending on September 30 of the following calendar year, and also shall mean the period from actual execution hereof to and including the next succeeding September 30; or such other consecutive twelve-month period as may hereafter be established pursuant to a Certified Resolution as the fiscal year of the Issuer for budgeting and accounting purposes as authorized by law. Fund shall mean any fund established pursuant to this Master Indenture. Generally Accepted Accounting Principles shall mean those accounting principles applicable in the preparation of financial statements of governmental entities. Government Obligations shall mean direct obligations of, or obligations the payment of principal of and interest on which are unconditionally guaranteed by, the United States of America. Indenture shall mean this Master Indenture, as amended and supplemented from time to time by a Supplemental Indenture or indentures, and, shall mean when used with respect to a Series of Bonds issued hereunder, this Master Indenture, as amended and supplemented by the Supplemental Indenture relating to such Series of Bonds. Independent shall mean a Person who is not a member of the Issuer s Board, an officer or employee of the Issuer or the majority landowner(s) within the jurisdictional boundaries of the Issuer, or which is not a partnership, corporation or association having a partner, director, officer, member or substantial stockholder who is a member of the Issuer s Board, or an officer or employee of the Issuer; provided, however, that the fact that such Person is retained regularly by or regularly transacts business with the Issuer or anyof the Other majoritylandowner(s) within the jurisdictional boundaries of the Issuer shall not make such Person an employee within the meaning of this definition. Interest Payment Date shall mean, with respect to a Series of Bonds, the dates specifiedin a Supplemental Indenture with respect to a Series of Bonds upon which the principal of and/or interest on Bonds of such Series shall be due and payable in each Bond Year. Investment Securities shall mean and includes anyof the following securities, ifandtothe extent that such securities are legal investments for funds of the Issuer: 10 B-4 11

143 (i) Government Obligations; (ii) obligations of the Government National Mortgage Association (including participation certificates issued by such Association); (iii) obligations of the Federal National Mortgage Association (including participation certificates issued by such Association); (iv) obligations of Federal Home Loan Banks; (v) deposits, Federal funds or bankers acceptances (with termtomaturityof270 days or less) of any bank which has an unsecured, uninsured and unguaranteed obligation rated in one of the top two rating categories by both Moody s and S&P; S&P; (vi) commercial paper rated in the top two rating category by both Moody s and (vii) obligations of anystate of the United States or politicalsubdivisionthereofor constituted authority thereof the interest on which is exempt from federal income taxation under Section 103 of the Code and rated in one of the top two rating categories by both Moody s and S&P; (viii) both (A) shares of a diversified open-end management investment company (as defined in the Investment CompanyAct of 1940) or a regulated investment company (as defined in Section 851(a) of the Code) that is a moneymarket fund that isratedinthehighest rating category by both Moody s and S&P, and (B) shares of money market mutual funds that invest only in Government Obligations and repurchase agreements secured by such obligations, which funds are rated in the highest categories for such funds by both Moody s and S&P; (ix) repurchase agreements, which will be collateralized at the onset of the repurchase agreement of at least 103% marked to market weekly with Collateral with a domestic or foreign bank or corporation (other than life or property casualty insurance company) the long-term debt of which, or, in the case of a financial guaranty insurance company, claims paying ability, of the guarantor is rated at least AA by S&P and Aa by Moody s provided that the repurchase agreement shall provide that if during its term the provider s rating by either S&P or Moody s falls below AA- or Aa3, respectively, the provider shall immediatelynotifythetrusteeandtheprovidershallatitsoption, withinten days of receipt of publication of such downgrade, either (A) maintain Collateral at levels, sufficient to maintain an AA rated investment from S&P and an Aa rated investment from Moody s, or (B) repurchase all Collateral and terminate the repurchase agreement. Further, if the provider s rating by either S&P or Moody s falls below A- or A3, respectively, the provider must at the direction of the Issuer to the Trustee, within ten (10) calendar days, either (1) maintain Collateral at levels sufficient to maintain an AA rated investment from S&P and an Aa rated investment from Moody s, or (2) repurchase all Collateral and terminate the repurchase agreement without penalty. In the event the repurchase agreement provider has not satisfied the above conditions within ten (10) daysof the date such conditions apply, then the repurchase agreement shall provide that the Trustee shall be entitled to, and in such event, the Trustee shall withdraw the entire amount invested plus accrued interest within two (2) Business Days. Anyrepurchase agreement entered into pursuant to this Indenture shall contain the following additional provisions: (1) Failure to maintain the requisite Collateral percentage will require the District of the Trustee to liquidate the Collateral as provided above; (2) The Holder of the Collateral, as hereinafter defined, shall have possession of the Collateral or the Collateral shall have been transferred to the Holder of the Collateral, in accordance with applicable state and federal laws (other than by means of entries on the transferror s books); (3) The repurchase agreement shall state and an opinion of Counsel in form and in substance satisfactoryto the Trustee shall be rendered that the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted Collateral and all proceeds thereof (in the case of bearer securities, this means the Holder of the Collateral is in possession); (4) The repurchase agreement shall be a repurchase agreement as defined in the United States BankruptcyCode and, if theproviderisadomesticbank, a qualified financial contract as defined in the Financial Institutions Reform, Recovery and Enforcement Act of 1989 ( FIRREA ) and such bank is subject to FIRREA; (5) The repurchasetransactionshallbeintheformofawrittenagreement, and such agreement shall require the provider to give written notice to the Trustee of any change in its long-term debt rating; (6) The Issuer or its designee shall represent that it has no knowledge of any fraud involved in the repurchase transaction; (7) The Issuer andthetrusteeshallreceivetheopinionofcounsel (which opinion shall be addressed to the Issuer and the Trustee and shall be in form and substance satisfactory to the Trustee) that such repurchase agreement complies with the terms of this section and is legal, valid, binding and enforceable upon the provider in accordance with its terms; (8) The term of the repurchase agreement shall be no longer than ten years; (9) The interest withrespecttotherepurchasetransactionshallbepayable no less frequently than quarterly; (10) The repurchase agreement shall provide that the Trustee may withdraw funds without penalty at any time, or from time to time, for any purpose permitted or required under this Indenture; (11) Any repurchase agreement shall provide that a perfected security interest in such investments is created for the benefit of the Beneficial Owners under the Uniform Commercial Code of Florida, or book-entryproceduresprescribedat31 C.F.R et seq. or 31 C.F.R et seq. are created for the benefit of the Beneficial Owners; and (12) The Collateral delivered or transferred to the Issuer, the Trustee, or a third-party acceptable to, and acting solely as agent for, the Trustee (the Holder of the Collateral ) shall be delivered and transferredincompliancewithapplicablestate and federal laws (other than by means of entries on provider s books) free and clear of any third-party liens or claims pursuant to a custodial agreement subject to the prior written approval of the majority of the Holders and the Trustee. The custodial agreement shall provide that the Trustee must have disposition or control over the Collateral of the repurchase agreement, irrespective of an event of default by the provider of such repurchase agreement. If such investments are held by a third-party, they shall be held as agent for the benefit of the Trustee as fiduciary for the Beneficial Owners and not as agent for the bank serving as Trustee in its commercial capacity or any other party and shall be segregated from securities owned generally by such third party or bank; (x) any other investment approved in writing by the Owners of a majority in aggregate principal amount of the Bonds of a Series secured thereby; (xi) bonds, notes and other debt obligations of any corporation organized under the laws of the United States, any state or organized territory of the United States or the District of Columbia, if such obligations are rated in one of the three highest ratings byboth Moody s and S&P or in one of the two highest categories by either S&P or Moody s; and (xii) investment agreements with a bank, insurance company or other financial institution, or the subsidiaryof a bank, insurance companyor other financialinstitutionifthe parent guarantees the investment agreement, which bank, insurance company, financial institution or parent has an unsecured, uninsured and unguaranteed obligation (or claimspaying ability) rated in the highest short-term rating categorybymoody sors&p (iftheterm of such agreement does not exceed 365 days), or has an unsecured, uninsured and unguaranteed obligation (or claims paying ability) rated byat least 2 national ratingagencies with a minimum rating of Aa2, AA or AA by Moody s, S&P or Fitch, respectively (if the term of such agreement is more than 365 days) or is the lead bank of a parent bank holding companywith an uninsured, unsecured and unguaranteed obligation of the aforesaidratings, provided: (A) interest is paid at least quarterlyat a fixed rate (subjecttoadjustments for yield restrictions required by the Code) during the entire term of the agreement; (B) moneys invested thereunder may be withdrawn without penalty, premium, or charge upon not more than two days notice unless otherwise specified in a Supplemental Indenture; (C) the same guaranteed interest rate will be paid on any future deposits made to restore the account to its required amount; and (D) the Trustee receives an opinion of counsel that such agreement is an enforceable obligation of such insurance company, bank, financial institution or parent; (E) in the event of a suspension, withdrawal, or downgrade below Aa3, AA- or AA- bymoody s, S&P or Fitch, respectively, the provider shall immediately notify the Trustee and the provider shall at its option, within five (5) days of receipt of publication of such downgrade, either, at the choice of the Provider: (1) collateralize the agreement at levels, sufficient to maintainan "AA" rated investment from S&P and an "Aa2" from Moody's with a market to market approach, or (2) assign the agreement to another provider, as long as the minimum rating criteria of "AA" rated investment from S&P and an "Aa2" from Moody's with a market to market approach or (3) have the agreement guaranteedbyaprovideracceptabletothe District. (F) in the event of a suspension, withdrawal, or downgrade belowa3, A- or A- by Moody s, S&P or Fitch, respectively, the provider must, at the direction of the District or the Trustee, within five (5) days of receipt of such direction, repaythe principal of and accrued but unpaid interest on the investment in either case with no penalty or premium to the District or Trustee. In the event the Provider has not satisfied the above condition with five (5) days of the date such conditions apply, then the agreement shall provide that the Trustee shall be entitled to, and in such event, the Trustee shall withdraw the entire amount invested plus accrued interest within two (2) Business days. (xiii) bonds, notes and other debt obligations of any corporation organized under the laws of the United States, any state or organized territory of the United States or the District of Columbia, if such obligations are rated in one of the three highest ratings byboth Moody s and S&P or in one of the two highest categories by either S&P or Moody s; 14 B-5 15

144 (xiv) the Local Government Surplus Funds Trust Fund as described in Florida Statutes, Section or the corresponding provisions of subsequent laws provided that such fund is rated at least AA by S&P (without regard to gradation) or at least Aa by Moody s (without regard to gradation); and (xv) other investments permitted by Florida law. Under all circumstances, the Trustee shallbeentitledtorequestandtoreceivefromtheissuer a certificate of a Responsible Officer setting forth that any investment directed by the Issuer is permitted under the Indenture. Issuer shall mean the North Springs Improvement District. Master Assessment Methodology shall mean the assessment methodology set forth in the Master Engineer s Report. Master Engineer s Report shall mean the Master Engineer s Report-Assessment Areas dated August 4, 2005, prepared by CH2MHill, Consulting Engineers to the Issuer, as same may be amended or supplemented from time to time, Master Indenture shall mean this Master Trust Indenture, as amended and supplemented from time to time in accordance with the provisions hereof. Maturity Amount shall mean the amount due at maturity with respect to a Capital Appreciation Bond. Maximum Annual Debt Service Requirement shall mean, at any given time of determination, the greatest amount of principal, interest and Amortization Installments coming due in any current or future Bond Year with regard to the Series of Bonds for which such calculation is made; provided, the amount of interest coming due in any Bond Year shall be reduced to the extent moneys derived from the proceeds of Bonds are used to pay interest in such Bond Year. Moody s shall mean Moody s Investors Service, Inc., acorporationorganizedandexisting under the laws of the State of Delaware, its successors and their assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of asecuritiesratingagency, Moody s shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer and acceptable to the Trustee. Officers Certificate or Officer s Certificate shall mean a certificate, dulyexecuted bya Responsible Officer and delivered to the Trustee. Option Bonds shall mean Current Interest Bonds, which may be either Serial or Term Bonds, which by their terms may be tendered by and at the option of the Owner for purchase prior to the stated maturity thereof. Outstanding shall mean, as of the time in question, all Bonds authenticated and delivered under this Master Indenture, except: (a) Bonds theretofore canceled or required to be canceled under Section 2.08 hereof; (b) Bonds for the payment, redemption or purchase of which moneys and/or Defeasance Securities, the principal of and interest on which, when due, will provide sufficient moneys to fullypaysuch Bonds in accordance with Article XIIIhereof, shall have been or shall concurrently be deposited with the Trustee; provided that, if such Bonds are being redeemed, the required notice of redemption shall have been given or provision shall have been made therefore, and that if such Bonds are being purchased, there shall be a firm commitment for the purchase and sale thereof; and (c) Bonds in substitution for which other Bonds have been authenticated and delivered pursuant to Article II hereof. In determining whether the Holders of a requisite aggregate principal amount of Bonds Outstanding have concurred in any request, demand, authorization, direction, notice, consent or waiver under the provisions of this Master Indenture, Bonds which are known by the Trustee to be held on behalf of the Issuer shall be disregarded for the purpose ofanysuchdetermination; provided, however, this provision does not affect the right of the Trustee to deal in Bonds as set forth in Section hereof. Participating Underwriter shall mean anyof the original underwriters of a Series of Bonds required to comply with the Rule in connection with the offering of the Bonds of such Series. Paying Agent shall mean the bank or trust companydesignatedbysupplementalindenture with respect to a Series of Bonds as the place where Debt Service Requirements shall be payable with respect to such Series of Bonds and which accepts the duties of Paying Agent underthismaster Indenture and under such Supplemental Indenture. Person shall mean any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization, governmental body, political subdivision, municipality, municipal authority or any other group or organization of individuals. Pledged Funds shall mean all of the Series Pledged Funds. Pledged Revenues shall mean all of the Series Pledged Revenues. Prepayments shall mean any Assessments, or portions thereof, which shall be paid to the Issuer prior to the time such amounts become due with respect to the Series of Bonds for which said Assessments are levied, and which are in excess of the Debt Service Requirements onsuchseriesof Bonds coming due prior to the date on which such Series of Bonds may next be redeemed as a result of such prepayment of Assessments Project Fund shall mean the Fund of that name created and designated by Section 4.01 of this Master Indenture. Property Appraiser shall mean the property appraiser of the County. Property Appraiser and Tax Collector Agreement shall mean the Property Appraiser and Tax Collector Agreement described in Section 8.04 hereof. Rebate Fund shall mean the Fund of that name created and designated by Section 5.02 of this Master Indenture. Date. Record Date shall mean, as the case may be, the applicable Regular or Special Record Redemption Price shall mean the principal amount of any Bond plus the applicable premium, if any, payable upon redemption thereof pursuant to this Master Indenture and the related Supplemental Indenture. Refunding Bonds shall mean Bonds issued pursuant to this Master Indenture and as more specificallydescribed in a SupplementalIndentureauthorizingtherefundingoradvancerefundingof all or any portion of one or more Series (or any portion thereof) of Bonds Outstanding. Registrar shall mean the bank or trust company designated as such by Supplemental Indenture with respect to a Series of Bonds for the purpose of maintaining the registry of the Issuer reflecting the names, addresses, and other identifyinginformationofownersofbondsofsuchseries and which accepts the duties of Registrar under this Master Indenture and under such Supplemental Indenture. Regular Record Date shall mean the fifteenth day (whether or not a Business Day) of the calendar month next preceding each Interest Payment Date applicable to a Series of Bonds. Regulatory Body shall mean and include (a) the United States of America and any department of or corporation, agencyor instrumentalityheretoforeorhereaftercreated, designatedor established by the United States of America, (b) the State, anypolitical subdivision thereof and any department of or corporation, agencyor instrumentalityheretoforeorhereaftercreated, designatedor established by the State, (c) the County, or any municipality in whose jurisdiction the District is located, and any department of or corporation, agency or instrumentality heretofore or hereafter created, designated or established bythe Countyor such municipality, and (d) anyotherpublicbody, whether federal, state or local or otherwise having regulatory jurisdiction and authority over the Issuer. Responsible Officer shall mean anymember of the Board or anyother officer of the Issuer or other person designated bycertified Resolution of the Issuer, a copyofwhichshallbeonfilewith the Trustee, to act for any of the foregoing, either generally or with respect to the execution of any particular document or other specific matter. 18 B-6 Revenue Fund shall mean the Fund of that name created and designated by Section 5.02 hereof. Rule shall mean Rule 15c2-12(b)(5) adopted bythe Securities and ExchangeCommission under the Securities Exchange Act of 1934, as the same may be amended from time to time. S&P shall mean Standard & Poor s Ratings Services, a division of The McGraw-Hill Companies, Inc., a corporation organized and existing under the laws of the State of New York, its successors and their assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, S&P shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer and acceptable to the Trustee. Serial Bonds shall mean Bonds (other than Term Bonds) that mature in annual or semiannual installments. Series shall mean all of the Bonds authenticated and delivered on original issuance of a stipulated aggregate principal amount in a simultaneous transaction under and pursuant to the same Supplemental Indenture and any Bonds thereafter authenticated and delivered in lieu of or in substitution therefor pursuanttothismasterindentureandsuchsupplementalindentureregardlessof variations in maturity, interest rate or other provisions; provided, however, two or more Series of Bonds may be issued simultaneously under the same Supplemental Indenture if designated as separate Series of Bonds bythe Issuer upon original issuance. Two or more Series of Bonds maybe issued simultaneouslyunder separate Supplemental Indentures, but under this Master Indenture. In addition, if an issue of Bonds is followed by a second issue of Bonds closed within 45 days of the closing of the first issue and the proceeds of the second issue are to be used to pay the Costs of Issuance of the first issue, or to pay for certain costs of a Series Project or Additional Series Project being financed from the proceeds of the first issue which costs cannot be financed with Tax Exempt Bonds, then the two issues of Bonds will be deemed a single Series for purposes of this Master Indenture, if so designated by the Issuer. Series Accounts shall mean, with respect to a Series of Bonds, the Accounts establishedin this Master Indenture and any Supplemental Indenture authorizing such Series of Bonds which are pledged thereto by this Master Indenture and such Supplemental Indenture. Series Capitalized Interest Account shall mean anyseries Capitalized Interest Account to be established within a Series Debt Service Fund by Supplemental Indenture with respect to any Series of Bonds issued under this Master Indenture, as authorized pursuant to this Master Indenture. Series Cost of Issuance Account shall mean the Account with respect to a Series of Bonds established in the Cost of Issuance Fund so designated in, and created pursuant to, Section 4.04 hereof. Series Interest Account shall mean the Account with respect to a Series of Bonds established within the Debt Service Fund so designated in, and created pursuant to, Section 5.02 hereof. 19

145 Series Pledged Funds shall mean all amountsondepositfromtimetotimeinthefundsand Accounts and designated in the Supplemental Indenture relating to such Series of Bonds as pledged to the payment of such Series of Bonds; provided, however, such term shallnotincludeanyamounts on deposit in a Series Rebate Account in the Rebate Fund. Series Pledged Revenues shall mean the revenues designated as such by Supplemental Indenture and which shall constitute the securityfor and source of payment of a Series of Bonds and may consist of Assessments or other user fees or other revenues or combinations thereof derived or to be derived by the Issuer in accordance with the Act. Series Principal Account shall mean the Account with respect to a Series of Bonds established within the Debt Service Fund so designated in, and created pursuant to, Section 5.02 hereof. Series Project shall mean the financing, acquisition, construction, equipping and/or improvement of capital projects comprising Assessable Improvements, to be located within or without the District, for the benefit of an Assessment Area, and to be financed with all or a part of the proceeds of a Series of Bonds as shall be described in the Supplemental Indenture authorizing such Series of Bonds. The term Series Project shall not include anyproject financed bythe Issuer under the provisions of any financing documents or instruments other than this Master Indenture. Series Project Account shall mean the Account within the Project Fund with respect to each Series of Bonds so designated in, and created pursuant to, a Supplemental Indenture relating to such Series of Bonds. Series Rebate Account shall mean the Account in the Rebate Fund with respect to a Series of Bonds so designated in, and created pursuant to, a Supplemental Indenture relating to such Series of Bonds. Series Redemption Account shall mean the Account with respect to a Series of Bonds established within the Debt Service Fund so designated in, and created pursuant to, Section 5.02 hereof. Series Reserve Account shall mean the Account within the Debt Service Reserve Fund with respect to a Series of Bonds so designated in, and created pursuantto, asupplementalindenture relating to such Series of Bonds and funded in an amount equal to the Series Reserve Account Requirement for such Series of Bonds. Series Reserve Account Requirement shall mean the amount of money or other security which maybe in the form of a Debt Service Reserve Insurance PolicyorDebtServiceReserveLetter of Credit or other security as may be required by the terms of a Supplemental Indenture to be deposited in or credited to a Series Reserve Account for each Series of Bonds; provided, however, that unless otherwise provided in the Supplemental Indenture relating to a Series of Bonds, asofany date of calculation for a particular Series Reserve Account, the Series Reserve Account Requirement shall be an amount equal to the least of: (A) Maximum Annual Debt Service Requirement for all Outstanding Bonds of such Series, (B) 125% of the average annual debt service for all Outstanding Bonds of such Series, or (C) the aggregate of 10% of the proceeds of the Bonds of such Series calculated as of the date of original issuance thereof (calculated as of the date of issue for purposes of clauses (B) and (C)). In computing the Series Reserve Account Requirement in respect of any Series of Bonds that constitute Variable Rate Bonds, the interest rate on such Bonds shall be assumed to be the greater of: (1) 110% of the daily average interest rate on such Variable Rate Bonds during the 12 months ending with the month preceding the date of calculation, or such shorter period of time that such Series of Bonds shall have been Outstanding, or (2) theactualrateof interest borne by the such Variable Rate Bonds on such date of calculation; provided, in no event shall the Series Reserve Account Requirement as adjusted on such date of calculation exceed the least of the amounts specified in the immediately preceding sentence determined by assuming that the interest rate is equal to the interest rate that the Bonds would bear if the Bonds bore interest at a fixed rate to maturity. In computing the Series Reserve Account Requirement in accordance with clause (C) of this definition in respect of any Capital Appreciation Bonds, the principal amount of such Bonds shall be the original principal amount thereof, not the Accreted Value. Series Revenue Account shallmeantherevenueaccountforaseriesofbondsestablished in the Revenue Fund by Supplemental Indenture for such Series of Bonds. Special Assessments shall mean the non-ad valorem assessments levied byor on behalfof the Issuer and collected or caused to be collected by the Issuer against the lands in an Assessment Area that are subject to assessment as a result of a Series Project or Additional Series Project or any part thereof, as provided for under the Act and other applicable law, to the extent levied and collected to enable the Issuer to paythe Debt Service Requirements on a Series of Bonds and which are referred to as such and pledged to a Series of Bonds pursuant to the Supplemental Indenture authorizing the issuance of such Series of Bonds. Special Assessments shall be deemed to include the interest and penalties on such Special Assessments, pursuant to all applicable provisions of the Act, Chapter 298, Florida Statutes and Chapter 197, Florida Statutes (and any successor statutes thereto), including, without limitation, anyamount received from anyforeclosureproceedingforthe enforcement of collection of such assessments or from the issuance and sale of tax certificates with respect to such assessments, less (to the extent applicable) the fees and costs of collection thereof payable to the Tax Collector and less certain administrative costs payable to the PropertyAppraiser pursuant to the Property Appraiser and Tax Collector Agreement. Special Assessments shall not include non-ad valorem assessments leviedandcollectedbytheissuerundertheactformaintenance purposes and shall also not includenon-advaloremspecialassessmentsorbenefitassessmentslevied and collected by or on behalf of the Issuer against the lands in the District, including in any Assessment Area, in respect of a project other than a Series Project or Additional Series Project or bonds other than the Bonds. Special Record Date shall mean such date as shall be fixed for the payment of defaulted interest on any Series of Bonds in accordance with Section 2.02 hereof. State shall mean the State of Florida Subordinated Debt shall mean indebtedness secured hereby or by any Supplemental Indenture which is by its terms expressly subordinate and inferior hereto both in lien and right of payment. Supplemental Indenture shall mean an indenture supplemental hereto authorizing the issuance of a Series of Bonds hereunder and establishing the terms thereof and the securitytherefor and shall also mean anyindenture supplemental hereto entered into for the purpose of amending the terms and provisions hereof with respect to all Bonds in accordance with Article XII hereof. Taxable Bonds shall mean Bonds of a Series which are not Tax Exempt Bonds. Tax Collector shall mean the tax collector of the County. Tax Exempt Bonds shall mean Bonds of a Series the interest on which, in the opinion of Bond Counsel on the date of original issuance thereof, is excludable from gross income for federal income tax purposes. Term Bonds shall mean Bonds that mature on one date and that are subject to mandatory redemption from Amortization Installments or Bonds designated bythe Issuer as Term Bonds upon original issuance thereof. Trust Estate shall have the meaning ascribed to such term in the granting clauses hereof, including, but not limited to, the Pledged Revenues and Pledged Funds Trustee shall mean Wachovia Bank, National Association, a national banking association duly organized and existing under the laws of the United States of America and duly authorized to exercise corporate trust powers in the State (and successor in interest to First Union NationalBank), having its designated corporate trust office in Miami, Florida, together with its successor or successors as Trustee under this Master Indenture. Variable Rate Bonds shall mean Current Interest Bonds, which maybeeitherserialbonds or Term Bonds, issued with a variable, adjustable, convertible or other similar interest rate which is not fixed in percentage for the entire term thereof at the date of issue, which Bonds may also be Option Bonds. The words hereof, herein, hereto, hereby, and hereunder (except in the form of Bond), refer to the entire Indenture. Every request, requisition, order, demand, application, notice, statement, certificate, consent, or similar action hereunder bythe Issuer shall, unless the form or execution thereof is otherwise specificallyprovided, beinwritingsignedbyaresponsibleofficeroftheissuer. All words and terms importing the singular number shall, where the context requires, import the plural number and vice versa. [END OF ARTICLE I] 22 B-7 ARTICLE II THE BONDS SECTION Issue of Bonds. For the purpose of refunding Bonds of a Series or providing funds for paying all or part of the Cost of a Series Project or Additional Series Project, Bonds of a Series, without limitation as to aggregate principal amount, may be issued under this Master Indenture, subject to the conditions hereinafter provided in Article III of this Master Indenture. The Debt Service Requirements on each Series of Bonds shall be payable solelyfrom the Series Pledged Revenues and Series Pledged Funds pledged to such Series of Bonds in the Supplemental Indenture authorizing the issuance of such Series of Bonds and, except as may otherwise be provided in such Supplemental Indenture, all of the provisionsofthismasterindenture shall be for the benefit and security of the present and future Owners of such Series of Bonds so issued, without preference, priority or distinction, as to lien or otherwise, of any one Bond of such Series over any other Bond of such Series. SECTION Details of Bonds. Bonds of a Series shall be in such Authorized Denominations, shall be numbered consecutively, shall bear interest from their date until their payment at rates not exceeding the maximum rate permitted bylaw, shall be dated, shall be stated to mature in such year or years in accordance with the Act, and shall be subject to redemption prior to their respective maturities, subject to the limitations hereinafter provided, as provided for in the Supplemental Indenture authorizing the issuance of such Series of Bonds. Bonds of a Seriesmaybe issued as Current InterestBonds, VariableRateBonds, CapitalAppreciationBonds, OptionBondsor any combination thereof and may be secured by a Credit Facility, all as shall be provided in the Supplemental Indenture authorizing the issuance of such Series of Bonds. The titleofthebondsofa Series shall identify the Assessment Area that is subject to Special Assessments as a result of the Series Project or Additional Series Project financed by such Series of Bonds. Bonds of a Series shall bear interest from the applicable Interest Payment Date next preceding the date on which they are authenticated unless authenticated on an applicable Interest Payment Date in which event they shall bear interest from such Interest Payment Date, or unless authenticated before the first Interest Payment Date in which event theyshall bearinterestfromtheir date; provided, however, that if a Bond of such Series is authenticated between a Record Date and the next succeeding applicable Interest Payment Date, such Bond shall bear interest from such succeeding Interest Payment Date; provided further, however, that if at the time of authentication of any Bond of a Series interest thereon is in default, such Bond shall bear interest from the date to which interest has been paid. Any interest on any Bond of a Series which is payable, but is not punctually paid or provided for on any applicable Interest Payment Date (hereinafter called Defaulted Interest ) shall be paid to the Owner in whose name the Bond is registered at the close of business on a Special Record Date to be fixed by the Trustee, such date to be not more than fifteen (15) nor less than ten (10) days prior to the date of proposed payment. TheTrusteeshallcausenotice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class, postage-prepaid, to each Owner of the Bonds of such Series of record as of the fifth (5th) dayprior to such mailing, at his address as it appears in the Bond Registernotlessthanten (10) days prior to such Special Record Date. The foregoingnotwithstanding, anyownerofbondsof a Series in an aggregate principal amount of at least $1,000,000 shall be entitledtohaveinterestpaid 23

146 by wire transfer to such Owner to the bank account number on file with the Trustee and the applicable Paying Agent, upon requesting the same in a writing received by the Trustee and such Paying Agent at least fifteen (15) days prior to the relevant Record Date, which writing shall specify the bank, which shall be a bank within the continental United States, and bank account number to which interest payments are to be wired. Any such request for interest payments by wire transfer shall remain in effect until rescinded or changed, in a writing delivered by the Owner to the Trustee and applicable Paying Agent, and anysuch rescission or change of wire transferinstructionsmustbe received bythe Trustee and such Paying Agent at least fifteen (15) days prior to the relevant Record Date. Unless otherwise provided in the Supplemental Indenture authorizing a Series of Bonds, interest on the Bonds will be computed on the basis of a 360-dayyear of twelve (12) 30-daymonths. Interest on overdue principal and, to the extent lawful, on overdue interest will be payable at the numerical rate of interest borne by such Bonds on the day before the default occurred. SECTION Execution and Form of Bonds. Bonds shall be executed bythe manual or facsimile signature of the President of the Board of the Issuer, and the corporate seal of the Issuer shall appear thereon (which may be in facsimile) and shall be attested by the manual or facsimile signature of its Secretaryor Assistant Secretaryof the Board of the Issuer. Bonds executed asabove provided may be issued and shall, upon request of the Issuer, be authenticated by the Trustee, notwithstanding that one or both of the officers of the Issuer whose signatures appearonsuchbonds shall have ceased to hold office at the time of issuance or authentication or shall not have held office at the date of the Bonds. Unless otherwise provided in the Supplemental Indenture authorizing a Series of Bonds, the Bonds of each Series, and the provisions for registration and reconversion tobe endorsed on such Bonds, shall be substantially in the form set forth as Exhibit A hereto. SECTION Authentication. No Bond shall be valid until the certificate of authentication shall have been duly executed by the Trustee, and such authentication shall be proof that the Bondholder is entitled to the benefit of the trust hereby created. The Trustee may appoint one or more Authenticating Agents. The Trustee shall be entitled to be reimbursed for payments made to any Authenticating Agent as reasonable compensation for its services. Any corporation into which any Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, consolidation or conversion to which any Authenticating Agent shall be party, or any corporation succeeding to the corporate trust business of any Authenticating Agent, shall be the successor of the Authenticating Agent hereunder, if such successor corporation is otherwise eligible under this Section, without the execution or filing of any further act on the part of the parties hereto or the Authenticating Agent or such successor corporation. Any Authenticating Agent may at any time resign bygiving written notice of resignation to the Trustee, the Issuer and any related Paying Agent. The Trustee may at any time terminate the agency of any Authenticating Agent by giving written notice of termination to such Authenticating Agent, the Issuer and anyrelated Paying Agent. Upon receiving such a notice of resignationorupon such a termination, or in case at any time any Authenticating Agent shall cease to be eligible under this Section, the Trustee shall promptlyappoint a successor Authenticating Agent, shallgivewritten notice of such appointment to the Issuer and the Paying Agent, shall mail a notice of such appointment to all Holders of Bonds of a Series affected therebyas the names and addresses of such Holders appear on the Bond Register. SECTION Registration and Registrar. TheRegistrarforeachSeriesofBondsshall act as registrar and transfer agent for the Bonds of such Series. The Issuer shall cause to be kept at an office of each Registrar for a Series of Bonds a register (herein sometimes referred to as the Bond Register or Register ) in which, subject to the provisions set forth in Section 2.09 below and such other regulations as the Issuer and such Registrar may prescribe, the Issuer shall provide for the registration of the Bonds of such Series and for the registration of transfers and exchanges of such Bonds. The Issuer shall cause each Registrar to designate, by a written notification to the Trustee, a specific office location (which maybe changedfromtimetotime, uponsimilarnotification) atwhich the Bond Register for the related Series of Bonds is kept. Each Registrar (when it is not also the Trustee), forthwith following each Record Date for a Series of Bonds and at any other time as reasonably requested by the Trustee, shall certify and furnish to the Trustee, and to any Paying Agent as such Trustee shall specify, the names, addresses, and holdings of Bondholders of such Series and any other relevant information reflected in the applicable Bond Register, and the Trustee and any such Paying Agent shall for all purposes be entitled to rely upon the information so furnished to it and shall have no liability or responsibility in connection with the preparation thereof. SECTION Mutilated, Destroyed, Lost or Stolen Bonds. If any Bond of a Series shall become mutilated, the Issuer shall execute and the Trustee or AuthenticatingAgent, asthecase may be, shall thereupon authenticate and deliver a new Bond of such Series of like tenor and denomination in exchange and substitution for the Bond so mutilated, but onlyuponsurrendertothe Trustee or Authenticating Agent, as the case may be, of such mutilated Bond for cancellation, and the Issuer and the Trustee or Authenticating Agent, as the case may be, may require reasonable indemnitytherefor. If anybond of a Series shall be reported lost, stolen or destroyed, evidenceasto the ownership and the loss, theft or destruction thereof shall be submitted to the Issuer and the Trustee or Authenticating Agent, as the case may be; and if such evidence shall be satisfactory to both and indemnity satisfactory to both shall be given, the Issuer shall execute, and thereupon the Trustee or Authenticating Agent, as the case may be, shall authenticate and deliver a new Bond of such Series of like tenor and denomination. The cost of providing any substitute Bond under the provisions of this Section shall be borne bythe BondholderforwhosebenefitsuchsubstituteBondis provided. If any such mutilated, lost, stolen or destroyed Bond shall have matured or be about to mature, the Issuer may, with the consent of the Trustee or Authenticating Agent, as the case maybe, pay to the Owner the principal amount of and accrued interest on such Bond upon the maturity thereof and compliance with the aforesaid conditions by such Owner, without the issuance of a substitute Bond therefor. Every substituted Bond issued pursuant to this Section 2.06 shall constitute an additional contractual obligation of the Issuer, whether or not the Bond alleged to have been destroyed, lost or stolen shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Master Indenture and related Supplemental Indenture equally and proportionately with any and all other Bonds duly issued hereunder All Bonds shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or stolen Bonds, and shall preclude any and all other rights or remedies with respect to the replacement or payment of negotiable instruments, investments or other securities without their surrender. SECTION TemporaryBonds. Pending preparationofdefinitivebondsofaseries, or by agreement with the original purchasers of all Bonds of such Series, the Issuer may issue and, upon its request, the Trustee shall authenticate in lieu of definitive Bonds of a Series one or more temporaryprinted or typewritten Bonds of such Series of substantiallythetenorrecitedabove. Upon request of the Issuer, the Trustee shall authenticate definitive Bonds of such Series in exchange for and upon surrender of an equal principal amount of temporary Bonds of such Series. Until so exchanged, temporary Bonds shall have the same rights, remedies and security hereunder as definitive Bonds. So long as Cede & Co., or anyother nominee of The DepositoryTrust Company, New York, New York ( DTC ) is the registered Owner of the Bonds of a Series, the definitive Bonds of such Series shall be in typewritten form. SECTION Cancellation and Destruction of Surrendered Bonds. All Bonds surrendered for payment or redemption and all Bonds surrendered for exchange shall, at the time of such payment, redemption or exchange, be promptlytransferred bythe applicable Registrar, Paying Agent or Authenticating Agent to, and cancelled and destroyed by, the Trustee. The Trustee shall deliver to the Issuer a certificate of destruction in respect of all Bonds destroyed in accordance with this Section. SECTION Registration, Transfer and Exchange. As provided in Section 2.05 hereof, the Issuer shall cause a Bond Register in respect of the Bonds of each Series to be kept at the designated office of the Registrar for such Series. Upon surrender for registration or transfer of anybond of a Series at the designated officeof the applicable Registrar, and upon compliance with the conditions for the transfer of Bondssetforth in this Section 2.09, the Issuer shall execute and the Trustee (or applicable Registrar or Authenticating Agent as described in Section 2.04 hereof) shallauthenticateanddeliver, inthename of the designated transferees, one or more new Bonds of such Series of a like aggregate principal amount and of the same maturity. At the option of the Bondholder, Bonds may be exchanged for other Bonds of a like aggregate principal amount and of the same maturity, upon surrender of the Bonds to be exchanged at anysuch office or agency. Whenever anybonds are so surrendered for exchange, the Issuer shall execute and the Trustee (or applicableregistrarorauthenticatingagentasdescribedinsection2.04 hereof) shall authenticate and deliver the Bonds of such Series which the Bondholder making the exchange is entitled to receive. All Bonds issued upon any transfer or exchange of Bonds shall be valid obligations of the Issuer, evidencing the same debt and entitled to the same benefits under this Master Indenture and related Supplemental Indenture as the Bonds surrendered upon such transfer or exchange. 26 B-8 Every Bond presented or surrendered for transfer or exchange shall be duly endorsed or accompanied bya written instrumentoftransferinformsatisfactorytothetrustee, applicablepaying Agent or Registrar, duly executed by the Bondholder or his attorney duly authorized in writing. Transfers and exchanges shall be made without charge to the Bondholder, except that the Issuer or the Trustee mayrequire payment of a sum sufficient to cover anytax orothergovernmental charge that may be imposed in connection with any transfer or exchange of Bonds. Neither the Issuer nor the applicable Registrar on behalf of the Issuer shall be required (i) to issue, transfer or exchange anybond of a Series during a period beginningattheopeningofbusiness fifteen (15) days before the dayof mailing of a notice of redemption ofbondsofsuchseriesselected for redemption and ending at the close of business on the day of such mailing, or (ii) to transfer or exchange any Bond of a Series so selected for redemption in whole or in part. SECTION Persons Deemed Owners. The Issuer, the Trustee, any Paying Agent, anyregistrar, or anyauthenticating Agent shall deem and treat the person in whosenameanybond is registered as the absolute Owner thereof (whether or not such Bond shall be overdue and notwithstanding any notation of ownership or other writing thereon made by anyone other than the Issuer, the Trustee, any Paying Agent, the Registrar or the Authenticating Agent) for the purpose of receiving payment of or on account of the principal or Redemption Price of and interest on such Bond, and for all other purposes, and the Issuer, the Trustee, any Paying Agent, Registrar and Authenticating Agent shall not be affected byanynotice to the contrary. All suchpaymentssomade to any such Owner, or upon his order, shall be valid and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for moneys payable upon any such Bond. SECTION Pari Passu Obligations Under Credit Agreements. As maybe provided for or required in any Supplemental Indenture, the Issuer may incur financial obligations under a Credit Facility payable pari passu with respect to the lien on the Trust Estate pledged to a Series of Bonds issued under this Master Indenture and a Supplemental Indenture, without meeting any financial test or requirement set forth in this Master Indenture or the corresponding Supplemental Indenture, but only if the Credit Facility supports a related Series of Bonds then being issued which does meet such tests or requirements. SECTION Qualification for The Depository Trust Company. To the extent authorized and directed by a Certified Resolution of the Issuer, the Trustee shall be authorized to enter into agreements with DTC and other depositorytrust companies, including,but not limited to, agreements necessaryfor wire transfers of interest and principal payments with respecttoanyseries of Bonds, utilization of electronic book entry data received from DTC, and other depository trust companies in place of actual delivery of Bonds of a Series and provision of notices with respect to Bonds of a Series registered bydtc and other depositorytrust companies (or anyof their designees identified to the Trustee) by overnight delivery, courier service, telegram, telecopy or other similar means of communication. So long as there shall be maintained a book-entry-only system with respect to a Series of Bonds (or portion thereof), as shall be providedinthe SupplementalIndentureauthorizing theseries of Bonds, the following provisions shall apply with respect to the Bonds of such Series: 27

147 The Bonds shall initially be registered in the name of Cede & Co. as nominee for DTC, which will act initially as securities depository for the Bonds and so long as the Bonds are held in book-entry-onlyform, Cede & Co. shall be considered the registered Owner for all purposes hereof. On original issue, the Bonds shall be deposited with DTC, which shall be responsible for maintaining a book-entry-onlysystem for recording the ownership interest of its participants ( DTC Participants ) and other institutions that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly ( Indirect Participants ). The DTC Participants and Indirect Participants will be responsible for maintaining records with respect to the beneficial ownership interests of individual purchasers of the Bonds ( Beneficial Owners ). Principal and interest on the Bonds prior to and at maturityshall be payable directlyto Cede & Co. in care of DTC. Disbursal of such amounts to DTC Participants shall be the responsibility of DTC. Payments by DTC Participants to Indirect Participants, and by DTC Participants and Indirect Participants to Beneficial Owners shall be the responsibility of DTC Participants and Indirect Participants and not of DTC, the Trustee or the Issuer. The Bonds shall initiallybe issued in the form of one fullyregistered Bond for each maturity and shall be held in such form until maturity. Individuals may purchase beneficial interests in Authorized Denominations in book-entry-only form, without certificated Bonds, through DTC Participants and Indirect Participants. DURING THE PERIOD FOR WHICH CEDE & CO. IS REGISTERED OWNER OF THE BONDS, ANY NOTICES TO BE PROVIDED TO ANY REGISTERED OWNER WILL BE PROVIDED TO CEDE & CO. DTC SHALL BE RESPONSIBLE FOR NOTICES TO DTC PARTICIPANTS AND DTC PARTICIPANTS SHALL BE RESPONSIBLE FOR NOTICES TO INDIRECT PARTICIPANTS, AND DTC PARTICIPANTS AND INDIRECT PARTICIPANTS SHALL BE RESPONSIBLE FOR NOTICES TO BENEFICIAL OWNERS. The Issuer and the Trustee shall enter into a blanket letter of representations with DTC providing for such book-entry-onlysystem. Such agreement maybeterminatedatanytimebyeither DTC or the Issuer. In the event of such termination, the Issuer shall select another securities depository. If the Issuer does not replace DTC, the Trustee will register and deliver tothebeneficial Owners replacement Bonds in the form of fullyregistered Bonds in accordance withtheinstructions from Cede & Co. In the event DTC, any successor of DTC or the Issuer elects to discontinue the book-entryonlysystem, the Trustee shall deliver bond certificatesinaccordancewiththeinstructionsfromdtc or its successor and after such time Bonds may be exchanged for an equal aggregate principal amount of Bonds in other Authorized Denominations and of the same maturity upon surrender thereof at the designated corporate trust office of the Trustee. Neither the Issuer, the Trustee, the Paying Agent nor the Registrar shall have any responsibility to any DTC Participant or Indirect Participant for any action specified in this Section 2.12 as the obligation of DTC. SECTION Credit Enhancement. By adoption of a Supplemental Indenture either prior to or subsequent to the issuance of a Series of Bonds, the Issuer may provide for a Credit Facility for such Series of Bonds and any requirements of the applicable Credit Facility Issuer. SECTION Special Obligations. Each Series of Bonds shall be a special and direct obligation of the Issuer. Neither the Bonds nor the interest and premium, if any, payable thereon shall constitute a general obligation or general indebtedness of the Issuer within the meaningof the Constitution and laws of Florida. The Bonds and the interest and premium, if any, payable thereon do not constitute either a pledge of the full faith and credit of the Issuer or a lien upon any property of the Issuer other than as provided herein or in the Supplemental Indenture authorizingtheissuance of such Series of Bonds. No Owner or any other person shall ever have the right to compel the exercise of anyad valorem taxing power of the Issuer or anyother public authorityor governmental body to pay Debt Service Requirements or to pay any other amounts required to be paid pursuant to this Master Indenture, any Supplemental Indenture, or the Bonds. Rather, Debt Service Requirements and any other amounts required to be paid pursuant to this Master Indenture, any Supplemental Indenture, or the Bonds, shall be payable solely from, and shall be secured solely by, the Series Pledged Revenues and the Series Pledged Funds pledged to such Series of Bonds, all as provided herein and in such Supplemental Indenture. SECTION Tax Status of Bonds. Any Series of Bonds issued under this Master Indenture either: (i) may be issued as Tax Exempt Bonds or (ii) may be issued as Taxable Bonds. The intended tax status of any Series of Bonds to be issued may be referenced in any Supplemental Indenture authorizing the issuance of such Series of Bonds. SECTION Bond Anticipation Notes. Whenever the Issuer shall authorize the issuance of a Series of Bonds, the Issuer maybyresolution or Supplemental Indenture authorize the issuance of bond anticipation notes in anticipation of the sale of such authorizedseriesofbondsina principal amount not exceeding the principalamountofsuchseries. Theaggregateprincipalamount of Bonds of such Series and all other Bonds previouslyauthenticatedanddeliveredtopaythecostof the Series Project or Additional Series Project for which the proceeds of the bond anticipation notes will be applied shall not exceed such Cost. The interest on such bond anticipation notes may be payable out of the related Series Interest Account established for the bond anticipation notes to the extent provided in the resolution of the Issuer or Supplemental Indenture authorizing such bond anticipation notes. The principal of and interest on such bond anticipation notes and renewals thereof shall be payable from anymoneys of the Issuer available therefor or from the proceedsofthe sale of the Series of Bonds in anticipation of which such bond anticipation notes are issued. The proceeds of sale of bond anticipation notes shall be applied to the purposes for which the Bonds anticipated by such bond anticipation notes are authorized and shall be deposited in the appropriate Fund or Account established by the Supplemental Indenture or resolution for such purposes; provided, however, that the resolution or resolutions or Supplemental Indenture authorizing such bond anticipation notes mayprovide for thepaymentofinterestonsuchbondanticipationnotesfrom the proceeds of sale of such bond anticipation notes and for the deposit, in the related Series Interest Account. In the event that the Issuer adopts a resolution rather than a Supplemental Indenture to authorize the issuance of bond anticipation notes, the Issuer will promptly furnish to the Trustee a copy of such resolution, certified by a Responsible Officer, together with such information with respect to such bond anticipation notes as the Trustee may reasonably request, including, without limitation, information as to the paying agent or agents for such bond anticipation notes. If authorized by resolution in lieu of supplemental indenture, the Trustee shall have no duties or obligations to the holders of such bond anticipation notes unless specifically so authorized by the resolution of the Issuer authorizing the issuance of such bond anticipation notes and accepted in writing by the Trustee. The provisions of this Master Indenture shall apply to bond anticipation notes issued pursuant hereto, except where the context clearly requires otherwise or as otherwise provided in a related Supplemental Indenture or resolution. [END OF ARTICLE II] ARTICLE III ISSUE OF BONDS SECTION Issue of Bonds. Subject to the provisions of Section 2.01 hereof, the Issuer may issue Bonds hereunder from time to time without limitation as to aggregate principal amount for the purposes of: (i) financing all or part of the Cost of one or more Series Project or Additional Series Project orrefunding (includingadvancerefunding) anoutstandingseriesofbonds or anyportion thereof; (ii) paying Capitalized InterestonaSeriesofBonds; (iii) depositingtheseries Reserve Account Requirement to the Series Reserve Account for such Series of Bonds; and (iv) paying the costs and expenses of issuing such Series of Bonds. In any such event the Trustee shall, at the request of the Issuer, authenticate the Bonds of each Series and deliver or cause them to be authenticated and delivered, as specified in the request, but only upon receipt of the following (except as otherwise provided in a Supplemental Indenture): 30 B-9 (1) a Certified Resolution of the Issuer (a) authorizing this Master Indenture and the Supplemental Indenture(s) relating to the Series of Bonds; and (b) authorizing the execution and delivery of the Series of Bonds to be issued; (2) an executed and attested original or certified copy of this Master Indenture; (3) an executed and attested original or certified copy of the Supplemental Indenture fixing the amount of and security for the Series of Bonds authorized to be issued thereby and establishing, among other things, the dates on, and the amounts in, which such Series of Bonds will mature (provided that the final maturity date of such Series of Bonds shall be not later than permitted bythe Act with respect to such SeriesofBonds), designating the Paying Agent and Bond Registrar, fixing the Amortization Installments, if any, for the Term Bonds of such Series, specifying the interest rates or the method for calculating such interest rates with respect to such Series of Bonds, specifying the redemption provisionsand prices thereupon, establishing the provisions for Additional Bonds, if any, which may be issued on a pari passu basis with such Series of Bonds, specifyingotherdetailsofsuchseries of Bonds, and directing the deliveryof such Series of Bonds to or upontheorderoftheinitial purchaser thereof upon payment of the purchase pricethereforsetforthinsuchsupplemental Indenture; (4) a written opinion or opinions of Counsel to the Issuer, addressed to the Trustee that (a) all conditions prescribed herein as precedent to the issuance of the Series of Bonds to be issued have been fulfilled; (b) suchseriesofbondshavebeenvalidlyauthorized and executed and when authenticated and delivered pursuant to the request of the Issuer will be valid obligations of the Issuer entitled to the benefit of the trust created hereby; (c) any consents of any Regulatory Bodies required in connection with the issuance of the Series of Bonds or in connection with the acquisition of the improvements included in the Series Project or Additional Series Project beingfinancedwiththeproceedsofsuchseriesofbonds have been obtained or can be reasonablyexpected to be obtained; and (d) iftheacquisitionof anyreal propertyor interest therein is included in the purpose of such issue, (i) the Issuerhas or can acquire good and marketable title thereto free from all liens and encumbrancesexcept 31

148 such as will not materiallyinterfere with the proposed use thereof or (ii) the Issuerhasorcan acquire a valid, subsisting and enforceableleasehold, easement, right-of-wayorotherinterest in real propertysufficient to effectuate the purpose of the issue (which opinionmaybestated in reliance on the opinion of other Counsel satisfactory to the signer or on a title insurance policy issued by a reputable title company); (5) a Consulting Engineer s Certificate stating, in the signer s opinion, that (a) the Series Project or Additional Series Project being financed by the Series of Bonds is reasonable and practicable; and (b)(i) the constructionitemsandthecoststhereofasstatedin the Master Engineer s Report are reasonable, (ii) the Series Project or Additional Series Project, as applicable, has been, orcanbe, acquired, constructed, reconstructed, equippedand installed in accordance with plans and specifications for the Series Project or Additional Series Project, as applicable approved byall RegulatoryBodies required to approve them or such approval can reasonably be expected to be obtained; (6) one or more Certified Resolutions of the Issuer relating to the levyof Special Assessments in respect of the Series Project or AdditionalSeriesProject, andevidencingthat the Issuer has undertaken and, to the extent then requiredunderapplicablelaw, completedall necessary proceedings, including, without limitation, the approval of assessment rolls, the holding of public hearings, the adoption of resolutions and the establishmentofallnecessary collection procedures, in order to levyand collect Special Assessments upon the lands inthe applicable Assessment Area in anamountsufficienttopaythedebtservicerequirementson the Series of Bonds to be issued; (7) an executed opinion of Bond Counsel stating that the signer is of the opinion that the Bonds of such Series are valid, binding and enforceableobligationsoftheissuerand, if such Series of Bonds are not intended to be Taxable Bonds, that interest thereon is excludable from gross income of the Owners under the income tax laws of the United States in effect on the date such Series of Bonds are delivered to their initial purchasers; (8) a written direction of the Issuer to the Trustee to authenticate and deliver the Series of Bonds; and SECTION Additional Requirements for Refunding Bonds. The Trustee shall, at the request of the Issuer, authenticate Refunding Bonds and provide for delivery of such Refunding Bonds as specified in the request, but only upon receipt of the following, in addition to the items listed in Section 3.01 hereof: (1) an Officer s Certificate of the Issuer stating (a) the intended use of the proceeds of the issue of Refunding Bonds; (b) any other amounts available for the purpose; (c) that the proceeds of the issue of the Refunding Bonds plus the other amounts, if any, stated to be available for the purpose will be sufficient to refund the Bonds to be refunded in accordance with the refunding plan and in compliance with Article XIII of this Master Indenture, including, without limitation, to pay the Costs of Issuance of such Refunding Bonds; (d) that notice of redemption, if applicable, of thebondstoberefundedhasbeenduly given or that provision has been made therefor, as applicable; and (e)(i) the Debt Service Requirements for the current and each Fiscal Year (A) with respect to all BondsOutstanding immediately prior to the authentication and delivery of Refunding Bonds and (B) with respect to all Bonds to be Outstanding immediately thereafter, and (ii) that the Debt Service Requirements for each such Fiscal Year is no greater in (i)(b) than in (i)(a) of this subsection; (2) a written opinion of Bond Counsel to the effect that the issuance of such Refunding Bonds will not adversely affect the exclusion from gross income for federal income tax purposes of interest on any Tax Exempt Bonds issued pursuant to this Master Indenture; and (3) to the extent that the proceeds of the Refunding Bonds are to be applied to defease all or a portion of the Bonds Outstanding, a verification report of a firm of certified public accountants selected bythe Issuer and having a favorablereputationinthepreparation of such reports, to the effect that the moneys and/or Defeasance Securitiesdepositedwiththe escrow agent to effect such defeasance are sufficient to pay the principal of, redemption premium, if any, and interest on the Bonds, or portion thereof, to be defeased. [END OF ARTICLE III] (9) such other documents, certifications and opinions as shall be required bythe Issuer or the Trustee upon advice of counsel. The delivery to the Trustee by the Issuer of the Issuer s order to authenticate and deliver the Series of Bonds and the delivery to the Trustee by Bond Counsel of Bond Counsel s opinion shall evidence that the foregoing requirements have been fulfilled to the satisfaction of the Issuer, Bond Counsel and the purchaser of the Series of Bonds. SECTION Disposition of Proceeds and Other Funds. The proceeds (including accrued interest and any premium) of each Series of Bonds shall be applied as soon as practicable upon deliverythereof to the Trustee as set forth in the SupplementalIndenturerelatingtosuchSeries of Bonds ARTICLE IV PROJECT FUND; COSTS OF ISSUANCE FUND SECTION Project Fund. There is created and established a fund designated as the Project Fund which shall be held bythe Trustee. PursuanttoaSupplementalIndentureauthorizing a Series of Bonds (other than Refunding Bonds), the Issuer may create a Series Project Account relating to that Series of Bonds. The Issuer shall pay to the Trustee, for deposit into the related Series Project Account of the Project Fund, as promptly as practicable, the following amounts received by it: (i) Bonds; the amount set forth in the Supplemental Indenture relating to such Series of (ii) payments made to the Issuer from the sale, lease or other disposition of the Series Project or Additional Series Project any portion thereof which are not part of the Series Pledged Funds and Series Pledged Revenues pledged to a Series of Bonds; (iii) insurance proceeds with respect to the lossordestructionoftheseriesproject or Additional Series Project or any portion thereof if a determination is made to restore, rebuild or replace such Series Project or Additional Series Project pursuant to Section 8.29 hereof; and (iv) such other amounts as may be provided in a Supplemental Indenture. Amounts in such Account shall be applied to the Cost of the Series Project or Additional Series Project until the Date of Completion, at which time such amounts shall be applied in the manner set forth in Section 4.02 below. SECTION Payments From Project Fund. Payment of the Cost of any Series Project or Additional Series Project shall be made from the Project Fund as herein provided. All such payments shall be subject to the provisions and restrictions set forth in thismasterindenture, andthe Issuer covenants that it will not request any sums to be paid from the Project Fund except in accordance with such provisions and restrictions. Unless otherwise provided in the Supplemental Indenture authorizing the issuance of a Series of Bonds, before anypayment from the related Series Project Account shall be made, the Issuer shall file with thetrusteearequisitionintheformattached to the corresponding Supplemental Indenture, signedbyaresponsibleofficerandbytheconsulting Engineer. Upon receipt of each such requisition the Trustee shall promptlywithdrawfromtheseries Project Account and pay to the person, firm or corporation named in such requisition the amount designated in such requisition. The Trustee shall have no dutyto investigate the accuracyorvalidity of the items delivered pursuant to the requisition. Moneys in the Project Fund shall be disbursed by check, voucher, order, draft, certificate or warrant signed by any one or more officers or employees of the Trustee legallyauthorized to sign such items or bywire transfer to an account specified bythe payee upon satisfaction of the conditions for disbursement set forth in this Section All requisitions and engineer's certificates received by the Trustee pursuant to this Section shall be retained in the possession of the Trustee, subject at all reasonable times to the inspection of the 34 B-10 Issuer, the Consulting Engineer, the Owner of any Bonds of the related Series, and the agents and representatives thereof. On the Date of Completion of a Series Project or Additional Series Project, the balance in the related Series Project Account not reserved for the payment of anyremaining part of the Cost of the Series Project or Additional Series Project shall be transferred bythe Trustee first, to the credit of the related Series Rebate Account in the amount, and to the extent necessary, at the written direction of the Issuer, so that the amount on deposit therein equals the accrued rebate obligation under Section 148(f) of the Code and thereafter to the credit of the Prepayment Subaccount of the Series Redemption Account relating to the Series of Bonds issuedtofinancesuch Series Project or Additional Series Project and used forthepurposessetforthforsuchaccountinthe Supplemental Indenture relating to such Series of Bonds. SECTION Costs of Issuance Fund. There is created and established a fund designated as the Costs of Issuance Fund which shall be held by the Trustee. Pursuant to a Supplemental Indenture authorizing a Series of Bonds, the Issuer shall create a Series Cost of Issuance Account relating to that Series of Bonds into which shall be deposited a portion of the proceeds of the Series of Bonds upon delivery thereof and from which Costs of Issuance of the applicable Series of Bonds shall be paid. The amounts in the Series Costs ofissuanceaccount, until applied, shall be held for the securityof the related Series of Bonds. Monies held for the creditofthe Series Costs of Issuance Account shall be used, as and when the Issuer determines it to be appropriate as evidenced in a certificate delivered by the Issuer to the Trustee, for the purpose of paying any unpaid Costs of Issuance of the related Series of Bonds. Requisitions from each Series Costs of Issuance Account shall be made pursuant to the requisition form attached to the Supplemental Indenture authorizing the related Series of Bonds, and the Trustee shall make disbursements from the Series Costs of Issuance Account as directed in the applicable Requisition. Amounts in the Series Costs of Issuance Account not needed to pay Costs of Issuance of the related Series of Bonds shall be transferred to the related Series Project Account through and including the Date of Completion and thereafter applied in accordance with the provisionsofsection4.02hereof.. [END OF ARTICLE IV] 35

149 ARTICLE V LIEN OF INDENTURE; ESTABLISHMENT AND APPLICATION OF FUNDS AND ACCOUNTS SECTION Lien of Indenture. The applicable Trust Estate is hereby irrevocably pledged for the payment of the Bonds of the related Series issued hereunder and all reimbursements due to any Credit Facility Issuer for any drawing with respect to such Series of Bonds on its Credit Facility, including, without limitation, interest thereon, as required under the terms oftheapplicable Credit Facility Agreement, subject only to the provisions of this Master Indenture and any Supplemental Indenture permitting the application thereof for the purposes and on the terms and conditions set forth in this Master Indenture and any such Supplemental Indenture with respect to each Series of Bonds; provided, however, that unless otherwise specifically provided herein or in a Supplemental Indenture relating to a Series of Bonds with respect to the Trust Estate securing such Series of Bonds, the Series Pledged Funds and Series Pledged Revenues securing a Series of Bonds shall secure only such Series of Bonds and Bonds issued on a parity therewith and shall not secure any other Bonds or Series of Bonds. Notwithstanding anything to the contrary herein, the lien and pledge of this Master Indenture shall not apply to any moneys transferred by the Trustee to the Rebate Fund. The foregoing pledge shall be valid and binding from and after the date of initial deliveryof the Bonds and the proceeds of sale of the Bonds and all the moneys, securities and funds set forth in this Section 5.01 shall immediately be subject to the lien of the foregoing pledge, which lien is hereby created, without any physical delivery thereof or further act. Such lien shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Issuer or the Trustee, irrespective of whether such parties have notice thereof. Such lien shall be prior and superior to all other liens now existing or hereafter created. SECTION Funds and Accounts Relating to the Bonds. In addition to the Project Fund and Costs of Issuance Fund and the Accounts therein, the following Funds and Accounts are hereby established and shall be held by the Trustee: (a) A Revenue Fund, and, within such Fund there may be established by Supplemental Indenture authorizing a Series of Bonds a separate SeriesRevenueAccount foreachseriesofbonds issued hereunder. (b) A Debt Service Fund, and within such Fund there may be established by Supplemental Indenture authorizing a Series of Bonds a Series Debt Service Fund and within such Series Debt Service Fund the following Accounts shall be established for each Series of Bonds issued hereunder: (i) (ii) a Series Interest Account, a Series Principal Account, and (iii) a Series Redemption Account, and therein a Prepayment Subaccount and an Optional Redemption Subaccount. In addition, a Series Capitalized Interest Account may be created in the Series Debt Service Fund with respect to a Series of Bonds pursuant to a Supplemental Indenture. (c) A Debt Service Reserve Fund, and, within such Fund there may be established by Supplemental Indenture authorizing a Series of Bonds a separate Series Reserve Account for each such Series of Bonds issued hereunder and any Bonds issued on a parity with any such Series of Bonds hereunder. (d) A Rebate Fund, and, within such Fund there may be established by Supplemental Indenture authorizing a Series of Bonds a separate Series Rebate Account for each such Series of Tax Exempt Bonds issued hereunder. In addition to the foregoing, whenever the Issuer issues Refunding Bonds hereunder, the Issuer may, by the Certified Resolution of the Issuer or Supplemental Indenture authorizing the Refunding Bonds, direct the Trustee to establish a separate fund and to deposit therein the proceeds of the Refunding Bonds. The Certified Resolution or Supplemental Indenture shall specify the investment and applicationofamountssodepositedincluding, withoutlimitation, thetransferthereof to any other agent or trustee of the Issuer and the time and conditions for such transfer. SECTION Revenue Fund and Series Revenue Accounts. The Issuer hereby covenants and agrees to immediately deposit upon receipt all Series Pledged Revenues (except Prepayments of related Assessments) when received, into therelatedseriesrevenueaccountandto immediately deposit all Prepayments of related Assessments, when received, into the Prepayment Subaccount of the related Series Redemption Account, unless otherwise provided for in the Supplemental Indenture relating to a Series of Bonds. The Issuer may deposit proceeds of any casualty relating to a Series Project or Additional Series Project, whether from insurance or selfinsurance, to the related Series Revenue Account as provided in Section 8.29 hereof. SECTION Debt Service Fund and Series Debt Service Funds and Accounts. (a) Principal, Maturity Amount, Interest and Amortization Installments. On the Business Day preceding each Interest Payment Date on the Bonds of a Series, the Trustee shall withdraw amounts on deposit in the related Series Revenue Account and, from theamountsowithdrawn, shall make the following deposits in the following order of priority to the related Series Accounts: (i) to the credit of the Series Interest Account, an amount which, together with other amounts, if any, then on deposit therein will equal theamountofinterestpayableonthe Bonds of such Series on such Interest Payment Date; (ii) to the credit of the Series Principal Account, an amount which, together with other amounts, if any, then on deposit therein will equal the principalamount, ifany, payable with respect to Serial Bonds of such Series on such Interest Payment Date; (iii) in each Bond Year in which Term Bonds of such Series are subject to mandatory redemption from Amortization Installments, to the credit of the Series Principal Account, an amount which, together with other amounts, if any, then on deposit therein, will equal the Amortization Installment payable on the Term Bonds of such Series on such Interest Payment Date; and (iv) in each Bond Year in which Capital Appreciation Bonds of such Series mature, to the credit of the Series Principal Account, an amount which, together with other amounts, if any, then on deposit therein, will equalthematurityamountpayablewithrespect to the Capital Appreciation Bonds of such Series maturing on such Interest Payment Date; (v) to the credit of the Series ReserveAccount, anamount, ifany, which, together with the amount then on deposit therein, willequaltheseriesreserveaccountrequirement; and (vi) to the credit of the Series RebateAccounttheRebateAmount, ifany, required to be deposited therein. Notwithstanding the foregoing, so long as there are moneys on deposit in the related Series Capitalized Interest Account on the date required for anytransfer into the Series Interest Account as set forth above, the Trustee shall, prior to making anytransferintotherelatedseriesinterestaccount from the related Series Revenue Account, transfer to the related Series Interest Account from the related Series Capitalized Interest Account, the lesser of the interest on suchseriesofbondscoming due on the next succeeding Interest Payment Date or the amount remaining on deposit in the related Series Capitalized Interest Account. In addition, moneysmaybetransferredtotheappropriateseries Rebate Account from the Project Fund or Revenue Fund at the timesandintheamountsnecessaryto pay any Rebate Amount then due. (b) Disposition of Remaining Amounts on Deposit in Series Revenue Account. The Issuer shall authorize the withdrawal, from time to time, from the Series Revenue Account of an amount sufficient to pay the fees and charges of the Trustee, Bond Registrar, and Paying Agent relating to that Series of Bonds, when due. If following such payment, moneyremains in the Series Revenue Account, then, if (x) the amount on deposit in the related Series Interest Account, Series Principal Account, and Series Redemption Account equals the Debt Service Requirements on the Bonds of such Series in such Bond Year (taking into account any Bonds of such Series which are to be purchased bythe Trustee pursuant to writtendirectionsfromtheissuerinaccordancewithsection 7.04 hereof), and (y) the related Series Reserve Account in the Debt Service Reserve Fund is fully funded, then the amounts remaining in the Series Revenue Account shall, first be deposited to the credit of the related Series Rebate Account in the amount, and to the extent necessary, so that the amount on deposit therein equals the accrued rebate obligation under Section 148(f) ofthecodeand may thereafter, at the written direction of the Issuer, be (i) used to pay the commissions, fees, costs and anyother charges of the Tax Collector and the PropertyAppraiser, or, ifsuchcommissions, fees, costs, or other charges have been paid by the Issuer, to reimburse the Issuer for such payment upon written request of a Responsible Officer; (ii) transferred to the related Series Optional Redemption Subaccount in the related Series RedemptionAccountandappliedasprovidedherein; (iii) disbursed 38 B-11 to the Issuer and applied to paythe operating and administrative costs and expenses of the Issuer; or (iv) applied in any combination of the foregoing. (c) Series Reserve Account. Moneys held for the credit of a Series Reserve Account shall be used for the purpose of paying any Debt Service Requirements on the Bonds of the related Series whenever amounts on deposit in the Series Debt Service Fund shall be insufficient for such purpose. At the time of any withdrawal from a Series Reserve Account that results in a deficiency therein, the Trustee shall promptly notify the Issuer of the amount of any such deficiency and the Trustee shall withdraw the amount of such deficiencyfromtherelatedseriesrevenueaccount, and, if amounts on deposit therein are insufficient therefor, the Issuer shall pay the amount of such deficiencyto the Trustee, for deposit in such Series Reserve Account, from the firstlegallyavailable sources of the Issuer. The Trustee, as of the close of business on the last Business Day in each Bond Year, after taking into account all payments and transfers made as of such date, shallcompute, inthe manner set forth in Section 6.03, the value of the Series Reserve Account and shall promptly notify the Issuer of the amount of any deficiency or surplus (as suchtermsarehereinafterdefined) asof such date in such Series Reserve Account. The Issuer shall immediately pay the amount of any deficiency to the Trustee, for deposit in the Series Reserve Account, from any legally available sources of the Issuer. The Trustee, as soon as practicable after such computation, shall deposit any surplus, at the direction of a Responsible Officer, to the credit of the Series Redemption Account or the Series Principal Account or as provided in the Supplemental Indenture relating to a Series of Bonds. For purposes of this Section: (i) a deficiency shall mean, in the case of a Series Reserve Account, that the amount on deposit therein is less than the Series Reserve Account Requirement (but onlyafter the Bond Year in which the amount on deposit therein first equals the Series Reserve Account Requirement), and (ii) a surplus shall mean, in the case of a Series Reserve Account, that the amount on deposit therein is in excess of the Series Reserve Account Requirement. (d) Series Debt Service Fund. MoneysheldforthecreditofaSeriesPrincipalAccountin a Series Debt Service Fund shall be withdrawn therefrom by the Trustee and transferred by the Trustee to the Paying Agent in amounts and at times sufficient to pay, when due, the principal of Serial Bonds of such Series, the MaturityAmount of Capital Appreciation Bonds of such Seriesand to redeem Term Bonds of such Series that are subject to mandatory redemption from Amortization Installments. Moneys held for the credit of a Series Interest Account in a Series Debt Service Fund shall be withdrawn therefrom by the Trustee and transferred by the Trustee to the Paying Agent in amounts and at times sufficient to pay, when due, the interest on the Bonds of such Series (e) Series RedemptionAccount. MoneysrepresentingPrepaymentsandsumstransferred from a Series Project Account in accordance herewith on deposit in a Prepayment Subaccount of a Series Redemption Account to the full extent of a multiple of an Authorized Denomination shall, unless otherwise provided in the Supplemental IndenturerelatingtosuchSeriesofBonds, beusedby the Trustee to redeem Bonds of such Series on the earliest dateonwhichsuchbondsarepermittedto be called without payment of premium bythe termsthereof (includingextraordinaryorextraordinary mandatory redemption) and of the Supplemental Indenture relating to such Series of Bonds. Such redemption shall be made pursuant to the provisions of Article VII. Except as otherwiseprovidedin a Supplemental Indenture relating to a Series of Bonds moneys deposited in a Series Redemption 39

150 Account other than from Prepayments or sums transferred from a Series Project Account may be deposited into the Series Optional Redemption Subaccount in the correspondingseriesredemption Account and shall be applied by the Trustee, at the written direction of a Responsible Officer, (i) to redeem the related Series of Bonds by calling, on or prior to the forty-fifth (45 th ) day preceding the date of redemption, such amount of Bonds of such Series then subject to optional redemption as, with the redemption premium, if any, will exhaust, as nearly as may be practicable, moneys on deposit in the related Optional Redemption Subaccount in a Series Redemption Account, and/or (ii) to purchase Outstanding Bonds of the related Series in accordance herewith. Such redemption or purchase shall be made pursuant to the provisions of Article VII. The Issuer shall pay all expenses incurred by the Trustee and Paying Agent in connection with any redemption or purchase. (f) Payment to Issuer. When no Bonds of a Series remain Outstanding, and after all expenses and charges herein and in the related Supplemental Indenture and any rebate obligation under Section 148(f) of the Code required to be paid have been paid as certified to the Trustee in writing by a Responsible Officer, the Trustee shall, upon the written direction of a Responsible Officer, pay any balance in the Series Funds and Series Accounts for such Series of Bonds to the Issuer, free and clear of any lien and pledge created by this Master Indenture. SECTION Drawings on Credit Facility. In the event that there has been issued a Credit Facilitywith respect to the Bonds, the Trustee shall draw on the CreditFacility, inaccordance with the provisions for drawing under such Credit Facility, and within the requisite time period, all as set forth in the Credit Facility. SECTION Procedure When Funds Are Sufficient to PayAll Bonds. Ifatanytime the moneys held by the Trustee in the Funds and Accounts (excluding the Project Fund) hereunder and available therefor are sufficient to paythe principal or Redemption Price of, as the case maybe, and interest on all Bonds of a Series then Outstanding to maturityor prior redemption, together with anyamounts due the Trustee, Paying Agent, Registrar, Credit FacilityIssuer, and the Issuer, andany rebate obligation under Section 148(f) of the Code, the Issuer shall direct the Trustee to, and the Trustee shall, applythe amounts in the Funds and Accounts related to such Series to the payment of the aforesaid obligations, without premium, and the Issuer shall not be required to pay over any further Pledged Revenues with respect to such Bonds unless and until it shall appear that there is a deficiency in the Funds and Accounts held by the Trustee. (c) be held and accounted for separate and apart from all other Funds and Accounts, including Series Accounts of other Series of Bonds, and other funds and accounts of the Trusteeand the Issuer; (d) except for amounts on depositintheseriesrebateaccountsintherebatefund, until applied for the purposes provided herein, be subject to a first lien in favor of the Owners of such Series of Bonds and any pari passu obligations to Credit Facility Issuers with respect to such Series of Bonds, which lien is herebycreated, prior and superior to all other liens now existing or hereafter created, and, to a second lien in favor of the Trustee, as securityfor the reasonable compensation for the services of the Trustee hereunder, and also all its reasonable expenses and disbursements, including the reasonable fees and expenses of Trustee s counsel, subordinate and inferior to the security interest granted to the Owners of such Series of Bonds and any pari passu obligations to Credit Facility Issuers with respect to such Series of Bonds, but nevertheless payable in the order of priority as set forth in Section 9.10 hereof upon the occurrence of an Event of Default; and (e) shall not be subject to lien or attachment byanycreditorofthetrusteeoranycreditor of the Issuer or any other Series of Bonds other than the Owners of such Series of Bonds and the Credit Facility Issuer with respect to such Series of Bonds. Notwithstanding anything to the contrary herein, the Trustee is authorized and directed to transfer moneys from the Series Accounts in the Project Fund and Reserve Fund to the credit of the related Series Rebate Account in the amount, and to the extent necessary, at the written direction of the Issuer, so the amount on deposit therein equalstheaccruedrebateobligationundersection148(f) of the Code with respect to the applicable Series of Bonds. [END OF ARTICLE V] SECTION Trust Funds. All amounts on deposit in Series Funds and Series Accounts for the benefit of a Series of Bonds shall: (a) be used only for the purposes and in the manner provided herein and in the Supplemental Indenture relating to such Series of Bonds and, pending such application, be held by the Trustee in trust for the benefit of the Owners of such Series of Bonds; (b) be irrevocablypledged to thepaymentofsuchseriesofbonds, exceptforamountson deposit in the Series Rebate Accounts in the Rebate Fund; ARTICLE VI SECURITY FOR AND INVESTMENT OR DEPOSIT OF FUNDS SECTION Deposits and Security. All moneys received by the Trustee for deposit in any Fund or Account established under this Master Indenture shall be considered trust funds, shall not be subject to lien or attachment, except for the lien created bythis Master Indenture, and shallbe deposited in the commercial department of the Trustee, until or unless invested or deposited as provided in Section 6.02 hereof. Unless otherwise provided in the Supplemental Indenture authorizing the issuance of a Series of Bonds, all deposits of moneys received by the Trustee under this Master Indenture in the commercial department of the Trustee (whether original deposits under this Section 6.01 or deposits or redeposits in time accounts under Section 6.02) shall, to the extent not insured, and to the extent permitted by law, be fully secured as to both principal and interest earned, by Investment Securities. If at any time the commercial department of the Trustee is unwilling to accept such deposits or unable to secure them as provided above, the Trustee may deposit such moneys with anyother depositarywhich is authorized to receive them and the deposits of which are insured by the Federal Deposit Insurance Corporation (including the FDIC S Savings Association Insurance Fund). All deposits in any other depositary in excess of the amount covered by insurance (whether under this Section 6.01 or Section 6.02 as aforesaid) shall, to the extent permitted by law, be fully secured as to both principal and interest earned, in the same manner as required herein for deposits with the Trustee. Such security shall be deposited with a Federal Reserve Bank, with the trust department of the Trustee as authorized by law with respect to trust funds in the State, or with a bank or trust company having a combined net capital and surplus of not less than $50,000,000. SECTION Investment or Deposit of Funds. Unless otherwise provided in the Supplemental Indenture authorizing the issuance of a Series of Bonds, the Trustee shall, as directed by the Issuer in writing, invest moneys held in the Project Fund, the Cost of Issuance Fund, the Revenue Fund, the Debt Service Fund, the Rebate Fund and the Debt Service Reserve Fund, and all accounts therein, only in Investment Securities. All investments shall mature or be subject to redemption bythe holder without penalty, not later than the date when the amounts will foreseeably be needed for purposes set forth herein. All securities securing investments under this Section shall be deposited with a Federal Reserve Bank, with the trust department of the Trustee, asauthorizedby law with respect to trust funds in the State, or with a bank or trust company having a combined net capital and surplus of not less than $50,000,000. The interest and income received upon such investments and anyinterest paid bythe Trustee or anyother depositaryof anyfund or Accountand any profit or loss resulting from the sale of securities shall be added or charged to the Fund or Account for which such investments are made and retained therein except as otherwise provided in the Supplemental Indenture authorizing a Series of Bonds. Upon request of the Issuer, or on its own initiative whenever payment is to be made out of any Fund or Account, the Trustee shall sell such securities as maybe requested to make the payment and restore the proceeds to the Fund or Account in which the securities were held. The Trustee shall not be accountable for any depreciation in the value of anysuch securityor for anyloss resulting from the sale thereof, unless it has failed to make investments in accordance with written directions of the Issuer. If net proceeds from the sale of securities held in any Fund or Account shall be less than the amount invested and, as a result, the amount on deposit in such Fund or Account is less than the amount required to be on deposit in such 42 B-12 Fund or Account, the amount of such deficit shall be transferred to such Fund or Account from the Revenue Fund. Absent specific or standing instructions from the Issuer, the Trustee shall not invest moneys in the Funds and Accounts, but the Trustee shall make investments in accordance with the direction of the Issuer, and if the Issuer has failed to give instructions, in accordance with the standing instructions, if any, of the Issuer. Absent specificorstandinginstructionsfromtheissuer, allmoneys in the Funds and Accounts established under this Master Indenture shall be invested in Investment Securities described in item (viii) of the definition of InvestmentSecurities. TheTrusteeshallnotbe liable or responsible for any loss or entitled to any gain resulting from any investment or sale upon the investment instructions of the Issuer or otherwise, including that set forth in the first sentence of this paragraph. SECTION Valuation of Funds. The Trustee shall value the assets in each of the Funds and Accounts established hereunder as of September 30 of each Fiscal Year, and as soon as practicable after each such valuation date (but no later than ten (10) days after each such valuation date) shall provide the Issuer a report of the status of each Fund and Accountasofthevaluationdate. In computing the assets of any Fund or Account, investments and accrued interest thereon shall be deemed a part thereof, subject to Section 6.02 hereof. For the purpose of determiningtheamounton deposit to the credit of any Fund or Account established hereunder (other than the Debt Service Reserve Fund), obligations in which money in such Fund or Account shall have been invested shall be valued at the market value thereof. For the purpose of determining the amount on deposit to the credit of the Debt Service Reserve Fund, obligations in which money in such Fund shall have been invested shall be valued at the market value thereof or the amortized cost thereof, whichever is lower. [END OF ARTICLE VI] 43

151 ARTICLE VII REDEMPTION AND PURCHASE OF BONDS (c) and letters; CUSIP numbers, to the extent applicable, and any other distinctive numbers SECTION Redemption Generally. The Bonds of any Series shall be subject to redemption, either in whole or in part on any date, and at such times, in the manner and at such prices, as maybe provided bythe Supplemental Indenture authorizing the issuance of such Seriesof Bonds. The Issuer shall provide written notice to the Trustee of any optional redemption on or before the forty-fifth (45 th ) day next preceding the date to be fixed for such optional redemption. Unless otherwise provided in the SupplementalIndenturerelatingtoaSeriesofBonds, ifless than all of the Bonds of any one maturity of a Series shall be called for redemption, the particular Bonds of a Series to be redeemed shall be selected by lot in such reasonable manner as the Bond Registrar for such Series in its discretion may determine. The portion of any Series of Bonds to be redeemed shall be in an Authorized Denomination and, in selecting the Bonds of such Series to be redeemed, the Bond Registrar for such Series shall treat each such Bond as representingthatnumber of Bonds of such Series which is obtained by dividing the principal amount of such Bond by an Authorized Denomination (such amount being hereafter referred to as the unit of principal amount ). If it is determined that one or more, but not all, of the units of principal amount represented byanysuch Bond is to be called for redemption, then upon notice of intentiontoredeem such unit or units of principal amount as provided below, the registered Owner of such Bond, upon surrender of such Bond to the Paying Agent for such Bond for payment to such registered Owner of the redemption price of the unit or units of principal amount called for redemption, shall be entitled to receive a new Bond or Bonds of such Series in the aggregate principal amount of the unredeemed balance of the principal amount of such Bond. New Bonds of such Series representing the unredeemed balance of the principal amount shall be issued to theownerthereofwithoutanycharge therefor. If the Owner of anybond of a denomination greater than the unit of principal amounttobe redeemed shall fail to present such Bond to the Paying Agent for such Bond for payment and exchange as aforesaid, such Bond shall, nevertheless, become due and payable on the date fixed for redemption to the extent of the unit or units of principal amount called for redemption. SECTION Notice of Redemption. When required to redeem Bonds under any provision of this Master Indenture or directed to do so bythe Issuer, the Trustee shall causenoticeof the redemption, either in whole or in part, to be mailed at least thirty (30) but not more than sixty (60) days prior to the redemption date to all Owners of Bonds to be redeemed (as such Owners appear on the Bond Register on the fifth (5th) dayprior to such mailing), attheirregisteredaddresses and also to any Credit Facility Issuer providing a Credit Facility securing such Bonds, but failure to mail any such notice or defect in the notice or in the mailing thereof shall not affect the validity of the redemption of the Bonds for which notice was dulymailed in accordance with this Section Such notice shall be given in the name of the Issuer, shall be dated, shall set forth the Bonds Outstanding which shall be called for redemptionandshallinclude, withoutlimitation, thefollowing additional information: (a) (b) the redemption date; the redemption price; (d) if less than all Outstanding Bonds of a Series are to be redeemed, the identification (and, in the case of partial redemption, the respectiveprincipalamounts) ofthe Bonds to be redeemed; (e) that on the redemptiondatetheredemptionpricewillbecomedueandpayable upon surrender of each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date; and (f) the place where such Bonds are to be surrendered for payment of the redemption, which place of payment shall be a corporate trust office of the Trustee. If at the time of mailing of notice of an optional redemption, the Issuer shall not have deposited with the Trustee or Paying Agent for the Bonds to be redeemed, moneys sufficient to redeem all the Bonds called for redemption, such notice shall state that it is subject to the deposit of the redemption moneys with the Trustee or Paying Agent, as the case may be, not later than the opening of business on the redemption, and such notice shall be of no effect unless such moneys are so deposited. If the amount of funds deposited with the Trustee for such redemption, or otherwise available, is insufficient to paythe redemption price and accrued interest on the Bonds of a Seriesso called for redemption on the redemption date, the Trustee shall redeem and pay on such date an amount of such Bonds for which such funds are sufficient, selecting the Bondstoberedeemedbylot from among all such Bonds called for redemption on such date, and among different maturities of Bonds in the same manner as the initial selection of Bonds to be redeemed, and from and after such redemption date, interest on the Bonds or portions thereof so paid shall cease to accrue and become payable; but interest on anybonds or portions thereof not so paid shall continue to accrue until paid at the same rate as it would have had such Bonds not been called for redemption. The notices required to be given bythis Section7.02shallstatethatnorepresentationismade as to correctness or accuracy of the CUSIP numbers listed in such notice or printed on the Bonds. SECTION Payment of Redemption Price. If anyrequired (a) unconditionalnotice of redemption has been duly mailed or waived by the Owners of all Bonds of a Series called for redemption or (b) conditional notice of redemption hasbeensomailedorwaivedandtheredemption moneys have been duly deposited with the Trustee or Paying Agent for such Bonds, then in either case, the Bonds called for redemption shall be payable on the redemption date at the applicable Redemption Price plus accrued interest, if any, to the redemption date. Bonds so called for redemption, for which moneys have been dulydeposited with the Trustee, will cease to bear interest on the specified redemption date, shall no longer be secured by this Master Indenture and related Supplemental Indenture and shall not be deemed to be Outstanding under the provisions of this Master Indenture and related Supplemental Indenture Payment of the Redemption Price, together with accrued interest, shall be made by the Trustee or applicable Paying Agent to or upon the order of the Owners of the Bonds called for redemption upon surrender of such Bonds. The Redemption Price of the Bonds to be redeemed, the expenses of giving notice and any other expenses of redemption, shall be paid out of the Fund or Account from which redemption is to be made or by the Issuer. SECTION Purchase of Bonds of a Series. The Issuer may purchase Bonds of a Series then Outstanding at anytime, whether or not such Bonds shall then be subject to redemption, at the most advantageous price obtainable with reasonable diligence, having regard to maturity, option to redeem, rate and price, such price not to exceed the principal of such Bonds plus the amount of the premium, if any, which would be payable on the next redemption date to the Owners of such Bonds under the provisions of this Master Indenture and the Supplemental Indenture pursuant to which such Series of Bonds were issued if such Bonds were called for redemption on such date. Before making each such purchase, the Issuer shall file with the Trustee a statement in writing directing the Trustee to paythe purchase price of thebondsofsuchseriessopurchasedupon their delivery and cancellation, which statement shall set forth a description of such Bonds, the purchase price to be paid therefor, the name of the seller and the place of delivery of the Bonds. At the written direction of the Issuer, the Trustee shall either: (i) paythe interest accrued onsuchbonds to the date of delivery thereof from the related Series Interest Account and the principal portion of the purchase price of Serial Bonds which would have been payable during the Bond Year in which the purchase occurs from the related Series Principal Account or (ii) paythe interest accruedonsuch Bonds to the date of deliverythereof and the principal portion of the purchase price of Serial Bonds which would have been payable during the Bond Year in which the purchase occurs from the Optional Redemption Subaccount in the related Series Redemption Account, but no such purchase shall be made after the Record Date in any Bond Year in which the Bonds to be purchased have been called for redemption. To the extent that such purchase is not to be made from the related Optional Redemption Subaccount and insufficient moneys are on deposit in a related Series Interest Account to paythe accrued interest portion of the purchase price of anybonds or in a related Series Principal Account to pay the aforedescribed principal amount of the purchase price of any Serial Bond, the Trustee shall transfer into such Accounts fromtherelatedseriesrevenueaccountsufficientmoneys to pay such respective amounts. To the extent that such purchase is not to be made from the related Optional Redemption Subaccount and there are insufficient moneys on deposit in the related Series Principal Account with which to paythe principal portion of the purchase price of anyterm Bonds, the Trustee may, at the written direction of the Issuer, transfer moneys into such related Series Principal Account from the related Series Revenue Account to pay the principal amount of such purchase price, but only in an amount no greater than the Amortization Installment related to such Series of Bonds coming due in the current Bond Year calculated after giving effect to any other purchases of Term Bonds during such Bond Year. The Trustee maypaythe principal portion of the purchase price of Term Bonds having maturities differentfromorinamountsgreaterthansetforthin the next preceding sentence from amounts on deposit in the related Series PrincipalAccountandthe Trustee maytransfer moneys from the related Series Revenue AccounttotherelatedSeriesPrincipal Account for such purpose, but onlyupon deliveryof written instructions from a ResponsibleOfficer to the Trustee accompanied by a certificate of a Responsible Officer: (i) stating that sufficient moneys are on deposit in the Series Principal Account, after giving effect to any transfers from the related Series Revenue Account, to pay the principal portion of the purchase price of such Term Bonds; (ii) setting forth the amounts and maturities of Term Bonds of such Series which are to be 46 B-13 redeemed from such amounts and the Amortization Installments against which theprincipalamount of such purchases are to be credited; and (iii) setting forth cash flow statements which demonstrate that, after giving effect to the purchase of Term Bonds in the amounts and having the maturities and with the credits against Amortization Installments set forth in clause (ii) above and any transfers from the related Series Revenue Account, the Series Pledged Revenues to be received by the Issuer in the current and in each succeeding Bond Year will be sufficient to pay the principal, Maturity Amount and Amortization Installments of and interest on all Bonds of such Series. If anybondsare purchased pursuant to this Section, the principal amount of the Bonds so purchased shallbecredited as follows: (i) if the Bonds are to be purchased from amounts on deposit in the Prepayment Subaccount of a Series Redemption Account, against the principal coming due or Amortization Installments set forth in the certificate of the Responsible Officer accompanying the direction of the Issuer to effect such purchase; or (ii) if the Bonds are Term Bonds of a Series, againsttheamortizationinstallment for Bonds of such Series first coming due in the current Bond Year, or, if such Term Bonds so purchased are to be credited against Amortization Installments coming due in any succeeding Bond Year, against the Amortization Installments on Term Bonds of suchseries maturing on the same date and designated in the certificate of the Responsible Officer accompanying the direction of the Issuer to effect such purchase; or (iii) against the principal or Maturity Amount of Serial Bonds coming due on the maturity date of such Serial Bond. [END OF ARTICLE VII] 47

152 ARTICLE VIII COVENANTS OF THE ISSUER SECTION Power to Issue Bonds and Create Lien. The Issuer is duly authorized under the Act and all applicable laws of the State to issue the Bonds of each Series, to adopt and execute and deliver this Master Indenture, to adopt and execute Supplemental Indentures, and to pledge the Pledged Funds and Pledged Revenues in the manner and to the extent provided herein. Except as provided herein, the Pledged Funds and the Pledged Revenues are not and shall not be subject to any other lien senior to or on a parity with the lien created in favor of the Bonds of each Series and anycredit FacilityIssuer providing a Credit Facilitysecuring such Bonds. The Bonds of each Series and the provisions of this Master Indenture are and will be valid and legallyenforceable obligations of the Issuer in accordance with their respective terms. The Issuer shall, at all times, to the extent permitted bylaw, defend, preserve and protect the pledge createdbythismasterindenture and all the rights of the Bondholders and any Credit Facility Issuer under this Master Indenture against all claims and demands of all other Persons whomsoever. SECTION Payment of Principal and Interest on Bonds. The Issuer shall promptly paythe interest on and the principal or Redemption Price of everybond issued hereunder according to the terms thereof, but shall be required to make such payment only out of the portion of the Trust Estate pledged to each Series of Bonds. The Issuer shall appoint oneormorepayingagentsforsuch purpose, each such agent to be a bank and trust company or a trust company or a national banking association having trust powers. SECTION Pledged Revenues. (a) The Issuer shall pay, or cause to be paid, Pledged RevenuesasreceivedtotheTrustee in accordance with the provisions hereof. The Issuer shall assess and levy Assessments which constitute Series Pledged Revenues for the payment of anyseries of Bonds. The Issuer shall further collect, or cause to be collected, Pledged Revenues and enforce paymentsthereoftotheextentandin an amount sufficient to pay the Debt Service Requirements on all Outstanding Series of Bonds to which such Pledged Revenues are pledged (b) If anyassessments shall be either in whole or in partannulled, vacatedorsetasideby the judgment of anycourt, or if the Issuer shall be satisfied that any Assessments levied by it are so irregular or defective that the same cannot be enforced or collected, or if the Issuer shall have omitted to make such Assessments when it might have done so, the Issuer shall either (i) take all necessary steps to cause new Assessments to be made by it for the whole or any part of said improvement or against any property benefited by said improvement, or (ii) in its sole discretion, make up the amount of such Assessments from legally available moneys, which moneys shall be deposited into the applicable Series Revenue Account in the Revenue Fund. In case such second Assessments shall be annulled, theissuershallobtainandmakeassessmentsuntilvalidassessments shall be made. SECTION Method of Collection. Pursuant to the procedures set forth in Section , Florida Statutes, the Issuer will use its best efforts to enter intothepropertyappraiserand Tax Collector Agreement with respect to each Series of Bonds, pursuant to which the Property Appraiser and Tax Collector will agree to list on the tax roll for each of the subsequent tax years any Special Assessments which are pledged to the payment of any Series of Bonds, to include in the notice of proposed property taxes the dollar amount of such Special Assessments and to include on the tax notice issued pursuant to Section , Florida Statutes, thedollaramountofsuchspecial Assessments. The Issuer will agree to provide by not later than September 15 of each year (or such earlier date as shall be required by the Tax Collector or the Property Appraiser) the amount of any such Special Assessment to be levied against each parcel in the District. The term of the Property Appraiser and Tax CollectorAgreementwill continueuntilafterthefinaldebtservicerequirements are scheduled to be paid on the Series of Bonds to which such Special Assessments are pledged. If the Issuer is unable to enter into the PropertyAppraiser and Tax Collector Agreementortokeepitin place for the period prescribed above, despite use of its best efforts to do so, then the Issuer covenants that the Special Assessments will be levied and collected by it in any other manner authorized by law. Notwithstanding the foregoing, the Issuer shall not be required to cause the Tax Collector to collect any Special Assessments (i) which are due and payable within a period of less than ten calendar years from the date of levythereof, or, (ii) that are levied againstbenefittedlandthathasnot yet been platted for its ultimate use, or, (iii) with respect to Assessments which are pledged as security for bond anticipation notes issued by the Issuer. The election to collect and enforce Special Assessments in any year pursuant to any one method shall not, to the extent permitted by law, preclude the Issuer from electing to collect and enforce Special Assessments pursuant to any other method permitted by law in any subsequent year. SECTION Delinquent Assessments. Subject to the provisions of Section 8.04 hereof, if the owner of any lot or parcel of land subject to the Assessments pledged to a Series of Bonds shall be delinquent in the payment of any Assessments collected in accordance with the provisions of Chapter 197, Florida Statutes, oranysuccessorstatutesthereto, thensuchassessments shall be enforced pursuant to the provisions of Chapter 197, FloridaStatutes, oranysuccessorstatute thereto, including but not limited to the sale of tax certificates and tax deed as regards such Delinquent Assessments. In the event the provisions of Chapter 197, Florida Statutes, and any provisions of the Act with respect to such sale are inapplicable by operation of law, or the Assessments are being billed and collected directly by the Issuer, then upon the delinquency of any Assessments the Issuer shall, to the extent permitted bylaw, utilizeanyothermethodofenforcement as provided bysection 8.04 hereof, including, withoutlimitation, declaringtheentireunpaidbalance of such Assessments to be in default and, at its own expense, cause such delinquent property to be foreclosed, in the same method now or hereafter provided bylaw fortheforeclosureofmortgageson real estate, or pursuant to the provisions of Chapter 173, Florida Statutes, or otherwise as provided by the Act. SECTION Sale of Tax Certificates and Issuance of Tax Deeds; Foreclosure of Assessment Liens. If the Assessments levied and collected under the uniform method described in Section 8.04 are delinquent, then, if available, the applicable procedures for issuance and sale of tax certificates and tax deeds for nonpayment shall be followed in accordance withchapter197, Florida Statutes and related statutes. Alternatively, if the uniform method of levy and collection is not utilized, and if any lands in an Assessment Area shall be offered for sale for the nonpayment of any Assessments, and no person or persons shall purchase the same for an amount at least equal to the full amount due on the Assessments (principal, interest, penalties and costs, plus attorneys fees, if any), the Issuer may then purchase such lands, for an amount equal to the balance due on the Assessments (principal, interest, penalties and costs, plus attorneys fees, if any). The Issuer shall thereupon receive in its corporate name the title to the property for the benefit of the Registered Owners of the Series of Bonds to which such Assessments were pledged and either through its own actions or actions caused to be done through the Trustee, shall use its best effortstoleaseorsellsuch property and deposit all of the net proceeds of any such lease or sale into the related Series Revenue Account. Not less than ten (10) days prior to the filing of any foreclosure action or any sale of tax deed as herein provided, the Issuer shall cause written notice thereof to be mailed to the registered Owners of the Bonds secured by such Delinquent Assessments. Not less than thirty (30) days prior to the proposed sale of any lot or tract of land acquired by foreclosure by the Issuer, it shall give written notice thereof to such registered Owners. The Issuer, either through its own actions or actions caused to be done through the Trustee, agrees that it shall be required to take the measure provided bylaw for sale of propertyacquired byit as trustee for the registered Owners of the related Series of Bonds within thirty (30) days after the receipt of the request therefor signed by the registered Owners of twenty-five percent (25%) of the aggregateprincipalamountofalloutstanding Bonds of the related Series. SECTION Construction to be on District Lands. The Issuer covenants that nopart of a Series Project or Additional Series Project will be constructed on, over orunderlandsotherthan (i) lands good and marketable title to which is owned bythe Issuer or other appropriate entity in fee simple, (ii) lands on, over or under which the Issuer or other appropriate entity shall have acquired perpetual easements for the purposes of the Series Project or Additional SeriesProject, or (iii) lands, including public streets and highways, the right to the use and occupancyofwhichforsuchpurposes shall be vested in the Issuer or other appropriate entity by law or by valid franchises, licenses, easements or rights of way or other legally effective permissions or approval. SECTION Operation, Use and Maintenance. TheIssuershallestablishandenforce reasonable rules and regulations governing the use and operationofanyportionofaseriesprojector Additional Series Project owned by the Issuer, such rules and regulations to be adopted in accordance with the Act, and the Issuer shall operate, use and maintain any portion of a Series Project or Additional Series Project owned by the Issuer in accordance with the Act and all other applicable federal and State laws, rules and regulations; the Issuer shall maintain and operate any portion of a Series Project or Additional Series Project owned by the Issuer in an efficient and economical manner, shall at all times maintain the same in good repair and in sound operating condition and shall make all necessary repairs, renewals and replacements. SECTION Observance of and Compliance with Valid Requirements. The Issuer shall payall municipal or governmental charges lawfullylevied or assessed upon a Series Project or Additional Series Project or anypart thereof or upon anyrevenues when the same shall becomedue, and the Issuer shall duly observe and comply with all valid requirements of any municipal or governmental authority relative to the Series Project or Additional Series Project. The Issuer shall not, except as otherwise provided in Section 8.19 of this Indenture, create or suffer to be created any lien or charge upon a Series Project or Additional Series Project or upon Series Pledged Funds or 50 B-14 Series Pledged Revenues, except the lien and charge of the Series of Bonds to which such Pledged Funds and Pledged Revenues are pledged. SECTION Payment of Operating or Maintenance Costs by State or Others. The Issuer may permit the United States of America, the State, the County, any municipality, or any of their agencies, departments or political subdivisions to payall or anypart of the cost of maintaining, repairing and operating a Series Project or Additional Series Project out of funds other than Pledged Revenues and other non-ad valorem assessments of the Issuer. SECTION Use of Revenues for Authorized Purposes Only. None of the Pledged Funds or Pledged Revenues shall be used for any purpose other than as provided in this Master Indenture and the Act and no contract or contracts shall be entered into or any action taken by the Trustee which will be inconsistent with the provisions of this Master Indenture or the Act. SECTION Books and Records. The Issuer shall keep proper books of record and account (separate from all other records and accounts) in which complete andcorrectentriesshallbe made of its transactions relating to each Series Project and Additional Series Project, and which, together with all other books and records of the Issuer, including, without limitation, insurance policies, relating to each Series Project and Additional Series Project, shall at all times be subject during regular business hours to the inspection of the Trustee. The report, statements and other documents required to be furnished by the Issuer to the Trustee pursuant to any provisions of this Master Indenture shall be available for the inspection of Bondholders at the office of the Trustee. SECTION Observance of Accounting Standards. The Issuer covenantsthatallthe accounts and records of the Issuer relating to each Series Project and Additional Series Project will be kept according to GenerallyAccepted Accounting Principles consistentlyapplied and consistent with the provisions of this Master Indenture. SECTION Employment of Certified Public Accountant. The Issuer shall employ or cause to be employed as required a Certified Public Accountant to perform accounting and auditing functions and duties required by Sections 8.17 of this Master Indenture. SECTION EstablishmentofFiscalYear, AnnualBudget. TheIssuerhasestablished a Fiscal Year beginning October 1 of each year and ending September 30 of the following year. The reports and budget of the Issuer shall relate to such Fiscal Year unless and until, in accordance with applicable law, a different Fiscal Year is established. On or before the first day of each Fiscal Year the Issuer shall adopt a final Annual Budget with respect to each Series Project and Additional Series Project for such Fiscal Year for the payment of anticipated operating and maintenance expenses and shall supplya copyof such budget promptly upon the approval thereof to the Trustee and to any Bondholders who shall have so requested in writing and shall have filed their names and addresses with the Secretary of the Board for such purpose. If for anyreason the Issuer shall not have adopted the Annual Budget with respect to each Series Project and Additional Series Project on or before the first dayof anyfiscal Year, the 51

153 Annual Budget for the preceding Fiscal Year shall, until the adoption of the new Annual Budget, be deemed in force for the ensuing Fiscal Year. The Issuer may at any time adopt an amended or supplemental Annual Budget for the remainder of the current Fiscal Year, and when such amended or supplemental Annual Budget is approved it shall be treated as the official Annual Budget under this Master Indenture. Copies of such amended or supplemental Annual Budget shall be filed with the Trustee and mailed to any Bondholders who shall have so requested in writing and shall have filed their names and addresses with the Secretary of the Board for such purpose. SECTION Employment of Consulting Engineer. The Issuer shall, for the purpose of performing and carrying out the duties, if any, imposed on the ConsultingEngineerbythisMaster Indenture, employone or more Independent engineers or engineering firms or corporationshavinga statewide and favorable repute for skill and experience in such work. SECTION Audit Reports. The Issuer covenants that, no later than 365 days after the end of each Fiscal Year, it will cause an audit to be made by a Certified Public Accountant covering all receipts and moneys then on deposit with or in the name of the Trustee or the Issuer and any security held therefor and any investments thereof. Copies of such audit reports shall be filed with the Trustee, the District Manager and the Secretary of the Board, and mailed by said Secretary to the Consulting Engineer and to all Bondholders who shall have filed their names and addresses with him for such purpose. SECTION Information to Be Filed with Trustee. The Issuer shall cause to be kept on file with the Trustee at all times copies of the schedules of Assessments levied on lands in each Assessment Areas in respect of each Series Project and Additional Series Project. The Issuer shall keep accurate records and books of account with respect to each SeriesProjectandAdditionalSeries Project, and shall have a complete audit of such records and accounts made annually by a Certified Public Accountant, as provided in Section 8.17 hereof. A signed copy of said audit shall be furnished to the Trustee as soon as practicable after such audit shall become available. SECTION Covenant Against Sale or Encumbrance. Subject to obtaining an opinion of Bond Counsel that such action will not adversely affect the exemption from federal income tax of the interest on anytax Exempt Bonds, the Issuer maysell, lease or otherwise dispose of or encumber any Series Project and Additional Series Project, or any part thereof, including, without limitation, pursuant to lease-purchase agreements, and by granting use rights, licenses, easements, franchises or concessions for the use of any part of any Series Project and Additional Series Project. A Supplemental Indenture may set forth additional restrictions on the sale, lease, disposition or encumbrance of anyseries Project or Additional Series Project. The proceeds of any such sale or disposition (to the extent not part of the Series Pledged Funds and Series Pledged Revenues pledged to a Series of Bonds) shall be deposited, at the written direction of the Issuer to the credit of the related Series Revenue Account or related Series Project Account. SECTION No Loss of Lien on Pledged Revenues. The Issuer shall not do or omit to do, or suffer to be done or omit to be done, any matter or thing whatsoever whereby the lien of a Series of Bonds on the Pledged Funds and Pledged Revenues or any part thereof pledged to such Series, or the priority thereof, would be lost or impaired; provided, however, that this Section shall not prohibit the Trustee from transferring moneys to therebatefundoraccountsthereinheldbythe Trustee under any arbitrage rebate agreement. SECTION Compliance With Other Contracts and Agreements. The Issuer shall comply with and abide by all of the terms and conditions of any and all contracts and agreements which the Issuer enters into in connection with any Series Project or Additional Series Project and the issuance of Bonds. SECTION Issuance of Additional Obligations. The Issuer will not issue or incur any obligations payable from the proceeds of Series Pledged Revenues securing a Series of Bonds (other than such related Series of Bonds) nor voluntarilycreate or cause to be created anydebt, lien, pledge, assignment, encumbrance or other charge upon such Series PledgedRevenuesotherthanthe lien of the related Series of Bonds or Additional Bonds on a parity therewith except for fees, commissions, costs, and other charges payable to the Property Appraiser or to the Tax Collector pursuant to Florida law or amounts payable to the Trustee and any Credit Facility Issuer. SECTION Extension of Time for Payment of Interest Prohibited. The Issuer shall not directly or indirectly extend or assent to an extension of time for payment of any claim for interest on anyof Series of the Bonds and shall not directlyor indirectlybe a partyto or approve any arrangement therefor by purchasing or funding or in any manner keeping alive any such claim for interest; no claim for interest which in any way, at or after maturity, shall have been transferred or pledged apart from the Series of Bonds to which it relates or which shall in any manner have been kept alive after maturity by extension or by purchase thereof by or on behalf of the Issuer, shall be entitled, in case of a default hereunder, to any benefit or security under this Master Indenture or Supplemental Indenture except after the prior paymentinfulloftheprincipalofallbondsandclaims for interest appertaining thereto not so transferred, pledged, kept alive or extended. SECTION Further Assurances. The Issuer shall not enter into anycontract or take any action by which the rights of the Trustee or the Bondholders may be impaired and shall, from time to time, execute and deliver such further instruments and take such further action as may be required to carry out the purposes of this Master Indenture or any Supplemental Indenture. SECTION of 1986, as amended. Investments and Use of Proceeds to Comply with Internal Revenue Code (a) The Issuer covenants with the Holders of each Series of Tax Exempt Bonds that it shall comply with the requirements of the Code necessary to maintain the exclusion of interest on such Series of Tax Exempt Bonds from gross income for purposes of federal income taxation, including the payment of any amount required to be rebated to the U.S. Treasury pursuant to the Code, and, in particular, that it shall not make or direct the making of any investment or other use of proceeds of such Series of Tax Exempt Bonds (or amounts deemed to be proceeds under the Code) in any manner which would cause the interest on such Series of Tax Exempt Bonds to be or become subject to federal income taxation, nor shall it fail to do any act which would cause such interest to become subject to federal income taxation (b) The Issuer covenants with the Holders of each Series of Tax Exempt Bonds that neither the Issuer nor any other person under its control or direction will make any investment or other use of the proceeds of such Bonds (or amounts deemedtobeproceedsunderthecode) ormake any use of the Series Project or Additional Series Project financed by such Series of Tax Exempt Bonds in any manner which would cause such Bonds to be private activity bonds as that term is defined in Section 141 of the Code (or any successor provision thereto) or arbitrage bonds as that term is defined in Section 148 of the Code (or any successor provision thereto) and that it will complywith such sections of the Code throughout the term of the Tax ExemptBondsof eachseries. (c) The provisions of this SectionshallsurviveanydefeasanceofanyTax ExemptBonds of a Series pursuant to Article XIII hereof. SECTION Corporate Existence and Maintenance of Properties. Forsolongasany Bonds are Outstanding hereunder, unless otherwise provided bythe Act, theissuershallmaintainits corporate existence and shall provide for or otherwise require each Series Project or Additional Series Project, and all parts thereof owned by the Issuer to be (a) continuously operated, repaired, improved and maintained as shall be necessary to provide adequate service to the lands benefited thereby; and (b) in compliance with all valid and applicable laws, acts, rules, regulations, permits, orders, requirements and directions of any competent public authority. SECTION Continuing Disclosure. The Issuer hereby covenants and agrees that it will comply with and carry out all of the provisions of each Continuing Disclosure Agreement. Notwithstanding anyother provision of this Master Indenture, failureoftheissuer (oranyotherthird party obligated pursuant to any Continuing Disclosure Agreement) to comply with any Continuing Disclosure Agreement shall not be considered an Event of Default with respect to the related Series of Bonds; however, with respect to each Continuing Disclosure Agreement, thetrusteemay (and, at the request of any Participating Underwriter of the related Series of Bonds or the Holders of at least 25% aggregate principal amount in Outstanding Bonds of the related Series of Bonds and receipt of indemnityto its satisfaction, shall) or anyholder of the related Series of Bonds or Beneficial Owner with respect to the related Series of Bonds may take such actions as may be necessary and appropriate, including seeking specific performance by court order, to cause the Issuer to comply with its obligations under this Section For purposes of this Section, Beneficial Owner means, with respect to a Series of Bonds, anyperson who (a) has the power, directlyor indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds of a Series (including persons holding Bonds of a Series through nominees, depositories or other intermediaries), or (b) is treated as the Owner of any Bonds of a Series for federal income tax purposes. SECTION Arbitrage Rebate Covenants. The Issuer covenants and agrees to establish the Rebate Fund to be held in the custody of the Trustee and within the Rebate Fund a Series Rebate Account for each Series of Tax Exempt Bonds. Prior to the issuance of each Seriesof Tax Exempt Bonds, the Issuer shall execute and deliver a certificate containing arbitrage rebate covenants (the Rebate Covenants ) as to said Bonds. The Issuer shall make deposits to the Series Rebate Account established for a Series of Tax Exempt Bonds in the amounts and at the times required bythe Rebate Covenants and shall make or cause to be made payments from the applicable Series Rebate Account of amounts required to be deposited therein to the United States of America in the amounts and at the times required by the Rebate Covenants. The Issuer covenants for the 54 B-15 benefit of the Bondholders of each Series of Tax Exempt Bonds that it will comply with the requirements of the Rebate Covenants applicable to such Series. There shall be excluded from the pledge and lien of this Master Indenture the Rebate Fund and each Series Rebate Account, together with all monies and securities from time to time held therein and all investment earnings derived therefrom. The Issuer shall not be required to comply with the requirements of this Section with respect to a Series of Tax Exempt Bonds, or with the Rebate Covenants applicable to such Series, in the event that the Issuer obtains an opinion of counsel with expertise in the field of tax-exempt municipal finance that: (i) such compliance is not required in order to maintain the federal income tax exemption of interest on the applicable Series of Bonds; and/or (ii) compliance with some other requirement is necessaryto maintain the federal income tax exemption of interest on the applicable Series of Bonds or is a permissible substitute for anydeleted requirement. The Issuer shall adopt an amendment or supplement to this Master Indenture and related Supplemental Indenture, or to the Rebate Covenants relating to the Series of Bonds, as may be applicable, to reflect the deletion or substitution of anysuch requirement. The provisions of this Section shall survive anydefeasanceof any Series of Tax Exempt Bonds pursuant to Article XIII hereof. SECTION Insurance. The Issuer shall maintain insurance with respect to each Series Project and Additional Series Project as certified to bytheconsultingengineer, intheformof multiple peril, all risks insurance, provided by a responsible insurance company or companies licensed to and doing business in the State, in the amount recommended by the Consulting Engineers, to the extent such insurance is obtainable from time to time. Notwithstanding the foregoing, the Issuer mayinstitute and maintain self-insurance programs with regardtosuchrisksas shall be consistent with the recommendations of the Consulting Engineers. The net proceeds of any casualty, whether from insurance or self-insurance, may be deposited to the related Series Project Account to be used to repair, restore, rebuild or replacetherelatedseriesprojectoradditionalseries Project. If the Issuer determines not to deposit such net proceeds to the Series Project Account or if such net proceeds are insufficient to accomplish the repair, restoration, rebuilding or replacementof the related Series Project or Additional Project, such net proceeds shall be deposited to the related Series Revenue Account and applied in accordance herewith. [END OF ARTICLE VIII] 55

154 ARTICLE IX EVENTS OF DEFAULT AND REMEDIES SECTION Events of Default Defined. Each of the following shall be an Eventof Default under this Master Indenture with respect to a Series of Bonds: (a) if payment of anyinstallment of interestonanybondofsuchseriesisnotmadewhen it becomes due and payable; or (b) if payment of the principal or Redemption Price of any Bond of such Series is not made when it becomes due and payable at maturity or upon call or presentation for redemption; or (c) if the Issuer, for any reason, is rendered incapable of fulfilling its obligations under this Master Indenture or under the Act or under the Supplemental IndenturerelatingtosuchSeriesof Bonds; or (d) if the Issuer proposes or makes an assignment for the benefit of creditors or enters into a composition agreement with all or a material part of its creditors, or a trustee, receiver, executor, conservator, liquidator, sequestrator or other judicial representative, similar or dissimilar, is appointed for the Issuer or any of its assets or revenues, or there is commenced any proceeding in liquidation, bankruptcy, reorganization, arrangement of debts, debtor rehabilitation, creditor adjustment or insolvency, local, state or federal, by or against the Issuer and if such is not vacated, dismissed or stayed on appeal within ninety (90) days; or (e) if the Issuer defaults in the due and punctual performance of any other covenant in this Master Indenture or in the Supplemental Indenture relating to such Series of Bonds or in any Bond of such Series issued pursuant to this Master Indenture and such default continues for sixty (60) days after written notice requiring the same to be remedied shall have been given to the Issuer by the Trustee, which may give such notice in its discretion and shall give such notice at the written request of the Holders of not less than a majority in aggregate principal amount of the Outstanding Bonds of such Series; provided, however, that if such performance requires worktobedone, actions to be taken, or conditions to be remedied, which bytheir nature cannot reasonablybe done, taken or remedied, as the case maybe, within such sixty (60) dayperiod, no EventofDefaultshallbedeemed to have occurred or exist if, and so long as the Issuer shall commence such performance within such sixty (60) day period and shall diligently and continuously prosecute the same to completion; or (f) written notice shall have been received by the Trustee from a Credit Facility Issuer providing a Credit Facilitysecuring Bonds of such Series that an event of default hasoccurredunder the Credit Facility Agreement, or there shall have been a failure by said Credit Facility Issuer to make said Credit Facility available or to reinstate the interest component of said Credit Facility in accordance with the terms of said Credit Facility, to the extent said notice or failure is established as an event of default under the terms of the Credit Facility Agreement. SECTION No Acceleration. No Bonds of a Series issued under this Master Indenture shall be subject to acceleration by reason of an Event of Default. SECTION Legal Proceedings by Trustee. If any Event of Default with respect to the Bonds of a Series has occurred and is continuing, the Trustee, in its discretion may, and upon the written request of the Holders of not less than a majority of the aggregate principal amount of the Outstanding Bonds of such Series and receipt of indemnityto its satisfaction shall, in its own name: (a) bymandamus, or other suit, action or proceedingatlaworinequity, enforceallrights of the Holders of the Bonds of such Series, including, without limitation, the right to require the Issuer to carry out any agreements with, or for the benefit of, the Bondholders of the Bonds of such Series and to perform its or their duties under the Act; (b) bring suit upon the Bonds of such Series; (c) by action or suit in equity require the Issuer to account as if it were the trustee of an express trust for the Holders of the Bonds of such Series ; (d) by action or suit in equity enjoin any acts or things which may be unlawful or in violation of the rights of the Holders of the Bonds of such Series; and (e) byother proceeding in law or equity, exercise all rights and remedies providedforby any other document or instrument securing such Bonds of such Series. SECTION Discontinuance of Proceedings bytrustee. If anyproceeding taken by the Trustee on account of any Event of Default is discontinued or is determined adversely to the Trustee, the Issuer, the Trustee, the applicable Paying Agent and the Bondholders of the applicable Series of Bonds shall be restored to their former positions and rights hereunder as though no such proceeding had been taken. SECTION Bondholders May Direct Proceedings. The Holders of a majority in aggregate principal amount of the Outstanding Bonds of a Series then subject to remedial proceedings under this Article shall have the right to direct the method and place of conducting all remedial proceedings by the Trustee under this Master Indenture and the applicable Supplemental Indenture with respect to such Series of Bonds, provided that such directions shall not be otherwise than in accordance with law or the provisions of this Master Indenture and the related Supplemental Indenture. SECTION Limitations on Actions by Bondholders. No Bondholder of the Bonds of a Series shall have any right to pursue any remedy hereunder unless (a) the Trustee shall have been given written notice of an Event of Default with respect to such SeriesofBonds, (b) theholdersofat least a majorityof the aggregate principal amount of theoutstandingbondsofsuchseriesshallhave requested the Trustee, in writing, to exercise the powers hereinabove granted or to pursue such remedy in its or their name or names, (c) the Trustee shall have been offered indemnity satisfactory to it against costs, expenses and liabilities, and (d)the Trustee shall havefailed to complywith such request within a reasonable time SECTION Trustee May Enforce Rights Without Possession of Bonds. All rights under this Master Indenture, the related Supplemental Indenture authorizing the issuance ofaseries of Bonds and such Series of Bonds maybe enforced bythe Trustee without the possession of anyof the Bonds of such Series or the production thereof at the trial or other proceedings relative thereto, and anyproceeding instituted bythe Trustee shall be brought in its namefortheratablebenefitofthe Holders of the applicable Series of Bonds. SECTION Remedies Not Exclusive. Except as limitedundersection 14.01ofthis Master Indenture, no remedy contained in this Master Indenture or applicable Supplemental Indenture is intended to be exclusive of any other remedy or remedies, and each remedy is in addition to everyother remedygiven hereunder or now or hereafter existing at law or in equityor by statute. SECTION Delays and Omissions Not to Impair Rights. No delay or omission in respect of exercising any right or power accruing upon any Event of Default shall impair such right or power or be a waiver of such Event of Default, and every remedy given by this Article may be exercised from time to time and as often as may be deemed expedient. SECTION Application of Moneys in Event of Default. Any moneys received by the Trustee or the Paying Agent, as the case may be, in connection with any proceedings brought under this Article with respect to a Series of Bonds shall be appliedinthefollowingorderofpriority: (a) to the payment of the costs of the Trustee and Paying Agent incurred in connection with actions taken under this Article with respect to such SeriesofBonds, includingcounselfeesand any disbursements of the Trustee and the Paying Agent and payment of unpaid fees owed to the Trustee allocable to such Series of Bonds. (b) unless the principal of all the Bonds of such Series shall have become or shall have been declared due and payable: FIRST: to payment of all installments of interest then due on the Bonds of such Series in the order of maturity of such installments of interest, and, if the amount available shall not be sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such installment, tothepersonsentitledthereto, withoutany preference or priority of one installment of interest over any other installment; and SECOND: to payment to the Persons entitled thereto of the unpaid principal or Redemption Price of any of the Bonds of such Series which shall have become due in the order of their due dates, with interest on said Bonds of such Series from the respective dates upon which theybecome due and, if the amount available shall not be sufficienttopayinfull the principal or Redemption Price coming due on said Bonds ofsuchseriesonanyparticular date, together with such interest, then to the payment ratably, according to the amount of principal due on such date, to the Persons entitled thereto without any preference or priority of one such Bond of such Series over another or of any installment of interest over another. (c) If the principal of all Bonds of such Series shall have become or shall have been declared due and payable, to the payment of principal or Redemption Price (as the case maybe) and interest then owing on the Bonds of such Series and in case such moneys shall be insufficient to pay the same in full, then to the payment of principal or Redemption Price and interest ratably, without preference or priority of one Bond of such Series over another or of any installment of interest over any other installment of interest. Anysurplus remaining after the payments described aboveshallbepaidtotheissuerortothe Person lawfully entitled to receive the same or as a court of competent jurisdiction may direct. For purposes of the application of moneys described above, to the extent payments of principal of and interest on the Bonds of such Series shall have been made under a Credit Facility relating thereto, the Credit Facility Issuer shall be entitled to moneys in the related Series Accounts in the Debt Service Fund in accordance with the agreement pursuant to which such Credit Facility has been issued (but subject to subsection (a) hereof and Section hereof) and the Certified Resolution of the Issuer authorizing the issuance of the Series ofbondstowhichsuchcreditfacility relates. SECTION Trustee s RighttoReceiver; CompliancewithAct. TheTrusteeshallbe entitled as of right to the appointment of a receiver and the Trustee, the Bondholders of the affected Series of Bonds and any receiver so appointed shall have such rights and powers and be subject to such limitations and restrictions as are contained in the Act and other applicable law of the State. SECTION Trustee and Bondholders Entitled to all Remedies under Act. Itisthe purpose of this Article to provide such remedies to the Trustee and Bondholders as maybe lawfully granted under the provisions of the Act and other applicable laws of the State; if any remedy herein granted shall be held unlawful, the Trustee and the Bondholders shall nevertheless be entitled to everyother remedyprovided bythe Act and other applicable laws of the State. It is further intended that, insofar as lawfully possible, the provisions of this Article shall apply to and be binding upon any receiver appointed in accordance with Section 9.11 hereof. SECTION Credit Facility Issuer s Rights Upon Events of Default. Anything in this Master Indenture to the contrarynotwithstanding, if anyevent of Default with respect to a Series of Bonds has occurred and is continuing while a Credit Facilitysecuring all or a portion of such Series of Bonds Outstanding is in effect, the Credit FacilityIssuer shall have the right, inlieuoftheowners of the Bonds of such Series (or portion thereof) secured by said Credit Facility, by an instrument in writing, executed and delivered to the Trustee, to direct the time, method and placeofconductingall remedial proceedings available to the Trustee under this Master Indenture and the related Supplemental Indenture, or exercising any trust or power conferred on the Trustee by this Master Indenture or related Supplemental Indenture. Said direction shall be controlling to the extent the direction of Owners of the Series of Bonds (or portion thereof) secured bysaidcreditfacilitywould have been controlling under this Article. If the Credit Facility Issuer shall be in default in the performance of its obligations under the Credit Facility, said Credit Facility Issuer shall have no rights under this Section. 58 B-16 59

155 SECTION No Cross Default. The occurrence of an Event of Default hereunder or under any Supplemental Indenture with respect to any Series of Bonds shall not constitute an Event of Default with respect to any other Series of Bonds, unless the event giving rise to the Event of Default also constitutes an Event of Default hereunder or under the Supplemental Indenture with respect to such other Series of Bonds. [END OF ARTICLE IX] ARTICLE X THE TRUSTEE; THE PAYING AGENT AND REGISTRAR SECTION Acceptance of Trust. The Trustee accepts and agrees to execute the trusts hereby created, but only upon the additional terms set forth in this Article, to all of which the parties hereto and the Bondholders agree. The Trustee shall have only those duties expressly set forth herein and no duties shall be implied against the Trustee. The Trustee shall act as Trustee for the Bonds. SECTION No Responsibility for Recitals. The recitals, statements and representations in this Master Indenture, in any Supplemental Indenture or in the Bonds, save only the Trustee s Certificate, if any, upon the Bonds, have been made by the Issuer and not by the Trustee and the Trustee shall be under no responsibility for the correctness thereof. SECTION Trustee May Act Through Agents; Answerable Only for Willful Misconduct or Negligence. The Trustee mayexecute anypowers hereunder and perform anyduties required of it through attorneys, agents, officers or employees, and shall be entitled to advice of Counsel concerning all questions hereunder; the Trustee shall not be answerable for the default or misconduct of anyattorneyor agent selected and supervised byit with reasonable care. The Trustee shall not be answerable for the exercise of anydiscretionorpowerunderthismasterindentureorany Supplemental Indenture nor for anything whatever in connection with the trust hereunder, except only its own negligence or willful misconduct or breach of its obligations hereunder. SECTION Compensation and Indemnity. The Issuer shall pay the Trustee reasonable compensation for its services hereunder, and also all its reasonable expenses and disbursements, and shall indemnify and, to the extent permitted by applicable law, hold the Trustee harmless against any liabilities which it may incur in the proper exercise and performance of its powers and duties hereunder or any Supplemental Indenture, except with respect to its own willful misconduct, negligence or breach of its obligations hereunder. If the Issuer defaults inrespectofthe foregoing obligations, the Trustee may, payable in the order of priority set forth in Section 9.10 hereof, deduct the amount owing to it from any moneys coming into its hands but exclusive of the Rebate Fund and moneys from a drawing on any Credit Facility. This provision shall survive the termination of this Master Indenture and any Supplemental Indenture and, as to any Trustee, its removal or resignation as Trustee. SECTION No Dutyto Renew Insurance. The Trustee shall not be under anyduty to effect or to renew anyinsurance policynor shall it incur anyliabilityfor the failure of the Issuerto require or effect or renew insurance or to report or file claims of loss thereunder. SECTION Notice of Default; Right to Investigate. The Trustee shall give written notice by first-class mail to registered Holders of the Bonds of the affected Series of all defaults known to the Trustee, unless such defaults have been remedied (the term defaults for purposes of this Section and Section being defined to includetheeventsspecifiedas EventsofDefault in Article X hereof, but not including any notice or periods of grace provided for therein); provided that, except in the case of a default in payment of principal or interest or Redemption Price, the Trustee may withhold such notice so long as it in good faith determines that such withholding is in the interest of the Bondholders of such Series. The Trustee shall notbedeemedtohavenoticeofany default other than a payment default under this Master Indenture or a notificationbyacreditfacility Issuer of a default under its Credit Facility, unless notified in writing of such default by the Holders of at least a majority of the aggregate principal amount of the Outstanding Bonds of the affected Series. The Trustee may, however, at any time require of the Issuer full information as to the performance of any covenant hereunder, and if information satisfactoryto it is not forthcoming, the Trustee may make or cause to be made, at the expense of the Issuer, an investigation into the affairs of the Issuer. SECTION Obligation to Act on Defaults. The Trusteeshallbeundernoobligation to take any action in respect of any default or otherwise (a) unless it is requested in writing to do so by the Holders of at least a majority of the aggregate principal amount of the Outstanding Series of Bonds which are or would be, upon the taking of such action, subject to remedial proceedings under Article IX of this Master Indenture, and (b) if in its opinion such action may tend to involve expense or liability, unless it is also furnished with indemnity satisfactory to it. SECTION Reliance bytrustee. TheTrusteemayactonanyrequisition, resolution, notice, telegram, facsimile transmission, request, consent, waiver, certificate, statement, affidavit, voucher, bond, or other paper or document which it in good faith believes to be genuine and to have been passed, signed or given by the persons purporting to be authorized (which in the case of the Issuer shall be a Responsible Officer) or to have been prepared and furnished pursuant to anyof the provisions of this Master Indenture or any Supplemental Indenture; the Trustee shall be under no dutyto make anyinvestigation as to anystatement contained in anysuch instrument, but mayaccept the same as conclusive evidence of the accuracy of such statement. SECTION Trustee May Deal in Bonds. The Trustee may in good faith buy, sell, own, hold and deal in any of the Bonds and may join in any action which any Bondholders may be entitled to take with like effect as if the Trustee were not a party to this Master Indenture. The Trustee may also engage in or be interested in any financial or other transaction with the Issuer; provided, however, that if the Trustee determines that any such relation is in conflict with its duties under this Master Indenture or anysupplemental Indenture, itshalleliminatetheconflictorresignas Trustee. SECTION Construction of Ambiguous Provisions. The Trustee mayconstrueany ambiguous or inconsistent provisions of this Master Indenture or any Supplemental Indenture, and except as otherwise provided in Article XIIof this Master Indenture, anyconstructionbythetrustee shall be binding upon the Bondholders. The Trustee shall give prompt notice to the Issuer of any intention to make such construction. SECTION Resignation of Trustee. The Trustee may resign and be discharged of the trusts created bythis Master Indenture bywritten resignation filed with the SecretaryoftheBoardof the Issuer not less than sixty (60) days before the date when such resignation is to take effect; provided, however, that (i) if any Outstanding Bonds are not registered Bonds, notice of such resignation is published at least once a week for three (3) consecutive calendar weeks in at least one Authorized Newspaper and at least once in The Bond Buyer, or its successor, if any, the first 62 B-17 publication to appear not less than three (3) weeks prior to the date when the resignation is to take effect; and that (ii) if anyoutstanding Bonds are registeredbonds, noticeofsuchresignationshallbe sent byfirst-class mail to each Bondholder as its name and address appearsonthebondregisterand to anypaying Agent, Registrar, Authenticating Agent and Credit FacilityIssuer, if any, at least sixty (60) days before the resignation is to take effect. Such resignation shall take effect on the day specified in the Trustee s notice of resignation unless a successor Trustee is previouslyappointed, in which event the resignation shall take effect immediately on the appointment of such successor; provided, however, that notwithstanding the foregoing, such resignation shall not take effect until a successor Trustee has been appointed. If a successor Trustee has not been appointed within ninety (90) days after the Trustee has given its notice of resignation, the Trustee may petition any court of competent jurisdiction for the appointment of a temporarysuccessortrusteetoserveastrusteeuntil a successor Trustee has been duly appointed. Notice of such resignation shall also be given to any rating agency that shall then have in effect a rating on any of the Bonds. SECTION Removal of Trustee. The Trustee maybe removedatanytimebyeither (a) the Issuer, if no default exists under this Master Indenture, or (b) an instrument or concurrent instruments in writing, executed by the Owners of at least a majority of the aggregate principal amount of the Bonds then Outstanding and filed with the Issuer. A photographic copy of any instrument or instruments filed with the Issuer under the provisions of this paragraph, dulycertified by a Responsible Officer, shall be delivered promptly by the Issuer to the Trustee and to anypaying Agent, Registrar, Authenticating Agent and Credit Facility Issuer, if any. 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 Master Indenture with respect to the duties and obligations of the Trustee byanycourt of competent jurisdiction upon the application of the Issuer or the Holders of not less than a majority of the aggregate principal amount of the Bonds then Outstanding. SECTION Appointment of Successor Trustee. If the Trustee or any successor Trustee resigns or is removed or dissolved, or if its propertyor business is taken under the control of any state or federal court or administrative body, a vacancy shall forthwith exist in the office of the Trustee, and the Issuer shall appoint a successor and (i) if anyoutstanding Bonds are not registered bonds, shall publish notice of such appointment in an Authorized Newspaper and in The Bond Buyer, or its successor, if any, and (ii) if any Outstanding Bonds are registered Bonds, shall mail notice of such appointment byfirst-class mail to each Bondholder as its name and address appearon the Bond Register, and to the Paying Agent, Registrar, Authenticating Agent, Credit FacilityIssuer, if any, and any rating agency that shall then have in effect a rating on any of the Bonds. If no appointment of a successor Trustee shall be made pursuanttotheforegoingprovisionsofthismaster Indenture prior to the date specified in the notice of resignation or removal as the date when such resignation or removal was to take effect, the Holders of a majorityin aggregate principal amountof all Bonds then Outstanding may appoint a successor Trustee. SECTION Qualification of Successor Trustee. A successor Trustee shall be a national bank with trust powers or a bank or trust companywith trust powers, havingacombinednet capital and surplus of at least $50,000,

156 SECTION Instruments of Succession. Any successor Trustee shall execute, acknowledge and deliver to the Issuer an instrument accepting such appointment hereunder and thereupon, such successor Trustee, without anyfurther act, deed, or conveyance, shall become fully vested with all the estates, properties, rights, powers, trusts, duties and obligations ofitspredecessor in trust hereunder, with like effect as if originally named Trustee herein. The Trustee ceasing to act hereunder, after deducting all amounts owned to the Trustee, shall payover to the successor Trustee all moneys held byit hereunder and, upon request of the successor Trustee, thetrustee ceasingtoact and the Issuer shall execute and deliver an instrument or instruments prepared by the Issuer transferring to the successor Trustee all the estates, properties, rights, powersandtrustshereunderof the predecessor Trustee, except for its rights under Section hereof. SECTION Merger of Trustee. Any corporation into which anytrustee hereunder may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which anytrustee hereunder shallbeaparty, oranycorporationthatshallacquire all or substantially all of the corporate trust business of the Trustee, shall be the successor Trustee under this Master Indenture, without the execution or filing of any paper or any further act on the part of the parties hereto, anything herein to the contrary notwithstanding; provided, however, that anysuch successor corporation continuing to act as Trusteehereundershallmeettherequirementsof Section hereof, and if such corporation does not meet the aforesaid requirements, a successor Trustee shall be appointed pursuant to this Article. SECTION Extension of Rights and Duties of Trustee to Paying Agent and Registrar. The provisions of Sections 10.02, 10.03, 10.04, 10.08, and hereof are hereby made applicable to each Paying Agent and the Registrar, as appropriate, and any Person serving as Paying Agent and/or Registrar, hereby enters into and agrees to comply with the covenants and agreements of this Master Indenture and any Supplemental Indenture applicable to such Paying Agent and Registrar, respectively. SECTION Resignation of Paying Agent or Registrar. Any Paying Agent or Registrar may resign and be discharged of the duties created by this Master Indenture and any Supplemental Indenture by executing an instrument in writing resigning such duties and specifying the date when such resignation shall take effect, and filing the same with the Issuer, the Trustee, and any rating agency that shall then have in effect a rating on any of the Bonds of the Series for which it is acting as Paying Agent or Registrar, not less than forty-five (45) days before the date specified in such instrument when such resignation shall take effect, and by giving written notice of such resignation not less than three (3) weeks prior to such resignation date to the Bondholders of the applicable Series of Bonds, mailed to their addresses as such appear in the Bond Register. Such resignation shall take effect on the date specified in such instrument and notice, but only if a successor Paying Agent or Registrar shall have been appointed as hereinafter provided, in which event such resignation shall take effect immediatelyupon the appointment of such successorpaying Agent or Registrar. If the successor Paying Agent or Registrar shall not have been appointed within a period of ninety (90) days following the giving of notice, then the Paying Agent or Registrar shall be authorized to petition anycourt of competent jurisdiction to appoint a successor Paying Agent or Registrar as provided in Section hereof. SECTION Removal of Paying Agent or Registrar. AnyPaying Agent or Registrar for a Series of Bonds may be removed at any time prior to any Event of Default by the Issuer with respect to that Series of Bonds by filing with the Paying Agent or Registrar to be removed, and with the Trustee, an instrument or instruments in writing executed bytheissuerappointingasuccessor, or an instrument or instruments in writing designating, and accompanied by an instrument or appointment by the Issuer of, such successor. Such removal shall be effective thirty (30) days (or such longer period as maybe set forth in such instrument) after deliveryof the instrument; provided, however, that no such removal shall be effective until the successor Paying Agent or Registrar appointed hereunder shall execute, acknowledge and deliver to the Issuer an instrument accepting such appointment hereunder. SECTION Appointment of Successor Paying Agent or Registrar. In case at any time any Paying Agent or Registrar for a Series of Bonds shall be removed, or be dissolved, or if its propertyor affairs shall be taken under the control of anystateorfederalcourtoradministrativebody because of insolvencyor bankruptcy, or for anyother reason, then a vacancyshallforthwithandipso facto exist in the office of the Paying Agent or Registrar, as the case may be, and a successor shall be appointed by the Issuer; and in case at any time the Paying Agent or Registrar shall resign, then a successor shall be appointed bythe Issuer. After anysuch appointment, notice of such appointment shall be given bythe Issuer to the predecessor Paying AgentorRegistrar, thesuccessorpayingagent or Registrar, the Trustee, anyrating agencythat shall then have in effect a rating on anyofthebonds of the affected Series, and all Bondholders of such Series. Any new Paying Agent or Registrar so appointed shall immediately, and without further act, supersede the predecessor Paying Agent or Registrar. SECTION Qualifications of SuccessorPayingAgentorRegistrar. Everysuccessor Paying Agent or Registrar (a) shall be a commercial bank or trust company (i) dulyorganized under the laws of the United States or anystate or territorythereof, (i) authorized bylaw to perform all the duties imposed upon it bythis Master Indenture and anysupplemental Indenture and (iii) capableof meeting its obligations hereunder and thereunder, and (b) shall have a combined net capital and surplus of at least $50,000,000. SECTION Judicial Appointment of Successor Paying Agent or Registrar. In case at anytime anypaying Agent or Registrar shall resign and no appointmentofasuccessorpayingagent or Registrar shall be made pursuant to the foregoing provisions of this Master Indenture prior to the date specified in the notice of resignation as the date when such resignation is to take effect, the retiring Paying Agent or Registrar may forthwith apply to a court of competent jurisdiction for the appointment of a successor Paying Agent or Registrar. Such court maythereupon, aftersuchnotice, if any, as it may deem proper and prescribe, appoint a successor Paying Agent or Registrar. Notice of such appointment shall be given by the successor Registrar or Paying Agent to the Issuer, the Trustee, any rating agency that shall then have in effect a rating on any of the Series of Bonds affected, and all Bondholders of such Series. In the absence of such an appointment, the Trustee shall become the Registrar or Paying Agent for such Series of Bonds, or and shall so notify the Issuer, any rating agency that shall have issued a rating on the Bonds on such Series, and all Bondholders of such Series SECTION Acceptance of Duties by Successor Paying Agent or Registrar. Any successor Paying Agent or Registrar for a Series of Bonds shall become duly vested with all the estates, property, rights, powers, duties and obligations of its predecessor hereunder, withlikeeffect as if originally named Paying Agent or Registrar herein. Upon request of such Paying Agent or Registrar, such predecessor Paying Agent or Registrar and the Issuer shall execute and deliver an instrument transferring to such successor Paying Agent or Registrar all the estates, property, rights and powers hereunder of such predecessor Paying Agent or Registrar and such predecessor Paying Agent or Registrar shall pay over and deliver to the successor Paying Agent or Registrar all moneys and other assets at the time held by it hereunder. SECTION Successor bymerger or Consolidation. Anycorporationintowhichany Paying Agent or Registrar hereunder may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which any Paying Agent or Registrar hereunder shall be a party, or anycorporationthatshallacquireallorsubstantially all of the corporate trust business of the Paying Agent or Registrar, shall be the successor Paying Agent or Registrar under this Master Indenture without the execution or filing of any paper or any further act on the part of the parties thereto, anything in this Master Indenture or any Supplemental Indenture to the contrary notwithstanding. ARTICLE XI ACTS OF BONDHOLDERS; EVIDENCE OF OWNERSHIP OF BONDS SECTION Acts of Bondholders; Evidence of Ownership of Bonds. Anyaction to be taken bybondholders maybe evidenced byone or more concurrentwritteninstrumentsofsimilar tenor signed or executed by such Bondholders in person or by an agent appointed in writing. The fact and date of the execution by any person of any such instrument may be provided by acknowledgment before a notarypublic or other officer empowered to take acknowledgments or by an affidavit of a witness to such execution. Any action by the Owner of any Bond shall bind all future Owners of the same Bond in respect of anything done or suffered by the Issuer, Trustee, Paying Agent or Registrar in pursuance thereof. [END OF ARTICLE XI] [END OF ARTICLE X] 66 B-18 67

157 ARTICLE XII AMENDMENTS AND SUPPLEMENTS SECTION Amendments and Supplements Without Bondholders Consent. This Master Indenture may be amended or supplemented, from time to time, without the consent of the Bondholders, by a Supplemental Indenture authorized by a Certified Resolution of the Issuer filed with the Trustee, for one or more of the following purposes: (a) to add additional covenants of the Issuer or to surrender any right or power herein conferred upon the Issuer; (b) for any purpose not inconsistent with the terms of this Master Indenture, or to cure any ambiguity or to cure, correct or supplement any defective provision (whether because of any inconsistencywith anyother provision hereof or otherwise) of thismasterindenture, insuchmanner as shall not impair the security hereof or thereof or adversely affect the rights and remedies of the Bondholders; (c) to provide for the execution of any and all contracts and other documents as may be required in order to effectuate the conveyance of any Series Project or Additional Series Project to the United States of America, the State, the County, any municipality or any department, agency or branch of any thereof, or any other unit of government of the United States of America, the State or the Countyor anymunicipality; provided, however, that the Issuer shall have caused to be delivered to the Trustee an opinion of Bond Counsel stating that such conveyance shall not impair the security hereof or adversely affect the rights and remedies of the Bondholders of the Series of Bonds that financed or refinanced such Series Project or Additional Series Project; and (d) to make such changes as maybe necessaryin order to reflect amendments to theact, Chapter 298, Florida Statutes or Chapter 197, Florida Statutes, so long as, in the opinion of counsel to the Issuer, such changes either: (i) do not have an adverse effect on the Holders of the Bonds; or (ii) if such changes do have an adverse effect, that they nevertheless are required to be made as a result of such amendments; and (e) to provide for, and set forth any or all of the matters in connection with, the issuance of a Series of Bonds or bond anticipation notes in accordance with the provisions hereof, provided that the issuance of Additional Bonds satisfy the requirements of any Supplemental Indenture relating to the original Series of Bonds to which such Additional Bonds relate. SECTION Amendments With Bondholders Consent. (a) Subject to the provisions of Section hereof, this Master Indenture may be amended from time to time by a Supplemental Indenture approved by the Owners of at least a majorityin aggregate principal amount of the Bonds then Outstanding; provided that the provisions regarding: (i) the interest payable upon anybonds, (ii) thedatesofmaturityorredemptionprovisions of any Bonds, (iii) this Article XII and (iv) the securityprovisions hereunder, mayonlybe amended by approval of the Owners of all Bonds to be so amended. (b) In addition to the foregoing, the Owners of not less than fifty-one percent (51%) in aggregate principal amount of the Bonds of a Series then Outstanding shall have theright, fromtime to time, anythingcontained in this Master IndentureorintheSupplementalIndenturerelatingtosuch Series of Bonds to the contrary notwithstanding, to consent to and approve the adoption of such indentures supplemental to the Supplemental Indenture relating to such Series of Bonds or amendatory thereof, but not hereof, as shall be deemed desirable by the Issuer for the purpose of modifying, altering, amending, adding to or rescinding, in any particular, any of the provisions of such Supplemental Indenture or of any supplemental indenture; provided, however, that the provisions regarding: (i) the interest payable upon anybondsofsuchseries, (ii) thedatesofmaturity or redemption provisions of any Bonds of such Series, (iii) this Section 12.02(b), and (iii) the securityprovisions of this Master Indenture and the Supplemental Indenture applicabletothebonds of such Series, may only be amended by approval of the Owners of all Bonds of such Series to be so amended. SECTION Trustee Authorized to Join in Amendments andsupplements; Reliance on Counsel. The Trustee is authorized to join in the execution and delivery of any Supplemental Indenture or amendment permitted by this Article and in so doing may request and is entitled to receive and relyon a written opinion of Counsel that such Supplemental Indenture or amendment is so permitted and has been duly authorized by the Issuer and that all things necessary to make it a valid and binding agreement have been done. SECTION Credit Facility Issuer as Owner. As long as a Credit Facility securing all or a portion of the Bonds of a Series Outstanding is in effect and the Credit Facility Issuer is not in default thereunder, the Credit Facility Issuer, to the extent so authorized in the applicable Supplemental Indenture, will be deemed to be the Owner of the Bonds of such Series secured by the Credit Facility: (i) at all times for the purpose of the execution and delivery of a Supplemental Indenture or of any amendment, change or modification of the Indenture or the applicable Supplemental Indenture or the initiation byowners of anyaction to be undertaken bythe Trustee at the Owner s request, which under the Master Indenture or the applicable Supplemental Indenture requires the written approval or consent of or can be initiated by the Owners of at least a majority in principal amount of the Bonds of the Series at the time Outstanding; (ii) at all times for the purpose of the mailing of any notice to Owners under the Master Indenture or the applicable Supplemental Indenture; and (iii) following an Event of Default for all other purposes, subject to the provisions of Section 9.13 hereof. Notwithstanding the foregoing, a Credit FacilityIssuer with respect to a Series of Bonds will not be deemed to be an Owner of the Bonds of such Series with respect to any such Supplemental Indenture or of anyamendment, changeormodificationofthemasterindenturewhich would have the effect of permitting: (i) a change in the terms of redemptionormaturityofanybonds of a Series Outstanding or of any installment of interest thereon; or (ii) a reduction in the principal amount or the Redemption Price thereof or in rate of interest thereon; or (iii) reducingthepercentage or otherwise affecting the classes of Bonds the consent of the Owners of which is required to effect any such modification or amendment; or (iv) creating any preference or priority of any Bond of a Series over any other Bond of such Series. [END OF ARTICLE XII] SECTION Defeasance. ARTICLE XIII DEFEASANCE (a) If the Issuer pays or causes to be paid, or there shall otherwise be paid, to the Owners of all Bonds the principal or Redemption Price, if applicable, and interest due or to become due thereon and the obligations under anycredit Facilityatthetimesandinthemannerstipulatedtherein and in this Master Indenture and any Credit Facility and pays or causes to be paid all other moneys owing hereunder and under any Supplemental Indenture, including any amounts then owing to the Trustee, then the lien of this Master Indenture and all covenants, agreementsandotherobligationsof the Issuer to the Owners and anycredit FacilityIssuer shall thereupon cease, terminate and become void and be discharged and satisfied. In such event, the Trustee upon the request of the Issuer shall execute and deliver to the Issuer all such instruments as maybe desirable to evidencesuchdischarge and satisfaction, and the Trustee and the Paying Agent shall pay over or deliver, as directed by the Issuer, all moneys or securities held bythem pursuanttothismasterindenturewhicharenotrequired for the payment of principal, interest or Redemption Price, if applicable, on Bonds not theretofore surrendered for such payment or redemption or for payment of obligations underanycreditfacility. If the Issuer pays or causes to be paid, or there shall otherwise be paid, to the Owners of all Outstanding Bonds or of a particular maturity, of a particular Series or of any part of a particular maturityor Series the principal or Redemption Price, if applicable, andinterestdueortobecomedue thereon, at the times and in the manner stipulated therein and in this Master Indenture, such Bonds shall cease to be entitled to any lien, benefit or security under this Master Indenture, and all covenants, agreements and obligations of the Issuer to the Owners of such Bonds shall thereupon cease, terminate and become void and be discharged and satisfied. Anything to the contrary in this Section notwithstanding, this Master Indenture shall not be discharged nor shall any Bonds with respect to which moneys or Defeasance Securities have been deposited in accordance with the provisions of this Section cease to be entitled to the lien, benefit or securityunder this Master Indenture, except to the extent that the lien, benefit and security of this Master Indenture and the obligations of the Issuer hereunder shall be limited solely to and such Bonds shall be secured solely by and be payable solely from the moneys or Defeasance Securities so deposited. (b) Bonds or interest installments for the payment or redemption of which moneys shall have been set aside and shall be held in trust by the Trustee (through deposit pursuant to this Master Indenture of funds for such payment or redemption or otherwise) at the maturityor redemption date thereof shall be deemed to have been paid within the meaning and with the effect expressed in this Section. All Outstanding Bonds of any particular maturity or Series shall prior to the maturity or redemption date thereof be deemed to have been paid within the meaning and with the effect expressed in subsection (a) of this Section if: (i) in case any of such Bonds are to be redeemed on anydate prior to their maturity, the Issuer shall have given to the Trustee or each applicablebond Registrar irrevocable instructions accepted in writing bythe Trustee or each such Bond Registrar to mail as provided in Article VIInotice of redemption of such Bonds on such date; (ii) thereshallhave been deposited with the Trustee either moneys in an amount which shallbesufficient, ordefeasance Securities, the principal of and the interest on which when due shall, as demonstrated in a certificate of a Certified Public Accountant, provide moneys which, togetherwiththemoneys, ifany, deposited 70 B-19 with the Trustee at the same time,shall be sufficient, to pay when due the principal or Redemption Price, if applicable, and interest due and to become due on said Bonds on or prior to the redemption date or maturity date thereof, as the case may be; (iii) the Issuer shall have given the Trustee or each applicable Bond Registrar in form satisfactoryto it irrevocable instructions tomail, postageprepaid, to each registered Owner of Bonds then Outstanding at the address, if any, appearing upon the registry books of the Issuer, a notice to the registered Owners of such Bonds and to each applicable Registrar that the deposit required by (ii) above has been made with the Trustee and that such Bonds are deemed to have been paid in accordance with this Section and stating such maturity or redemption date upon which moneys are to be available for the payment of the principal or redemption price, if applicable, on such Bonds; and, (iv) an opinion of Bond Counsel to the effect that such defeasance is permitted under this Master Indenture and the Supplemental Indenture relating to the Series of Bonds so defeased and that, in the case of Tax-Exempt Bonds, such defeasance will not adversely affect the tax exempt status of such Series of Bonds. Neither Defeasance Securities nor moneys deposited with the Trustee pursuant to this Section nor principal or interest payments on anysuch Defeasance Securities shall be withdrawn or used forany purpose other than, and shall be held in trust for, the payment of the principal or redemption price, if applicable, and interest on such Bonds; provided that any cash received from such principal or interest payments on such Defeasance Securities deposited with the Trustee: (i) to the extent such cash shall not be required at any time for such purpose as evidenced by a certificate of a Certified Public Accountant or, and to the extent all obligations under any Credit Facility are satisfied, as determined byan Insurer or anycredit FacilityIssuer providing a Credit FacilitysecuringtheBonds with respect to which such Defeasance Securities havebeensodeposited, shallbepaidover uponthe direction of the Issuer as received by the Trustee, free and clear of any trust, lien, pledge or assignment securing such Bonds or otherwise existing under this Master Indenture; and (ii) to the extent such cash shall be required for such purpose at a later date, shall, to the extent practicable, be reinvested in Defeasance Securities maturing at times and in amounts sufficient to paywhenduethe principal or redemption price, if applicable, andinteresttobecomedueonsuchbonds, orobligations under any Credit Facility, on or prior to such redemption date or maturity date thereof, as the case maybe, and interest earned from such reinvestments shall be paid over as received bythe Trustee to the Issuer, free and clear of any lien, pledge or security interest securing such Bonds or otherwise existing under this Master Indenture. For the purposes of this provision, Defeasance Securities means and includes only such securities which shall not be subject to redemption prior to their maturity other than at the option of the holder thereof. (c) As to anyvariable Rate Bonds, whetherdischargedandsatisfiedundertheprovisions of subsection (a) or (b) above, the amount required for the interest thereon shall be calculated at the maximum rate permitted by the terms of the provisions which authorized the issuance of such Variable Rate Bonds; provided, however, that if on anydate, as a result of such VariableRateBonds having borne interest at less than such maximum rate for anyperiod, the total amountofmoneysand Investment Obligations on deposit for the payment of interest on such Variable Rate Bonds is in excess of the total amount which would have been required to be depositedonsuchdateinrespectof such Variable Rate Bonds in order to fully discharge and satisfy such Bonds and obligations under any Credit Facility pursuant to the provisions of this Section, the Issuer mayuse the amount of such excess free and clear of anytrust, lien, securityinterest, pledge or assignment securing said Variable Rate Bonds or otherwise existing under this Master Indenture or under any Credit Facility. 71

158 (d) Notwithstanding any of the provisions of this Master Indenture to the contrary, Option Bonds may only be fully discharged and satisfied either pursuant to subsection (a) above or by depositing in the Series Interest Account, the Series Principal Account and the Series Redemption Account, or in such other accounts which are irrevocably pledged to the payment of the Option Bonds, as the Issuer may create and establish by Supplemental Indenture, moneys which together with other moneys lawfully available therefor shall be sufficient at the time of such deposit to pay when due the maximum amount of principal of and redemption price, if any, and interest on such Option Bonds which could become payable to the Owners of such Bonds upon the exercise of any options provided to the Owners of such Bonds; provided however, that if, at the time a deposit is made pursuant to this subsection (d), the options originally exercisable by the Owner of an Option Bond are no longer exercisable, such Bond shall not be considered an Option Bond for purposes of this subsection (d). If any portion of the moneys deposited for the payment of the principal of and redemption price, if any, and interest on Option Bonds is not required for such purpose and is not needed to reimburse any Credit Facility Issuer for obligations under any Credit Facility, the Issuer may use the amount of such excess free and clear of any trust, lien, security interest, pledge or assignment securing such Option Bonds or otherwise existing under this Master Indenture or any Credit Facility. SECTION Moneys Held in Trust. Allmoneysandobligationsheldbyanescrowor paying agent or trustee pursuant to this Section shall be held in trust and the principal and interest of said obligations when received, and said moneys, shall be applied to the payment, when due, of the principal, interest and premium, if any, of the Bonds to be paid or to be called for redemption. [END OF ARTICLE XIII] (e) Anything in this Master Indenture to the contrarynotwithstanding, anymoneys held bythe Trustee or anypaying Agent in trust for the payment and discharge of anyseries of thebonds which remain unclaimed for six (6) years after the date when such Bonds have become due and payable, either at their stated maturity dates or by call for earlier redemption, if such moneys were held by the Trustee or any Paying Agent at such date, or for six (6) years after the date of deposit of such moneys if deposited with the Trustee or Paying Agent after the date when such Bonds became due and payable, shall, at the written request of the Issuer be repaid by the Trustee or Paying Agent to the Issuer as its absolute property and free from trust, and the Trustee or Paying Agent shall thereupon be released and discharged with respect thereto and the Owners shall look only to the Issuer for the payment of such Bonds; provided, however, that before being required to make any such payment to the Issuer, the Trustee or Paying Agent shall, at the expense of the Issuer, cause to be mailed, postage prepaid, to anycredit FacilityIssuer, and to eachregisteredownerofbondsthen Outstanding at the address, if any, appearing upon the registrybooks of the Issuer, a notice that such moneys remain unclaimed and that, after a date named in such notice, which date shall be not less than thirty (30) days after the date of the mailing of such notice, the balance of such moneys then unclaimed shall be returned to the Issuer. (f) In the event that the principal and redemption price, if applicable, and interestdueon the Bonds shall be paid bya Credit FacilityIssuer pursuant to a municipal bondinsurancepolicy, the assignment and pledge and all covenants, agreements and other obligations of the Issuer to the Owners of such Bonds shall continue to exist and the Credit FacilityIssuershallbesubrogatedtothe rights of such Owners. (g) Anything in this Master Indenture to the contrarynotwithstanding, the provisions of the foregoing subsections (b) through (f) shall apply to the discharge of Bonds of a Series and to the discharge of the lien of any Supplemental Indenture securing such Series of Bonds as though each reference to the "Master Indenture" were a referencetosuch "SupplementalIndenture" andasthough each reference to "Bonds Outstanding" were a reference to the "Bonds of such Series Outstanding." ARTICLE XIV MISCELLANEOUS PROVISIONS SECTION Limitations on Recourse. No personal recourse shall be had for any claim based on this Master Indenture or any Supplemental Indenture or the Bonds against any member of the Board of the Issuer, officer, employee or agent, past, present or future, oftheissueror of anysuccessor bodyas such, either directlyor through the Issueroranysuchsuccessorbody, under any constitutional provision, statute or rule of law or by the enforcement of any assessment or penalty or otherwise. The Bonds of each Series are payable solelyfrom the Pledged Funds and Pledged Revenues pledged thereto by this Master Indenture and the related Supplemental Indenture, and any other moneys held by the Trustee under this Master Indenture or any Supplemental Indenture for such purpose. There shall be no other recourse under the Bonds of a Series, this Master Indenture, any Supplemental Indenture or otherwise, against the Issuer or any other property now or hereafter owned by it. SECTION Payment Dates. In any case where an Interest Payment Date or the maturity date of the Bonds or the date fixed for the redemption of any Bonds shall be other than a Business Day, then payment of interest, principal or Redemption Price need not be made on such date but may be made on the next succeeding Business Day, with the same force and effect as if made on the due date, and no interest on such payment shall accrue for the period after such due date if payment is made on such next succeeding Business Day. SECTION No Rights Conferred on Others. Nothing herein contained shall confer any right upon any Person other than the parties hereto and the Holders of the Bonds. SECTION Illegal ProvisionsDisregarded. IfanytermofthisMasterIndenture, any Supplemental Indenture or the Bonds or the application thereofforanyreasonorcircumstancesshall to any extent be held invalid or unenforceable, the remaining provisions or the application of such terms or provisions to Persons and situations other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each remaining term and provision hereof and thereof shall be valid and enforced to the fullest extent permitted by law. SECTION Substitute Notice. If for any reason it shall be impossible to make duplication of anynotice required herebyin anewspaperornewspapers, thensuchpublicationinlieu thereof as shall be made with the approval of the Trustee shall constitute a sufficient publication of such notice. SECTION Notices. Any notice, demand, direction, request or other instrument authorized or required by this Master Indenture to be given to or filed with the Issuer or the Trustee shall be deemed to have been sufficiently given or filed for all purposes of this Master Indenture if and when personally delivered and receipted for, or sent by registered United States mail, return receipt requested, addressed as follows: (a) (b) As to the Issuer: North Springs Improvement District District Offices NW 11 th Manor Coral Springs, Florida Attention: District Manager As to the Trustee: Wachovia Bank, National Association One First Union Financial Center 200 S. Biscayne Blvd. Miami, Florida Attention: Corporate Trust Department, 14th Floor Any of the foregoing may, by notice sent to each of the others, designate a different or additional address to which notices under this Master Indenture are to be sent. All documents received bythe Trustee under the provisions of this Master Indenture andnot required to be redelivered shall be retained in its possession, subject at all reasonable times to the inspection of the Issuer, any Consultant, any Bondholder and the agents and representatives thereof as evidence in writing. Notices to Bondholders shall be sufficient if sent byfirst-class mail, postage prepaid. SECTION Controlling Law. This Master Indenture shall be governed by and construed in accordance with the laws of the State. SECTION Successors and Assigns. Allthecovenants, promisesandagreementsin this Master Indenture contained by or on behalf of the Issuer or by or on behalf of the Trustee shall bind and inure to the benefit of their respective successors and assigns, whether so expressed or not. SECTION Headings for Convenience Only. Thetableof contents and descriptive headings in this Master Indenture are inserted for convenience onlyandshallnotcontroloraffectthe meaning or construction of any of the provisions hereof. SECTION Counterparts. This Master Indenturemaybeexecutedinanynumberof counterparts, each of which when so executed and delivered shall be an original; but such counterparts shall together constitute but one and the same instrument. SECTION Appendices andexhibits. Anyandallappendicesorexhibitsreferredto in and attached to this Master Indenture are herebyincorporated herein andmadeaparthereofforall purposes. [END OF ARTICLE XIV] 74 B-20 75

159 R- EXHIBIT A FORM OF BOND UNITED STATES OF AMERICA STATE OF FLORIDA NORTH SPRINGS IMPROVEMENT DISTRICT (BROWARD COUNTY, FLORIDA) SPECIAL ASSESSMENT BOND, SERIES 20 ( ASSESSMENT AREA) Interest Rate Maturity Date Dated Date CUSIP Registered Owner: Principal Amount: % 1, 1, 20 CEDE & CO. $ KNOW ALL PERSONS BY THESE PRESENTS that North Springs Improvement District (the Issuer ), for value received, hereby promises to pay to the registered owner shown above or registered assigns, on the date specified above, from the sources hereinafter mentioned, upon presentation and surrender hereof at the corporate trust office of Wachovia Bank, National Association, in Miami, Florida, as paying agent (said Wachovia Bank, National Association and/or any bank or trust company to become successor paying agent being herein called the Paying Agent ), the principal sum of DOLLARS ($ ) with interest thereon at the rate of percent ( %) per annum, payable on the first day of and of each year, commencing 1, 20. Principal of this Bond is payable at the corporate trust office of Wachovia Bank, National Association, located in Miami, Florida, in lawful money of the United States of America. Interest on this Bond is payable by check or draft of the Paying Agent made payable to the registered owner and mailedtotheaddressoftheregisteredowner as such name and address shall appear on the registry books of the Issuer maintained by Wachovia Bank, National Association, as Registrar (said Wachovia Bank, National Association and any successor Registrar being herein called the Registrar ) at the close of business on the fifteenth day of the calendar month preceding each interest payment date or the date on which the principal of a Bond is to be paid (the Record Date ). Such interest shall be payable from the most recent interest payment date next preceding the date of authentication hereof to whichinteresthasbeenpaid, unless the date of authentication hereof is a 1 or 1 to which interest has been paid, in which case from the date of authentication hereof, or unless such date of authentication is prior to 1, 20, in which case from 1, 20, or unless the date of authentication hereof is between a Record Date and the next succeeding interest payment date, in which case from such interest payment date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the registered owner on such Record Date and may be paid to the person in whose name this Bond is registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed bythe Paying Agent, noticewhereofshallbegiven to Bondholders of record as of the fifth (5th) dayprior to such mailing, at their registered addresses, not less than ten (10) days prior to such Special Record Date, or maybe paid, atanytimeinanyother lawful manner, as more fully provided in the Indenture (defined below). THE BONDS ARE LIMITED OBLIGATIONS OF THE ISSUER PAYABLE SOLELY OUT OF THE PLEDGED REVENUES PLEDGED THEREFOR UNDER THE INDENTURE AND NEITHER THE PROPERTY, THE FULL FAITH AND CREDIT, NOR THE TAXING POWER OF THE ISSUER, BROWARD COUNTY, FLORIDA, THE STATE OF FLORIDA, OR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED AS SECURITY FOR THE PAYMENT OF THE BONDS, EXCEPT THAT THE ISSUER IS OBLIGATED UNDER THE INDENTURE TO LEVY AND TO EVIDENCE AND CERTIFY, OR CAUSE TO BE CERTIFIED, FOR COLLECTION, ASSESSMENTS (AS DEFINED IN THE INDENTURE) TO SECURE AND PAY THE BONDS. THE BONDS DO NOT CONSTITUTE AN INDEBTEDNESS OF THE ISSUER, BROWARD COUNTY, FLORIDA, THE STATE OF FLORIDA, OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION OR LIMITATION. This Bond is one of an authorized issue of Bonds of North Springs Improvement District, a public corporation and independent special district duly created, organized and existing under Chapter , Laws of Florida, as amended and supplemented, designated as North Springs Improvement District (Broward County, Florida) Special Assessment Bonds, Series20 ( Assessment Area) in the aggregate principal amount of Dollars ($ ) (the Bonds ) of like date, tenor and effect, exceptastonumber. TheBonds are being issued under authority of Chapter , Laws of Florida, as amended and supplemented, Chapter 298, Florida Statutes, as amended, anysuccessor lawsorstatutesthereto, the Florida Constitution and other applicable law (collectively, the Act ) to paythe Costs of the Series Project consisting of certain Assessable Improvements (as defined in the hereinafter mentioned Indenture) (the Project ), make deposits to certain Funds and Accounts created undertheindenture and paycosts of issuing the Bonds. The Bonds shall be issued as fullyregisteredbondsinauthorized denominations, as set forth in the Indenture. The Bonds are issued under and secured by a Master Trust Indenture dated as of December 1, 2005, as supplemented by a Supplemental Indenture dated as of 1, 20 (collectively, the Indenture ), each entered into by and between the Issuer and the Trustee, executed counterparts of which are on file at the corporate trust office of the Trustee in Miami, Florida. Reference is hereby made to the Indenture for the provisions, among others, with respect to the custody and application of the proceeds of the Bonds issued under the Indenture, the operation and application of the Series 20 Debt Service Account and other Accounts and Subaccounts (each as defined in the Indenture) charged with and pledged to the payment of the principal of, premium, if any, and the interest on the Bonds, the levy and the evidencing and certifying for A-1 B-21 A-2

160 collection, of Series 20 Assessments, the nature and extent of the security for the Bonds, the terms and conditions on which the Bonds are issued, the rights, duties and obligations of the Issuer and of the Trustee under the Indenture, the conditions under which such Indenture maybe amended without the consent of the registered owners of Bonds, the conditions under which such Indenture may be amended with the consent of the registered owners of a majority in aggregate principal amount of the Bonds outstanding, and as to other rights and remedies of the registered owners ofthe Bonds. The registered owner of this Bond shall have no right to enforce the provisions of the Indenture or to institute action to enforce the covenants therein, or to take anyaction with respect to any event of default under the Indenture or to institute, appear in or defend any suit or other proceeding with respect thereto, except as provided in the Indenture. It is expressly agreed by the registered owner of this Bond that such registered owner shall never have the right to require or compel the exercise of the ad valorem taxing power of the Issuer, Broward County, Florida, the State of Florida or anypolitical subdivision thereof, or taxation in any form of any real or personal property of the Issuer, Broward County, Florida, the State of Florida or anypolitical subdivision thereof, for the payment of the principalof, premium, ifany, andintereston this Bond or the making of anyother sinking fund and other payments provided for in the Indenture, except for Series 20 Assessments to be assessed and levied by the Issuer with respect to the Bonds as set forth in the Indenture. By the acceptance of this Bond, the registered owner hereof assents to all the provisions of the Indenture. This Bond is payable from and secured bythe Series 20 Pledged Revenues, as such term is defined in the Indenture, all in the manner provided in the Indenture. The Indenture provides for the levy and the evidencing and certifying, of non ad valorem assessments in the form of Series 20 Assessments to secure and pay the Bonds. [Describe any additional Pledged Revenues] The Bonds are subject to redemption prior to maturity. [Insert redemption provisions] Notice of Redemption and of Purchase. When required to redeem or purchase Bonds under anyprovision of this Indenture or directed to do so bythe Issuer, the Trustee shall causenoticeofthe redemption, either in whole or in part, to be mailed at least thirty (30) but not more than sixty (60) days prior to the redemption or purchase date to all Owners of Bonds to be redeemed or purchased (as such Owners appear on the Bond Register on the fifth (5th) day prior to such mailing), at their registered addresses and also to any Credit Facility Issuer, but failure to mail any such notice or defect in the notice or in the mailing thereof shall not affect the validity of the redemption or purchase of the Bonds for which notice was duly mailed in accordance with the Indenture. Such notice shall be given in the name of the Issuer, shall be dated, shall set forth the Bonds Outstanding which shall be called for redemption or purchase and shall include, certain additional information required by the Indenture. Partial Redemption of Bonds. If less than all the Bonds of a maturity are to be redeemed, the Trustee shall select the particular Bonds or portions of Bonds to be redeemed by lot in such reasonable manner as the Trustee in its discretion may determine. The Issuer shall keep books for the registration of the Bonds at the corporate trust office of the Registrar in Miami, Florida. Subject to the restrictions contained in the Indenture, the Bonds may be transferred or exchanged by the registered owner thereof in person or by his attorney duly authorized in writing onlyupon the books of the Issuer kept bytheregistrarandonlyuponsurrender thereof together with a written instrument of transfer satisfactory to the Registrar duly executed by the registered owner or his duly authorized attorney. In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Issuer shall execute and the Trustee or such other authenticating agent as may be appointed by the Trustee under the Indenture shall authenticate and deliver a new Bond or Bonds in authorized form and in like aggregate principal amount in accordance with the provisions of the Indenture. There shall be no charge for anysuch exchange or transfer of Bonds, but the Issuer mayrequire payment of a sum sufficient to payanytax, fee or other governmental charge imposed. Neither the Issuer nor the Registrarshallberequired (a) totransferor exchange Bonds for a period of 15 days next preceding any selection of Bonds to be redeemed or thereafter until after th ingof anynoticeof redemption; or (b) to transferorexchangeanybond called for redemption in whole or in part. The Issuer, the Trustee, the Paying Agent and the Registrar maydeem and treat the personin whose name anybond shall be registered upon the books kept bythe Registrarastheabsoluteowner thereof (whether or not such Bond shall be overdue and notwithstanding any notation of ownership or other writing thereon made by anyone other than the Issuer, the Trustee, the Paying Agent or the Registrar) for the purpose of receiving payment of or on account of the principalof, premium, ifany, and interest on such Bond as the same becomes due, and for all other purposes. All such payments so made to any such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the Issuer, the Trustee, the Paying Agent, nor the Registrar shall be affected by any notice to the contrary. This Bond shall not be valid or become obligatory for any purpose or be entitled to any benefit or security under the Indenture until it shall have been authenticated by execution of the Trustee, or such other authenticating agent as may be appointed by the Trustee under the Indenture, of the certificate of authentication endorsed hereon. It is hereby certified and recited that all acts, conditions and things required to exist, to happen, and to be performed, precedent to and in the issuance of this Bond exist, have happenedand have been performed in regular and due form and time as required by the Act, and that the issuance of this Bond, and of the issue of the Bonds of which this Bond is one, is in full compliance with all constitutional and statutory limitations or provisions. A-3 A-4 IN WITNESS WHEREOF, North Springs Improvement District has caused this Bond to be signed by the signature of the President of its Board of Supervisors and its seal to be imprinted hereon, and attested by the signature of the Secretary or an Assistant Secretary of its Board of Supervisors, all as of the date hereof. NORTH SPRINGS IMPROVEMENT DISTRICT CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds delivered pursuant to the within mentioned Indenture. Date of Authentication: Attest: (SEAL) By: President, Board of Supervisors WACHOVIA BANK, NATIONAL ASSOCIATION, astrustee By: Responsible Officer By: Assistant Secretary, Board of Supervisors A-5 B-22 A-6

161 STATEMENT OF VALIDATION ABBREVIATIONS This Bond is one of an issue of Bonds which were validated byjudgmentofthecircuitcourt of the 17 th Judicial Circuit of Florida, in and for Broward County, Florida, rendered on the 26th day of September, The following abbreviations, when used in the inscription on the face of the within Bond, shall be construed as though theywere written out in full accordingtoapplicablelawsorregulations: ATTEST: President TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with rights of survivorship and not as tenants in common Assistant Secretary UNIFORM GIFT MIN ACT - Custodian (Cust) (Minor) Under Uniform Gifts to Minors Act (State) Additional abbreviations may also be used though not in the above list. A-7 A-8 ASSIGNMENT AND TRANSFER FOR VALUE RECEIVED the undersigned sells, assigns and transfers unto (please print or typewrite name and address of assignee) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints Attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. Signature Guarantee: NOTICE: Signature(s) must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company Please insert social security or other identifying number of Assignee. NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever. [THIS PAGE INTENTIONALLY LEFT BLANK] A-9 B-23

162 TABLE OF CONTENTS PAGE ARTICLE I DEFINITIONS...4 THIRD SUPPLEMENTAL TRUST INDENTURE between NORTH SPRINGS IMPROVEMENT DISTRICT and U.S. BANK NATIONAL ASSOCIATION, as successor in interest to WACHOVIA BANK, NATIONAL ASSOCIATION, As Trustee Dated as of October 1, 2006 relating to $6,930,000 NORTH SPRINGS IMPROVEMENT DISTRICT (BROWARD COUNTY, FLORIDA) SPECIAL ASSESSMENT BONDS, SERIES 2006A (HERON BAY NORTH ASSESSMENT AREA) and $2,165,000 NORTH SPRINGS IMPROVEMENT DISTRICT (BROWARD COUNTY, FLORIDA) SPECIAL ASSESSMENT BONDS, SERIES 2006B (HERON BAY NORTH ASSESSMENT AREA) ARTICLE II THE BONDS...9 SECTION Amounts and Terms of Bonds; Details of Bonds...9 SECTION Qualification for The Depository Trust Company...10 ARTICLE III ESTABLISHMENT OF FUNDS AND ACCOUNTS: DISPOSITION OF PROCEEDS OF BONDS; PROJECT...11 SECTION Establishment of Funds and Accounts...11 SECTION Disposition of Proceeds and Other Funds...11 SECTION Completion of Project...11 SECTION Costs of Issuance Account...12 ARTICLE IV SPECIAL ASSESSMENTS; APPLICATION THEREOF TO FUNDS AND ACCOUNTS...14 SECTION Special Assessments; Lien of Indenture on Revenues...14 SECTION Revenue Account...14 SECTION Reserve Account...17 ARTICLE V INVESTMENT OF FUNDS...20 SECTION Investment of Funds...20 ARTICLE VI REDEMPTION...22 SECTION Redemption Dates and Prices...22 ARTICLE VII COVENANTS OF THE ISSUER...25 SECTION Issuance of Additional Bonds SECTION Collection of Special Assessments...25 SECTION 7.03 Continuing Disclosure...25 SECTION 7.04 Limitation on Disbursements from the Series 2006 Deferred Obligations Subaccount...25 ARTICLE VIII THE TRUSTEE; THE PAYING AGENT AND REGISTRAR...27 SECTION Acceptance of Trust...27 SECTION Trustee s Duties...27 ARTICLE IX MISCELLANEOUS PROVISIONS...28 SECTION Confirmation of Master Indenture...28 SECTION Headings for Convenience Only...28 SECTION Counterparts...28 SECTION Appendices and Exhibits...28 (i) APPENDICES EXHIBIT A BOND FORMS... A-1 EXHIBIT B FORM OF COSTS OF ISSUANCE REQUISITION...B-1 EXHIBIT C PROJECT DESCRIPTION...C-1 EXHIBIT D FORM OF PROJECT ACCOUNT/SERIES 2006 DEFERRED OBLIGATIONS REQUISITION... D-1 THIS THIRD SUPPLEMENTAL TRUST INDENTURE, dated as of October 1, 2006 (the Supplemental Indenture ) is entered into by and between NORTH SPRINGS IMPROVEMENT DISTRICT (the Issuer ), a localunitofspecialpurposegovernmentorganized and existing under the laws of the State of Florida, and U.S. BANK NATIONAL ASSOCIATION, a national banking association duly organized and existing under the laws of the United States of America and having corporate trust offices in Miami, Florida, as successor in interest to WACHOVIA BANK, NATIONAL ASSOCIATION, (said national banking association and any bank or trust company becoming successor trustee under this First Supplemental Indenture being hereinafter referred to as the Trustee ). Allcapitalizedtermsnototherwisedefinedhereinshallhave the meaning ascribed thereto in the hereinafter defined Master Indenture. WITNESSETH: A. The Issuer is a local unit of special purpose government dulyorganized and existing under the provisions of the Act. The Issuer was established for the purpose, among other things, of delivering certain communitydevelopment services andfacilitiesasauthorizedbytheact, including planning, financing, constructing, acquiring, owning, operating and maintaining the Series Projects and Additional Series Projects. B. Pursuant to Resolution Nos , and of the Issuer adopted on August 4, 2005, the Issuer, among other matters, established within its boundariestheparklandgolf and Country Club Assessment Area and the Parkland Golf and Country Club Assessment Area A, and the Heron Bay North Assessment Area, respectively. The Issuer has heretofore approved a Master Engineer s Report Assessment Areas dated August 4, 2005, prepared by CH2MHill, Consulting Engineers to the Issuer, as amended and supplemented through December 16, 2005, which describes the capital projects comprising Assessable Improvements for the benefit of the Parkland Golf and CountryClub Assessment Area, the ParklandGolfandCountryClubAssessment Area A and the Heron BayNorth Assessment Area, as same maybe amended or supplementedfrom time to time (the Engineer s Report ), including, with respect to the Heron BayNorth Assessment Area, by that certain Supplement to Master Engineer s Report dated September 15, 2006, updated October 12, 2006 (the Supplement ). C. The Issuer and the Trustee have entered into the Master Trust Indenture to secure the issuance of Bonds by the Issuer in various Series to finance Series Projects and Additional Series Projects that comprise Assessable Improvements to be undertaken with respect to various Assessment Areas. The Bonds were validated by final judgment of the Circuit Court of Broward County, Florida on September 26, D. Pursuant to Resolution No of the Issuer adopted on August 4, 2005, the Issuer acknowledged that pursuant to written agreements (the Agreements ) betweentheissuerand the developer(s) of lands in the Assessment Areas (the Developer(s) ), such Developer(s) have made, and may continue to make through the date of issuance of a Series of Bonds to finance a Series Project for the applicable Assessment Area, certain advances to the Issuer (collectively, the Advances ). These Advances have been, and will continue to be, applied bytheissuertopaycosts associated with the Series Project for the applicable Assessment Area prior to the issuance of a (ii) B-24 1

163 Series of Bonds to finance the Costs thereof. Accordingly, for purposes of the Master Indenture, the Cost of a Series Project is deemed to include repayment of Advances relating to such Series Project. E. Pursuant to the Series 2006 Bond Resolution, the Issuer has authorized the financing and refinancing, through the repayment of related Advances, the Series 2006 Project as a Series Project comprising Assessable Improvements relating to the Heron BayNorthAssessmentArea, the issuance, sale and delivery of the Series 2006 Bonds in two Series, consisting of the Series 2006A Bonds and the Series 2006B Bonds, and ratified the execution and delivery of the Master Indenture and authorized the execution and deliveryof this Supplemental Indenture. In addition, theissuerhas adopted the Series 2006 Assessment Proceedings to fix and establish the Series 2006 Special Assessments securing the Series 2006 Bonds. F. The Issuer will applythe proceeds of the Series 2006 Bonds to financeandrefinance, through the repayment of Advances, a portion of the Cost of the Series 2006 Project and make necessary deposits into the related Series Reserve Subaccounts, Series Capitalized Interest Subaccounts and Series Cost of Issuance Account, as more fully provided for herein. G. The execution and delivery of the Series 2006 Bonds, the Master Indenture and this Supplemental Indenture have been dulyauthorized bythe Issuer and allthingsnecessarytomakethe Series 2006 Bonds, when executed by the Issuer and authenticated by the Trustee, valid and legal, binding obligations of the Issuer and to make this Supplemental Indenture a valid and binding agreement of the Issuer, and, together with the Master Indenture, a valid and binding lien on the Series 2006 Trust Estate have been done. NOW, THEREFORE, THIS INDENTURE WITNESSETH, that the Issuer, in consideration of the premises, the acceptance bythe Trustee of the trusts herebycreated, the mutual covenants herein contained, the purchase and acceptance of the Series 2006 Bonds bythe purchaser or purchasers thereof, and other good and valuable consideration, receipt of which is hereby acknowledged, and in order to further secure the payment of the principal and Redemption Price of, and interest on, all Series 2006 Bonds Outstanding from time to time, according to their tenor and effect, and such other payments required to be made under the Master Indentureorhereunder, andto further secure the observance and performance by the Issuer of all the covenants, expressed or implied in the Master Indenture, in this Supplemental Indenture and in the Series 2006 Bonds: (a) has executed and delivered this Supplemental Indenture and (b) does hereby, in confirmation of the Master Indenture, grant, bargain, sell, convey, transfer, assign and pledge unto the Trustee, and unto its successors in the trusts under the Master Indenture, and to them and their successors and assigns forever, all right, title and interest of the Issuer, in, to and under, subject to the terms and conditions of the Master Indenture and the provisions of the Master Indenture pertaining to the application thereof for or to the purposes and on the terms set forth in the Master Indenture the revenues derived bythe Issuer from the Series 2006 Special Assessments (the Series 2006 Pledged Revenues ) and the Funds and Accounts (except for the Series 2006 Rebate Account) established hereby (the Series 2006 Pledged Funds ) which shall comprise a part of the Series Trust Estate securing the Series 2006 Bonds (the Series 2006 Trust Estate ); TO HAVE AND TO HOLD, all the same bythe Master Indenture granted, bargained, sole, conveyed, transferred, assigned and pledged, or agreed or intended so to be, to the Trustee and its successors in said trust and to it and its assigns forever; IN TRUST NEVERTHELESS, except as in each such case may otherwise be provided in the Master Indenture, upon the terms and trusts in the Indenture set forth for the equal and proportionate benefit, securityand protection of all and singularthepresentandfutureownersofthe Series 2006 Bonds issued or to be issued under and secured bythis Supplemental Indenture, without preference, priorityor distinction as to lien or otherwise, of anyone Series2006Bondoveranyother Series 2006 Bond by reason of priority in their issue, sale or execution; PROVIDED FURTHERHOWEVER, that if the Issuer, its successors or assigns, shall well and truly pay, or cause to be paid, or make due provision for the payment of the principal and Redemption Price of the Series 2006 Bonds or anyseries 2006 Bond of a particular maturityissued, secured and Outstanding under this Supplemental Indenture and the interest due or to become due thereon, at times and in the manner mentioned in the Series 2006 Bonds and this Supplemental Indenture, according to the true intent and meaning thereof, and shall well and truly keep, perform and observe all the covenants and conditions pursuant to the terms of the Master Indenture and this Supplemental Indenture to be kept, performed and observed byit, andshallpayorcausetobepaidto the Trustee all sums of money due or to become due to it in accordance with the terms and provisions of the Master Indenture and this Supplemental Indenture, then upon such finalpayments, this Supplemental Indenture and the rights herebygranted shall cease and terminate, with respect to all Series 2006 Bonds or anyseries 2006 Bond of a particular maturity, otherwisethissupplemental Indenture shall remain in full force and effect; THIS SUPPLEMENTAL INDENTURE FURTHER WITNESSETH, and it is expressly declared, that all Series 2006 Bonds issued and secured hereunder aretobeissued, authenticatedand delivered and all of the rights and property pledged to the payment thereof are to be dealt with and disposed of under, upon and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes as in the Master Indenture (except as amended directlyorbyimplicationby this Supplemental Indenture), including this Supplemental Indenture, expressed, and the Issuer has agreed and covenanted, and does herebyagreeandcovenant, withthetrusteeandwiththerespective Owners, from time to time, of the Series 2006 Bonds, as follows: [THIS SPACE INTENTIONALLY LEFT BLANK] 2 3 ARTICLE I DEFINITIONS All terms used herein that are defined in the Master Indenture are used with the same meaning herein (including the use of such terms in the recitals hereto and the granting clauses hereof) unless expressly given another meaning or the context clearly requires otherwise. In this Supplemental Indenture (except as otherwise expressly provided or unless the context otherwise requires) terms defined in the recitals hereto shall have the same meaning throughout this Supplemental Indenture, and in addition, the following terms shall have the meanings specified below. Advances shall have the meaning set forth in the recitals herein. Deemed Outstanding shall mean, in the case of the Series 2006A Bonds, the aggregate Outstanding principal amount of Series 2006A Bonds, reduced by the result of dividing (x) the amount on deposit in the Series 2006A Prepayment Subaccount in the Series 2006 Redemption Subaccount by (y) 1- the Series 2006A Reserve Account Percentage and shall mean, in the case of the Series 2006B Bonds, the aggregate Outstanding principal amount of Series 2006B Bonds, reduced by the result of dividing (x) the amount on deposit in the Series 2006B Prepayment Subaccount in the Series 2006 Redemption Subaccount by (y) 1- theseries2006breserveaccount Percentage. Delinquent 2006 Assessment Interest shall mean interest on the Series 2006 Special Assessments pledged to the Series 2006 Bonds deposited with the Trustee on or after May 1 of the year in which such interest has, or would have, become delinquent under State law applicable thereto. Delinquent 2006 Assessment Principal shall mean principal of the Series 2006 Special Assessments pledged to the Series 2006 Bonds (and which, with respect to the Series 2006ABonds, shall mean Series 2006A Assessment Principal and with respect to the Series 2006B Bonds, shall mean Series 2006B Assessment Principal) deposited with thetrusteeonoraftermay1oftheyearin which such principal has, or would have, become delinquent under State law applicable thereto. Engineer s Report shall have the meaningsetforthintherecitalsherein, assuchreportmay be amended and supplemented from time to time, including by the Supplement. Indenture shall mean, collectively, the Master Indenture and this Supplemental Indenture. Investment Grade Rating means either a rating of the Series 2006 Bonds of BBB- or higher by S&P or a rating of the Series 2006 Bonds of Baa3 or higher by Moody s or a rating of BBB- or higher by Fitch Ratings. Interest Payment Date shall mean each May1 andnovember1, commencingmay1, Purchase Agreement shall mean one or more written agreements between the Issuer and a Seller, pursuant to which said Seller has agreed to sell to the Issuer, and the Issuer has agreed to purchase from said Seller the portion of the Series 2006 Project specified in the applicable Purchase Agreement or with respect to which the Seller has agreed to complete and convey to the Issuer, and/or provide funds to the Issuer to complete, all or any portion of the Series 2006 Project. Quarterly Redemption Date shall mean, with respect to the Series 2006B Bonds, each February 1, May 1, August 1 and November 1. Seller shall mean such person or entity from which the Issuer acquires or accepts conveyance of, or receives funds to complete, all or any portion of the Series 2006 Project pursuant to a Purchase Agreement. Series 2006 Assessment Interest shall mean the interest on the Series 2006 Special Assessments which are pledged to the Series 2006 Bonds. Series 2006 Assessment Proceedings shall mean the proceedingsoftheissuerwithrespect to the establishment, levyand collection of the Series 2006 Special Assessments for the Series 2006 Project, including, without limitation, Resolution No adopted by the Issuer on August 4, 2005 and Resolution No adopted by the Issuer on September 1, 2005, the portion of the Engineer s Report comprising the Master Assessment Methodology, under the caption Apportionment of Estimate Total Cost of Improvements Heron Bay North Assessment Area, as same may be supplemented or amended from time to time, including by the Supplement, and any supplemental proceedings taken or assessment methodologies approvedbytheissuerwithrespectto such Series 2006 Special Assessments. Series 2006 Bonds shall mean, collectively, the Series 2006A Bonds andtheseries2006b Bonds. Series 2006 Bond Resolution shall mean Resolution No of the Issuer adoptedon August 4, 2005 and Resolution No of the Issuer adopted on August 9, Series 2006 Deferred Obligations shall mean the obligation of the Issuer evidenced in the Purchase Agreement to pay, without interest, the amount by which the Cost of the Series 2006 Project or portion thereof to be conveyed to the Issuer pursuant to suchpurchaseagreementexceeds the amount actually paid by the Issuer theretofor from proceeds of the Series 2006 Bonds, which obligation shall be subordinate to such Series 2006 Bonds and payable, if ever, solely as provided herein pursuant to a Requisition, and which shall not be due and payable during such time as the Seller to which the Series 2006 Deferred Obligations is owed is in defaultinitsobligationsunderthe Purchase Agreement. Series 2006 Project shall mean the Series Project consisting of Assessable Improvements benefiting certain lands in the Heron Bay North Assessment Area, as more fully described in the Engineer s Report under the section of the Supplement entitled Update to Recommendations and in the related exhibits and appendices included in the Engineer s Report and on Exhibit C hereto. 4 B-25 5

164 Series 2006A Reserve Account Percentage shall mean (A) on the date of issuance of the Series 2006A Bonds the result of dividing (i) the Series 2006A Reserve Requirement on the date of initial issuance and delivery of the Series 2006A Bonds ($559,900) by (ii) the initial Outstanding aggregate principal amount of the Series 2006ABonds (whichequals8.079%) and (B) subsequentto the earlier of (i) the date on which the Series 2006 Bonds have received an Investment Grade Rating or (ii) the Series 2006A Assessment Principal has been Substantially Absorbed, in each case as evidenced by a certificate to such effect delivered to the Trustee from a Responsible Officer on which the Trustee mayconclusivelyrely, the term Series2006AReserveAccountPercentage shall mean the result of dividing (x) fifty percent (50%) of the maximum annual Debt Service Requirements on the Series 2006A Bonds by (y) the then Outstanding aggregateprincipalamountof the Series 2006A Bonds, but onlyif the amount so determined is less than the amount determined in clause (A). Series 2006 Special Assessments shall mean the Special Assessments levied pursuant to the Series 2006 Assessment Proceedings and pledged to the Series 2006 Bonds. Series 2006 Special Assessment Revenues shall mean the net proceeds derived from the levyand collection of Series 2006 Special Assessments, including the interest and penalties on such Series 2006 Special Assessments, pursuant to all applicable provisions of the Act, Chapter 298, Florida Statutes and Chapter 197, Florida Statutes (and any successor statutes thereto), including, without limitation, any amount received from any foreclosure proceeding for the enforcement of collection of such assessments or from the issuance and sale of tax certificates with respect to such assessments, less (to the extent applicable) the fees and costs of collectionthereofpayabletothetax Collector and less certain administrative costs payable to the Property Appraiser pursuant to the Property Appraiser and Tax Collector Agreement. Series 2006A Assessment Principal shall mean the principal amount of the Series 2006 Special Assessments received by the Issuer which represent the principal and Sinking Fund Installments relating to the Series 2006A Bonds, other than Series 2006A Prepayment Principaland applicable Delinquent 2006 Assessment Principal, as same is reflected in the Series 2006 Assessment Proceedings. Series 2006A Bonds shall mean the $6,930,000 North Springs Improvement District (Broward County, Florida) Special Assessment Bonds, Series 2006A (HeronBayNorthAssessment Area), issued and delivered pursuant to the provisions of this Indenture. Series 2006A Prepayment Principal shall mean the excess amount of Series 2006A Assessment Principal received by the Issuer over the Series 2006A Assessment Principal included within the Series 2006 Special Assessmentsappearingonanyoutstandingandunpaidassessmentbill relating to the Series 2006A Bonds, whether or not mandated to be prepaid by proceedings of the Issuer. Series 2006A Reserve Requirement shall mean (A) on the date of issuance of the Series 2006 Bonds $559,900, representingthelesserof (i) themaximumannualdebtservicerequirements for Outstanding Series 2006A Bonds determined on the date of initial issuance of the Series 2006A Bonds; (ii) 125% of the average annual Debt Service Requirements for Outstanding Series 2006A 6 Bonds determined on the date of initial issuance of the Series 2006A Bonds; or (iii) 10% of the proceeds of the Series 2006A Bonds determined on the date of initial issuance of the Series 2006A Bonds, and (B) at any time thereafter, the Series 2006A Reserve Account Percentage times the Deemed Outstanding principal amount of the Series 2006A Bonds, as of the time of any such calculation. Series 2006B Assessment Principal shall mean the principal amount of the Series 2006 Special Assessments received by the Issuer which represent the principal and Sinking Fund Installments relating to the Series 2006B Bonds, other than Series 2006B Prepayment Principal and applicable Delinquent 2006 Assessment Principal, as same is reflected in the Series 2006 Assessment Proceedings. Series 2006B Bonds shall mean the $2,165,000 North Springs Improvement District (Broward County, Florida) Special Assessment Bonds, Series 2006B (HeronBayNorthAssessment Area), issued and delivered pursuant to the provisions of this Indenture. Series 2006B Prepayment Principal shall mean the excess amount of Series 2006B Assessment Principal received by the Issuer over the Series 2006B Assessment Principal included within the Series 2006 Special Assessmentsappearingonanyoutstandingandunpaidassessmentbill relating to the Series 2006B Bonds. Series 2006B Reserve Account Percentage shall mean the result of dividing (a) the Series 2006B Reserve Requirement on the date of initial issuance and delivery of the Series 2006B Bonds ($54,125) by (b) the initial Outstanding aggregate principal amount of the Series 2006B Bonds (which equals 2.5%). Series 2006B Reserve Requirement shall mean (A) on the date of initial issuance of the Series 2006B Bonds an amount ($54,125) equal to six months of interest ontheseries2006bbonds as of the date of issuance, and (B) at any time after the date of initial issuance of the Series 2006B Bonds, shall mean the Series 2006B Reserve Account Percentage times the Deemed Outstanding principal amount of the Series 2006B Bonds as of any time of calculation. Substantially Absorbed means, with respect to Series 2006A Assessment Principal, the date on which at least seventy-five percent (75%) of the then outstanding Series 2006A Assessment Principal has been allocated to land within the boundaries of the Issuer with respect to which a certificate of occupancy has issued for a structure thereon. The words hereof, herein, hereto, hereby, and hereunder (except in the form of Bond), refer to the entire Indenture. Every request, requisition, order, demand, application, notice, statement, certificate, consent, or similar action hereunder bythe Issuer shall, unless the form or execution thereof is otherwise specifically provided, be in writing signed bythe President or the Secretary or Assistant Secretary or Responsible Officer of the Issuer. 7 All words and terms importing the singular number shall, where the context requires, import the plural number and vice versa. [END OF ARTICLE I] ARTICLE II THE BONDS SECTION Amounts and Terms of Bonds; Details of Bonds. The Series 2006Bonds are hereby authorized to be issued as Tax-Exempt Term Bonds in two Series, pursuant to the terms and conditions of the Indenture. The total aggregate principal amount ofseries2006bondsthatmay be issued under the Indenture is expressly limited to Nine Million Ninety-Five Thousand Dollars ($9,095,000), with the total aggregate principal amount of Series 2006A Bonds that may be issued under the Indenture being expressly limited to Six Million Nine Hundred Thirty Thousand Dollars ($6,930,000) and the total aggregate principal amount of Series 2006B Bonds that may be issued under the Indenture being expressly limited to Two Million One Hundred Sixty-Five Thousand Dollars ($2,165,000). The Series 2006 Bonds shallbeissuedinauthorizeddenominations, withthe Series 2006A Bonds being numbered consecutively from R-1A and upwards and the Series 2006B Bonds being numbered consecutively from R-1B and upwards. The Series 2006 Bonds shall be in substantiallythe form attached hereto as Exhibit A, with such appropriate variations, omissions and insertions as are permitted or required bythe Indenture. The Series 2006 Bonds shall be issued only upon satisfaction of the conditions set forth in Article III of the Master Indenture; and the Trustee shall, at the Issuer s request, authenticate such Series 2006 Bonds and deliver them as specified in such request. The proceeds of the Series 2006 Bonds shall be applied to (a) finance a portion of the Cost of the Series 2006 Project; (b) pay Capitalized Interest on the Series 2006 Bonds; (c) make a deposit to the Series 2006A Reserve Subaccount in an amount equal to the Series 2006A Reserve Requirement; (d) make a deposit to the Series 2006B Reserve Subaccount in an amount equal to the Series 2006B Reserve Requirement; and (e) pay costs of issuance of the Series 2006 Bonds. The Series 2006 Bonds shall be dated October 1, The Series 2006A Bonds will mature on May 1 of the year shown below, in the amounts and at the rate as set forth below, subject to the right of prior redemption in accordance with their terms: Year Principal Amount Interest Rate 2027 $6,930, % The Series 2006B Bonds will mature on May 1 of the year shown below, in the amounts and at the rate as set forth below, subject to the right of prior redemption in accordance with their terms: Year Principal Amount Interest Rate 2014 $2,165, % Interest on any Series 2006 Bond is payable on May 1, 2007, and on each Interest Payment Date thereafter by check or draft mailed to the person in whose name that Series 2006 Bond is registered at the close of business on the Regular Record Date for such Interest Payment Date, at his address as it appears on the Bond Register. The Trustee is hereby appointed as Trustee, Paying Agent and Registrar for the Series 2006 Bonds. 8 B-26 9

165 Prior to the issuance of the Series 2006 Bonds, the Issuer shall cause compliance with the requirements of Section 3.01 of the Master Indenture relating to the Series 2006 Bonds. SECTION Qualification for The Depository Trust Company. A book-entry only system of registration with DTC is hereby authorized with respect to the Series 2006 Bonds. [END OF ARTICLE II] ARTICLE III ESTABLISHMENT OF FUNDS AND ACCOUNTS: DISPOSITION OF PROCEEDS OF BONDS; PROJECT SECTION Establishment of Funds and Accounts. The following Accounts, for the Series 2006 Bonds are hereby established and shall be held by the Trustee: (a) a Series 2006 Costs of Issuance Account in the Costs of Issuance Fund, (b) a Series 2006 Project Account in the Project Fund, (c) a Series 2006 Reserve Account in the Debt Service Reserve Fund and therein a Series 2006A Reserve Subaccount and a Series 2006B Reserve Subaccount which shall be jointlyheld for the benefit of all of the Series 2006 Bonds, without distinction as to Series of Series 2006Bondsand without privilege or priority of one Series of Series 2006 Bonds over another, (d) a Series 2006 Revenue Account in the Revenue Fund, (e) a Series 2006 Debt Service Account in the Debt Service Fund, and (f) a Series 2006 Rebate Account in the Rebate Fund. In addition, there are hereby established in the Series 2006 Debt Service Account thefollowingsubaccountsandsubaccountsfor the Series 2006 Bonds to be held bythe Trustee: (a) a Series 2006A Capitalized Interest Subaccount and a Series 2006B Capitalized Interest Subaccount; (b) a Series 2006A Interest Subaccount and a Series 2006B Interest Subaccount; (c) a Series 2006A SinkingFundSubaccountandaSeries2006B Principal Subaccount; and (d) a Series 2006 Redemption Subaccount, and therein, a Series 2006A Prepayment Subaccount, a Series 2006B Prepayment Subaccount and a Series 2006 Optional Redemption Subaccount. SECTION Disposition of Proceeds and Other Funds. From $8,971,188.97, representing the net proceeds of the Series 2006 Bonds (the $9,095,000 aggregate par amount of the Series 2006 Bonds less an original issue discount with respect to the Series 2006A Bonds of $17,325.00, less the aggregate underwriter s discountof$136,425.00plusaggregateaccruedinterest of $29,938.97): (a) $334,274.00, representing Capitalized Interest on the Series 2006A Bonds shall be deposited in the Series 2006A Capitalized Interest Subaccount; (b) $104,926.72, representing Capitalized Interest on the Series 2006B Bonds shall be deposited in the Series 2006B Capitalized Interest Subaccount; (c) $23,023.00, representing accrued interest on the Series 2006A Bonds shall be deposited in the Series 2006A InterestSubaccount; (d) $6,915.97, representingaccruedintereston the Series 2006B Bonds shall be deposited in theseries2006binterestsubaccount; (e) $559,900.00, representing the Series 2006A Reserve Requirement shall be deposited in the Series2006AReserve Subaccount; (f) $54,125.00, representing the Series 2006B Reserve Requirement shall be deposited in the Series 2006B Reserve Subaccount; (g) $160,000shallbedeliveredtotheTrusteefordepositto the credit of the Series 2006 Costs of Issuance Account and applied to pay the costs of issuance of the Series 2006 Bonds; and (h) $7,728, shall be deposited to the Series 2006 Project Account in the Project Fund and applied as provided in Section 3.05 hereof (of which $1,474, represents the amount to be applied on the date of delivery of the Series 2006 Bonds to repay Advances related to the Series 2006 Project made through the date immediately prior to the date of delivery of the Series 2006 Bonds, together with interest accrued thereon) (the Initial Series 2006 Project Account Deposit ). SECTION Completion of Project. The Issuer will proceed to complete the Series 2006 Project by closing the acquisition of improvements under the Purchase Agreement(s) and constructing the portion of the Series 2006 Project not being acquired by the Issuer pursuant to the Purchase Agreement(s) and by taking any and all other actions necessary or appropriate to accomplish same. The Issuer will comply with all present and future laws, acts, rules, regulations, orders and requirements lawfully made and applicable in fact to any acquisition or construction hereby undertaken and shall obtain all necessary approvals under federal, state and local laws, acts, rules and regulations necessary for the acquisition, operation and maintenance of the Series 2006 Project. SECTION Costs of Issuance Account. The amounts in the Series 2006 Costs of Issuance Account, until applied, shall be held for the securityoftheseries2006bonds. Moniesheld for the credit of the Series 2006 Costs of Issuance Account shall be used, as and when the Issuer determines it to be appropriate as evidenced in a certificate delivered bythe Issuer to thetrustee, for the purpose of paying anyunpaid costs of issuance of the Series 2006 Bonds. Requisitions from the Series 2006 Costs of Issuance Account shallbemadepursuanttotherequisitionformattachedhereto as Exhibit B, and the Trustee shall make disbursements from the Series 2006 Costs of Issuance Account as directed in the applicable Requisition. Amounts in the Series 2006 Costs of Issuance Account not needed to pay costs of issuance of the Series 2006 Bonds shall be transferred to the Series 2006 Project Account through and including the date on which the Initial Series 2006 Project Account Deposit has been fullydisbursed and thereafterappliedinaccordancewiththeprovisionsof Section 3.05 hereof. Fund and applied to the extraordinary mandatory redemption of Series 2006 Bonds in accordance with Section 6.01 hereof, provided, however, the Trustee shall transfer such amounts into the Bond Redemption Fund first into the Series 2006B Prepayment Subaccount to be used for the extraordinarymandatoryredemption of Series 2006BBondsuntilsuchtimeasalloftheOutstanding Series 2006B Bonds have been paid, or payment thereof provided for, and thereafter, into the Series 2006A Prepayment Subaccount to be used for the extraordinary mandatory redemption of Series 2006A Bonds until such time as all of the Outstanding Series 2006A Bonds have been paid, or payment thereof provided for. [END OF ARTICLE III] SECTION Project Account. A Series 2006 Project Account in the Project Fund is hereby established for the Series 2006 Bonds with the Trustee into which shall be deposited the Initial Series 2006 Project Account Deposit in the amount and at the time set forth in Section 3.02 hereof and from which Costs of the Series 2006 Project may be paid as set forth herein. A Series 2006 Deferred Obligations SubaccountisherebyestablishedintheSeries2006ProjectAccountfrom which funds shall be deposited and disbursed as provided herein. The amounts in the Series 2006 Project Account, until applied as hereafter provided, shall be held for the securityof the Series 2006 Bonds. Monies held for the credit of the Series 2006 Project Account shall be disbursed on the date of delivery of the Series 2006 Bonds pursuant to a requisition in the form attached hereto as Exhibit D (each, a Requisition ) to repay the Advances related to the Series 2006 Project made through the date immediatelyprior to the date of deliveryof the Series 2006 Bonds in the amount of $1,474, The balance of the monies held for the credit of the Series 2006 Project Account shall be disbursed from time to time pursuant to Requisitions to acquire portions of the Series 2006 Project pursuant to the applicable Purchase Agreement and in connection with the Issuer s acquisition or construction of additional components of the Series 2006 Project. The Trustee shall make disbursements from the Series 2006 Project Account as directed in the applicablerequisition. Any balance remaining in the Series 2006 Project Account after the date on which the Initial Series 2006 Project Account Deposit has been fully disbursed shall, at the written direction of the Issuer, first be transferred to and deposited in the Series 2006 Rebate Account in the amount, and to the extent necessary, as directed bythe Issuer in writing, so that the amountondepositthereinequalsthe accrued rebate obligation under Section 148(f) of the Code, and shall next be deposited into the Series 2006 Deferred Obligations Subaccount to be applied to payanyunpaid Series 2006 Deferred Obligations, subject to the receipt by the Trustee of a Requisition therefore. Upon receipt by the Trustee of a written certification from the Issuer signed by a Responsible Officer to the effect that there are no remaining unpaid Series 2006 Deferred Obligations, anybalanceremainingintheseries 2006 Deferred Obligations Subaccount shallbetransferredtoanddepositedinthebondredemption 12 B-27 13

166 ARTICLE IV SPECIAL ASSESSMENTS; APPLICATION THEREOF TO FUNDS AND ACCOUNTS SECTION Special Assessments; Lien of Indenture on Revenues. The Issuer covenants that it shall levy Series 2006 Special Assessments, to the extent and in the amount necessary, to pay the Debt Service Requirements on Series 2006 Bonds issued and Outstanding under the Indenture. The Series 2006 Pledged Revenues are hereby pledged for the payment of the principal or Redemption Price of and interest on all Series 2006 Bonds issued and Outstanding under this Indenture. The Series 2006 Pledged Revenues shall immediatelybe subject to thelienandpledgeof the Indenture without anyphysical deliveryhereoforfurtheract; provided, however, thatthelienand pledge of the Indenture shall not apply to any moneys transferred by the Trustee to the Series 2006 Rebate Account. SECTION Revenue Account. The Trustee is hereby authorized and directed to immediatelydeposit anyand all Series 2006 Special AssessmentRevenues (otherthanseries2006a Prepayment Principal and Series 2006B Prepayment Principal), including any amounts received as the result of any foreclosure, sale of tax certificates or other remedial action for nonpayment of Series 2006 Special Assessments, for the payment of the Series 2006 Bonds and other payments required hereunder (unless such Series 2006 Special Assessment Revenues and/or other payments are specifically designated by the Issuer for deposit into the Rebate Fund or any other Fund or Account established hereunder) and any other amounts or payments specifically designated by the Issuer pursuant to a written direction to the Trustee to be deposited to the Series 2006 Revenue Account. The Series 2006 Revenue Account shall be held bythe Trustee separate and apart from all other Funds and Accounts held under the Indenture and from all other moneys of the Trustee. Notwithstanding anything to the contrary herein, Series 2006A Prepayment Principal shall be deposited directlyinto the Series 2006A Prepayment Subaccount andappliedasprovidedhereinand Series 2006B Prepayment Principal shall be deposited directly into the Series 2006B Prepayment Subaccount and applied as provided herein. (a) The Issuer shall deposit Series 2006 Special Assessment Revenues with the Trustee immediatelyupon receipt together with a written accounting settingforththeamountsofsuchseries 2006 Special Assessment Revenues in the following categories which shall be deposited by the Trustee into the Funds and Accounts established hereunder as follows: (i) Series 2006A Assessment Principal, which shall be deposited into the Series 2006A Principal Subaccount and Series 2006B Assessment Principal, which shall be deposited into the Series 2006B Principal Subaccount; (ii) Series 2006A Prepayment Principal, which shall be deposited into the Series 2006A Prepayment Subaccount of the Series 2006 Redemption Subaccount and Series 2006B Prepayment Principal, which shall be deposited into the Series 2006B Prepayment Subaccount of the Series 2006 Redemption Subaccount; 14 (iii) Delinquent 2006 Assessment Principal relating to the Series 2006A Assessment Principal, which shall first be applied to restore the amount of any withdrawal from the Series 2006A Reserve Subaccount to paythe principal of the Series 2006A Bonds, and the balance, if any, shall be deposited into the Series 2006A Sinking Fund Subaccount and Delinquent 2006 Assessment Principal relating to the Series 2006B Assessment Principal, which shall first be applied to restore the amount of any withdrawal from the Series 2006B Reserve Subaccount to pay the principal of the Series 2006B Bonds, and the balance, if any, shall be deposited into the Series 2006B Principal Subaccount; (iv) Delinquent 2006 Assessment Interest, which shall first be applied to restore the amount of any withdrawal from the Series 2006A Reserve Subaccount or the Series 2006B Reserve Subaccount to pay the interest on the Series 2006 Bonds and the balance, if any, deposited into the Series 2006 Revenue Account; and (v) All other Series 2006 Special Assessment Revenues, which shall be retained in the Series 2006 Revenue Account. Moneys other than Series 2006 Special Assessment Revenues, shall, at the written direction of the Issuer be deposited into the Series 2006 Optional Redemption Subaccount of the Series 2006 Redemption Subaccount and used to paythe principal of and premium, if any, onseries2006bonds called or to be called for optional redemption at the written direction of theissuerin accordancewith the provisions for optional redemption of Series 2006 Bonds as set forth herein. (b) On each March 15 and September 15 (or if either of such dates is not a Business Day, on the Business Day next preceding such day) the Trustee shall determine the amount on deposit in the Series 2006A Prepayment Subaccount and, if the balance therein is greater than zero, shall transfer from the Series 2006 Revenue Account, for deposit into such Series 2006A Prepayment Subaccount, an amount sufficient to increase the amount on deposit thereintoanintegralmultipleof $5,000, and, shall thereupon give notice and cause the extraordinary mandatory redemption of the Series 2006A Bonds on the next succeeding Interest Payment Date in the maximum aggregate principal amount for which moneys are then on deposit in such Series 2006A Prepayment Subaccount in accordance with the provisions for extraordinary redemption of such Series 2006A Bonds set forth herein and in the Master Indenture. On each December 15, March 15, June 15 and September 15 (or if any of such dates is not a Business Day, on the Business Day next preceding such day) the Trustee shall determine the amount on deposit in the Series 2006B Prepayment Subaccount and, if the balance therein is greater than zero, shall transfer from the Series 2006 Revenue Account for deposit into such Series 2006B Prepayment Subaccount, an amount sufficient to increase the amount on deposit therein to an integral multiple of $5,000, and, shallthereupongive notice and cause the extraordinary mandatory redemption of the Series 2006B Bonds on the next succeeding Quarterly Redemption Date in the maximum aggregate principal amount for which moneys are then on deposit in such Series 2006B Prepayment Subaccount in accordance with the provisions for extraordinary redemption of such Series 2006B Bonds set forth herein and in the Master Indenture. (c) Amounts on deposit in the Series 2006A Capitalized Interest Subaccount shall be deposited to the Series 2006A Interest Subaccount and used to payinterest coming dueontheseries A Bonds until there are no longer anysums on deposit in the Series 2006A Capitalized Interest Subaccount. Amounts on deposit in the Series 2006B Capitalized Interest Subaccount shall be deposited to the Series 2006B Interest Subaccount and used to payinterest coming due on theseries 2006B Bonds until there are no longer anysums on deposit in the Series 2006B Capitalized Interest Subaccount. (d) The Trustee shall transfer from amounts on deposit in the Series 2006 Revenue Account to the Accounts and Subaccountsdesignatedbelow, thefollowingamounts, atthefollowing times and in the following order of priority: FIRST, upon receipt but no later than the Business Day preceding (i) the first May 1 or November 1 for which there remains an insufficient amount from Series 2006 Bond proceeds (or investment earningsthereon) ondepositintheseries2006acapitalizedinterest Subaccount to be applied to the payment of interest on the Series 2006A Bonds due on such May 1 and November 1 and each May 1 and November 1 thereafter while Series 2006A Bonds remain Outstanding, to the Series 2006A Interest Subaccount an amount equal to the interest on the Series 2006A Bonds becoming due on such May 1 or November 1, less any amount on deposit in such Series 2006A Interest Subaccountnotpreviouslycredited; and (ii) the first Quarterly Redemption Date for which there remains an insufficient amount from Series 2006 Bonds proceeds (or investment earnings thereon) on depositintheseries2006b Capitalized Interest Subaccount to be applied to the payment of interest on the Series 2006B Bonds due on such QuarterlyRedemption Date (either as aresultofextraordinarymandatory redemption or an Interest PaymentDatecoincidingwithsuchQuarterlyRedemptionDate, as applicable) and no later than the Business Day next preceding each Quarterly Redemption Date thereafter while Series 2006B Bonds remain Outstanding, to the Series 2006B Interest Subaccount an amount equal to the interest on the Series 2006B Bonds becoming due on such Quarterly Redemption Date, less any amount on deposit in such Series 2006B Interest Subaccount not previously credited; SECOND, beginning on May 1, 2008, and no later than the Business Day next preceding each May 1 thereafter while Series 2006 Bonds remain Outstanding, to (i) the Series 2006A Sinking Fund Subaccount, an amount equal to the principal amount of the Series 2006A Bonds subject to mandatory sinking fund redemption on such May 1 or maturing on such May 1, less any amount on deposit in the Series 2006A Sinking Fund Subaccount not previously credited; and (ii) on May 1, 2014 to the Series 2006B Principal Subaccount, an amount equal to the principalamountoftheseries2006bbondsmaturingon such May 1, less any amount on deposit in the Series 2006B Principal Subaccount not previously credited; THIRD, upon receipt but no later than the Business Daynext preceding each Interest Payment Date while Series 2006 Bonds remain Outstanding, (i) to theseries2006areserve Subaccount, an amount equal to the amount, if any, which is necessary to make the amount on deposit therein equal to the Series 2006A Reserve Requirement for all Series 2006A Bonds Outstanding; and (ii) to the Series 2006B Reserve Subaccount, anamountequaltothe amount, if any, which is necessaryto make the amount on deposit therein equal to the Series 2006B Reserve Requirement for all Series 2006B Bonds Outstanding; 16 B-28 FOURTH, subject to the following paragraph the balance of any moneys remaining after making the foregoing deposits shall remain therein. Anything herein to the contrary notwithstanding, it shall not, in and of itself, constitute an Event of Default hereunder if the full amount of the foregoing deposits are not made due to an insufficiency of funds therefore. The Trustee shall within ten (10) Business Days after the last Interest Payment Date in anycalendar year, at the direction of the Issuer, withdraw anymoneys held for the credit of the Series 2006 Revenue Account which are not otherwise required to be deposited to other Funds and Accounts pursuant to this Section and deposit such moneys first to the credit of the Series 2006 Rebate Account in the amount, and to the extent necessary, sotheamountondeposit therein equals the accrued rebate obligation under Section 148(f) of the Code, if the Trustee has received a certification from the Issuer by such date detailing the amount of such obligation which shall be deposited. Any remaining amounts (the Remaining Series 2006 Revenue Account Balance ) shall next be transferred to the Series 2006 DeferredObligationsSubaccounttobeapplied to pay any unpaid Series 2006 Deferred Obligations, upon receipt by the Trustee of a Requisition therefore. Upon receipt by the Trustee of a written certification from the Issuer signed by a Responsible Officer to the effect that there are no remaining unpaid Series 2006 Deferred Obligations, anyremaining Series 2006 Revenue Account Balance shall be transferredtotheissuer to be used to pay the operating and administrative costs and expenses of the Trustee; provided, however, that on the proposed payment date of any proposed transfer to the Issuer, the amount on deposit in the Series 2006A Reserve Subaccount shall be equal to the Series 2006A Reserve Requirement and the amount on deposit in the Series 2006B Reserve Subaccount shall be equal to the Series 2006B Reserve Requirement, and provided further, that the Trustee shall not have actual knowledge of an Event of Default hereunder, including payment of Trustee sfeesandexpensesthen due. SECTION Reserve Account. Upon a decrease in the Series 2006A Reserve Requirement as a result of the Series 2006A Bonds being irrevocably called for redemption or as otherwise provided herein, the excess amount in the Series 2006A Reserve Subaccount resulting from such decrease shall be transferred from the Series2006AReserveSubaccountfirst, tothecredit of the Series 2006 Rebate Account in the amount, and to the extent necessary, so the amount on deposit therein equals the accrued rebate obligation under Section 148(f) of the Code, if the Trustee has received a certification from the Issuer by such date detailing the amount of such obligation which shall be deposited and shall next be transferred to the Series 2006 Deferred Obligations Subaccount to be applied to pay any unpaid Series 2006 Deferred Obligations, if the Trustee has received a Requisition relating to such payment. UponreceiptbytheTrusteeofawrittencertification from the Issuer signed by a Responsible Officer to the effect that there are no remaining unpaid Series 2006 Deferred Obligations, any remaining funds after making the required deposit to the Series 2006 Rebate Account as aforesaid shall be deposited to the Series 2006A Prepayment Subaccount, in anyevent, no later than the dateon which the Series 2006A Bonds irrevocablycalled for redemption are to be redeemed. Upon a decrease in the Series 2006B Reserve Requirement as a result of the Series 2006B Bonds being irrevocablycalled for redemption, the excess amount in the Series 2006B Reserve Subaccount resulting from such decrease shall be transferred from the Series 2006B Reserve Subaccount and depositedtotheseries2006bprepaymentsubaccount, inanyevent, 17

167 no later than the date on which the Series 2006B Bonds irrevocably called for redemption are to be redeemed. Simultaneously with the deposit by the Trustee of Series 2006A Prepayment Principal into the Series 2006A Prepayment Subaccount the Trustee is hereby authorized and directed to recalculate the Series 2006A Reserve Requirement and to transfer anyresulting excessondepositin the Series 2006A Reserve Subaccount first, to the credit of the Series 2006 Rebate Account in the amount, and to the extent necessary, so the amount on deposit therein equals the accrued rebate obligation under Section 148(f) of the Code, if thetrusteehasreceivedacertificationfromtheissuer by such date detailing the amount of such obligation which shall be deposited and shall next be transferred to the Series 2006 Deferred Obligations Subaccount to be applied to pay any unpaid Series 2006 Deferred Obligations, if the Trustee has receivedarequisitionrelatingtosuchpayment. Upon receipt bythe Trustee of a written certification from the IssuersignedbyaResponsibleOfficer to the effect that there are no remaining unpaid Series 2006 Deferred Obligations, any remaining funds after making the required deposit to the Series 2006 Rebate Account as aforesaid shall be transferred to the Series 2006A Prepayment Subaccount. Simultaneously with the deposit by the Trustee of Series 2006B Prepayment Principal into the Series 2006B Prepayment Subaccount the Trustee is herebyauthorized and directed to recalculate the Series 2006B Reserve Requirement and to transfer any resulting excess on deposit in the Series 2006B Reserve Subaccount to the Series 2006B Prepayment Subaccount. Instrument as described above in the face amount of such withdrawal and such withdrawn moneys shall, after payment of the premium forsuchreservesubaccountcreditinstrument, betransferredto the Series 2006A Prepayment Subaccount or Series 2006B Prepayment Subaccount of the 2006 Redemption Account, as applicable, and applied to the redemption of Series 2006A Bonds orseries 2006B Bonds, as applicable, or, upon the Issuer obtaining an opinion of nationallyrecognized bond counsel to the effect that such application will not adverselyaffectthetax-exemptstatusoftheseries 2006A Bonds or Series 2006B Bonds, as applicable, be used for any other lawful purpose of the Issuer. [END OF ARTICLE IV] On the earliest date on which there is on deposit in the Series 2006A Reserve Subaccount, sufficient moneys, taking into account other moneys available therefore (other than amounts on deposit in the Series 2006 Project Account), to payand redeem all of the Outstanding Series 2006A Bonds, together with accrued interest and redemption premium, if any, on such Series2006ABonds to the earliest date of redemption permitted herein, and to payanyaccrued rebate obligation and any unpaid Series 2006 Deferred Obligations, the Trustee shall transfer the amount on deposit in the Series 2006A Reserve Subaccount into the Series 2006A PrepaymentSubaccounttopayandredeem all of the Outstanding Series 2006A Bonds on the earliest date permitted for redemption herein. On the earliest date on which there is on deposit in the Series 2006B Reserve Subaccount, sufficient moneys, taking into account other moneys available therefore (other than amounts on deposit in the Series 2006 Project Account), to pay and redeem all of the Outstanding Series 2006B Bonds, together with accrued interest and redemption premium, if any, on such Series 2006B Bonds to the earliest date of redemption permitted herein and to pay any accrued rebate obligation, the Trustee shall transfer the amount on deposit in the Series 2006B Reserve Subaccount into the Series 2006B Prepayment Subaccount to payand redeem all of the OutstandingSeries2006BBondsontheearliest date permitted for redemption herein. The Issuer mayprovide that the Series2006AReserveRequirementorSeries2006BReserve Requirement, respectively, required to be on deposit in the Series 2006A Reserve Subaccount or Series 2006B Reserve Subaccount, respectively, shall be satisfied, all or in part, byobtaining adebt Service Reserve Insurance Policy or Debt Service Reserve Letter of Credit (individually or collectively, the Reserve Subaccount Credit Instrument ). At any time after the issuance of the Series 2006A Bonds and/or Series 2006B Bonds, as applicable, theissuermaywithdrawanyorallof the amount of money on deposit in the Series 2006A Reserve Subaccount and/ or Series 2006B Reserve Subaccount, as applicable, and substitute in its place a Reserve Subaccount Credit ARTICLE V INVESTMENT OF FUNDS SECTION Investment of Funds. Earnings on investments in the Series 2006Project Account shall be retained, as realized, therein, and used for the purpose of such Series 2006 Project Account until the Initial Series 2006 Project Account Deposit has been fullydisbursed and amounts on deposit in the Series 2006 Project Account transferred to the Series 2006 Deferred Obligations Subaccount as provided herein. Earnings on investments in the Series 2006 Deferred Obligations Subaccount shall be retained, as realized, therein and used for the purpose of such Series 2006 Deferred Obligations Subaccount. Earnings on investments in the Series 2006 Principal Account and the Series 2006 Revenue Account shall be deposited, as realized to the credit of the Series 2006 Revenue Account and used for the purpose of such Account. Aslongasthereexistsnodefaultunder the Indenture and the amount in the Series 2006A Reserve Subaccount is not reduced below the Series 2006A Reserve Requirement, earnings on investments in the Series 2006A Reserve Subaccount shall be transferred first, through November 1, 2007, to the credit of the Series 2006A Capitalized Interest Subaccount, thensecond, priortothedatetheinitialseries2006projectaccount Deposit is fully disbursed, to the Series 2006 Project Account, then third, following the date the Initial Series 2006 Project Account Deposit is fullydisbursed, to the Series 2006 Rebate Account in the amount, and to the extent necessary, so the amount on deposit therein equals the accrued rebate obligation under Section 148(f) of the Code, if thetrusteehasreceivedacertificationfromtheissuer by such date detailing the amount of such obligation which shall be deposited, then, fourth, to the Series 2006 Deferred Obligations Subaccount to pay any unpaid Series 2006 Deferred Obligations, upon receipt bythe Trustee of a Requisition relating to such payment; providedthat, uponreceiptby the Trustee of a written certification from the Issuer signed byaresponsibleofficertotheeffectthat there are no remaining unpaid Series 2006 Deferred Obligations, any remaining amounts shall be transferred to the Series 2006 Revenue Account. Otherwise, earnings on investments in the Series 2006A Reserve Subaccount shall be retained therein until applied as set forth herein Revenue Account. Otherwise, earnings on investments in the Series 2006B Reserve Subaccount shall be retained therein until applied as set forth herein. [END OF ARTICLE V] As long as there exists no default under the Indenture and the amount in the Series 2006B Reserve Subaccount is not reduced below the Series 2006B Reserve Requirement, earnings on investments in the Series 2006B Reserve Subaccount shall be transferredtofirst, throughnovember 1, 2007, to the credit of the Series 2006B Capitalized Interest Subaccount, then second, prior to the date the Initial Series 2006 Project Account Deposit is fully disbursed, to the Series 2006 Project Account, then third, following the date the Initial Series 2006 Project Account Deposit is fully disbursed, to the Series 2006 Rebate Account in the amount, and to the extent necessary, so the amount on deposit therein equals the accrued rebate obligation under Section 148(f) of the Code, if the Trustee has received a certification from the Issuer by such date detailing the amount of such obligation which shall be deposited, then, fourth, to the Series 2006 Deferred Obligations Subaccount to pay any unpaid Series 2006 Deferred Obligations, upon receipt by the Trustee of a Requisition relating to such payment; provided, that, upon receipt by the Trustee of a written certification from the Issuer signed bya Responsible Officer to the effect that there arenoremaining unpaid Series 2006 Deferred Obligations, any remaining amounts shall be transferred to the Series 20 B-29 21

168 ARTICLE VI REDEMPTION SECTION Redemption Dates and Prices. The Series 2006 Bonds shall be subjectto redemption at the times and in the manner provided in this Article and the Master Indenture. All payments of the Redemption Price of the Series 2006 Bonds shall be made on the dates hereinafter required. Except as otherwise provided in this Section 6.01, if less than all the Series 2006 Bonds are to be redeemed, the Trustee shall select the Series 2006 Bonds or portions of the Series 2006 Bonds to be redeemed by lot. Partial redemptions of Series 2006 Bonds shall be made in such a manner that the remaining Series 2006 Bonds held by each Bondholder shall be in Authorized Denominations. Notice of redemption shall be given as provided in the Master Indenture. (a) Optional Redemption. The Series 2006A Bonds are subject to redemption at the option of the Issuer prior to maturity, in whole or in part at anytime on or after May1, 2016 (less than all Series2006ABondsof the same maturity to be selected at the direction of the Issuer), at the Redemption Price equal to 100% of the Series 2006A Bonds or portions thereof to be redeemed, plus accrued interest to the redemption date. The Series 2006B Bonds are not subject to optional redemption prior to maturity. (b) Mandatory Sinking Fund Redemption. The Series 2006A Bonds are subject to mandatorysinking fund redemption on May1 in the respective years set forth in the following table, at a Redemption Price of 100% of the principal amount thereof plus accrued interest to the redemption date. [THIS SPACE INTENTIONALLY LEFT BLANK] Year Beginning May 1 Principal Amount 2008 $200, , , , , , , , , , , , , , , , , , , * 545,000 *Final Maturity In connection with such mandatory sinking fund redemption of Series 2006A Bonds, amounts shall be transferred from the Series 2006 Revenue Account to the Series 2006A Sinking Fund Subaccount of the Series 2006 Debt Service Account, all as more particularly described in Section 4.02(d) hereof. Upon any redemption of Series 2006A Bonds (other than Series 2006A Bonds redeemed in accordance with this Section 6.01(b)) the Issuer shall cause to be recalculated and delivered to the Trustee a revised schedule of mandatorysinking fundredemptionoftheseries2006abondssoasto re-amortize the remaining Outstanding Series 2006A Bonds in substantially equal annual installments of principal and interest (subject toroundingtoauthorizeddenominationsofprincipal) over the remaining term of the Series 2006A Bonds. The Series 2006B Bonds are not subject to mandatory sinking fund redemption. (c) Extraordinary Mandatory Redemption. The Series 2006A Bonds are subjecttoextraordinarymandatoryredemptionpriortomaturity by the Issuer in whole, on any date, or in part, on any Interest Payment Date, at an extraordinary mandatoryredemption price equal to 100% of the principal amount of the Series 2006ABondstobe redeemed, plus interest accrued to the redemption date, as follows: (i) from moneys transferred from the Series 2006ProjectAccountanddeposited into the Series 2006A Prepayment SubaccountoftheSeries2006RedemptionSubaccountas provided in Section 3.05 hereof; (ii) from Series 2006A Prepayment Principal deposited into the Series 2006A Prepayment Subaccount of the Series 2006 Redemption Subaccount pursuant to Section 4.02(a) of this Supplemental Indenture; (iii) from amounts in the Series 2006A Reserve Subaccount transferred to the Series 2006A Prepayment Subaccount as a result of a decrease in the Series 2006A Reserve Requirement (after payment of any Series 2006 Deferred Obligations), pursuant to Section 4.03 of this Supplemental Indenture; (iv) when amounts on deposit in the Series 2006A Reserve Subaccount, together with other moneys available therefor, are sufficient to pay and redeem all of the Series 2006A Bonds then outstanding and any unpaid Series 2006 Deferred Obligations and are transferred to the Series 2006A Prepayment Subaccount as provided in Section 4.03 of this Supplemental Indenture. The Series 2006B Bonds are subject to extraordinarymandatoryredemptionpriortomaturity by the Issuer in whole, on any date, or in part, on each Quarterly Redemption Date, at an extraordinary mandatory redemption price equal to 100% of the principal amount of the Series 2006B Bonds to be redeemed, plus interest accrued to the redemption date, as follows: (i) from moneys transferred from the Series 2006ProjectAccountanddeposited into the Series 2006B PrepaymentSubaccountoftheSeries2006 RedemptionSubaccountas provided in Section 3.05 hereof; (ii) from Series 2006B Prepayment Principal deposited into the Series 2006B Prepayment Subaccount of the Series 2006 Redemption Subaccount pursuant to Section 4.02(a) of this Supplemental Indenture; (iii) from amounts in the Series 2006B Reserve Subaccount transferred to the Series 2006 Prepayment Subaccount as a result of a decrease in the Series 2006B Reserve Requirement pursuant to Section 4.03 of this Supplemental Indenture; and (iv) when amounts on deposit in the Series 2006B Reserve Subaccount, together with other moneys available therefor, are sufficienttopayandredeemalloftheseries2006b Bonds then outstanding and are transferred to the Series 2006B Prepayment Subaccount as provided in Section 4.03 of this Supplemental Indenture. [END OF ARTICLE VI] ARTICLE VII COVENANTS OF THE ISSUER SECTION Issuance of Additional Bonds. Except as hereinafter provided, the Issuer shall not issue Additional Bonds on a parity with the Series 2006 Bonds payable from Series 2006 Pledged Revenues, nor voluntarily create or cause to be created any other debt, lien, pledge, assignment, encumbrance or other charge, payable from Series 2006 Pledged Revenues. The Issuer may issue Refunding Bonds payable from the Series 2006 Pledged Revenues for the purpose of refinancing the Series 2006 Project and in connection therewith refunding the Series2006Bonds, in part, as permitted in the Master Indenture, providing for anynecessaryreserves and paying the costs of issuance of such Refunding Bonds, provided that such Refunding Bonds shallnotrequirethelevy of additional Series 2006 Special Assessments. The IssuermayalsoissueSubordinatedDebtsecured by the Series 2006 Pledged Revenues. SECTION Collection of SpecialAssessments. TheIssuerpresentlyintendstocollect Series 2006 Special Assessments relating to the Series 2006A Bonds (the Series 2006A Assessments ) levied on platted lots through the Uniform Method of collection afforded bychapter 197, Florida Statutes. The Issuer presently intends to, itself, directly collect the Series 2006A Assessments levied on unplatted lots and the Series 2006 Special Assessments relating to the Series 2006B Bonds in lieu of the Uniform Method of Collection afforded bysection197, FloridaStatutes, but reserves the right to use the Uniform Method to collect all or any part of such Series 2006 Special Assessments if it determines such collection method to be in the best interests of the Issuer. In addition, and not in limitation of, the covenants contained elsewhere in this Supplemental Indenture and in the Master Indenture, the Issuer covenants to comply with the terms of the proceedings heretofore adopted with respect to the Series 2006 Special Assessments, andtolevythe Series 2006 Special Assessments and required payments under the true-up mechanismsetforthin the Master Assessment MethodologyReport, in such manner as will generate fundssufficienttopay the Debt Service Requirements on the Series 2006 Bonds when due. SECTION 7.03 Continuing Disclosure. Contemporaneously with the execution and deliveryhereof, the Issuer has executed anddeliveredacontinuingdisclosureagreementinorderto complywith the requirements of Rule 15c2-12 promulgated under the Securities and Exchange Act of The Issuer covenants and agrees to comply with the provisions of such Continuing Disclosure Agreement; however, as set forth therein, failure to so comply shall not constitute and Event of Default hereunder, but shall instead be enforceable by mandamus, injunction or any other means of specific performance. SECTION 7.04 Limitation on Disbursements from the Series 2006 Deferred Obligations Subaccount. Notwithstanding anything to the contrary contained herein, no payment of unpaid Series 2006 Deferred Obligations will be requested by the Issuer to be made from the Series 2006 Deferred Obligations Subaccount unless the amount on deposit in the Series 2006A Reserve Subaccount shall be equal to the Series 2006A Reserve Requirement and the amount on deposit in the Series 2006B Reserve Subaccount shall be equal to the Series 2006B Reserve Requirement and all amounts in the Series 2006 Deferred Obligations Subaccount shall be used to make up 24 B-30 25

169 deficiencies in the Series 2006 Reserve Account prior to anydisbursementofamountsthereintopay unpaid Series 2006 Deferred Obligations. [END OF ARTICLE VII] ARTICLE VIII THE TRUSTEE; THE PAYING AGENT AND REGISTRAR SECTION Acceptance of Trust. The Trustee accepts and agreestoexecutethetrusts hereby created and agrees to perform such trusts upon the terms and conditions set forth in the Master Indenture. The Trustee agrees to act as Paying Agent and Registrar for the Series 2006 Bonds. SECTION Trustee s Duties. The Trustee shall not be responsible in anymanner for the due execution of this Supplemental Indenture bythe Issuerorfortherecitalscontainedherein, all of which are made solely by the Issuer. Except as otherwise expressly stated in this Supplemental Indenture, nothing contained herein shall limit the rights, benefits, privileges, protection and entitlement inuring to the Trustee under the Master Indenture. [END OF ARTICLE VIII] ARTICLE IX MISCELLANEOUS PROVISIONS SECTION Confirmation of Master Indenture. As supplemented hereby, the Master Indenture is in all respects ratified and confirmed, and this Supplemental Indenture shall be read, taken and construed as a part of the Master Indenture so that all of the rights, remedies, terms, conditions, covenants and agreements of the Master Indenture, expect insofar as modified herein, shall apply and remain in full force and effect with respect to this Supplemental Indenture and the Series 2006 Bonds issued hereunder. SECTION Headings for Convenience Only. The table of contents and descriptive headings in this Supplemental Indenture are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. SECTION Counterparts. This Supplemental Indenture may be executed in any number of counterparts, each of which when so executed and delivered shall be anoriginal; butsuch counterparts shall together constitute but one and the same instrument. SECTION Appendices and Exhibits. Any and all appendices or exhibits referred to in and attached to this Indenture are herebyincorporated herein and madeaparthereofforallpurposes. IN WITNESS WHEREOF, North Springs Improvement DistricthascausedthisIndentureto be executed bythe President of its Board and its corporate seal to be hereuntoaffixed, attestedbythe Secretary or Assistant Secretary of its Board and U.S. Bank National Association has caused this Indenture to be executed by an Authorized Signatory, all as of the day and year first above written. [SEAL] Attest: By: Assistant Secretary Board of Supervisors NORTH SPRINGS IMPROVEMENT DISTRICT By: President, Board of Supervisors U.S. BANK NATIONAL ASSOCIATION, as Trustee, Paying Agent and Registrar [END OF ARTICLE IX] By: Authorized Signatory 28 B-31 29

170 STATE OF FLORIDA ) ) SS: COUNTY OF BROWARD ) STATE OF FLORIDA ) ) SS: COUNTY OF BROWARD ) On this day of October, 2006, before me, a notary public in and for the State and County aforesaid, personally appeared Salvatore Mendolia and John Petty, the President and Assistant Secretary, respectively, of the Board of Supervisors of North Springs Improvement District, who acknowledged that they did sign the foregoing instrument as such officers, respectively, for and on behalf of North Springs Improvement District; that the same is their free act and deed as such officers, respectively, and the free act and deed of North Springs Improvement District; and that the seal affixed to said instrument is the seal of North Springs Improvement District. IN WITNESS WHEREOF, Ihave hereunto set myhand and affixed mynotarial seal the day and year in this certificate first above written. My Commission expires: Notary Public, State of Florida On this day of October, 2006, before me, a notary public in and for the State and County aforesaid, personally appeared, an Authorized Signatory of U.S. Bank National Association, as Trustee, who acknowledged that he did sign said instrumentassuchofficer for and on behalf of said corporation and that the same is his free act and deed as such officer and the free act and deed of said corporation. IN WITNESS WHEREOF, Ihave hereunto set myhand and affixed mynotarial seal the day and year in this certificate first above written. My Commission expires: Notary Public, State of Florida [NOTARIAL SEAL] [NOTARIAL SEAL] EXHIBIT A [BOND FORMS] R-1A $6,930,000 UNITED STATES OF AMERICA STATE OF FLORIDA NORTH SPRINGS IMPROVEMENT DISTRICT (BROWARD COUNTY, FLORIDA) SPECIAL ASSESSMENT BOND, SERIES 2006A (HERON BAY NORTH ASSESSMENT AREA) Interest Rate Maturity Date Dated Date CUSIP NO. 5.20% May 1, 2027 October 1, AJ6 Registered Owner: Principal Amount: CEDE & CO. SIX MILLION NINE HUNDRED THIRTY THOUSAND DOLLARS KNOW ALL PERSONS BY THESE PRESENTS that North Springs Improvement District (the Issuer ), for value received, hereby promises to pay to the registered owner shown above or registered assigns, on the date specified above, from the sources hereinafter mentioned, upon presentation and surrender hereof at the corporate trust office of U.S. Bank National Association, in Miami, Florida, as successor in interest to Wachovia Bank, National Association, as paying agent (said U.S. Bank National Association and/or anybank or trust companyto become successorpaying agent being herein called the Paying Agent ), the principalsumofsix MillionNineHundredThirty Thousand Dollars ($6,930,000) with interest thereon at the rate of 5.20% per annum, payable on the first day of May and November of each year, commencing May 1, Principal of this Bond is payable at the corporate trust office of the Paying Agent in lawful money of the United States of America. Interest on this Bond is payable bycheck or draft of the Paying Agent made payable tothe registered owner and mailed to the address of the registered owner as such name and address shall appear on the registry books of the Issuer maintained by U.S. Bank National Association, as successor in interest to Wachovia Bank, National Association, as Registrar (saidu.s. BankNational Association and anysuccessor Registrar being herein called the Registrar ) at the close of business on the fifteenth dayof the calendar month preceding each interest payment date or the dateonwhich the principal of a Bond is to be paid (the Record Date ). Such interest shall be payable from the most recent interest payment date next preceding the date of authentication hereof to which interest has been paid, unless the date of authentication hereof is a May 1 or November 1 to which interest has been paid, in which case from the date of authentication hereof or unless the date of authentication hereof is between a Record Date and the next succeeding interest payment date, in A-1 B-32 which case from such interest payment date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the registered owner on such Record Date and may be paid to the person in whose name this Bond is registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Paying Agent, notice whereof shall be given to Bondholders of record as of the fifth (5th) day prior to such mailing, at their registered addresses, not less than ten (10) days prior to such Special Record Date, or may be paid, at any time in any other lawful manner, as more fully provided in the Indenture (defined below). THE BONDS ARE LIMITED OBLIGATIONS OF THE ISSUER PAYABLE SOLELY OUT OF THE PLEDGED REVENUES PLEDGED THEREFORE UNDER THE INDENTURE AND NEITHER THE PROPERTY, THE FULL FAITH AND CREDIT, NOR THE TAXING POWER OF THE ISSUER, BROWARD COUNTY, FLORIDA, THE STATE OF FLORIDA, OR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED AS SECURITY FOR THE PAYMENT OF THE BONDS, EXCEPT THAT THE ISSUER IS OBLIGATED UNDER THE INDENTURE TO LEVY ANDTOEVIDENCEANDCERTIFY, ORCAUSETOBECERTIFIED, FOR COLLECTION, SERIES 2006 SPECIAL ASSESSMENTS (AS DEFINED IN THE INDENTURE) TO SECURE AND PAY THE BONDS. THE BONDS DO NOT CONSTITUTE AN INDEBTEDNESS OF THE ISSUER, BROWARD COUNTY, FLORIDA, THE STATE OF FLORIDA, OR ANY POLITICALSUBDIVISIONTHEREOFWITHINTHEMEANINGOFANY CONSTITUTIONAL OR STATUTORY PROVISION OR LIMITATION. This Bond is one of an authorized issue of Bonds of North Springs Improvement District, a political corporation and independent special district of the State of Florida established pursuant to Chapter , Laws of Florida (the Special Act ) designated as North Springs Improvement District (Broward County, Florida) Special Assessment Bonds, Series 2006A (Heron Bay North Assessment Area) in the aggregate principal amount of Six MillionNineHundredThirtyThousand Dollars ($6,930,000) (the Series 2006A Bonds ) and North Springs Improvement District (Broward County, Florida) Special Assessment Bonds, Series 2006B (HeronBayNorthAssessment Area) in the aggregate principal amount of Two Million One HundredSixtyFiveThousandDollars ($2,165,000) (the Series 2006B Bonds and, togetherwiththeseries2006abonds, the Bonds ) of like date, tenor and effect, except as to number. The Bonds are being issued under authority of the Special Act, Chapter 298, Florida Statutes, the Florida Constitution and other applicable provisions of law, to paya portion of the costs of acquisitionand/or construction of a Series Project consisting of certain Assessable Improvements, as such terms are defined in the hereinafter mentioned Indenture, benefiting the Heron Bay North Assessment Area located within the boundaries of the Issuer (the Series 2006 Project ), make deposits to certain Funds and Accounts created under the Indenture and paycosts of issuing the Bonds. The Bonds shall be issued as fullyregistered Bonds in authorized denominations, as set forth in the Indenture. TheBondsareissuedunderandsecuredbya Master Trust Indenture (the Master Indenture ) datedasofdecember1, 2005, assupplementedbya Third Supplemental Trust Indenture dated as of October 1, 2006 (the SupplementalIndenture and, together with the Master Indenture, the Indenture ), eachenteredintobyandbetweentheissuerand the Trustee, executed counterparts of which are on file at the corporate trust office of the Trustee in Miami, Florida. A-2

171 Reference is hereby made to the Indenture for the provisions, among others, with respect to the custody and application of the proceeds of the Bonds issued under the Indenture, the operation and application of the Series 2006 Debt Service Account and other AccountsandSubaccounts (each as defined in the Indenture) charged with and pledged to the payment of the principalof, premium, if any, and the interest on the Bonds, the levyand the evidencing and certifyingforcollection, ofseries 2006 Special Assessments, the nature and extent of the security for the Bonds, the terms and conditions on which the Bonds are issued, the rights, duties and obligations of the Issuer and of the Trustee under the Indenture, the conditions under whichsuchindenturemaybeamendedwithoutthe consent of the owners of Bonds, the conditions under which such Indenture may be amended with the consent of the owners of a majorityin aggregate principal amount of the Bonds outstanding, and as to other rights and remedies of the owners of the Bonds. The owner of this Bond shall have no right to enforce the provisions of the Indenture or to institute action to enforce the covenants therein, or to take any action with respect to any event of default under the Indenture or to institute, appear in or defend any suit or other proceeding with respect thereto, except as provided in the Indenture. It is expressly agreed by the owner of this Bond that such owner shall never have the right to require or compel the exercise of the ad valorem taxing power of the Issuer, Broward County, Florida, the State of Florida or anypolitical subdivision thereof, ortaxationinanyformofanyrealor personal property of the Issuer, Broward County, Florida, the State of Florida or any political subdivision thereof, for the payment of the principal of, premium, if any, andinterestonthisbondor the making of any other sinking fund and other payments provided for in the Indenture, except for Series 2006 Special Assessments to be assessed and levied bythe Issuer with respecttothebondsas set forth in the Indenture. By the acceptance of this Bond, the owner hereof assents to all the provisions of the Indenture. This Bond is payable from and secured bythe Series 2006 PledgedRevenues, assuchtermis defined in the Indenture, all in the manner provided in the Indenture. The Indenture provides for the levy and the evidencing and certifying, of non ad valorem assessments in the form of Series 2006 Special Assessments to secure and pay the Bonds. Optional Redemption. The Series 2006A Bonds are subject to redemption at the option of the Issuer prior to maturity, in whole or in part at any time on or after May 1, 2016 (less than all Series 2006A Bonds of the same maturity to be selected at the direction of the Issuer), at a Redemption Price equal to 100% of such Series 2006A Bonds or portions thereof to be redeemed, plus accrued interest to the redemption date. Mandatory Sinking Fund Redemption. The Series 2006A Bonds are subject to mandatory sinking fund redemption on May 1 in the respective years set forth in the following table, at a Redemption Price of 100% of the principal amount thereof plus accrued interest to the redemption date. A-3 Year Beginning May 1 Principal Amount 2008 $200, , , , , , , , , , , , , , , , , , , * 545,000 * Final Maturity In connection with such mandatory sinking fund redemption of Series 2006A Bonds, amounts shall be transferred from the Series 2006 Revenue Account to the Series 2006A Sinking Fund Subaccount of the Series 2006 Debt Service Account, all as more particularly described in Section 4.02(d) of the Supplemental Indenture. Upon anyredemption ofseries2006abonds (other than Series 2006A Bonds redeemed in accordance with the mandatorysinkingfundscheduleabove) the Issuer shall cause to be recalculated and delivered to the Trustee a revisedscheduleofmandatory sinking fund redemption of the Series 2006A Bonds so as to re-amortize the remaining Outstanding Series 2006A Bonds in substantially equal annual installments of principal and interest (subject to rounding to Authorized Denominations of principal) over the remaining term of the Series 2006A Bonds. Extraordinary Mandatory Redemption. The Series 2006A Bonds are subject to extraordinary mandatoryredemption prior to maturitybythe Issuer in whole, onanydate, orinpart, onanyinterest Payment Date, at an extraordinary mandatory redemption price equal to 100% of the principal amount of the Series 2006A Bonds to be redeemed, plus interest accrued to the redemption date, as follows: (i) from moneys transferred from the Series 2006ProjectAccountanddeposited into the Series 2006A Prepayment SubaccountoftheSeries2006RedemptionSubaccountas provided in Section 3.05 of the Supplemental Indenture; A-4 (ii) from Series 2006A Prepayment Principal deposited into the Series 2006A Prepayment Subaccount of the Series 2006 Redemption Subaccount pursuant to Section 4.02(a) of the Supplemental Indenture; (iii) from amounts in the Series 2006A Reserve Subaccount transferred to the Series 2006A Prepayment Subaccount as a result of a decrease in the Series 2006A Reserve Requirement (after payment of any Series 2006 Deferred Obligations), pursuant to Section 4.03 of the Supplemental Indenture; (iv) when amounts on deposit in the Series 2006A Reserve Subaccount, together with other moneys available therefor, are sufficient to pay and redeem all of the Series 2006A Bonds then outstanding and any unpaid Series 2006 Deferred Obligations and are transferred to the Series 2006A Prepayment Subaccount as provided in Section 4.03 of the Supplemental Indenture. Notice of Redemption and of Purchase. When required to redeem or purchase Bonds under any provision of the Indenture or directed to do so by the Issuer, the Trustee shall cause notice of the redemption, either in whole or in part, to be mailed at least thirty (30) but not more than sixty (60) days prior to the redemption or purchase date to all Owners of Bonds to be redeemed or purchased (as such Owners appear on the Bond Register on the fifth (5th) day prior to such mailing), at their registered addresses and also to any Credit Facility Issuer, but failure to mail any such notice or defect in the notice or in the mailing thereof shall not affect the validity of the redemption or purchase of the Bonds for which notice was duly mailed in accordance with the Indenture. Such notice shall be given in the name of the Issuer, shall be dated, shall set forth the Bonds Outstanding which shall be called for redemption or purchase and shall include, certain additional information required by the Indenture. Partial Redemption of Bonds. If less than all the Bonds of a maturity are to be redeemed, the Trustee shall select the particular Bonds or portions of Bonds to be redeemed by lot in such reasonable manner as the Trustee in its discretion may determine. The Issuer shall keep books for the registration of the Bonds at the corporate trust office of the Registrar in Miami, Florida. Subject to the restrictions contained in the Indenture, the Bonds may be transferred or exchanged by the registered owner thereof in person or by his attorney duly authorized in writing onlyupon the books of the Issuer kept bytheregistrarandonlyuponsurrender thereof together with a written instrument of transfer satisfactory to the Registrar duly executed by the registered owner or his duly authorized attorney. In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Issuer shall execute and the Trustee or such other authenticating agent as may be appointed by the Trustee under the Indenture shall authenticate and deliver a new Bond or Bonds in authorized form and in like aggregate principal amount in accordance with the provisions of the Indenture. There shall be no charge for anysuch exchange or transfer of Bonds, but the Issuer mayrequire payment of a sum sufficient to payanytax, fee or other governmental charge imposed. Neither the Issuer nor the Registrarshallberequired (a) totransferor exchange Bonds for a period of 15 days next preceding any selection of Bonds to be redeemed or thereafter until after th ingof anynoticeof redemption; or (b) to transferorexchangeanybond called for redemption in whole or in part. The Issuer, the Trustee, the Paying Agent and the Registrar maydeem and treat the personin whose name anybond shall be registered upon the books kept bythe Registrarastheabsoluteowner thereof (whether or not such Bond shall be overdue and notwithstanding any notation of ownership or other writing thereon made by anyone other than the Issuer, the Trustee, the Paying Agent or the Registrar) for the purpose of receiving payment of or on account of the principalof, premium, ifany, and interest on such Bond as the same becomes due, and for all other purposes. All such payments so made to any such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the Issuer, the Trustee, the Paying Agent, nor the Registrar shall be affected by any notice to the contrary. This Bond shall not be valid or become obligatory for any purpose or be entitled to any benefit or security under the Indenture until it shall have been authenticated by execution of the Trustee, or such other authenticating agent as may be appointed by the Trustee under the Indenture, of the certificate of authentication endorsed hereon. It is hereby certified and recited that all acts, conditions and things required to exist, to happen, and to be performed, precedent to and in the issuance of this Bond exist, have happenedand have been performed in regular and due form and time as required by the Act, and that the issuance of this Bond, and of the issue of the Bonds of which this Bond is one, is in full compliance with all constitutional and statutory limitations or provisions. IN WITNESS WHEREOF, North Springs Improvement District has caused this Bond to be signed by the signature of the President of its Board of Supervisors and its seal to be imprinted hereon, and attested by the signature of the Secretary or an Assistant Secretary of its Board of Supervisors, all as of the date hereof. (SEAL) Attest: By: Assistant Secretary Board of Supervisors NORTH SPRINGS IMPROVEMENT DISTRICT By: President, Board of Supervisors A-5 B-33 A-6

172 CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds delivered pursuant to the within mentioned Indenture. Date of Authentication: October 24, 2006 STATEMENT OF VALIDATION This Bond is one of an issue of Bonds which were validated byjudgmentofthecircuitcourt of the Circuit Court in and for Broward County, Florida, rendered on the 26th day of September, U.S. BANK NATIONAL ASSOCIATION, as Trustee By: Authorized Signatory ATTEST: Assistant Secretary President A-7 A-8 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of the within Bond, shall be construed as though theywere written out in full accordingtoapplicablelawsorregulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with rights of survivorship and not as tenants in common UNIFORM GIFT MIN ACT - Custodian (Cust) (Minor) Under Uniform Gifts to Minors ASSIGNMENT AND TRANSFER FOR VALUE RECEIVED the undersigned sells, assigns and transfers unto (please print or typewrite name and address of assignee) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints Attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. Signature Guarantee: Act (State) Additional abbreviations may also be used though not in the above list. NOTICE: Signature(s) must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company Please insert social security or other identifying number of Assignee. NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears upon the faceof the within Bond in every particular, without alteration or enlargement or any change whatsoever. A-9 B-34 A-10

173 R-1B $2,165,000 UNITED STATES OF AMERICA STATE OF FLORIDA NORTH SPRINGS IMPROVEMENT DISTRICT (BROWARD COUNTY, FLORIDA) SPECIAL ASSESSMENT BOND, SERIES 2006B (HERON BAY NORTH ASSESSMENT AREA) Interest Rate Maturity Date Dated Date CUSIP NO. 5.00% May 1, 2014 October 1, AK3 Registered Owner: Principal Amount: CEDE & CO. TWO MILLION ONE HUNDRED SIXTY FIVE THOUSAND DOLLARS KNOW ALL PERSONS BY THESE PRESENTS that North Springs Improvement District (the Issuer ), for value received, hereby promises to pay to the registered owner shown above or registered assigns, on the date specified above, from the sources hereinafter mentioned, upon presentation and surrender hereof at the corporate trust office of U.S. Bank National Association, in Miami, Florida, as successor in interest to Wachovia Bank, National Association, as paying agent (said U.S. Bank National Association and/or anybank or trust companyto become successorpaying agent being herein called the Paying Agent ), the principal sum of TwoMillionOneHundredSixty Five Thousand Dollars ($2,165,000) with interestthereonattherateof5.00% perannum, payableon the first dayof Mayand November of each year, commencing May1, PrincipalofthisBondis payable at the corporate trust office of the Paying Agent in lawful money of the United States of America. Interest on this Bond is payable bycheck or draft of the Paying Agent made payable tothe registered owner and mailed to the address of the registered owner as such name and address shall appear on the registry books of the Issuer maintained by U.S. Bank National Association, as Registrar, as successor in interest to Wachovia Bank, National Association (saidu.s. BankNational Association and anysuccessor Registrar being herein called the Registrar ) at the close of business on the fifteenth dayof the calendar month preceding each interest payment date or the dateonwhich the principal of a Bond is to be paid (the Record Date ). Such interest shall be payable from the most recent interest payment date next preceding the date of authentication hereof to which interest has been paid, unless the date of authentication hereof is a May 1 or November 1 to which interest has been paid, in which case from the date of authentication hereof or unless the date of authentication hereof is between a Record Date and the next succeeding interest payment date, in which case from such interest payment date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the registered owner on such Record Date and may be paid to the person in whose name this Bond is registered at the close of business on a Special A-11 Record Date for the payment of such defaulted interest to be fixed by the Paying Agent, notice whereof shall be given to Bondholders of record as of the fifth (5th) day prior to such mailing, at their registered addresses, not less than ten (10) days prior to such Special Record Date, or may be paid, at any time in any other lawful manner, as more fully provided in the Indenture (defined below). THE BONDS ARE LIMITED OBLIGATIONS OF THE ISSUER PAYABLE SOLELY OUT OF THE PLEDGED REVENUES PLEDGED THEREFORE UNDER THE INDENTURE AND NEITHER THE PROPERTY, THE FULL FAITH AND CREDIT, NOR THE TAXING POWER OF THE ISSUER, BROWARD COUNTY, FLORIDA, THE STATE OF FLORIDA, OR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED AS SECURITY FOR THE PAYMENT OF THE BONDS, EXCEPT THAT THE ISSUER IS OBLIGATED UNDER THE INDENTURE TO LEVY ANDTOEVIDENCEANDCERTIFY, ORCAUSETOBECERTIFIED, FOR COLLECTION, SERIES 2006 SPECIAL ASSESSMENTS (AS DEFINED IN THE INDENTURE) TO SECURE AND PAY THE BONDS. THE BONDS DO NOT CONSTITUTE AN INDEBTEDNESS OF THE ISSUER, BROWARD COUNTY, FLORIDA, THE STATE OF FLORIDA, OR ANY POLITICALSUBDIVISIONTHEREOFWITHINTHEMEANINGOFANY CONSTITUTIONAL OR STATUTORY PROVISION OR LIMITATION. This Bond is one of an authorized issue of Bonds of North Springs Improvement District, a political corporation and independent special district of the State of Florida established pursuant to Chapter , Laws of Florida (the Special Act ) designated as North Springs Improvement District (Broward County, Florida) Special Assessment Bonds, Series 2006A (Heron Bay North Assessment Area) in the aggregate principal amount of Six MillionNineHundredThirtyThousand Dollars ($6,930,000) (the Series 2006A Bonds ) and North Springs Improvement District (Broward County, Florida) Special Assessment Bonds, Series 2006B (HeronBayNorthAssessment Area) in the aggregate principal amount of Two Million One HundredSixtyFiveThousandDollars ($2,165,000) (the Series 2006B Bonds and, togetherwiththeseries2006abonds, the Bonds ) of like date, tenor and effect, except as to number. The Bonds are being issued under authority of the Special Act, Chapter 298, Florida Statutes, the Florida Constitution and other applicable provisions of law, to paya portion of the costs of acquisitionand/or construction of a Series Project consisting of certain Assessable Improvements, as such terms are defined in the hereinafter mentioned Indenture, benefiting the Heron Bay North Assessment Area located within the boundaries of the Issuer (the Series 2006 Project ), make deposits to certain Funds and Accounts created under the Indenture and paycosts of issuing the Bonds. The Bonds shall be issued as fullyregistered Bonds in authorized denominations, as set forth in the Indenture. TheBondsareissuedunderandsecuredbya Master Trust Indenture (the Master Indenture ) datedasofdecember1, 2005, assupplementedbya Third Supplemental Trust Indenture dated as of October 1, 2006 (the SupplementalIndenture and, together with the Master Indenture, the Indenture ), eachenteredintobyandbetweentheissuerand the Trustee, executed counterparts of which are on file at the corporate trust office of the Trustee in Miami, Florida. Reference is hereby made to the Indenture for the provisions, among others, with respect to the custody and application of the proceeds of the Bonds issued under the Indenture, the operation and application of the Series 2006 Debt Service Account and other AccountsandSubaccounts (each as defined in the Indenture) charged with and pledged to the payment of the principalof, premium, if A-12 any, and the interest on the Bonds, the levyand the evidencing and certifyingforcollection, ofseries 2006 Special Assessments, the nature and extent of the security for the Bonds, the terms and conditions on which the Bonds are issued, the rights, duties and obligations of the Issuer and of the Trustee under the Indenture, the conditions under whichsuchindenturemaybeamendedwithoutthe consent of the owners of Bonds, the conditions under which such Indenture may be amended with the consent of the owners of a majorityin aggregate principal amount of the Bonds outstanding, and as to other rights and remedies of the owners of the Bonds. The owner of this Bond shall have no right to enforce the provisions of the Indenture or to institute action to enforce the covenants therein, or to take any action with respect to any event of default under the Indenture or to institute, appear in or defend any suit or other proceeding with respect thereto, except as provided in the Indenture. It is expressly agreed by the owner of this Bond that such owner shall never have the right to require or compel the exercise of the ad valorem taxing power of the Issuer, Broward County, Florida, the State of Florida or anypolitical subdivision thereof, ortaxationinanyformofanyrealor personal property of the Issuer, Broward County, Florida, the State of Florida or any political subdivision thereof, for the payment of the principal of, premium, if any, andinterestonthisbondor the making of any other sinking fund and other payments provided for in the Indenture, except for Series 2006 Special Assessments to be assessed and levied bythe Issuer with respecttothebondsas set forth in the Indenture. By the acceptance of this Bond, the owner hereof assents to all the provisions of the Indenture. This Bond is payable from and secured bythe Series 2006 PledgedRevenues, assuchtermis defined in the Indenture, all in the manner provided in the Indenture. The Indenture provides for the levy and the evidencing and certifying, of non ad valorem assessments in the form of Series 2006 Special Assessments to secure and pay the Bonds. No Optional or Mandatory Sinking Fund Redemption. The Series 2006B Bonds are not subject to optional redemption or mandatory sinking fund redemption prior to maturity. Extraordinary Mandatory Redemption. The Series2006BBondsaresubjecttoextraordinary mandatory redemption prior to maturity by the Issuer in whole, on any date, or in part, on each Quarterly Redemption Date, at an extraordinary mandatory redemption price equal to 100% of the principal amount of the Series 2006B Bonds to be redeemed, plus interest accruedtotheredemption date, as follows: (i) from moneys transferred from the Series 2006ProjectAccountanddeposited into the Series 2006B Prepayment Subaccount oftheseries2006redemptionsubaccountas provided in Section 3.05 of the Supplemental Indenture; (ii) from Series 2006B Prepayment Principal deposited into the Series 2006B Prepayment Subaccount of the Series 2006 Redemption Subaccount pursuant to Section 4.02(a) of the Supplemental Indenture; A-13 B-35 (iii) from amounts in the Series 2006B Reserve Subaccount transferred to the Series 2006 Prepayment Subaccount as a result of a decrease in the Series 2006B Reserve Requirement pursuant to Section 4.03 of the Supplemental Indenture; and (iv) when amounts on deposit in the Series 2006B Reserve Subaccount, together with other moneys available therefor, are sufficienttopayandredeemalloftheseries2006b Bonds then outstanding and are transferred to the Series 2006B Prepayment Subaccount as provided in Section 4.03 of the Supplemental Indenture. Notice of Redemption and of Purchase. When required to redeem or purchase Bonds under any provision of the Indenture or directed to do so by the Issuer, the Trustee shall cause notice of the redemption, either in whole or in part, to be mailed at least thirty (30) but not more than sixty (60) days prior to the redemption or purchase date to all Owners of Bonds to be redeemed or purchased (as such Owners appear on the Bond Register on the fifth (5th) day prior to such mailing), at their registered addresses and also to any Credit Facility Issuer, but failure to mail any such notice or defect in the notice or in the mailing thereof shall not affect the validity of the redemption or purchase of the Bonds for which notice was duly mailed in accordance with the Indenture. Such notice shall be given in the name of the Issuer, shall be dated, shall set forth the Bonds Outstanding which shall be called for redemption or purchase and shall include, certain additional information required by the Indenture. Partial Redemption of Bonds. If less than all the Bonds of a maturity are to be redeemed, the Trustee shall select the particular Bonds or portions of Bonds to be redeemed by lot in such reasonable manner as the Trustee in its discretion may determine. The Issuer shall keep books for the registration of the Bonds at the corporate trust office of the Registrar in Miami, Florida. Subject to the restrictions contained in the Indenture, the Bonds may be transferred or exchanged by the registered owner thereof in person or by his attorney duly authorized in writing onlyupon the books of the Issuer kept bytheregistrarandonlyuponsurrender thereof together with a written instrument of transfer satisfactory to the Registrar duly executed by the registered owner or his duly authorized attorney. In all cases in which the privilege of transferring or exchanging Bonds is exercised, the Issuer shall execute and the Trustee or such other authenticating agent as may be appointed by the Trustee under the Indenture shall authenticate and deliver a new Bond or Bonds in authorized form and in like aggregate principal amount in accordance with the provisions of the Indenture. There shall be no charge for anysuch exchange or transfer of Bonds, but the Issuer mayrequire payment of a sum sufficient to payanytax, fee or other governmental charge imposed. Neither the Issuer nor the Registrarshallberequired (a) totransferor exchange Bonds for a period of 15 days next preceding any selection of Bonds to be redeemed or thereafter until after th ingof anynoticeof redemption; or (b) to transferorexchangeanybond called for redemption in whole or in part. The Issuer, the Trustee, the Paying Agent and the Registrar maydeem and treat the personin whose name anybond shall be registered upon the books kept bythe Registrarastheabsoluteowner thereof (whether or not such Bond shall be overdue and notwithstanding any notation of ownership or other writing thereon made by anyone other than the Issuer, the Trustee, the Paying Agent or the A-14

174 Registrar) for the purpose of receiving payment of or on account of the principalof, premium, ifany, and interest on such Bond as the same becomes due, and for all other purposes. All such payments so made to any such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the Issuer, the Trustee, the Paying Agent, nor the Registrar shall be affected by any notice to the contrary. This Bond shall not be valid or become obligatory for any purpose or be entitled to any benefit or security under the Indenture until it shall have been authenticated by execution of the Trustee, or such other authenticating agent as may be appointed by the Trustee under the Indenture, of the certificate of authentication endorsed hereon. It is hereby certified and recited that all acts, conditions and things required to exist, to happen, and to be performed, precedent to and in the issuance of this Bond exist, have happenedand have been performed in regular and due form and time as required by the Act, and that the issuance of this Bond, and of the issue of the Bonds of which this Bond is one, is in full compliance with all constitutional and statutory limitations or provisions. CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds delivered pursuant to the within mentioned Indenture. Date of Authentication: October 24, 2006 U.S. BANK NATIONAL ASSOCIATION, as Trustee By: Authorized Signatory IN WITNESS WHEREOF, North Springs Improvement District has caused this Bond to be signed by the signature of the President of its Board of Supervisors and its seal to be imprinted hereon, and attested by the signature of the Secretary or an Assistant Secretary of its Board of Supervisors, all as of the date hereof. NORTH SPRINGS IMPROVEMENT DISTRICT (SEAL) Attest: By: President, Board of Supervisors By: Assistant Secretary Board of Supervisors A-15 A-16 STATEMENT OF VALIDATION This Bond is one of an issue of Bonds which were validated byjudgmentofthecircuitcourt of the Circuit Court in and for Broward County, Florida, rendered on the 26th day of September, ATTEST: Assistant Secretary President ABBREVIATIONS The following abbreviations, when used in the inscription on the face of the within Bond, shall be construed as though theywere written out in full accordingtoapplicablelawsorregulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with rights of survivorship and not as tenants in common UNIFORM GIFT MIN ACT - Custodian (Cust) (Minor) Under Uniform Gifts to Minors Act (State) Additional abbreviations may also be used though not in the above list. A-17 B-36 A-18

175 ASSIGNMENT AND TRANSFER FOR VALUE RECEIVED the undersigned sells, assigns and transfers unto (please print or typewrite name and address of assignee) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints Attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. Signature Guarantee: EXHIBIT B FORM OF COSTS OF ISSUANCE ACCOUNT REQUISITION COST OF ISSUANCE REQUISITION NO. NORTH SPRINGS IMPROVEMENTDISTRICT (BROWARD COUNTY, FLORIDA) SPECIAL ASSESSMENT BONDS, SERIES 2006A HERON BAY NORTH ASSESSMENT AREA and SPECIAL ASSESSMENT BONDS, SERIES 2006B HERON BAY NORTH ASSESSMENT AREA NOTICE: Signature(s) must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company Please insert social security or other identifying number of Assignee. NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears upon the faceof the within Bond in every particular, without alteration or enlargement or any change whatsoever. The undersigned, a ResponsibleOfficerofNorthSpringsImprovementDistrict (the Issuer ) hereby submits the following requisition for disbursement from the Costs of Issuance Fund created under and pursuant to the terms of the Master Trust Indenture from the Issuer to U.S. Bank, National Association, as successor in interest to Wachovia Bank, National Association, as trustee (the Trustee ), dated as of December 1, 2005, as supplementedbyathirdsupplementalindenturedated as of October 1, 2006 (collectively, the Indenture ), (all capitalizedtermsusedhereinshallhavethe meaning ascribed to such terms in this Indenture): (A) Requisition Number: (B) Name of Payee: (C) Amount Payable: (D) Purpose for which paid or incurred: The undersigned hereby certifies that: 1. This requisition is for Costs of Issuance payable from the Series 2006 Costs of Issuance Account that have not previously been paid; and 2. Each disbursement set forth above is a proper charge againsttheseries2006costsof Issuance Account. A-19 B-1 Attached hereto are originals of the invoice(s) from the vendor of the services rendered with respect to which disbursement is hereby requested. NORTH SPRINGS IMPROVEMENT DISTRICT EXHIBIT C DESCRIPTION OF SERIES 2006 PROJECT By: Responsible Officer B-2 B-37 C-1

176 EXHIBIT D FORM OF PROJECT ACCOUNT/SERIES 2006 DEFERRED OBLIGATIONS REQUISITION NORTH SPRINGS IMPROVEMENTDISTRICT (BROWARD COUNTY, FLORIDA) SPECIAL ASSESSMENT BONDS, SERIES 2006A HERON BAY NORTH ASSESSMENT AREA and SPECIAL ASSESSMENT BONDS, SERIES 2006B HERON BAY NORTH ASSESSMENT AREA 2. Each disbursement set forth above is a proper charge against the Series 2006 Project Account or other Fund, Account or Subaccount noted above. To the extent any disbursement set forth above is made as payment of a portion of the purchase price payable for the Series 2006 Project as providedinthepurchaseagreement (including any unpaid Series 2006 Deferred Obligation), the undersigned represents that the copy of the Purchase Agreement on file with the Trustee has not been modified or amended and is in full force and effect on the date hereof. NORTH SPRINGS IMPROVEMENT DISTRICT By: Title: The undersigned, a ResponsibleOfficerofNorthSpringsImprovementDistrict (the Issuer ) hereby submits the following requisition for disbursement from the Fund, Account or Subaccount noted below created under and pursuant to the terms of the Master Trust Indenture fromtheissuerto U.S. Bank National Association, as successor ininteresttowachoviabank, NationalAssociation, as trustee (the Trustee ), dated as of December 1, 2005, as supplemented by that certain Third Supplemental Indenture, dated as of October 1, 2006 (collectively, the Indenture ), (all capitalized terms used herein shall have the meaning ascribed to such terms in this Indenture); (A) (B) (C) (D) (E) Requisition Number: Name of Payee: Amount Payable: Indicate if this requisition is for payment of Advances or a Deferred Obligation and, if so, the amount: Indicate the Fund, Account or Subaccount from which payment is to be made. The undersigned hereby certifies that: 1. This requisition is for a Cost of the Series 2006 Project payable from the Series 2006 Project Account or Series 2006 Deferred Obligations Subaccount that have not previouslybeen paid or for payment of AdvancesrelatedtotheSeries2006Projector unpaid Series 2006 Deferred Obligations; and The undersigned, an authorized representative of the Issuer s Consulting Engineers, hereby certifies that this disbursement is for a Cost of the Series 2006 Project and is consistent with: (i) the applicable acquisition or construction contract; (ii) the plans and specifications fortheportionofthe Series 2006 Project with respect to which such disbursement is being made; and (iii) the Engineer s Report. The undersigned further certifies that (a) the Series 2006 Project improvements to be acquired have been completed in accordance with the plans and specifications therefore; (b) the Series 2006 Project improvements are constructed in a sound workmanlike manner and in accordance with industrystandards; (c) the purchase price tobepaidbytheissuerfortheseries2006 Project improvements is no more than the lesser of (i) the fair market value of such improvements and (ii) the actual cost of construction of such improvements; (d) the plans and specificationsforthe Series 2006 Project improvements have been approved byall regulatorybodies required to approve them or such approval can reasonably be expected to be obtained; (e) all currently required approvals and permits for the acquisition, construction, reconstruction, installationandequippingof the portion of the Series 2006 Project for which disbursement is made have been obtained from all applicable regulatory bodies; (f) the Developer has paid all contractors, subcontractors, and materialmen that have provided services or materials in connection with the portions of the Series 2006 Project for which disbursement is made hereby, if acquisition is being made pursuant to a Purchase Agreement; and (g) upon payment of the disbursement hereby, sufficient amounts will remain on deposit in the Series 2006 Project Account to complete the Series 2006 Project. [CONSULTING ENGINEERS] By: Title: D-1 D-2 [THIS PAGE INTENTIONALLY LEFT BLANK] [THIS PAGE INTENTIONALLY LEFT BLANK] B-38

177 APPENDIX C PROPOSED FORM OF OPINION OF BOND COUNSEL

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179 FORM OF BOND COUNSEL OPINION October 24, 2006 Board of Supervisors North Springs Improvement District c/o District Manager Coral Springs, Florida Re: $6,930,000 North Springs Improvement District (Broward County, Florida) Special Assessment Bonds, Series 2006A (Heron Bay North Assessment Area) and $2,165,000 North Springs Improvement District (Broward County, Florida) Special Assessment Bonds, Series 2006B (Heron Bay North Assessment Area) (collectively, the Series 2006 Bonds ) Ladies and Gentlemen: We have acted as bond counsel in connection with the issuance by the North Springs Improvement District (the Issuer ) of the above referenced Series 2006 Bonds. The Series 2006 Bonds are being issued pursuant to the Constitution and laws of the State of Florida, including particularly Chapter , Laws of Florida, as amended and supplemented, and Chapter 298, Florida Statutes, and Resolution Nos and of the Issuer adopted on August 4, 2005 and August 9, 2006, respectively (collectively, the Resolution ). The Series 2006 Bonds are being further issued and secured by a Master Trust Indenture dated as of December 1, 2005 (the Master Indenture ) between the Issuer and U.S. Bank National Association, as trustee, as successor in interest to Wachovia Bank, National Association (the Trustee ), as supplemented by a Third Supplemental Trust Indenture dated as of October 1, 2006 between the Issuer and the Trustee (the Supplemental Indenture and, together with the Master Indenture, the Indenture ). All capitalized terms not otherwise defined herein shall have the meaning ascribed thereto in the Indenture. We have examined the Act, the Resolution, the Indenture, the proceedings for validation in Case No (08) in the 17th Circuit Court in and for Broward County, Florida and such certified copies of the proceedings of the Issuer and such other documents as we have deemed necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon representations of the Issuer contained in Resolution and in the Indenture and in the certified proceedings and other certifications and representations of public officials and others which have been furnished to us without undertaking to verify the same by independent investigation. In rendering the opinions expressed herein, we have relied upon the opinion of even date herewith of Billing, Cochran, Heath, Lyles, Mauro & Anderson, P.A., counsel to the Issuer, as to the due creation and valid existence of the Issuer, the due authorization, execution and delivery of the Indenture by the Issuer, the due adoption of the Resolution and other resolutions of the Issuer relating to the Series 2006 Special Assessments and that such Series C-1

180 Board of Supervisors North Springs Improvement District October 24, 2006 Page 2 of Special Assessments are valid and binding first liens against the property upon which they are assessed. Reference is also made to the opinion of even date herewith of Holland & Knight, L.L.P, Counsel to the Trustee, upon which we have relied, as to the due authorization and execution of the Indenture by the Trustee and the enforceability of the Indenture against the Trustee. Based on the foregoing, we are of the opinion that, under existing law: 1. The Indenture has been duly authorized, executed and delivered by the Issuer. The Indenture creates a valid pledge of the Series 2006 Trust Estate and constitutes a valid and binding obligation of the Issuer enforceable against the Issuer. 2. The issuance and sale of the Series 2006 Bonds has been duly authorized by the Issuer, and the Series 2006 Bonds constitute valid and binding special limited obligations of the Issuer payable solely from the Series 2006 Special Assessments and other funds provided therefor in the Indenture. 3. Interest on the Series 2006 Bonds (including any original issue discount properly allocable to an owner thereof) is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, such interest is taken into account in determining adjusted current earnings for purposes of computing the alternative minimum tax imposed on certain corporations under the Internal Revenue Code of 1986, as amended (the Code ). The opinion set forth in the preceding sentence is subject to the condition that the Issuer complies with all requirements of the Code that must be satisfied subsequent to the issuance of the Series 2006 Bonds in order for interest on the Series 2006 Bonds to be excluded from gross income for federal income tax purposes. The Issuer has covenanted in the Indenture to comply with such requirements. Failure to comply with certain of such requirements may cause interest on the Series 2006 Bonds to be included in gross income for federal income tax purposes retroactively to the date of issuance of the Series 2006 Bonds. 4. The Series 2006 Bonds are exempt from registration under the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of This opinion is qualified to the extent that the rights of the holders of the Series 2006 Bonds and the enforceability of the Series 2006 Bonds and the Indenture may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally, now or hereafter in effect, and by the exercise of judicial discretion in appropriate cases in accordance with equitable principles. C-2

181 Board of Supervisors North Springs Improvement District October 24, 2006 Page 3 of 3 In our capacity as bond counsel to the Issuer, we have not been engaged or undertaken to review the accuracy, completeness or sufficiency of the Limited Offering Memorandum or of other offering material relating to the Series 2006 Bonds (except to the extent, if any, stated in the Limited Offering Memorandum) and we express no opinion relating thereto (except only the matters set forth as our opinion in the Limited Offering Memorandum). Further, we express no opinion regarding tax consequences arising with respect to the Series 2006 Bonds other than as expressly set forth herein. Respectfully submitted, RUDEN, McCLOSKY, SMITH, SCHUSTER & RUSSELL, P.A. C-3

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183 APPENDIX D CONTINUING DISCLOSURE AGREEMENT

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185 CONTINUING DISCLOSURE AGREEMENT This Continuing Disclosure Agreement (the Disclosure Agreement ) dated as of October 24, 2006, is executed and delivered by the NORTH SPRINGS IMPROVEMENT DISTRICT, (the District ), WCI COMMUNITIES, INC., a Delaware corporation (the Developer ), and PRAGER, SEALY & CO., LLC, as dissemination agent ( Prager ), in connection with the issuance of $6,930,000 Special Assessment Bonds, Series 2006A (Heron Bay North Assessment Area) and $2,165,000 Special Assessment Bonds, Series 2006B (Heron Bay North Assessment Area) (collectively, the Bonds ). The Bonds are being issued pursuant to a Master Trust Indenture dated as of December 1, 2005, as supplemented by a Third Supplemental Trust Indenture dated as of October 1, 2006, each entered into between the District and U.S. Bank National Association, as successor in interest to Wachovia Bank, National Association, as trustee (the Trustee ) (collectively, the Indenture ). The District, the Developer and the Dissemination Agent covenant and agree as follows: 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the District and the Developer to provide information required by the Indenture. The District represents that the information is consistent with the requirements of S.E.C. Rule 15c2-12(b)(5). The provisions of this Disclosure Agreement are supplemental and in addition to the provisions of the Indenture with respect to reports, filings and notifications provided for therein, and do not in any way relieve the District, the Trustee or any other person of any covenant, agreement or obligation under the Indenture (or remove any of the benefits thereof) nor shall anything herein prohibit the District, the Trustee or any other person from making any reports, filings or notifications required by the Indenture or any applicable law. 2. Definitions. In addition to the definitions set forth in 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: Annual Report shall mean any Annual Report provided by the District pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. "Assessments Area" shall mean the lands within the geographic boundaries of the District which are encumbered by the Assessments. Assessments shall mean the non-ad valorem special assessments pledged to the Bonds. Business Day means any day other than a Saturday, Sunday or a day on which the District is required, or authorized or not prohibited by law (including executive orders), to close and is closed. Disclosure Representative shall mean the District Manager of the District or his or her designee, or such other officer or employee as the District shall designate in writing to the Trustee and the Dissemination Agent from time to time. D-1

186 Dissemination Agent shall mean the District, acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing by the District and which has filed with the District and Trustee a written acceptance of such designation. Prager, Sealy & Co., LLC has been designated as the initial Dissemination Agent hereunder and its acceptance thereof is indicated by its execution of this Disclosure Agreement. Fiscal Year shall mean the period commencing on October 1 and ending on September 30 of the next succeeding year, or such other period of time provided by applicable law. Listed Events shall mean any of the events listed in Section 5(a) of this Disclosure Agreement. MSRB means the Municipal Securities Rulemaking Board. National Repository shall mean any of the names and addresses of each National Repository and State Repository as of any date may currently be obtained by calling the SEC s Fax on Demand Service from a fax machine phone line at (202) and requesting document numbers 0206 and 0207, respectively, or by visiting the SEC s web site at Obligated Person(s) shall mean, with respect to the Bonds, those person(s) who either generally or through an enterprise fund or account of such persons are committed by contract or other arrangement to support payment of all or a part of the obligations on such Bonds, which person(s) shall include the District, and the Developer for so long as the Developer is the owner of (or is responsible for developing as the case may be) at least twenty percent (20%) of the lands which have been determined by the District to be lands benefited by the project financed with proceeds of the Bonds or are responsible for payment of at least twenty percent (20%) of the Assessments. Participating Underwriter shall mean the original underwriter of the Bonds required to comply with the Rule in connection with offering of the Bonds. Repository shall mean each National Repository and each State Repository. Rule shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. State Repository shall mean any public or private repository or entity designated by the State as a state repository for the purposes of the Rule. 3. Provision of Annual Reports. (a) Subject to the following sentence, the District shall provide the Annual Report to the Dissemination Agent and the Trustee no later than 180 days after the close of the D-2

187 District s Fiscal Year, commencing with the Fiscal Year ended September 30, The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Agreement; provided that the audited financial statements of the District may be submitted separately from the balance of the Annual Report, and may be submitted up to, but no later than, 365 days after the close of the District s Fiscal Year. The District shall, or shall cause the Dissemination Agent to, provide to each Repository the components of an Annual Report which satisfies the requirements of Section 4(a) of this Disclosure Agreement within thirty days after same becomes available. If the District s Fiscal Year changes, the District shall give notice of such change in the same manner as for a Listed Event under Section 5. (b) If by the 180 th day after the close of the District s Fiscal Year the Dissemination Agent has not received a copy of the Annual Report (other than the audited financial statements of the District), the Dissemination Agent shall notify the District in writing that the District has not complied with its obligations under subsection (a) above. If by the 365 th day after the close of the District s Fiscal Year the Dissemination Agent has not received a copy of the audited financial statements of the District, the Dissemination Agent shall notify the District in writing that the District has not complied with its obligations under subsection (a) above. (c) If the Dissemination Agent is unable to verify in writing from the District that the District has filed an Annual Report with the Repositories by the date required in subsection (a) above, the Dissemination Agent shall send a notice to each Repository in substantially the form attached as Exhibit A. (d) The Dissemination Agent shall: (i) determine each year prior to the date for providing the Annual Report the name and address of each National Repository and each State Repository, if any; and (ii) promptly upon fulfilling its obligations under subsection (a) above, file a report with the District and the Trustee certifying that the Annual Report has been provided pursuant to this Disclosure Agreement, stating the date(s) it was provided and listing all the Repositories to which it was provided. 4. (a) Content of Annual Reports. The District s Annual Report shall contain or incorporate by reference the following: (i) The amount of Assessments levied for the most recent Fiscal Year; (ii) The amount of Assessments collected from the property owners during the most recent Fiscal Year; (iii) If available, the amount of delinquencies greater than 150 days, and, in the event that delinquencies amount to more than ten percent (10%) of the amounts of Assessments due in any year, a list of delinquent property owners; D-3

188 (iv) If available, the amount of tax certificates sold, if any, and the balance, if any, remaining for sale from the most recent Fiscal Year; (v) All fund balances in all funds and accounts for the Bonds. The District shall provide any Bondholder with this information more frequently than annually within thirty (30) days of the written request of the Bondholder; Year; and (vi) (vii) The total amount of Bonds Outstanding; The amount of principal and interest to be paid in the current Fiscal (viii) The most recent audited financial statements of the District (provided, however, if the District has not prepared audited financial statements for its Fiscal Year ending September 30, 2006, the first Annual Report submitted by the District in accordance herewith may include unaudited financial statements for such Fiscal Year). To the extent any of the items set forth in subsections (i) through (vii) above are included in the audited financial statements referred to in subsection (viii) above, they do not have to be separately set forth. Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues of the District or related public entities, which have been submitted to each of the Repositories or the Securities and Exchange Commission. If the document incorporated by reference is a final official statement, it must be available from the MSRB. The District shall clearly identify each such other document so incorporated by reference. (b) The parties to this Disclosure Agreement agree to assist the District and the Dissemination Agent in preparing and providing the information necessary to prepare the Annual Report and the quarterly reports. The Developer or its successors or assigns agrees to provide the information pursuant to (d) below necessary to prepare the Annual Report and quarterly reports so long as it is an Obligated Person. If the Developer transfers an interest in the lands in the Assessment Area to an entity which will in turn become an Obligated Person, the Developer agrees to assign its obligations set forth herein in regard to such lands to such successor in interest or if such assignment does not occur to retain the obligations of the Developer set forth herein as to such conveyed lands. (c) The financial statements provided by the District shall be audited. (d) The Developer, so long as it is an owner, optionee or developer, or collectively, they are an owner, optionee or developer, of at least twenty percent (20%) of the property subject to the Assessments, shall also prepare reports no later than thirty (30) days after the end of each calendar quarter commencing December 31, 2006 and provide these reports to the Dissemination Agent provided, however, that so long as the Developer is a reporting company, such thirty (30) days shall be extended to the date of filing of the Developer s 10K or 10Q, if later, as the case may be. At such time as the Developer is no longer an Obligated Person, the D-4

189 Developer will no longer be obligated to prepare the quarterly reports as it relates to such component of the Development. These quarterly reports may address the following, as applicable: (i) Single Family lots (1) Estimation of total number of lots expected to be included within the Development upon full build-out; (2) Number of lots sold/parcels (closed) to persons or entities in the business of building or developing homes (hereinafter referred to as Builder ); (3) Number of lots sold (closed) to persons or entities that are not Builders (hereinafter referred to as non-builders ); and (4) Number of homes (whether or not occupied) for which certificates of completion or certificates of occupancy have been issued (hereinafter referred to as Completed Homes ) with respect to land owned by the Developer. (ii) Multi-Family Units (1) Estimation of total number of units expected to be included within the Development upon full build-out; (2) Number of acres sold (closed) to Builders; (3) Number of units sold to Non-Builders; and (4) Number of units for which certificates of completion or certificates of occupancy have been issued (hereinafter referred to as Completed Units ) with respect to the land owned by the Developer. (iii) Materially adverse changes or determinations in the permit/approvals for the Assessment Area that necessitates changes in the Developer s land use plan. 5. Reporting of Significant Events. (a) the following events: Bonds. This Section 5 shall govern the giving of notices of the occurrence of any of 1. Delinquency in payment when due of any principal or interest on the 2. Amendment to the Indenture or this Disclosure Agreement modifying the rights of the owners of the Bonds. D-5

190 3. Giving a notice of optional or unscheduled redemption of any Bonds. 4. Defeasance of the Bonds or any portion thereof. 5. Any change in any rating of the Bonds. * 6. (A) Receipt of an opinion of nationally recognized bond counsel to the effect that interest on the Bonds is not tax-exempt; or (B) Bonds, including, but not limited to: Any event adversely affecting the tax-exempt status of the (i) Any audit, investigation or other challenge of the taxexempt status of the Bonds by the Internal Revenue Service or in any administrative or judicial proceeding; or (ii) The issuance of any regulation, decision or other official pronouncement by the Internal Revenue Service or other official tax authority or by any court adversely affecting the tax-exempt status of the Bonds or bonds of the same type as the Bonds or financing structures of the same type as financed by the Bonds. 7. Any unscheduled draw on the Series 2006A or Series 2006B Reserve Accounts reflecting financial difficulties. difficulties. ** 8. Any unscheduled draw on credit enhancements reflecting financial 9. The release, substitution or sale of property securing repayment of the Bonds (including property leased, mortgaged or pledged as such security). The sale of real property in the District in the ordinary course of the Developer s business shall not be a material event for purposes of the foregoing. perform. ** 10. The substitution of credit or liquidity providers or their failure to 11. Occurrence of any Event of Default under the Indenture (other than as described in clause (1) above). (b) The District shall, within five (5) business days of obtaining actual knowledge of the occurrence of any of the Listed Events, except events listed in clauses (a)(1), (3) or (4), notify the Dissemination Agent in writing of such event and whether or not to report the event pursuant to subsection (e). * Note: The Bonds are not rated ** Note: There are currently no credit or liquidity providers for the Bonds D-6

191 (c) Whenever the District obtains knowledge of the occurrence of a Listed Event, the District shall file a notice of the occurrence of a Listed Event, with (i) the Repositories, or (ii) the State Repository, if any, if material. (d) If the District sends notice pursuant to subsection (c) or otherwise, the District shall promptly notify the Dissemination Agent. Such notice shall instruct the Dissemination Agent to report the occurrence pursuant to subsection (e). (e) If the Dissemination Agent has been instructed by the District to report the occurrence of a Listed Event, the Dissemination Agent shall file a notice of such occurrence with the MSRB. Notwithstanding the foregoing: (i) notice of the occurrence of a Listed Event, described in subsections (a)(1), (3) and (4) shall be given by the Dissemination Agent unless the District gives the Dissemination Agent affirmative instructions not to disclose such occurrence; and (ii) notice of Listed Events described in subsections (a)(3) and (4) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to Holders of affected Bonds pursuant to the Indenture. 6. Termination of Disclosure Agreement. This Disclosure Agreement shall terminate upon the defeasance, prior redemption or payment in full of all of the Bonds. 7. Dissemination Agent. The District may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. If at any time there is not any other designated Dissemination Agent, the District shall be the Dissemination Agent. The initial Dissemination Agent shall be Prager. 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the District, the Developer and the Dissemination Agent may amend this Disclosure Agreement, and any provision of this Disclosure Agreement may be waived, if such amendment or waiver is supported by an opinion of counsel expert in federal securities laws, acceptable to the District, to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule. Notwithstanding the above provisions of this Section 8, no amendment to the provisions of Section 4(d) hereof may be made without the consent of the Developer as long as the Developer is an Obligated Person. In the event of any amendment or waiver of a provision of this Agreement, the District shall describe such amendment in the next Annual 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 in accounting principles, on the presentation) of financial information or D-7

192 operating data being presented by the District. 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(b); and (ii) the Annual 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. 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the District from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the District chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the District shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. 10. Default. In the event of a failure of the District, the Disclosure Representative, the Developer, or a Dissemination Agent to comply with any provision of this Disclosure Agreement, the Trustee may (and, at the request of any Participating Underwriter or the Holders of at least 25% aggregate principal amount of Outstanding Bonds and receipt of indemnity satisfactory to the Trustee, shall), or any beneficial owner of a Bond may take such actions as may be necessary and appropriate, including seeking mandate or specify performance by court order, to cause the District, the Disclosure Representative, the Developer, or a Dissemination Agent, as the case may be, to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement by any party shall not be deemed a default by any other party hereunder and no default hereunder shall be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure Agreement in the event of any failure of the District, the Disclosure Representative, the Developer, or a Dissemination Agent, to comply with this Disclosure Agreement shall be an action to compel performance. 11. Duties of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement. 12. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the District, the Developer, the Dissemination Agent, the Participating Underwriters and Holders of the Bonds, and shall create no rights in any other person or entity. 13. 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. 14. Tax Roll. The District, through its District Manager, if applicable, agrees to provide the Dissemination Agent with a certified copy of the tax roll provided to the County Tax Collector within 30 days of its delivery to the County Tax Collector. D-8

193 15. Governing Law and Venue. This Agreement shall be governed by the laws of the State of Florida and Federal law and venue shall be in Broward County, Florida. [SIGNATURES ON FOLLOW PAGE] D-9

194 SIGNATURE PAGE FOR CONTINUING DISCLOSURE AGREEMENT North Springs Improvement District IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the date and year set forth above. NORTH SPRINGS IMPROVEMENT DISTRICT Consented to and Agreed to by: DISTRICT MANAGER: SEVERN TRENT SERVICES, and its Successors and assigns By: President, Board of Supervisors By: Title: Authorized Signatory WCI COMMUNITIES, INC. By: Title: Authorized Signatory PRAGER, SEALY & CO., LLC By: Title: Managing Director D-10

195 SIGNATURE PAGE FOR CONTINUING DISCLOSURE AGREEMENT North Springs Improvement District Joined by U.S. Bank National Association, as Trustee for purposes of Section 10 only. TRUSTEE: U.S. BANK NATIONAL ASSOCIATION By: Title: Authorized Signatory D-11

196 EXHIBIT A NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT Name of District: Name of Bond Issue: North Springs Improvement District $6,930,000 Special Assessment Bonds, Series 2006A (Heron Bay North Assessment Area) and $2,165,000 Special Assessment Bonds, Series 2006B (Heron Bay North Assessment Area) (collectively, the Bonds ) Date of Issuance: October 24, 2006 NOTICE IS HEREBY GIVEN that the District has not provided an Annual Report with respect to the above-named Bonds as required by Section 3 of the Continuing Disclosure Agreement dated as of October 24, 2006, among the District, the District Manager, the Developer, the Dissemination Agent and the Trustee named therein. The District has advised the undersigned that it anticipates that the Annual Report will be filed by, 20. Dated:, Dissemination Agent cc: District D-12

197 APPENDIX E AUDITED FINANCIAL STATEMENTS

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251 APPENDIX F MAP

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