ave maria stewardship community district · no broker, dealer, salesperson, or other person has...

NEW ISSUE - BOOK-ENTRY ONLY NOT RATED

In the opinion of Bond Counsel, under existing statutes, regulations, court decisions and rulings, and assuming continuing compliance with

certain tax covenants, interest on the 2012 Bonds (hereinafter defi ned) is excludable 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 certain corporations' alternative minimum taxable income. See "TAX MATTERS" herein regarding certain other

tax considerations. Bond Counsel is further of the opinion that the 2012 Bonds and 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 profi ts on debt obligations owned

by corporations as defi ned in Chapter 220. For a more complete discussion of tax aspects relating to the 2012 Bonds, see "TAX MATTERS" herein.

$29,100,000

AVE MARIA STEWARDSHIP COMMUNITY DISTRICT

(Collier County, Florida)

Capital Improvement Revenue Refunding Bonds,

Series 2012

Dated: June 7, 2012 Due Date: As set forth below

The $29,100,000 Ave Maria Stewardship Community District (Collier County, Florida) Capital Improvement Revenue Refunding Bonds, Series 2012 (the

"2012 Bonds") are being issued by the Ave Maria Stewardship Community District (the "District") which is located in unincorporated Collier County, Florida

(the "County"), only in fully registered form, in denominations of $5,000, provided, however, that the 2012 Bonds will be deliverable to the initial purchasers only

in aggregate denominations of $100,000 or integral multiples of $5,000 in excess of $100,000. The District is a public body corporate and politic, an independent,

limited, special and single purpose local government created, chartered and established by Chapter 2004-461, Laws of Florida, a special act of the Florida

Legislature (the "Act"), pursuant to and in compliance with Chapter 189, Florida Statutes, and an independent, special district under section 189.404, Florida

Statutes, as amended.

The 2012 Bonds, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"), New York, New York.

Purchases of benefi cial interests in the 2012 Bonds will be made in book-entry only form. Accordingly, principal of and interest on the 2012 Bonds will be paid

from the sources provided below by U.S. Bank National Association, as trustee (the "Trustee") directly to Cede & Co. as the nominee of DTC and the registered

owner thereof. Disbursement of such payments to the DTC Participants is the responsibility of DTC and disbursement of such payments to the benefi cial owners

is the responsibility of DTC Participants and the Indirect Participants, as more fully described herein. See "DESCRIPTION OF THE 2012 BONDS - Book-Entry

Only System" herein. The 2012 Bonds will bear interest at the fi xed rate set forth below, calculated on the basis of a 360-day year comprised of twelve thirty-day

months. Interest on the 2012 Bonds is payable semi-annually on each May 1 and November 1, commencing November 1, 2012.

The 2012 Bonds are subject to optional, mandatory and extraordinary mandatory redemption at the times, in the amounts and at the redemption prices as

more fully described herein. See "DESCRIPTION OF THE 2012 BONDS - Redemption Provisions - 2012 Bonds" herein.

The 2012 Bonds are issued by the District pursuant to the Act, Resolution No. 2006-05 adopted by the Board of Supervisors of the District (the "Board") on

June 12, 2006, authorizing the issuance of not to exceed $825,000,000 aggregate principal amount of its Capital Improvement Revenue Bonds, as supplemented

by Resolution No. 2012-03 adopted by the Board on May 1, 2012 (collectively, the "Resolution") authorizing the issuance, sale and delivery of the 2012 Bonds in an

aggregate principal amount not to exceed $30,000,000 and a Master Trust Indenture dated as of December 1, 2006 (the "Master Indenture") between the District

and the Trustee, as amended and supplemented by a Second Supplemental Trust Indenture dated as of June 1, 2012 between the District and the Trustee (the

"Second Supplemental Indenture" and, together with the Master Indenture, the "Indenture").

The 2012 Bonds are being issued to: (i) currently refund and redeem all of the outstanding $26,220,000 original aggregate principal amount of Ave Maria

Stewardship Community District Bond Anticipation Bonds, Series 2006 (the "2006 Bond Anticipation Bonds"), all of which are currently outstanding; (ii) pay

certain costs associated with the issuance of the 2012 Bonds; and (iii) make a deposit into the Series 2012 Reserve Account for the benefi t of all of the 2012 Bonds.

See "PLAN OF REFUNDING" herein.

The 2012 Bonds are limited obligations of the District payable solely from the revenues derived by the District from the Series 2012 Assessments (the "2012

Pledged Revenues") and the Funds and Accounts (except for the 2012 Rebate Account), established under the Second Supplemental Indenture (the "2012 Pledged

Funds and Accounts") pledged therefor under the Indenture and neither the property, the full faith and credit, nor the taxing power of the District, the County, the

State of Florida (the "State"), or any political subdivision thereof, is pledged as security for the payment of the 2012 Bonds, except that the District is obligated

under the Indenture to levy and to collect Series 2012 Assessments to secure and pay the 2012 Bonds. The 2012 Pledged Revenues and the 2012 Pledged Funds

and Accounts collectively comprise the "2012 Trust Estate." The 2012 Bonds do not constitute an indebtedness of the District, the County, the State, or any

political subdivision thereof within the meaning of any constitutional or statutory provision or limitation.

THE UNDERWRITER NAMED BELOW IS LIMITING THIS OFFERING TO "ACCREDITED INVESTORS" WITHIN THE MEANING OF CHAPTER 517,

FLORIDA STATUTES, AS AMENDED, AND THE RULES OF THE FLORIDA DEPARTMENT OF FINANCIAL SERVICES PROMULGATED THEREUNDER.

THE LIMITATION OF THE INITIAL OFFERING TO ACCREDITED INVESTORS DOES NOT DENOTE RESTRICTIONS ON TRANSFER IN ANY SECONDARY

MARKET FOR THE 2012 BONDS. THE 2012 BONDS ARE NOT CREDIT ENHANCED OR RATED AND NO APPLICATION HAS BEEN MADE FOR A

RATING WITH RESPECT TO THE 2012 BONDS. THE 2012 BONDS INVOLVE A DEGREE OF RISK AND ARE NOT SUITABLE FOR ALL INVESTORS. SEE

"SUITABILITY FOR INVESTMENT" AND "BONDHOLDERS' RISKS" HEREIN. POTENTIAL INVESTORS ARE SOLELY RESPONSIBLE FOR EVALUATING

THE MERITS AND RISKS OF AN INVESTMENT IN THE 2012 BONDS. EACH PROSPECTIVE INVESTOR SHOULD CONDUCT ITS OWN INVESTIGATION

INTO THE DISTRICT, THE SOURCES OF PAYMENT FOR THE 2012 BONDS AND THE RISKS OF INVESTMENT IN THE 2012 BONDS AND SHOULD

INDEPENDENTLY EVALUATE THE MERITS AND RISKS OF SUCH AN INVESTMENT.

This cover page contains information for quick reference only. It is not a summary of the 2012 Bonds. Investors must read this entire Limited Offering

Memorandum to obtain information essential to the making of an informed investment decision.

MATURITY SCHEDULE

$29,100,000 - 6.700% 2012 Bonds due May 1, 2042 - Price 98.093% - CUSIP┴ - 05355A AB3

The 2012 Bonds are offered when, as and if issued and received by the Underwriter, subject prior to sale, to withdrawal or modifi cation of the offer

without notice, and to the approval of validity by Nabors, Giblin & Nickerson, Tampa, Florida, Bond Counsel. Certain legal matters will be passed upon for

the Developer by its counsel, Akerman Senterfi tt, Orlando, Florida, for the District by its counsel, Young van Assenderp, P.A., Tallahassee, Florida. Greenberg

Traurig, P.A., Orlando, Florida, is serving as Underwriter's Counsel. It is expected that the 2012 Bonds will be delivered in book-entry form through the

facilities of DTC on or about June 7, 2012.

MBS Capital Markets, LLC

Dated: May 23, 2012

_________________________

┴ Neither the District nor the Underwriter is 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.

No broker, dealer, salesperson, or other person has been authorized by the District or theUnderwriter (each as defined herein) to give any information or to make any representations,other than those contained in this Limited Offering Memorandum, and if given or made, suchother information or representations must not be relied upon as having been authorized by eitherof the foregoing. This Limited Offering Memorandum does not constitute an offer to sell or thesolicitation of an offer to buy any of the 2012 Bonds and there shall be no offer, solicitation, orsale of the 2012 Bonds by any person in any jurisdiction in which it is unlawful for such personto make such offer, solicitation or sale.

The Underwriter has provided the following sentence for inclusion in this LimitedOffering Memorandum. The Underwriter has reviewed the information in this Limited OfferingMemorandum in accordance with, and as part of, its responsibilities to investors under thefederal securities laws as applied to the facts and circumstances of this transaction, but theUnderwriter does not guarantee the accuracy or completeness of such information.

The information set forth herein has been obtained from public documents, records andother sources, including the Developer (as defined herein), which are believed by theUnderwriter to be reliable. The Underwriter does not, however, guaranty the accuracy of thisinformation. The information and expressions of opinion herein contained are subject to changewithout notice and neither the delivery of this Limited Offering Memorandum, nor any salemade hereunder, shall, under any circumstances, create any implication that there has been nochange in the affairs of the District or the Developer since the date hereof.

CERTAIN STATEMENTS INCLUDED OR INCORPORATED BY REFERENCE INTHIS LIMITED OFFERING MEMORANDUM CONSTITUTE "FORWARD-LOOKINGSTATEMENTS." SUCH STATEMENTS GENERALLY ARE IDENTIFIABLE BY THETERMINOLOGY USED, SUCH AS "PROJECTS", "PLAN", "INTENDS", "EXPECT","ESTIMATE", "BUDGET", "ANTICIPATES" OR OTHER SIMILAR WORDS. SUCHFORWARD-LOOKING STATEMENTS INCLUDE BUT ARE NOT LIMITED TO CERTAINSTATEMENTS CONTAINED IN THE INFORMATION UNDER THE CAPTIONS"ESTIMATED SOURCES AND USES OF PROCEEDS," "THE CAPITAL IMPROVEMENTPROGRAM AND THE 2006 PROJECT," "THE LANDOWNER/DEVELOPER" AND "THEDEVELOPMENT" IN THIS LIMITED OFFERING MEMORANDUM. THEACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED INSUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWNRISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE ACTUALRESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLYDIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTSEXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. NEITHERTHE DEVELOPER NOR THE DISTRICT PLANS TO ISSUE ANY UPDATES ORREVISIONS TO THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN ITSEXPECTATIONS OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCHSTATEMENTS ARE BASED OCCUR, SUBJECT TO ANY CONTRACTUAL OR LEGALRESPONSIBILITIES TO THE CONTRARY.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAYOVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE

MARKET PRICE OF THE 2012 BONDS AT A LEVEL ABOVE THAT WHICH MIGHTOTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IFCOMMENCED, MAY BE DISCONTINUED AT ANY TIME.

THE 2012 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIESACT OF 1933, NOR HAS THE INDENTURE BEEN QUALIFIED UNDER THE TRUSTINDENTURE ACT OF 1939. THE REGISTRATION OR QUALIFICATION OF THE 2012BONDS UNDER THE SECURITIES LAWS OF ANY JURISDICTIONS IN WHICH THEYMAY HAVE BEEN REGISTERED OR QUALIFIED, IF ANY, SHALL NOT BE REGARDEDAS A RECOMMENDATION THEREOF. NEITHER THE STATE, THE COUNTY, THEDISTRICT, NOR ANY OF THEIR AGENCIES HAVE PASSED UPON THE MERITS OFTHE 2012 BONDS. THE DISTRICT HAS PASSED UPON THE ACCURACY ANDFACTUAL COMPLETENESS OF THIS LIMITED OFFERING MEMORANDUM, OTHERTHAN THOSE SECTIONS CAPTIONED "DESCRIPTION OF THE 2012BONDS - BOOK-ENTRY ONLY SYSTEM," "THE DISTRICT - THE DISTRICT MANAGERAND OTHER CONSULTANTS," "THE LANDOWNER/DEVELOPER," "THEDEVELOPMENT," "TAX MATTERS" AND "LITIGATION" (AS IT RELATES TO THEDEVELOPER) HOWEVER, NEITHER THE STATE, THE COUNTY, NOR ANY OF THEIRAGENCIES HAVE PASSED UPON THE ACCURACY OR COMPLETENESS OF THISLIMITED OFFERING MEMORANDUM.

[THIS PAGE INTENTIONALLY LEFT BLANK]

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TABLE OF CONTENTS

Page

INTRODUCTION ...........................................................................................................................1PLAN OF REFUNDING.................................................................................................................3DESCRIPTION OF THE 2012 BONDS .........................................................................................4General .......................................................................................................................................4Redemption Provisions – 2012 Bonds.......................................................................................5Notice of Redemption ................................................................................................................7Book-Entry Only System...........................................................................................................7

ESTIMATED SOURCES AND USES OF PROCEEDS..............................................................10DEBT SERVICE REQUIREMENTS FOR 2012 BONDS ...........................................................11SECURITY FOR AND SOURCE OF PAYMENT OF THE 2012 BONDS................................12General .....................................................................................................................................12No Parity Bonds.......................................................................................................................15Enforcement of Payment of Series 2012 Assessments ............................................................15Debt Service Reserve Fund Deficiency Agreement ................................................................17Collateral Assignment and Assumption of Development and Contract Rights.......................18Developer Prepayment Waiver ................................................................................................19

FUNDS AND ACCOUNTS ..........................................................................................................19Costs of Issuance Account .......................................................................................................19Debt Service Fund....................................................................................................................19Reserve Fund ...........................................................................................................................19Revenue Fund ..........................................................................................................................21Rebate Fund .............................................................................................................................24

ENFORCEMENT OF SERIES 2012 ASSESSMENT COLLECTIONS......................................24General .....................................................................................................................................24Collection Through Uniform Method......................................................................................24Sale of Tax Certificates............................................................................................................26Judicial Proceedings.................................................................................................................27Collection Agreement ..............................................................................................................28

BONDHOLDERS' RISKS.............................................................................................................29THE DISTRICT.............................................................................................................................34General .....................................................................................................................................34Board of Supervisors................................................................................................................34The District Manager and Other Consultants ..........................................................................36The 2006A Bonds ....................................................................................................................37

THE CAPITAL IMPROVEMENT PROGRAM AND THE 2006 PROJECT .............................37THE LANDOWNER/DEVELOPER.............................................................................................38Barron Collier ..........................................................................................................................39Thomas S. Monaghan ..............................................................................................................39

THE DEVELOPMENT .................................................................................................................40History......................................................................................................................................40The Ave Maria Community.....................................................................................................40Land Acquisition......................................................................................................................41Town of Ave Maria Development of Regional Impact ...........................................................42

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Governmental Approvals .........................................................................................................42Developer Equity and Financing Plan .....................................................................................44Residential Community ...........................................................................................................45Residential Development .........................................................................................................46Ave Maria University ..............................................................................................................47Commercial/Office/Industrial Development ...........................................................................47Recreational and Lifestyle Amenities......................................................................................48Land Sale Information .............................................................................................................48Participating Builder ................................................................................................................49Marketing Plan.........................................................................................................................50Property Taxes, Assessments, Homeowner's Association and Other Fees..............................50Competition..............................................................................................................................51Rural Lands Stewardship Program ..........................................................................................51

TAX MATTERS............................................................................................................................52Opinion of Bond Counsel ........................................................................................................52Internal Revenue Code of 1986 ...............................................................................................52Collateral Tax Consequences...................................................................................................52Florida Taxes ...........................................................................................................................53Other Tax Matters ....................................................................................................................53Tax Treatment of Original Issue Discount...............................................................................53

AGREEMENT BY THE STATE ..................................................................................................53LEGALITY FOR INVESTMENT ................................................................................................54SUITABILITY FOR INVESTMENT ...........................................................................................54DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS ...............................54FINANCIAL INFORMATION.....................................................................................................54CONTINUING DISCLOSURE.....................................................................................................55ENFORCEABILITY OF REMEDIES ..........................................................................................55LITIGATION.................................................................................................................................56VERIFICATION OF ARITHMETICAL COMPUTATIONS ......................................................56RATING ........................................................................................................................................56UNDERWRITING ........................................................................................................................56VALIDATION...............................................................................................................................56EXPERTS ......................................................................................................................................56LEGAL MATTERS.......................................................................................................................57MISCELLANEOUS ......................................................................................................................57

APPENDIX A ENGINEER'S REPORTAPPENDIX B COPY OF MASTER TRUST INDENTURE AND FORM OF SECOND

SUPPLEMENTAL TRUST INDENTUREAPPENDIX C FORM OF OPINION OF BOND COUNSELAPPENDIX D FORMS OF CONTINUING DISCLOSURE AGREEMENTSAPPENDIX E MASTER ASSESSMENT METHODOLOGYAPPENDIX F AUDITED FINANCIAL STATEMENT OF THE DISTRICT FOR FISCAL

YEAR ENDING SEPTEMBER 30, 2011

LIMITED OFFERING MEMORANDUM

$29,100,000AVE MARIA STEWARDSHIP COMMUNITY DISTRICT

(Collier County, Florida)Capital Improvement Revenue Refunding Bonds,

Series 2012

INTRODUCTION

The purpose of this Limited Offering Memorandum is to provide information concerningthe $29,100,000 Ave Maria Stewardship Community District (Collier County, Florida) CapitalImprovement Revenue Refunding Bonds, Series 2012 (the "2012 Bonds"). The District is apublic body corporate and politic, an independent, limited, special and single purposegovernment created and established by Chapter 2004-461, Laws of Florida, a special act of theFlorida Legislature (the "Act"), and an independent, special district under section 189.404,Florida Statutes, as amended. The 2012 Bonds are being issued pursuant to the Act, ResolutionNo. 2006-05 adopted by the Board of Supervisors of the District (the "Board") on June 12, 2006,authorizing the issuance of not to exceed $825,000,000 aggregate principal amount of its CapitalImprovement Revenue Bonds, as supplemented by Resolution No. 2012-03 adopted by theBoard on May 16, 2012 (collectively, the "Resolution") authorizing the issuance, sale anddelivery of the 2012 Bonds in an aggregate principal amount not to exceed $30,000,000 and aMaster Trust Indenture between the District and U.S. Bank National Association (as successor ininterest to SunTrust Bank), Orlando, Florida, as trustee (the "Trustee"), dated as of December 1,2006 (the "Master Indenture"), as amended and supplemented by a Second Supplemental TrustIndenture, dated as of June 1, 2012 between the District and the Trustee (the "SecondSupplemental Indenture" and, together with the Master Indenture, the "Indenture"). Allcapitalized terms used, but not defined, in this Limited Offering Memorandum shall have themeanings assigned thereto in the Indenture. See "APPENDIX B - COPY OF MASTER TRUSTINDENTURE AND FORM OF SECOND SUPPLEMENTAL TRUST INDENTURE" herein.

The 2012 Bonds are not a suitable investment for all investors (see "SUITABILITY FORINVESTMENT" and "BONDHOLDERS' RISKS" herein). Pursuant to applicable State law, theUnderwriter is limiting this initial offering of the 2012 Bonds to only "Accredited Investors"within the meaning of Chapter 517, Florida Statutes, as amended, and the rules of the FloridaDepartment of Financial Services promulgated thereunder. Such limitation of the initial offeringto Accredited Investors does not denote restrictions on transfer in any secondary market for the2012 Bonds. PROSPECTIVE INVESTORS SHOULD BE AWARE OF CERTAIN RISKFACTORS, ANY OF WHICH, IF MATERIALIZED TO A SUFFICIENT DEGREE, COULDDELAY OR PREVENT PAYMENT OF PRINCIPAL OF AND/OR INTEREST ON THE 2012BONDS. Prospective investors in the 2012 Bonds are invited to visit the District, ask questionsof representatives of the District and to request documents, instruments and information whichmay not necessarily be referred to, summarized or described herein. Therefore, prospectiveinvestors should utilize the information appearing in this Limited Offering Memorandum withinthe context of and in conjunction with availability of such additional information and the sources

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thereof. Prospective investors may request such additional information and arrange to visit theDistrict as described under the caption "SUITABILITY FOR INVESTMENT" herein.

Other than as referenced in the section captioned "SUITABILITY FOR INVESTMENT"herein, no person has been authorized by the District or the Underwriter to give any informationor to make any representations, other than those contained in this Limited OfferingMemorandum, and if given or made, such other information or representations must not be reliedupon as having been authorized by any of the foregoing.

The District was created, chartered and established by the Act for the single purpose ofmanaging the acquisition, construction, maintenance, operation and financing of the publicinfrastructure necessary for capital improvement within the boundaries of the District. The Actauthorizes the District to issue special assessment bonds and revenue bonds for the purpose offinancing the cost of acquiring and constructing improvements and the funding of construction(as defined in the Act) and to impose and levy and collect special assessments therefor asprovided by the Act in Section 4(15) and Chapter 197, Florida Statutes, as amended.

The 2012 Bonds are being issued to: (i) currently refund and redeem all of theOutstanding principal amount of the District's $26,220,000 Ave Maria Stewardship CommunityDistrict (Collier County, Florida) Bond Anticipation Bonds, Series 2006 (the "2006 BondAnticipation Bonds"), which 2006 Bond Anticipation Bonds were issued to fund, in part, thehereinafter described 2006 Project; (ii) pay certain costs associated with the issuance of the 2012Bonds; and (iii) make a deposit into the Series 2012 Reserve Account for the benefit of all of the2012 Bonds. See "PLAN OF REFUNDING," "THE CAPITAL IMPROVEMENT PROGRAMAND THE 2006 PROJECT" and "THE DISTRICT - The 2006A Bonds" herein.

The 2012 Bonds are the third series of securities issued by the District. In December2006, the District issued the 2006 Bond Anticipation Bonds and the $26,245,000 originalaggregate principal amount of Ave Maria Stewardship Community District (Collier County,Florida) Capital Improvement Revenue Bonds, Series 2006A (the "2006A Bonds") to finance aportion of the Ave Maria DRI CIP (as hereinafter defined). See "THE CAPITALIMPROVEMENT PROGRAM AND THE 2006 PROJECT" and "THE DISTRICT - The 2006ABonds" herein, and "APPENDIX A - ENGINEER'S REPORT" attached hereto.

The District has covenanted not to issue or incur any obligations payable on a parity withthe 2012 Bonds from the proceeds of Series 2012 Assessments imposed and levied in connectionwith such 2012 Bonds nor to voluntarily create or cause to be created any debt, lien, pledge,assignment, encumbrance or other charge upon the Series 2012 Assessments except for fees,commissions, costs, reimbursements, compensations and other charges payable to the PropertyAppraiser or to the Tax Collector pursuant to State law. The District may however levyassessments on the same real property which is encumbered by the Series 2012 Assessmentspursuant to a separate trust indenture; provided, however, that the District has covenanted in theIndenture that so long as there are any 2012 Bonds Outstanding, it shall not levy or imposeassessments for capital projects on lands subject to the Series 2012 Assessments without thewritten consent of the Beneficial Owners of more than fifty percent (50%) of the 2012 Bondsthen Outstanding (the "Majority Owners"), without regard to Series designation; provided,further, that the foregoing limitation shall not apply if a principal amount of the Series 2012

3

Assessments equaling at least seventy-five percent (75%) of the then-Outstanding principalamount of the 2012 Bonds have been levied on lands within the District with respect to whichthere exists a separate tax parcel identification number for such parcel and a certificate ofoccupancy has been issued for a structure thereon. See "SECURITY FOR AND SOURCE OFPAYMENT OF THE 2012 BONDS," "ENFORCEMENT OF SERIES 2012 ASSESSMENTCOLLECTIONS" herein and "APPENDIX E - MASTER ASSESSMENT METHODOLOGY"hereto.

There follows in this Limited Offering Memorandum a brief description of the Districtand the 2006 Project which 2006 Project is being refinanced with the proceeds of the 2012Bonds, together with summaries of the terms of the 2012 Bonds, the Indenture and certainprovisions of the Act. All references herein to the Indenture and the Act are qualified in theirentirety by reference to such documents and all references to the 2012 Bonds are qualified byreference to the definitive forms thereof and the information with respect thereto contained in theIndenture.

PLAN OF REFUNDING

The proceeds of the 2012 Bonds, together with additional monies authorized by theDistrict, will be used to currently refund and redeem all of the District's Outstanding 2006 BondAnticipation Bonds (for purposes of this section, the "Refunded Bonds"). To effect therefunding of the Refunded Bonds, the District will enter into an Escrow Deposit Agreement forthe Refunded Bonds with U.S. Bank National Association, Orlando, Florida, as escrow agent(the "Escrow Agent") on or prior to the delivery of the 2012 Bonds. Pursuant to the terms of theEscrow Deposit Agreement, the District will deposit the proceeds of the 2012 Bonds (excludingproceeds used to pay costs of issuance and fund the Series 2012 Reserve Account) and certainother available funds with the Escrow Agent for deposit to the credit of the Escrow Deposit TrustFund (the "Escrow Fund") established pursuant to the Escrow Deposit Agreement. Such monieswill be held in the Escrow Fund uninvested. The amounts deposited into the Escrow Fund willbe sufficient to pay when due, all principal of, redemption premiums (if any) and accrued intereston the Refunded Bonds as the same are called for redemption as provided in the Escrow DepositAgreement, which redemption is expected to take place on or about July 9, 2012 (the "ExpectedRedemption Date").

Upon delivery of the 2012 Bonds, Causey Demgen & Moore Inc. (the "VerificationAgent") will verify the accuracy of the arithmetical computations of the sufficiency of theamounts to be held in the Escrow Fund to pay the principal, interest and redemption premium (ifany) on the Refunded Bonds. See "VERIFICATION OF ARITHMETICALCOMPUTATIONS" herein. Upon the issuance of the 2012 Bonds and the deposit of moneys inthe Escrow Fund as described above, in the opinion of Bond Counsel in reliance upon, amongother things, the report of the Verification Agent, the Refunded Bonds shall be deemed paid andno longer outstanding.

Notwithstanding anything herein contained to the contrary, the District reserves the rightto redeem all or a portion of the Refunded Bonds, before the Expected Redemption Date, as and

4

to the extent all or any of the holders of the Refunded Bonds waive the right to thirty (30) daysnotice of the refunding and redemption of the Refunded Bonds as contemplated herein.

The amounts held in the Escrow Fund are pledged solely for the benefit of the holders ofthe Refunded Bonds and will not be available for payment of debt service on the 2012 Bonds.

DESCRIPTION OF THE 2012 BONDS

General

The 2012 Bonds are issued only in fully registered book entry only form, indenominations equal to the lesser of $100,000 and any integral multiple of $5,000 in excess of$100,000 or the Outstanding principal amount of the 2012 Bonds and will be sold only toaccredited investors within the meaning of the Rules of the Florida Department of FinancialServices.

The 2012 Bonds will be dated June 7, 2012, shall bear the date of authentication and each2012 Bond shall bear interest from the Interest Payment Date to which interest has been paidnext preceding the date of its authentication, unless the date of its authentication is: (i) an InterestPayment Date to which interest on such 2012 Bond has been paid, in which event such 2012Bond shall bear interest from its date of authentication; or (ii) prior to the first Interest PaymentDate for the 2012 Bonds, in which event such 2012 Bond shall bear interest from its date.Interest on the 2012 Bonds shall be due and payable on each May 1 and November 1,commencing November 1, 2012, and shall be computed on the basis of a 360-day year of twelve30-day months.

The 2012 Bonds will be initially issued in the form of a separate single certificated fullyregistered 2012 Bond for each Series and maturity thereof. Upon initial issuance, the ownershipof the 2012 Bonds will be registered in the registration books kept by the Bond Registrar in thename of Cede & Co., as Nominee of Depository Trust Company, New York, New York("DTC"), the initial Bonds Depository. All of the Outstanding 2012 Bonds will be registered inthe registration books kept by the Bond Registrar in the name of Cede & Co., as Nominee ofDTC. See "DESCRIPTION OF THE 2012 BONDS - Book-Entry Only System" herein.

With respect to 2012 Bonds registered in the registration books kept by the BondRegistrar in the name of Cede & Co., as Nominee of DTC, the District, the Trustee, the BondRegistrar and the Paying Agent will have no responsibility or obligation to any such DirectParticipant (as defined herein) or to any Indirect Participant (as defined herein). Withoutlimiting the immediately preceding sentence, the District, the Trustee, the Bond Registrar and thePaying Agent will have no responsibility or obligation with respect to: (i) the accuracy of therecords of DTC, Cede & Co. or any Direct Participant with respect to any ownership interest inthe 2012 Bonds; (ii) the delivery to any Direct Participant or any other person other than anOwner, as shown in the registration books kept by the Bond Registrar, of any notice with respectto the 2012 Bonds, including any notice of redemption; or (iii) the payment to any DirectParticipant or any other person, other than an Owner, as shown in the registration books kept bythe Bond Registrar, of any amount with respect to principal of, premium, if any, or interest onthe 2012 Bonds. The District, the Trustee, the Bond Registrar and the Paying Agent may treat

5

and consider the person in whose name each 2012 Bond is registered in the registration bookskept by the Bond Registrar as the absolute Owner of such 2012 Bond for the purpose of paymentof principal of, premium, if any, and interest with respect to such 2012 Bond, for the purpose ofgiving notices of redemption and other matters with respect to such 2012 Bond, for the purposeof registering transfers with respect to such 2012 Bond, and for all other purposes whatsoever.The Paying Agent will pay all principal of, premium, if any, and interest on the 2012 Bonds onlyto or upon the order of the respective Owners, as shown in the registration books kept by theBond Registrar, or their respective attorneys duly authorized in writing, as provided in theSecond Supplemental Indenture, and all such payments will be valid and effective to fully satisfyand discharge the District's obligations with respect to payment of principal of, premium, if any,and interest on the 2012 Bonds to the extent of the sum or sums so paid. No person other than anOwner, as shown in the registration books kept by the Bond Registrar, will receive a certified2012 Bond evidencing the obligation of the District to make payments of principal, premium, ifany, and interest on the 2012 Bonds pursuant to the provisions of the Second SupplementalIndenture.

U.S. Bank National Association is the initial Trustee, Registrar and Paying Agent for the2012 Bonds.

The 2012 Bonds are limited obligations of the District issued under the provisions of theAct and the Indenture and do not constitute an indebtedness of the State or the County, but arepayable solely from revenues derived by the District from the Series 2012 Assessments (the"2012 Pledged Revenues") and the Funds and Accounts (except for the 2012 Rebate Account)established hereby (the "2012 Pledged Funds and Accounts") which shall comprise a part of theTrust Estate securing the 2012 Bonds (the "2012 Trust Estate"). Other than as set forth in thepreceding sentence, the issuance of the 2012 Bonds shall not directly, indirectly or contingentlyobligate the District to levy or to pledge any other funds whatever therefore or to make anyappropriation for their payment. The 2012 Bonds are not obligations or indebtedness of the Stateor any agency, authority, district or political subdivision of the State, including the County, otherthan the District.

Redemption Provisions – 2012 Bonds

Optional Redemption - The 2012 Bonds maturing on or after May 1, 2023 are subject tooptional redemption at the option of the District, in whole or in part at any time on or afterMay 1, 2022, at the Redemption Price of the principal amount of the 2012 Bonds or portionsthereof to be redeemed together with accrued interest to the Redemption Date.

Mandatory Redemption - The 2012 Bonds are subject to mandatory redemption in part bythe District by lot prior to their scheduled maturity from moneys in the Series 2012 Sinking FundAccount established under the Supplemental Indenture in satisfaction of applicable AmortizationInstallments (as defined in the Master Indenture) at the Redemption Price of the principal amountthereof, without premium, together with accrued interest to the date of redemption on May 1 ofthe years and in the principal amounts set forth below:

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Year(May 1)

AmortizationInstallment

Year(May 1)


2013 $310,000 2028 $855,0002014 335,000 2029 910,0002015 355,000 2030 975,0002016 380,000 2031 1,040,0002017 410,000 2032 1,115,0002018 435,000 2033 1,190,0002019 465,000 2034 1,275,0002020 500,000 2035 1,365,0002021 535,000 2036 1,455,0002022 570,000 2037 1,560,0002023 610,000 2038 1,665,0002024 650,000 2039 1,780,0002025 700,000 2040 1,905,0002026 745,000 2041 2,035,0002027 795,000 2042* 2,180,000

_____________________*Maturity

As more particularly set forth in the Indenture, any 2012 Bonds that are purchased by theDistrict with amounts held to pay an Amortization Installment will be cancelled and the principalamount so purchased will be applied as a credit against the applicable Amortization Installmentof 2012 Bonds. Amortization Installments are also subject to recalculation, as provided in theSecond Supplemental Indenture, as the result of the redemption of 2012 Bonds so as toreamortize the remaining Outstanding principal balance of the 2012 Bonds as set forth in theSupplemental Indenture.

Extraordinary Mandatory Redemption. The 2012 Bonds are subject to ExtraordinaryMandatory Redemption prior to maturity, in whole on any date or in part on any InterestPayment Date, in the manner determined by the Bond Registrar at the Redemption Price of 100%of the principal amount thereof, without premium, together with accrued interest to the date ofredemption, if and to the extent that any one or more of the following shall have occurred:

(a) from Prepayments of Series 2012 Assessments (as defined in theIndenture) deposited into the Series 2012 Prepayment Subaccount of the Series 2012Redemption Account or from Foreclosure Proceeds; or

(b) from amounts transferred to the Series 2012 Prepayment Subaccount ofthe Series 2012 Redemption Account resulting from a reduction in the Series 2012Reserve Account Requirement as provided for in the Indenture, and, on the date on whichthe amount on deposit in the Series 2012 Reserve Account, together with other moneysavailable therefor, are sufficient to pay and redeem all of the 2012 Bonds thenOutstanding, including accrued interest thereon.

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Reference is hereby specifically made to "APPENDIX B - COPY OF MASTER TRUSTINDENTURE AND FORM OF SECOND SUPPLEMENTAL TRUST INDENTURE" foradditional details concerning the redemption of 2012 Bonds.

Notice of Redemption

Notice of each redemption of 2012 Bonds is required to be mailed by the Bond Registrar,postage prepaid, not less than thirty (30) nor more than forty-five (45) days prior to theRedemption Date to each registered Owner of 2012 Bonds to be redeemed at the address of suchregistered Owner recorded on the bond register maintained by the Bond Registrar. On the datedesignated for redemption, notice having been given and money for the payment of theRedemption Price being held by the Paying Agent, all as provided in the Indenture, the 2012Bonds or such portions thereof so called for redemption shall become and be due and payable atthe Redemption Price provided for the redemption of such 2012 Bonds or such portions thereofon such date, interest on such 2012 Bonds or such portions thereof so called for redemption shallcease to accrue, such 2012 Bonds or such portions thereof so called for redemption shall cease tobe entitled to any benefit or security under the Indenture and the Owners thereof shall have norights in respect of such 2012 Bonds or such portions thereof so called for redemption except toreceive payments of the Redemption Price thereof so held by the Paying Agent. Further noticeof redemption shall be given by the Bond Registrar to certain registered securities depositoriesand information services as set forth in the Indenture, but no defect in said further notice nor anyfailure to give all or any portion of such further notice shall in any manner defeat theeffectiveness of a call for redemption if notice thereof is given as above prescribed.

Reference is hereby specifically made to "APPENDIX B - COPY OF MASTER TRUSTINDENTURE AND FORM OF SECOND SUPPLEMENTAL TRUST INDENTURE" foradditional details concerning the redemption of 2012 Bonds.

Book-Entry Only System

The information in this section concerning DTC and DTC's book-entry system has beenobtained from DTC and the District does not make any representation or warranty or take anyresponsibility for the accuracy or completeness of such information.

DTC will act as securities depository for the 2012 Bonds. The 2012 Bonds will be issuedas fully registered securities registered in the name of Cede & Co. (DTC's partnership nominee)or such other name as may be requested by an authorized representative of DTC. One fullyregistered 2012 Bond certificate will be issued for each maturity of the 2012 Bonds, each in theaggregate principal amount of such maturity, and will be deposited with DTC.

DTC, the world's largest depository, is a limited-purpose trust company organized underthe New York Banking Law, a "banking organization" within the meaning of the New YorkBanking Law, a member of the Federal Reserve System, a "clearing corporation" within themeaning of the New York Uniform Commercial Code, and a "clearing agency" registeredpursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holdsand provides asset servicing for over 3.5 million U.S. and non-U.S. equity issues, corporate andmunicipal debt issues, and money market instruments from over 100 countries that DTC's

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participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-tradesettlement among Direct Participants of sales and other securities transactions in depositedsecurities, through electronic computerized book-entry transfers and pledges between DirectParticipants' 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, trustcompanies, clearing corporations, and certain other organizations. DTC is a wholly-ownedsubsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holdingcompany for DTC, National Securities Clearing Corporation and Fixed Income ClearingCorporation, all of which are registered clearing agencies. DTCC is owned by the users of itsregulated subsidiaries. Access to the DTC system is also available to others such as both U.S.and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporationsthat clear through or maintain a custodial relationship with a Direct Participant, either directly orindirectly ("Indirect Participants"). The Direct Participants and the Indirect Participants arecollectively referred to herein as the "DTC Participants." DTC has Standard & Poor's rating:AA+. The DTC rules applicable to its DTC Participants are on file with the Securities andExchange Commission (the "SEC"). More information about DTC can be found atwww.dtcc.com.

Purchases of 2012 Bonds under the DTC system must be made by or through DirectParticipants, which will receive a credit for the 2012 Bonds on DTC's records. The ownershipinterest of each actual purchaser of each 2012 Bond (each a "Beneficial Owner") is in turn to berecorded on the Direct and Indirect Participants' records. Beneficial Owners will not receivewritten confirmation from DTC of their purchase. Beneficial Owners are, however, expected toreceive written confirmations providing details of the transaction, as well as periodic statementsof their holdings, from the Direct or Indirect Participant through which the Beneficial Ownerentered into the transaction. Transfers of ownership interests in the 2012 Bonds are to beaccomplished by entries made on the books of Direct and Indirect Participants acting on behalfof Beneficial Owners. Beneficial Owners will not receive certificates representing theirownership interests in the 2012 Bonds, except in the event that use of the book-entry system forthe 2012 Bonds is discontinued.

To facilitate subsequent transfers, all 2012 Bonds deposited by Direct Participants withDTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other nameas may be requested by an authorized representative of DTC. The deposit of the 2012 Bondswith DTC and their registration in the name of Cede & Co. or such other DTC nominee do noteffect any change in beneficial ownership. DTC has no knowledge of the actual BeneficialOwners of the 2012 Bonds; DTC's records reflect only the identity of the Direct Participants towhose accounts such 2012 Bonds are credited, which may or may not be the Beneficial Owners.The Direct and Indirect Participants will remain responsible for keeping account of theirholdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, byDirect Participants to Indirect Participants, and by Direct Participants and Indirect Participants toBeneficial Owners will be governed by arrangements among them, subject to any statutory orregulatory requirements as may be in effect from time to time. Beneficial Owners of 2012Bonds may wish to take certain steps to augment the transmission to them of notices ofsignificant events with respect to the 2012 Bonds, such as redemptions, tenders, defaults, and

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proposed amendments to the 2012 Bond documents. For example, Beneficial Owners of 2012Bonds may wish to ascertain that the nominee holding the 2012 Bonds for their benefit hasagreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Ownersmay wish to provide their names and addresses to the Registrar and request that copies of noticesbe provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the 2012 Bonds within amaturity are being redeemed, DTC's practice is to determine by lot the amount of the interest ofeach Direct Participant in such maturity to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote withrespect to the 2012 Bonds unless authorized by a Direct Participant in accordance with DTC'sMMI procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the District assoon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting orvoting rights to those Direct Participants to whose accounts the 2012 Bonds are credited on therecord date (identified in a listing attached to the Omnibus Proxy).

Principal and interest payments on the 2012 Bonds will be made to Cede & Co., or suchother nominee as may be requested by an authorized representative of DTC. DTC's practice is tocredit Direct Participants' accounts upon DTC's receipt of funds and corresponding detailinformation from the District or the Paying Agent on a payment date in accordance with theirrespective holdings shown on DTC's records. Payments by DTC Participants to BeneficialOwners will be governed by standing instructions and customary practices, as is the case withsecurities held for the accounts of customers in bearer form or registered in "street name," andwill be the responsibility of such DTC Participant and not of DTC nor its nominee, the Trustee,or the District, subject to any statutory or regulatory requirements as may be in effect from timeto time. Payment of principal and interest on the 2012 Bonds, as applicable, to Cede & Co. (orsuch other nominee as may be requested by an authorized representative of DTC) is theresponsibility of the District and/or the Paying Agent, disbursement of such payments to DirectParticipants will be the responsibility of DTC, and disbursement of such payments to theBeneficial Owners will be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as depository with respect to the 2012 Bondsat any time by giving reasonable notice to the District or the Trustee. Under such circumstances,in the event that a successor depository is not obtained, 2012 Bond certificates are required to beprinted and delivered.

The District may decide to discontinue use of the system of book-entry transfers throughDTC upon compliance with any applicable DTC rules and procedures. In that event, 2012 Bondcertificates will be printed and delivered.

So long as Cede & Co. is the registered owner of the 2012 Bonds, as nominee of DTC,reference herein to the Bondholders or Registered Owners of the 2012 Bonds will meanCede & Co., as aforesaid, and will not mean the Beneficial Owners of the 2012 Bonds.

NEITHER THE DISTRICT NOR THE TRUSTEE WILL HAVE ANYRESPONSIBILITY OR OBLIGATION TO THE DTC PARTICIPANTS OR THE PERSONS

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FOR WHOM THEY ACT AS NOMINEE WITH RESPECT TO THE PAYMENTS TO ORTHE PROVIDING OF NOTICE FOR THE DTC PARTICIPANTS OR THE BENEFICIALOWNERS OF THE 2012 BONDS. THE DISTRICT CANNOT AND DOES NOT GIVE ANYASSURANCES THAT DTC, THE DTC PARTICIPANTS OR OTHERS WILL DISTRIBUTEPAYMENTS OF PRINCIPAL OF OR INTEREST ON THE 2012 BONDS PAID TO DTC ORITS NOMINEE, AS THE REGISTERED OWNER, OR PROVIDE ANY NOTICES TO THEBENEFICIAL OWNERS OR THAT THEY WILL DO SO ON A TIMELY BASIS, OR THATDTC WILL ACT IN THE MANNER DESCRIBED IN THIS OFFICIAL STATEMENT.

Portions of the foregoing concerning DTC and DTC's book-entry system are based oninformation furnished by DTC to the District. No representation is made herein by the Districtas to the accuracy or completeness of such information.

ESTIMATED SOURCES AND USES OF PROCEEDS

Proceeds from the issuance and delivery of the 2012 Bonds are expected to be applied asfollows:

SOURCESPar Amount of 2012 Bonds $29,100,000.00Liquidation of 2006 Reserve Fund 748,912.09Less Original Issue Discount (554,937.00)

TOTAL SOURCES: $29,293,975.09

USES2012 Escrow Fund $26,457,728.00Series 2012 Costs of Issuance Account(1) 582,182.09Series 2012 Reserve Account 2,254,065.00

TOTAL USES: $29,293,975.09________________________________(1) Includes, without limitation, underwriter's discount, fees of District Counsel, Bond Counsel, Assessment Consultant, DistrictManager, printing and other costs of issuing the 2012 Bonds.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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DEBT SERVICE REQUIREMENTS FOR 2012 BONDS

Year EndingNovember 1 Principal Interest Total

2012 $ 779,880.00 $779,880.002013 $ 310,000 1,939,315.00 2,249,315.002014 335,000 1,917,707.50 2,252,707.502015 355,000 1,894,592.50 2,249,592.502016 380,000 1,869,970.00 2,249,970.002017 410,000 1,843,505.00 2,253,505.002018 435,000 1,815,197.50 2,250,197.502019 465,000 1,785,047.50 2,250,047.502020 500,000 1,752,720.00 2,252,720.002021 535,000 1,718,047.50 2,253,047.502022 570,000 1,681,030.00 2,251,030.002023 610,000 1,641,500.00 2,251,500.002024 650,000 1,599,290.00 2,249,290.002025 700,000 1,554,065.00 2,254,065.002026 745,000 1,505,657.50 2,250,657.502027 795,000 1,454,067.50 2,249,067.502028 855,000 1,398,792.50 2,253,792.502029 910,000 1,339,665.00 2,249,665.002030 975,000 1,276,517.50 2,251,517.502031 1,040,000 1,209,015.00 2,249,015.002032 1,115,000 1,136,822.50 2,251,822.502033 1,190,000 1,059,605.00 2,249,605.002034 1,275,000 977,027.50 2,252,027.502035 1,365,000 888,587.50 2,253,587.502036 1,455,000 794,117.50 2,249,117.502037 1,560,000 693,115.00 2,253,115.002038 1,665,000 585,077.50 2,250,077.502039 1,780,000 469,670.00 2,249,670.002040 1,905,000 346,222.50 2,251,222.502041 2,035,000 214,232.50 2,249,232.502042 2,180,000 73,030.00 2,253,030.00

Total $29,100,000 $39,213,090.00 $68,313,090.00


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SECURITY FOR AND SOURCE OF PAYMENT OF THE 2012 BONDS

General

THE 2012 BONDS ARE LIMITED OBLIGATIONS OF THE DISTRICT PAYABLESOLELY FROM 2012 PLEDGED REVENUES AND 2012 PLEDGED FUNDS ANDACCOUNTS PLEDGED THEREFOR UNDER THE INDENTURE AND NEITHER THEPROPERTY, THE FULL FAITH AND CREDIT, NOR THE TAXING POWER OF THEDISTRICT, THE COUNTY, THE STATE, OR ANY POLITICAL SUBDIVISION THEREOF,IS PLEDGED AS SECURITY FOR THE PAYMENT OF THE 2012 BONDS, EXCEPT THATTHE DISTRICT IS OBLIGATED UNDER THE INDENTURE TO IMPOSE, LEVY AND TOCOLLECT SERIES 2012 ASSESSMENTS (AS DEFINED IN THE INDENTURE) TOSECURE AND PAY THE 2012 BONDS. THE 2012 BONDS DO NOT CONSTITUTE ANINDEBTEDNESS OF THE DISTRICT, THE COUNTY, THE STATE, OR ANY POLITICALSUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL ORSTATUTORY PROVISION OR LIMITATION.

The principal of and interest on the 2012 Bonds issued under the Indenture will besecured by a lien upon the amounts collected by or on behalf of the District from landowners orotherwise collected as a result of the Series 2012 Assessments imposed and levied by the Districtto secure the 2012 Bonds in accordance with the Series 2012 Assessment Proceedings, includingamounts received from the collection of Delinquent Assessments (collectively, the "Series 2012Assessment Revenues" or the "2012 Pledged Revenues") and the 2012 Pledged Funds andAccounts. The Series 2012 Assessments will be imposed and levied upon land within theDistrict specially benefited by certain infrastructure improvements to be acquired, constructedand equipped by the District from the proceeds of the 2012 Bonds. See "THE CAPITALIMPROVEMENT PROGRAM AND THE 2006 PROJECT" herein).

The Indenture provides that the pledge shall be valid and binding from and after the dateof delivery of the 2012 Bonds, and the proceeds of the 2012 Bonds and Series 2012 AssessmentRevenues shall immediately be subject to the lien of the pledge without any physical deliverythereof or further act, and the lien of the pledge shall be valid and binding as against all partieshaving claims of any kind in tort, contract or otherwise against the District irrespective ofwhether such parties have notice thereof.

Series 2012 Assessments consist of assessments imposed and levied and collected by oron behalf of the District pursuant to section 4(15) of the Act, and other applicable law, togetherwith the interest specified by resolutions adopted by the District, the interest specified in law, asamended, if any such interest is collected by or on behalf of the Board, and any applicablepenalties collected by or on behalf of the District, together with any and all amounts received bythe District from the sale of tax certificates or otherwise from the collection of DelinquentAssessments and which are referred to as such and pledged to the 2012 Bonds pursuant to theIndenture.

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For purposes hereof, Delinquent Assessment means collectively, any and all installmentsof any Series 2012 Assessments which are not paid within thirty (30) days of the date on whichsuch installments are due and payable.

In carrying out its single specialized purpose to provide basic systems, facilities, services,infrastructure and improvements to the lands within the District serving the Ave MariaCommunity, the Act grants the District the power to manage the construction of the 2006 Projectimprovements funded by exercising its financing powers to issue bonds and to amortize thebonds by imposing and levying the Series 2012 Assessments upon the lands which receivespecial benefits apportioned, peculiar to the property, fairly and reasonably, from the 2006Project. Non-ad valorem assessments are not based on millage and can become a lien against thehomestead as permitted in Section 4, Article X of the Florida State Constitution.

Series 2012 Assessments imposed and levied on unplatted lots and pledged to secure the2012 Bonds shall be collected by invoice by the District pursuant to the Act, and not pursuant tothe Uniform Method, in each case unless otherwise directed by the Trustee, acting at thedirection of the Majority Owners. It is currently contemplated that the Series 2012 Assessmentslevied on such unplatted lots securing the 2012 Bonds shall be collected by an agent of theDistrict pursuant to a Collection Agreement (as hereinafter described), until such time as suchliened land is platted for lots. To give effect to the foregoing, the Board of Supervisors of theDistrict shall require the District Manager to invoice the Series 2012 Assessments which havebeen imposed and levied on unplatted land off of the District's assessment roll that is certified tothe Tax Collector and using instead the District's assessment roll which is to be invoiced by theDistrict's collection agent by operation of semi-annual installments as required under theIndenture.

Anything in the Indenture to the contrary notwithstanding, but subject to the sentenceimmediately succeeding, Series 2012 Assessments levied on platted lots and pledged to securethe 2012 Bonds may be collected pursuant to the uniform method for the collection of Series2012 Assessments set forth in the Act (the "Uniform Method"). To the extent the District is notable to collect such Series 2012 Assessments pursuant to the Uniform Method, the District mayelect to collect and enforce such Series 2012 Assessments pursuant to any then available andcommercially reasonable method under the Act, other applicable law, or any successor statutesthereto.

The 2012 Bonds will be secured by the revenues derived by the District from the Series2012 Assessments which may be (but are not currently contemplated to be) collected by the TaxCollector. Pursuant to Section 4 of the Act, and Section 197.3631, Florida Statutes, the Districtmay use the Uniform Method for the collection and enforcement of the imposed and leviedspecial assessments under Section 197.3632, Florida Statutes, and Rule D-18, FloridaAdministrative Code, as amended. Under this methodology the District provides to the PropertyAppraiser the appropriate legal description pursuant to which the Property Appraiser providesthe District by June 1 of the applicable calendar year, the name, address and legal description ofeach individual parcel after which the District must prepare and adopt the roll. The law imposesthe duty on the Chairman of the District, or the designee of the Chairman, to certify the non-advalorem assessment roll noticed and adopted by the District to the Tax Collector on compatibleelectronic medium tied to the property identification number no later than September 15 of the

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applicable calendar year. The Tax Collector will attempt to merge that non-ad valoremassessment roll with other assessments rolls and the tax roll to create a collection roll from whichthe individual tax notice and receipt (the so called "property tax bill") will be sent to the owner ofeach parcel for collection and enforcement. The tax notice and receipt will include the dollaramount of the Series 2012 Assessments imposed and levied and to be collected on each suchparcel. If payments of Series 2012 Assessments securing the 2012 Bonds are remitted by theTax Collector to the District, the District agrees to give such consents and to take such othersteps as may be necessary to permit the Paying Agent, in its discretion, to obtain informationfrom the Tax Collector concerning the amount and date of each such payment of Series 2012Assessments to the District. If the District is unable, despite its best efforts to do so, to cause theSeries 2012 Assessments securing the 2012 Bonds to be collected pursuant to Section 197.3632,Florida Statutes, then the District covenants that the Series 2012 Assessments will be collectedby it in the manner prescribed by law (as referenced in the preceding paragraph) and will,immediately upon receipt, deposit the same with the Trustee for repayment of the 2012 Bonds,including interest to the date of such repayment.

Concerning any Delinquent Assessments, the District covenanted in the Indenture that ifany property shall be offered for sale for the nonpayment of any Series 2012 Assessment and noperson or persons shall purchase such property for an amount equal to the full amount due on theSeries 2012 Assessments (principal, interest, penalties and costs, plus attorneys' fees, if any), theproperty which is the subject of the Delinquent Assessment may then be purchased by theDistrict for an amount equal to the balance due on the Series 2012 Assessments (principal,interest, penalties and costs, plus attorneys' fees, if any), from any legally available funds of theDistrict, and the District shall receive title to the property in its corporate name or in the name ofa special purpose entity for the benefit of the Owners of the 2012 Bonds; provided that theTrustee shall have the right, acting at the direction of the Majority Owners to direct the Districtwith respect to any action taken pursuant to the Indenture. The District, either through its ownaction, or actions caused to be taken through the Trustee, shall have the power and shall lease orsell such property, and deposit all of the net proceeds of any such lease or sale into the 2012Revenue Account. The District, either through its own actions, or actions caused to be takenthrough the Trustee, agrees that it shall, after being provided with assurances satisfactory to it ofpayment of its fees, costs and expenses for doing so, be required to take the measures providedby law for sale of property acquired by it as trustee for the Owners of the 2012 Bonds withinthirty (30) days after the receipt of the request therefore signed by the Trustee or the MajorityOwners. The Trustee may, upon direction from the Majority Owners, pay costs associated withany actions taken by the District pursuant to the Indenture from any moneys legally available forsuch purpose held under the Indenture. It should be noted that the District may not havesufficient funds to complete such a purchase.

The District covenants in the Indenture, that if any Series 2012 Assessment shall be eitherin whole or in part annulled, vacated or set aside by the judgment of any court, or the Districtshall be satisfied that any such Series 2012 Assessments are so irregular or defective that itcannot be enforced or collected, or if the District shall have omitted to make such Series 2012Assessments when it might have done so, the District shall either: (i) take all necessary steps tocause a new Assessment to be made for the whole or any part of such improvement or againstany property benefited by such improvement; or (ii) in its sole discretion, make up the amount ofsuch Assessment from legally available moneys, which moneys shall be deposited into the 2012

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Revenue Account. In case any such subsequent Assessment shall also be annulled, the Districtshall obtain and make other Assessments until a valid Assessment shall be made.

Please refer to "APPENDIX E - MASTER ASSESSMENT METHODOLOGY" for adescription of the Series 2012 Assessments and the methodology by which they are imposed andlevied.

No Parity Bonds

The District covenants and agrees that so long as there are any 2012 Bonds Outstanding,it shall not cause or permit to be caused any lien, charge or claim against the 2012 Trust Estate;provided, however, that the District reserves the right to issue bonds, notes or other obligationspayable from or secured by the 2012 Trust Estate pledged to the 2012 Bonds, but only so long assuch bonds, notes or other obligations are not entitled to a lien upon or charge against the 2012Trust Estate equal or prior to the lien of this Supplemental Indenture securing the 2012 Bonds.

Notwithstanding the foregoing, the District may levy assessments on the same realproperty which is encumbered by the Series 2012 Assessments pursuant to a separate trustindenture; provided, however, that the District has covenanted in the Indenture that so long asthere are any 2012 Bonds Outstanding, it shall not levy or impose assessments for capitalprojects on lands subject to the Series 2012 Assessments without the written consent of theMajority Owners (without regard to Series designation); provided, further, that the foregoinglimitation shall not apply if a principal amount of the Series 2012 Assessments equaling at leastseventy-five percent (75%) of the then-Outstanding principal amount of the 2012 Bonds havebeen levied on lands within the District with respect to which there exists a separate tax parcelidentification number for such parcel and a certificate of occupancy has been issued for astructure thereon.

Enforcement of Payment of Series 2012 Assessments

Upon the failure of any property owner to pay the principal of the Series 2012Assessment or the interest thereon, when due, the governing body of the District is authorized tocommence legal proceedings for the enforcement of the payment thereof, includingcommencement of an action in chancery, commencement of a foreclosure proceeding in thesame manner as the foreclosure of a real estate mortgage, or commencement of an action underChapter 173, Florida Statutes, relating to foreclosure of municipal tax and special assessmentliens. Any foreclosure proceedings to enforce payment of the Series 2012 Assessments willmost probably proceed under the provisions of Chapter 173, Florida Statutes, which providesthat after the expiration of one year from the date any special assessment or installment thereofbecomes due, the District may commence a foreclosure proceeding against the lands upon whichthe Series 2012 Assessments are liens. Such a proceeding is in rem, meaning that it is broughtagainst the land and not against the owner. The statutes if used relating to enforcement of countytaxes provide that ad valorem taxes first become payable on November 1 of the year whenassessed and constitute a lien upon the assessed land from January 1 of such year. The Series2012 Assessments will be imposed and levied from the date of adoption by the Board ofSupervisors of the District of the final assessment roll. See "ENFORCEMENT OF SERIES2012 ASSESSMENT COLLECTIONS - Collection Through Uniform Method" herein.

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Anything in the Master Indenture to the contrary notwithstanding, the District hascovenanted and agreed that upon the occurrence and continuance of an Event of Default, it willtake such actions to enforce the remedial provisions of the Indenture, the applicable provisionsfor the collection of Delinquent Assessments, and the provisions for the foreclosure of liens ofDelinquent Assessments and will take such other lawful appropriate remedial actions as shall bedirected by the Trustee acting at the direction of the Majority Owners.

With respect to unplatted lands directly invoiced by the District, if any property shall beoffered for sale for the nonpayment of any Series 2012 Assessment and no person or personsshall purchase such property for an amount equal to the full amount due on the Series 2012Assessments (principal, interest, penalties and costs, plus attorneys' fees, if any), the propertymay then be purchased by the District for an amount equal to the balance due on the Series 2012Assessments (principal, interest, penalties and costs, plus attorneys' fees, if any), from anylegally available funds of the District and the District shall receive the property in its corporatename or in the name of a special purpose entity title to the property for the benefit of the Ownersof the 2012 Bonds; provided that the Trustee shall have the right, acting at the direction of theMajority Owners to direct the District with respect to any action taken pursuant to the provisionsof the Indenture summarized above. The Indenture further provides that the District, eitherthrough its own action, or lawful actions caused to be taken through the Trustee, shall have thepower and shall lease or sell such property, and deposit all of the net proceeds of any such leaseor sale into the 2012 Revenue Account. In addition, the District, either through its own actions,or lawful actions caused to be taken through the Trustee, has agreed that it shall, after beingprovided with assurances satisfactory to it of payment of its fees, costs and expenses for doingso, be required to take the measures provided by law for sale of property acquired by it as trusteefor the Owners of the 2012 Bonds within thirty (30) days after the receipt of the request thereforsigned by the Trustee or the Majority Owners. The Trustee may, upon direction from theMajority Owners, pay costs associated with any actions taken by District pursuant to the abovesummarized provisions of the Indenture from any moneys legally available for such purpose heldunder the Indenture.

Anything in the Master Indenture to the contrary notwithstanding, the SecondSupplemental Indenture provides that any direction or consent or similar provision in theIndenture which requires fifty-one percent of the Owners, shall in each case be deemed to referto, and shall mean, the Majority Owners.

Notwithstanding anything in the Indenture to the contrary, the covenants of the Districtset forth in the Second Supplemental Indenture (as summarized below) relating to the rights ofthe Trustee and the Owners of the 2012 Bonds with respect to the enforcement and collection ofDelinquent Assessments (relating to 2012 Bonds) and the enforcement of Series 2012Assessment liens apply, both before and after the commencement, whether voluntary orinvoluntary, or any case, proceeding or other action by or against any owner of any tax parcelsubject to the Series 2012 Assessments (an "Insolvent Taxpayer") under any existing or futurelaw of any jurisdiction relating to bankruptcy, insolvency, reorganization, assignment for thebenefit of creditors, or relief of debtors (a "Proceeding"), except where such tax parcel shall behomestead property. For as long as any 2012 Bonds remain outstanding, in any Proceedinginvolving the District, any Insolvent Taxpayer, the 2012 Bonds or the Series 2012 Assessments,the District has covenanted that it shall be obligated to act in accordance with direction from the

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Trustee with regard to all matters directly or indirectly affecting the 2012 Bonds or for as long asany of the 2012 Bonds remain Outstanding. The District has also agreed that it shall not be adefense to a breach of the foregoing covenant that it has acted upon advice of counsel in notcomplying with this covenant.

The District has further acknowledged and agreed that, although the 2012 Bonds wereissued by the District, the Owners of the 2012 Bonds are categorically a party with a financialstake in the transaction and, consequently, a party with a vested interest in a Proceeding. Assuch, in the event of any Proceeding involving any Insolvent Taxpayer:

(a) the District has agreed that it shall not make any election, give any consent,commence any action or file any motion, claim, obligation, notice or application or take anyother action or position in any Proceeding or in any action related to a Proceeding that affects,either directly or indirectly, the Series 2012 Assessments, the 2012 Bonds or any rights of theTrustee under the Indenture that is inconsistent with any direction from the Trustee;

(b) the Trustee shall have the right, but is not obligated to, vote in any suchProceeding and all claims of the District, and, if the Trustee chooses to exercise such right, theDistrict shall be deemed to have appointed the Trustee as its agent and granted to the Trustee anirrevocable power of attorney coupled with an interest, and its proxy, for the purpose ofexercising any and all rights and taking any and all actions available to the District in connectionwith any Proceeding of any Insolvent Taxpayer, including without limitation, the right to fileand/or prosecute any claims, to vote to accept or reject a plan, and to make any election underSection 1111(b) of the United States Bankruptcy Code; and

(c) the District shall not challenge the validity or amount of any claim submitted insuch Proceeding by the Trustee in good faith or any valuations of the lands owned by anyInsolvent Taxpayer submitted by the Trustee in good faith in such Proceeding or take any otheraction in such Proceeding, which is adverse to the Trustee's enforcement of the District claimwith respect to the Series 2012 Assessments or receipt of adequate protection (as that term isdefined in the United States Bankruptcy Code).

Without limiting the generality of the foregoing, the District has agreed that the Trusteeshall have the right (i) to file a proof of claim with respect to the Series 2012 Assessments andthe Completion Agreement, (ii) to deliver to the District a copy thereof, together with evidenceof the filing with the appropriate court or other authority, and (iii) to defend any objection filedto said proof of claim.

Nothing in the Indenture, however, shall preclude the District from becoming a party to aProceeding in order to enforce a claim for operation and maintenance Assessments, and theDistrict shall be free to pursue such a claim in such manner as it shall deem appropriate in itssole and absolute discretion.

Debt Service Reserve Fund Deficiency Agreement

Contemporaneously with the issuance of the 2012 Bonds, the Developer, the District andthe Trustee will enter into a Debt Service Reserve Fund Deficiency Agreement dated as ofJune 7, 2012 (the "Deficiency Agreement") which provides that in the event that (i) on any

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Interest Payment Date (and if such Interest Payment Date is not a Business Day, then on theBusiness Day immediately preceding such Interest Payment Date), a withdrawal occurs from theSeries 2012 Reserve Account (the "Series 2012 Reserve Account") to pay Debt Service on the2012 Bonds, or (ii) on the first Business Day next succeeding the withdrawal of any funds fromthe Series 2012 Reserve Account to pay Debt Service on the 2012 Bonds, or a deficiency existsin the valuation of the Series 2012 Reserve Account in relation to the 2012 Series ReserveAccount Requirement, upon valuation of the investments therein pursuant to the Indenture (each,a "Deficiency Event"), the Trustee shall notify the Developer that a Deficiency Event hasoccurred and the amount which is required to be deposited in the Series 2012 Reserve Account inorder to make the amount on deposit in the Series 2012 Reserve Account equal to the Series2012 Reserve Account Requirement (the "Deficiency Amount"), and the Developer hascovenanted and agreed to deposit on the next Business Day in immediately available funds theDeficiency Amount.

The Deficiency Agreement further provides that in the event payments are made by theDeveloper to the Trustee or otherwise for the benefit of the District according to the terms of theDeficiency Agreement, then such payments shall, for so long as the 2012 Bonds are Outstandingand the Developer or its affiliates are not delinquent in the payment of the Series 2012Assessments, be reimbursed to the Developer from any sources legally available to the District.

Collateral Assignment and Assumption of Development and Contract Rights

Contemporaneously with the execution and delivery of the 2012 Bonds, as aninducement to the District to refinance the 2006 Bond Anticipation Bonds and for theBondholders to purchase the 2012 Bonds, the Developer (as hereinafter defined) will executeand deliver to the District a Collateral Assignment and Assumption of Development andContract Rights (the "Assignment") dated as of June 7, 2012 pursuant to which the Developerwill collaterally assign to the District all of it's rights (the "Contract Rights"), to the extentassignable and to the extent that they are solely owned or controlled by the Developer, all of itsdevelopment rights and contract rights relating to Ave Maria (the "Development and ContractRights") as security for the Developer's payment and performance and discharge of itsobligation to pay the Assessments imposed and levied against the to the developable lands inAve Maria, subject to the terms and conditions therein. Development and Contract Rightsinclude shall include, by way of example and not as a limitation, the following: (a) engineeringand construction plans and specifications for grading, roadways, site drainage, stormwaterdrainage, signage, water distribution, waste water collection, and other improvements;(b) preliminary and final site plans; (c) architectural plans and specifications for buildings andother improvements to the Lands within the District; (d) permits, approvals, resolutions,variances, licenses, impact fees and franchises granted by governmental authorities, or any oftheir respective agencies, for or affecting the Project and construction of improvements thereon;(e) contracts with engineers, architects, land planners, landscape architects, consultants,contractors, and suppliers for or relating to the construction of the Project or the construction ofimprovements thereon; (f) notwithstanding anything contained in the Assignment to the contrary,contracts and agreements with private utility providers to provide utility services to the Project,including the Lots; and (g) all future creations, changes, extensions, revisions, modifications,substitutions, and replacements of any of the foregoing. In addition to the foregoing, the Districtwill absolutely and unconditionally assign all of its rights, title and interest in and to the

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Development and Contract Rights, as provided under the Assignment, to the Trustee for thebenefit of the holders of the 2012 Bonds. For purposes of clarification, the Development andContract Rights specifically excludes any such portion of the Development and Contract Rightswhich relate solely to any property which has been conveyed to a landowner resulting from thesale of certain Lands in the ordinary course of business, the County, the District, any applicablehomeowner's association or other governing entity or association as may be required byapplicable permits, approvals, plats, entitlements or regulations affecting Ave Maria, if any.

Developer Prepayment Waiver

Pursuant to the terms of the Act and the Assessment Proceedings, the owner of propertysubject to Series 2012 Assessments may pay the entire balance of the Series 2012 Assessmentsused to finance the 2006 Project remaining due within thirty (30) days after the 2006 Project'sDate of Completion and the Board has adopted a resolution accepting the 2006 Project, withoutinterest. At the time of delivery of the 2006 Bond Anticipation Bonds, the Developer waivedthis right in writing.

FUNDS AND ACCOUNTS

Pursuant to the Second Supplemental Indenture the following funds and accounts are heldby the Trustee:

Costs of Issuance Account

The amount deposited in the Series 2012 Costs of Issuance Account shall, at the writtendirection of an Authorized Officer to the Trustee, be used to pay the costs of issuance relating tothe 2012 Bonds. At the written direction of an Authorized Officer, any amounts deposited in theSeries 2012 Costs of Issuance Account which are not needed to pay such costs shall betransferred over and deposited into the 2012 Interest Account and used for the purposespermitted therefor.

Debt Service Fund

Within the Debt Service Fund held by the Trustee are the (i) Series 2012 Debt ServiceAccount and therein, the Series 2012 Sinking Fund Account and the Series 2012 InterestAccount, and (ii) Series 2012 Redemption Account and therein the Series 2012 PrepaymentSubaccount and the Optional Redemption Subaccount.

Reserve Fund

Within the Reserve Fund held by the Trustee is the Series 2012 Reserve Account whichwill be held for the benefit of all of the 2012 Bonds, without distinction as to the Series of 2012Bonds and without privilege or priority of one Series of 2012 Bonds over another.

Amounts on deposit in the Series 2012 Reserve Account shall be used only for thepurpose of making payments into the Series 2012 Interest Account and the Series 2012 SinkingFund Account to pay Debt Service on the 2012 Bonds, when due, without distinction as to 2012

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Bonds and without privilege or priority of one 2012 Bond over another, to the extent the moneyson deposit in such Accounts therein and available therefor are insufficient and for no otherpurpose, except as specified in the Second Supplemental Indenture; provided, however, that theTrustee shall first draw the amount of any insufficiency under the Debt Service Reserve FundDeficiency Agreement prior to withdrawing moneys from the Series 2012 Reserve Account. Onthe fifth (5th) Business Day preceding any Interest Payment Date, the Trustee shall determine theamount on deposit in the Series 2012 Interest Account and the Series 2012 Sinking FundAccount and if the amounts on deposit therein will be insufficient to pay the principal or intereston the 2012 Bonds coming due on such Interest Payment Date and shall provide notice to theMaster Developer under the Reserve Fund Deficiency Agreement of the amount of suchinsufficiency, which, pursuant to the Reserve Fund Deficiency Agreement shall be required to bedeposited with the Trustee, in immediately available funds, on the Business Day preceding suchInterest Payment Date for deposit into the Funds and Accounts as to which such insufficiencyexists.

Any amount drawn under the Debt Service Reserve Fund Deficiency Agreement shall bereimbursed from funds which otherwise would be deposited into the Series 2012 ReserveAccount to restore a withdrawal therefrom or a deficiency therein, but only after the amount ondeposit in the Series 2012 Reserve Account is equal to the Series 2012 Reserve AccountRequirement and all other requirements for payment under the Debt Service Reserve FundDeficiency Agreement have been satisfied. In the event that for whatever reason funds are notmade available to the Trustee for payment of Debt Service under the Debt Service Reserve FundDeficiency Agreement on or before the Interest Payment Date, the Trustee shall draw the amountof such insufficiency from the Series 2012 Reserve Account and thereafter restore the amountwithdrawn from funds drawn under the Debt Service Reserve Fund Deficiency Agreement.

Such Accounts shall consist only of cash and Series 2012 Investment Obligations.

For purposes of repayment of draws under the Debt Service Reserve Fund DeficiencyAgreement only, and not for any other purpose including but not limited to the enforcement ofremedial provisions, the Debt Service Reserve Fund Deficiency Agreement constitutes a CreditFacility Agreement under the Indenture and the Developer shall constitute a Credit FacilityIssuer under the Indenture. For the avoidance of doubt, the Developer will not be considered aCredit Facility Issuer, and the Debt Service Reserve Fund Deficiency Agreement will not beconsidered a Credit Facility Agreement for purposes of Section 11.05 of the Master Indenture(which section treats the Credit Facility Issuer as the Owner of Bonds for certain purposes).

The provisions set forth above relating to the Debt Service Reserve Fund DeficiencyAgreement shall be inapplicable from and after the date of termination of the Debt ServiceReserve Fund Deficiency Agreement, as provided therein.

Anything in the Indenture to the contrary notwithstanding, on the forty-fifth (45th) daypreceding each Redemption Date (or, if such forty-fifth (45th) day is not a Business Day, on thefirst Business day preceding such forty-fifth (45th) day), the Trustee is authorized and directed torecalculate the Series 2012 Reserve Account Requirement and to transfer any excess on depositin the Series 2012 Reserve Account into the Series 2012 Prepayment Subaccount of the Series

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2012 Redemption Account and applied to the extraordinary mandatory redemption of the 2012Bonds.

On the earliest date on which there is on deposit in the Series 2012 Reserve Account,sufficient monies, after taking into account other monies available therefor, to pay and redeem allof the Outstanding 2012 Bonds, together with accrued interest and redemption premium, if any,on such 2012 Bonds to the earliest date of redemption permitted therein and in the SecondSupplemental Indenture, then the Trustee shall transfer the amount on deposit in the Series 2012Reserve Account into the Series 2012 Prepayment Subaccount in the 2012 Redemption Accountto pay and redeem all of the Outstanding 2012 Bonds on the earliest date permitted forredemption therein and in the Second Supplemental Indenture.

Anything in the Indenture to the contrary notwithstanding, amounts on deposit in theSeries 2012 Reserve Account shall, upon the occurrence and continuance of an Event of Default,be subject to a first charge by the Trustee for its fees and expenses, including fees and expensesof collection of Delinquent Assessments.

For purposes of this section, the following term shall have the following definition:

"Series 2012 Reserve Account Requirement" shall mean the lesser of: (i) MaximumAnnual Debt Service Requirement (as defined in the Indenture) for all Outstanding 2012 Bonds,(ii) 125% of the average annual debt service for all Outstanding 2012 Bonds, or (iii) 10% of theproceeds of the 2012 Bonds, calculated as of the date of original issuance thereof.

Revenue Fund

(a) The Trustee is authorized and directed to establish within the Revenue Fund a2012 Revenue Account into which the Trustee shall deposit any and all amounts required to bedeposited therein by the Indenture, and any other amounts or payments specifically designatedby the District pursuant to a written direction or by a Supplemental Indenture for said purpose.The 2012 Revenue Account shall be held by the Trustee separate and apart from all other Fundsand Accounts held under the Indenture and from all other moneys of the Trustee.

(b) The Trustee shall deposit into the 2012 Revenue Account the amounts other thanSeries 2012 Assessment Revenues required to be deposited therein in accordance with theprovisions of the Second Supplemental Indenture. The District shall deposit Series 2012Assessment Revenues with the Trustee immediately upon receipt together with a writtenaccounting setting forth the amounts of such Series 2012 Assessment Revenues in the followingcategories which shall be deposited by the Trustee into the Funds and Accounts establishedunder the Second Supplemental Indenture as follows:

(i) Series 2012 Assessment Principal, which shall be deposited into the Series2012 Sinking Fund Account;

(ii) 2012 Prepayment Principal, which shall be deposited into the Series 2012Prepayment Subaccount in the Series 2012 Redemption Account;

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(iii) 2012 Delinquent Assessment Principal, which shall first be applied torestore the amount of any withdrawal from the Series 2012 Reserve Account to pay theprincipal of 2012 Bonds, then to reimburse any draw for such purpose under the DebtService Reserve Fund Deficiency Agreement, and, the balance, if any, shall be depositedinto the Series 2012 Sinking Fund Account;

(iv) Delinquent Assessment Interest, which shall first be applied to restore theamount of any withdrawal from the Series 2012 Reserve Account to pay the interest on2012 Bonds, then to reimburse any draw for such purpose under the Debt ServiceReserve Fund Deficiency Agreement, and, the balance, if any, deposited into the 2012Revenue Account; and

(v) all other Series 2012 Assessment Revenues, which shall be deposited intothe 2012 Revenue Account.

Notwithstanding the provisions of (iii) and (iv) above, the Trustee shall not reimburse anydraw under the Debt Service Reserve Fund Deficiency Agreement unless the amount on depositin the Series 2012 Reserve Account is equal to the Series 2012 Reserve Account Requirement,but shall instead deposit any amount that otherwise be reimbursed under the Debt ServiceReserve Deficiency Agreement into the Series 2012 Reserve Account until the amount ondeposit therein is equal to the Series 2012 Reserve Account Requirement.

(c) On the forty-fifth (45th) day preceding each Redemption Date (or if such forty-fifth (45th) day is not a Business Day, on the Business Day next preceding such forty-fifth (45th)day), the Trustee shall determine the amount on deposit in the Series 2012 PrepaymentSubaccount of the Series 2012 Redemption Account, and, if the balance therein is greater thanzero, shall transfer from the 2012 Revenue Account for deposit into the Series 2012 PrepaymentSubaccount, an amount sufficient to increase the amount on deposit therein to an integralmultiple of $5,000, and, shall thereupon give notice and cause the extraordinary mandatoryredemption of the corresponding Series of 2012 Bonds on the next succeeding Redemption Datein the maximum aggregate principal amount for which moneys are then on deposit in Series2012 Prepayment Subaccount in accordance with the provisions for extraordinary redemption ofsuch Series of 2012 Bonds set forth in the Indenture.

(d) On May 1 and November 1 (or if such May 1 or November 1 is not a BusinessDay, on the Business Day preceding such May 1 or November 1), the Trustee shall transferamounts on deposit in the 2012 Revenue Account to the Funds and Accounts designated belowin the following amounts and in the following order of priority:

FIRST, from the 2012 Revenue Account to the Series 2012 Interest Account of the DebtService Fund, an amount equal to the amount of interest payable on all 2012 Bonds thenOutstanding on such May 1 or November 1, less any amount already on deposit in the Series2012 Interest Account not previously credited;

SECOND, to the Series 2012 Sinking Fund Account, the amount, if any, equal to thedifference between the Amortization Installments of all 2012 Bonds subject to mandatory

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sinking fund redemption on such May 1, and the amount already on deposit in the Series 2012Sinking Fund Account not previously credited;

THIRD, to the Series 2012 Reserve Account, the amount, if any, which is necessary tomake the amount on deposit therein equal to the Series 2012 Reserve Account Requirement withrespect to the 2012 Bonds; and

FOURTH, if the amount on deposit in the Series 2012 Reserve Account is equal to theSeries 2012 Reserve Account Requirement, the amount necessary to reimburse any draw underthe Debt Service Reserve Fund Deficiency Agreement; and

FIFTH, the balance shall be retained in the Series 2012 Revenue Account.

(e) On any date required by the Tax Regulatory Covenants, the District shall give theTrustee written direction, and the Trustee shall, transfer from the 2012 Revenue Account to theRebate Account established for the 2012 Bonds in the Rebate Fund in accordance with theMaster Indenture, the amount due and owing to the United States, which amount shall be paid, tothe United States, when due, in accordance with such Tax Regulatory Covenants.

(f) On or after each November 2, the balance on deposit in the 2012 RevenueAccount shall be paid over to the District at the written direction of an Authorized Officer andused for any lawful purpose of the District; provided, however, that on the date of such proposedtransfer the amount on deposit in the Series 2012 Reserve Account shall be equal to the Series2012 Reserve Account Requirement, and, provided further, that the Trustee shall not have actualknowledge of an Event of Default under the Indenture relating to any of the 2012 Bonds,including the payment of Trustee's fees and expenses then due.

(g) Anything in the Indenture to the contrary notwithstanding, earnings oninvestments in all of the Funds and Accounts held as security for the 2012 Bonds shall beinvested only in 2012 Investment Obligations, and further, earnings on the Series 2012 InterestAccount shall be retained, as realized, in such Account and used for the purpose of suchAccount. Earnings on investments in the Series 2012 Sinking Fund Account and the Series 2012Redemption Account and the Subaccounts therein shall be deposited, as realized, to the credit ofthe 2012 Revenue Account and used for the purpose of such Account.

Earnings on investments in the Series 2012 Reserve Account:

(i) if there was no deficiency in the Series 2012 Reserve Account as of themost recent date on which amounts on deposit in the Series 2012 Reserve Account werevalued by the Trustee, and if no withdrawals have been made from the Series 2012Reserve Account since such date which have created a deficiency, and if there is nounreimbursed draw under the Debt Service Reserve Fund Deficiency Agreement thenearnings on the Series 2012 Reserve Account shall be deposited into the 2012 RevenueAccount and used for the purpose of such Account; and

(ii) if as of the last date on which amounts on deposit in the Series 2012Reserve Account were valued by the Trustee there was a deficiency, or if there is noreimbursed draw under the Debt Service Reserve Fund Deficiency Agreement or if after

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such date withdrawals have been made from the Series 2012 Reserve Account and havecreated such a deficiency, then earnings on investments in the Series 2012 ReserveAccount shall be retained in the Series 2012 Reserve Account until the amount on deposittherein is equal to the Series 2012 Reserve Account Requirement, and, thereafter earningsin the Series 2012 Reserve Account shall be deposited into the 2012 Revenue Accountand used for the purpose of such Account.

Rebate Fund

Within the Rebate Fund held by the Trustee is the Series 2012 Rebate Account. TheDistrict shall comply with the Indenture and the Tax Compliance Certificate (including depositsto and payments from the Series 2012 Rebate Account) included as part of the closing transcriptfor the 2012 Bonds, as amended and supplemented from time to time in accordance with theirterms.

ENFORCEMENT OF SERIES 2012 ASSESSMENT COLLECTIONS

General

As stated herein, one of the primary prospective sources of payment for the 2012 Bondsare the Series 2012 Assessments imposed and levied on each parcel of specially benefited landwithin the District pursuant to the Assessment Proceedings. To the extent that landowners fail topay such Series 2012 Assessments, delay payments, or are unable to pay the same, the successfulpursuance of collection procedures available to the District is essential to continued payment ofprincipal of and interest on the 2012 Bonds. The Act provides for various methods of collectionof Delinquent Assessments by reference to its provisions and other provisions of the FloridaStatutes. The following is a description of certain statutory provisions of assessment paymentand collection procedures appearing in the Florida Statutes, but is qualified in its entirety byreference to such statutes.

The Series 2012 Assessments securing the 2012 Bonds will be payable in annualinstallments and will be imposed and levied by the District each year for those lots that havebeen platted. The determination, order, levy and collection of Series 2012 Assessments must bedone in compliance with procedural and substantive requirements and guidelines provided by theAct and other State law. Failure by the District, its collection agent, or the Tax Collector or theProperty Appraiser to comply with such requirements could result in delays in the collection of,or the complete inability to collect, Series 2012 Assessments during any year. Such delays in thecollection of, or complete inability to collect, Series 2012 Assessments could have a materialadverse effect on the ability of the District to make full or punctual payment of Debt Service onthe 2012 Bonds. The Series 2012 Assessments securing the 2012 Bonds for those lots that havenot been platted will be payable in semi annual installments and will be imposed and levied bythe District each year.

Collection Through UniformMethod

As referenced in "SECURITY FOR AND SOURCE OF PAYMENT OF THE 2012BONDS," the Florida Statutes provide that, subject to certain conditions, special assessments

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such as the Series 2012 Assessments may be collected in the same manner as county ad valoremtaxes (this is the method to be employed for the Series 2012 Assessments securing the 2012Bonds once a lot is platted). The statutes relating to enforcement of county taxes provide thatcounty taxes become due and payable on November 1 of the year when assessed and constitute alien upon the land from January 1 of such year. Special assessments are a lien on the landagainst which they are assessed from January 1 of the year of assessment until paid or barred byoperation of law. The lien of the Series 2012 Assessments is of equal dignity with the liens forstate and county taxes upon land, and thus is a first lien, superior to all other liens, includingmortgages (except for state and county taxes and other taxes which are of equal dignity). Suchtaxes and assessments (including the Series 2012 Assessments, if any, being collected by theUniform Method) are to be billed, and landowners in the District, subject to next succeedingsentence, are required to pay all such taxes and assessments, without preference in payment ofany particular increment of the tax bill, such as the increment owing for the Series 2012Assessments. If a landowner initiates legal proceedings contesting the levy or the amount of aparticular ad valorem tax or possibly a non ad valorem assessment which could include theSeries 2012 Assessments, under certain circumstances, such landowner may be permitted to payonly that amount of ad valorem taxes that the landowner, in good faith, admits to be owing. Asdescribed below, if a landowner should commence legal proceedings regarding the Series 2012Assessments, this could result in the delay of certain remedial actions made available using theUniform Method. If a significant number of landowners contest the levy or amount of Series2012 Assessments, it is possible the District would not have sufficient Pledged Revenues totimely pay debt service on the 2012 Bonds. Upon any receipt of moneys by the Tax Collectorfrom the Series 2012 Assessments, such moneys will be delivered to the District, which willremit such Series 2012 Assessments to the Trustee. Upon receipt by the Tax Collector of theSeries 2012 Assessments, moneys therefrom will be deposited as provided in the Indenture.

All County, applicable state water management district, school and special district taxes,and county and special district non ad valorem assessments, Series 2012 Assessments (if theuniform method of collection is utilized) and voter approved ad-valorem taxes imposed andlevied to pay principal of and interest on bonds, including the Series 2012 Assessments imposedand levied by the District, are payable at one time. If a taxpayer does not make completepayment, he or she cannot designate specific line items on his or her tax bill as deemed paid infull, except that if a taxpayer has commenced legal proceedings contesting the levy or amount ofan ad valorem tax and paid the total amount of non ad valorem assessments, a tax collector mayaccept a partial payment of the ad valorem tax. In the event the Series 2012 Assessments are tobe collected pursuant to the Uniform Method, any failure to pay any one line item, except asrelates to a challenge in connection with the Series 2012 Assessments, would not affect thecollection of Series 2012 Assessments. However, if a taxpayer disputes all or a portion of theSeries 2012 Assessments, and pays the balance of ad valorem taxes and paid the total amount ofthe non ad valorem assessments which the taxpayer in good faith admits to be owing, this couldpossibly cause a delay in the collection of the Series 2012 Assessments, which could have asignificant adverse effect on the ability of the District to make full or punctual payment of thedebt service requirements on the 2012 Bonds. Under certain circumstances, the District mayprospectively opt out of using the Uniform Method and utilize the foreclosure proceduresdescribed in the section below captioned "Judicial Proceedings."

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If Series 2012 Assessments collected by this method are paid during November when dueor during the following three months, the taxpayer is granted a variable discount equal to 4% inNovember and decreasing one percentage point per month to 1% in February. All unpaid taxesbecome delinquent on April 1 of the year following assessment, and the Tax Collector is requiredto collect taxes prior to April 1 and after that date to institute statutory procedures upondelinquency to collect assessed taxes. Delay in the mailing of tax notices to taxpayers may resultin a delay throughout this process.

Sale of Tax Certificates

The collection of Delinquent Assessments collected by the uniform method is, in essence,based upon the sale by the Tax Collector of "tax certificates" and remittance of the proceeds ofsuch sale to the District for the payment of the Series 2012 Assessment due. The demand forsuch certificates is in turn dependent upon various factors, which include the interest that can beearned by ownership of such certificates and the value of the land that is the subject of suchcertificates and which may be subject to sale at the demand of the certificate holder. Therefore,the underlying value of the land within the District may affect the demand for such certificatesand the successful collection of the Series 2012 Assessments. See "BONDHOLDERS' RISKS"herein.

In the event of a delinquency in the payment of taxes on real property, the Tax Collectoris required to attempt to sell tax certificates on such property to the person who pays thedelinquent taxes and interest and certain costs and charges relating thereto, and who accepts thelowest interest rate per annum to be borne by the certificates (not to exceed 18%). Delinquenttaxes may be paid by a taxpayer prior to the date of sale of a tax certificate by the payment ofsuch taxes, together with interest and all costs and charges relating thereto. Generally, taxcertificates are sold by public bid. If there are no bidders at the public sale of tax certificates, thecertificate is issued to the County in which the assessed lands are located, at the maximum rate ofinterest allowed (currently 18%). The Tax Collector does not collect any money if taxcertificates are issued to the County. Proceeds from the sale of tax certificates are required to beused to pay taxes (including Series 2012 Assessments), interest, costs and charges on the realproperty described in the certificate.

County held certificates may be purchased and any tax certificate may be redeemed, inwhole, by any person at any time before a tax deed is issued or the property is placed on the listof lands available for sale, at a price equal to the face amount of the certificate or portion thereoftogether with all interest, costs, charges and omitted taxes due. The proceeds of such aredemption are paid to the Tax Collector who transmits to the holder of the certificate suchproceeds less service charges, and the certificate is canceled. Any holder, other than the County,of a tax certificate that has not been redeemed has seven years from the date of issuance of thetax certificate 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 acertificate, during which period actions against the land are held in abeyance to allow for salesand redemptions of tax certificates and before the expiration of seven years from the date ofissuance, the holder of a certificate may apply for a tax deed to the subject land. The applicant isrequired to pay to the Tax Collector at the time of application all amounts required to redeem or

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purchase all other outstanding tax certificates covering the land, plus interest, any omitted taxesor delinquent taxes and interest, and current taxes, if due. If the County holds a tax certificate onproperty valued at $5,000 or more and has not succeeded in selling it, the county must apply fora tax deed two years after April 1 of the year of issuance. The County pays costs and fees to theTax Collector but not any amount to redeem any other outstanding certificates covering the land.Thereafter, the property is advertised for public sale.

In any such public sale, the private holder of the tax certificate who is seeking a tax deedfor non-homestead property is deemed to submit a minimum bid equal to the amount required toredeem the tax certificate, charges for the cost of sale, redemption of other tax certificates on theland, and the amount paid by such holder in applying for the tax deed, plus interest thereon. Inthe case of homestead property, the bid is also deemed to include an amount equal to one-half ofthe latest assessed value of the homestead. If there are no higher bids, the holder receives title tothe land and the amounts paid for the certificate and in applying for a tax deed are creditedtowards the purchase price. If there are other bids, the holder may enter the bidding. Thehighest bidder is awarded title to the land. The portion of proceeds of such sale needed toredeem 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 successfulbidder. Excess proceeds are distributed first to satisfy governmental liens against the land andthen to the former title holder of the property (less service charges), lienholders of record,mortgagees of record, vendees of recorded contracts for deeds, and other lienholders and anyother person to whom the land was last assessed on the tax roll for the year in which the land wasassessed, all as their interests 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, forexample, 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 oradvertising for a statutorily prescribed opening bid. After ninety (90) days have passed, anyperson or governmental unit may purchase the land by paying the amount of the opening bid.Three years from the date of offering for public sale, unsold lands escheat to the County in whichthey are located and all tax certificates and liens against the property are canceled and a deed isexecuted vesting title in the County Commissioners.

Judicial Proceedings

In addition to the sale of tax certificates as a method of enforcing the payment of Series2012 Assessments, upon the failure of any property owner to pay the principal of the SpecialAssessment or the interest thereon, when due, the governing body of the District is authorized tocommence legal proceedings for the enforcement of the payment thereof, includingcommencement of an action in chancery, commencement of a foreclosure proceeding in thesame manner as the foreclosure of a real estate mortgage, or commencement of an action underChapter 173, Florida Statutes, relating to foreclosure of municipal tax and special assessmentliens. Foreclosure proceedings under the provisions of Chapter 173, Florida Statutes providesthat after the expiration of one year from the date any special assessment or installment thereof

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becomes due, the District may commence a foreclosure proceeding against the lands upon whichthe assessments are liens. As and to the extent applicable, Chapter 170.10, Florida Statutes doesnot have the one year waiting period. Such a proceeding is in rem, meaning that it is broughtagainst the land and not against the owner in the Circuit Court where the land is located.

Certain mortgage lenders have, in recent foreclosure suits brought under Chapter 170,Florida Statutes, plead a defense stating that a foreclosing district must abide by the same oneyear period as Chapter 173 in order to begin foreclosure proceedings. The defense is, apparently,based upon recent amendments to Section 190.026, Florida Statutes, where, in an apparentattempt to clarify that not only Chapter 173 was available to districts for foreclosure, but thatalso Chapter 170 was available, that statute's language became less clear regarding theinapplicability of the one year waiting period for districts employing Chapter 170. Floridaspecial districts, similar in many respects to the District, which have taken a position on thisissue, such as community development districts, have all asserted that the one year waitingperiod does not apply to Chapter 170, and at least one Circuit Court has agreed.

In general, after the District commences the suit, there is a period of notice to, and anopportunity for response by, affected persons. Ultimately a hearing will be held and, if the courtdecides in favor of the District, a judgment will be rendered in the amount of the DelinquentAssessments and costs of the proceeding. The judgment would also direct sale of the landsubject to the Delinquent Assessments by public bid to the highest bidder, with proceeds of thesale being applied to payment of the Delinquent Assessments. If no bidder bids at least theamount of the Delinquent Assessments and applicable costs, the District may obtain title to theland.

Enforcement of the obligation to pay Series 2012 Assessments and the ability of the TaxCollector to sell tax certificates and ultimately tax deeds, or the ability to foreclose the liencreated by the failure to pay Series 2012 Assessments, may not be readily available or may belimited as such enforcement is dependent upon judicial actions that are often subject to discretionand delay.

For a description of the Series 2012 Assessments and the methodology for their levy,please refer to "SECURITY FOR AND SOURCE OF PAYMENT OF THE 2012 BONDS"herein and "APPENDIX E - MASTER ASSESSMENT METHODOLOGY" herein.

Unless the Series 2012 Assessments are collected using the Uniform Method, the onlyremedies available for enforcement of the Series 2012 Assessments would be those described inthis Section.

Collection Agreement

As referenced in "SECURITY FOR AND SOURCE OF PAYMENT OF THE 2012BONDS" herein at the time of the delivery of the 2012 Bonds, it is anticipated that the Districtwill enter into a Collection Agreement (the "Collection Agreement") with the Developer andSpecial District Services, Inc. to act as collection agent (the "Collection Agent") to monitorpayment of the Series 2012 Assessments and collect the Series 2012 Assessments levied onunplatted lots which secure the 2012 Bonds until the Uniform Method of Collection is employed

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in respect of such unplatted lots. Pursuant to the Collection Agreement, the District will recordan instrument with the appropriate office for real estate recordation in the County evidencing therequirements of payment of Series 2012 Assessments including any prepayment of Series 2012Assessments on the unplatted lots subject to Series 2012 Assessments. The Collection Agentwill be authorized to release the applicable lien on the applicable parcel upon receipt of paymentin full of each applicable Series 2012 Assessment. The Collection Agreement establishesprocedures for the Collection Agent to monitor the status of properties subject to Series 2012Assessments and requires the Collection Agent to assure delivery of the payment to the Trustee.

BONDHOLDERS' RISKS

Certain risks are inherent in an investment in obligations secured by Series 2012Assessments issued by a public authority or governmental body in the State of Florida. Certainof these risks are described in the preceding section entitled "ENFORCEMENT OF SERIES2012 ASSESSMENT COLLECTIONS"; however, certain additional risks are associated withthe 2012 Bonds offered hereby. This section does not purport to summarize all risks that may beassociated with purchasing or owning the 2012 Bonds and prospective purchasers are advised toread this Limited Offering Memorandum in its entirety for a more complete description ofinvestment considerations relating to the 2012 Bonds.

1. Until further development takes place on the benefited land within the District,payment of a significant portion of the Series 2012 Assessments is dependent upon their timelypayment by the landowners who will all be affiliates of the Developer (as defined herein). Atclosing of the sale of the 2012 Bonds it is expected that the majority of the land within theDistrict burdened by the Series 2012 Assessments will continue to be owned either directly orindirectly by the Developer or an affiliated company. In the event of the institution ofbankruptcy or similar proceedings with respect to the Developer or its affiliates or any othersubsequent significant owner of property within the District, delays will most likely occur in thepayment of Debt Service on the 2012 Bonds as such bankruptcy could negatively impact theability of: (i) the Developer and any other land owner being able to pay the Series 2012Assessments; (ii) the Tax Collector to sell tax certificates in relation to such property; and (iii)the District to foreclose the lien on the Series 2012 Assessments if tax certificates are not sold (inthe case of (ii) or (iii) above, to the extent that any portion of the Series 2012 Assessments arebeing collected by the Uniform Method of collection). In the event that tax certificates cannot besold on such land, delays in the receipt of Series 2012 Assessment Revenues could result duringthe period it would take for the District to institute and complete foreclosure proceedings. In theevent of the institution of bankruptcy or similar proceedings with respect to the Developer or anyother subsequent owner of property within the Development, delays could occur in the paymentof debt service on the 2012 Bonds. In addition, the remedies available to the Beneficial Ownersof the 2012 Bonds upon an Event of Default under the Indenture are in many respects dependentupon judicial actions which are often subject to discretion and delay. Under existingconstitutional and statutory law and judicial decisions, during a bankruptcy of the Developer, theremedies specified by federal, state and local law and in the Indenture and the 2012 Bonds,including, without limitation, enforcement of the obligation to pay the Series 2012 Assessmentsmay not be readily available or may be limited. The various legal opinions to be deliveredconcurrently with the delivery of the 2012 Bonds (including Bond Counsel's approving opinion)

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will be qualified as to the enforceability of the various legal instruments by limitations imposedby bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditorsenacted before or after such delivery. The inability, either partially or fully, to enforce remediesavailable respecting the 2012 Bonds could have a material adverse impact on the interest of theBeneficial Owners thereof.

2. The principal security for the payment of the principal of and interest on the 2012Bonds is the timely collection of the Series 2012 Assessments. The Series 2012 Assessments donot constitute a personal indebtedness of the owners of the land subject thereto, but are securedonly by a lien on such land. The Developer expects to proceed in its normal course of businessto develop lots and construct homes to sell to retail buyers to be served by the 2006 Project andthe Total Capital Improvement Program (as defined herein). There is no assurance that thecurrent and subsequent owners of this land will be able to pay the Series 2012 Assessments orthat they will pay such Series 2012 Assessments even though financially able to do so. Beyondlegal delays that could result from bankruptcy, the ability of the Tax Collector to sell taxcertificates (to the extent that any portion of the Series 2012 Assessments are being collected bythe Uniform Method of Collection) will be dependent upon various factors, including the interestrate which can be earned by ownership of such certificates and the value of the land which is thesubject of such certificates and which may be subject to sale at the demand of the certificateholder after two years. The determination of the special benefits to be received by and peculiarto the land within the District as a result of implementation and development of the 2006 Projectand the Capital Improvement Program is not indicative of the realizable or market value of theland, which value may actually be higher or lower than the dollar amount of the assessment. Inother words, the value of the land could potentially be ultimately less than the special assessmentor the debt associated with it. To the extent that the realizable or market value of the land islower than the dollar amount of the assessment used to amortize the debt or lower than the debtper parcel, the ability of the Tax Collector to sell tax certificates (to the extent that any portion ofthe Series 2012 Assessments are being collected by the Uniform Method of Collection) relatingto such land may be adversely affected. If there is no purchaser, the tax certificate is struck offto the County. Such adverse effect could render the District unable to collect DelinquentAssessments, if any, and could negatively impact the ability of the District to make the full orpunctual payment of Debt Service on the 2012 Bonds. The payment of the annual Series 2012Assessments and the ability of the Tax Collector to sell tax certificates or the District to foreclosethe lien of the unpaid assessments, including the Series 2012 Assessments, may be limited bybankruptcy, insolvency, or other laws generally affecting creditors' rights or by the laws of theState relating to court foreclosure. Bankruptcy of a property owner will most likely also result ina delay by the Tax Collector in selling tax certificates or the clerk in selling tax deeds or theDistrict in prosecuting court foreclosure proceedings. Such delay would increase the likelihoodof a delay or default in payment of and interest on the 2012 Bonds.

3. The District is required to comply with statutory and case law procedures inlevying the Series 2012 Assessments. Failure of the District to follow these procedures couldresult in the Series 2012 Assessments not being imposed and levied or potential future challengesto such levy. See "SECURITY FOR AND SOURCE OF PAYMENT OF THE 2012 BONDS"herein.

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4. The proposed Development may be affected by changes in general economicconditions, fluctuations in the real estate market and other factors beyond the control of theDeveloper. The real estate market in Florida has experienced significant slowing of new homesales and new home closings, as well as an increased rate of cancellation of lot purchaseagreements as compared to recent years. Although the Developer (and Pulte, as hereinafterdefined) is committed to sell homes to end users, there can be no assurance that such purchaseswill occur or be realized in the manner currently anticipated. In addition, the proposedDevelopment is subject to comprehensive federal, state, and local regulations and future changesto such regulations. Approval is required from various public agencies in connection with,among other things, the design, nature and extent of required future public improvements, bothpublic and private, and the construction of same in accordance with applicable zoning, land useand environmental regulations for the Development. Although no delays are anticipated, failureto obtain any such approvals in a timely manner could delay or adversely affect theDevelopment, which may negatively impact the Developer's desire or ability to develop theDevelopment as contemplated. See "THE DEVELOPMENT - Governmental Approvals" and"APPENDIX A - ENGINEER'S REPORT" attached hereto for a discussion of permits andapprovals.

5. The District has not granted, and may not grant under Florida law, a mortgage orsecurity interest in the 2006 Project. Furthermore, the District has not pledged the revenues fromthe operation of the 2006 Project as security for, or a source of payment of, the 2012 Bonds.Neither has the District covenanted to establish rates, fees and charges for the 2006 Project atany specified levels. The 2012 Bonds are payable solely from, and secured solely by, the 2012Trust Estate. The Developer's obligation to pay the Series 2012 Assessments is limited solely tothe obligation of any landowner to pay its Series 2012 Assessment. The Developer is not aguarantor of payment on any Series 2012 Assessment and the recourse for the Developer'sfailure to pay the Series 2012 Assessments is limited to its ownership interest in the assessedland.

6. The willingness and/or ability of an owner of land within the District to pay theSeries 2012 Assessments could be affected by the existence of taxes and other assessmentsimposed upon the land by the District or by the County, or by other public entities withjurisdiction over the lands within the District. Under the uniform method, applicable state watermanagement district, County, municipal, school, special district taxes and County, any municipaland any special district non ad valorem assessments and Series 2012 Assessments, and voter-approved ad valorem taxes imposed and levied to pay principal of and interest on bonds,including the Series 2012 Assessments, if collected pursuant to the uniform method, are payableat one time. As referenced above, if a taxpayer does not make complete payment, he or shecannot designate specific line items on the tax bill as deemed paid in full. In such case, the TaxCollector does not accept such partial payment; provided, however, that if a taxpayer hascommenced legal proceedings contesting the levy or amount of an ad valorem tax, a tax collectormay accept a partial payment of the ad valorem tax as described under "ENFORCEMENT OFSERIES 2012 ASSESSMENT COLLECTIONS" herein. Public entities whose boundariesoverlap those of the District, such as the County and the County school district, could, withoutthe consent of the owners of the land within the District, impose additional taxes or assessmentson the property within the District. The District has no control over the amount of taxes orassessments imposed and levied by governmental entities other than the District. The lien of theSeries 2012 Assessments is, however, of equal dignity with the liens for State and County and

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certain taxes upon land. As referenced herein, the District may initially collect the Series 2012Assessments by invoice rather then using the Uniform Method. Accordingly, the sale of taxcertificates as described herein would not be available. In addition, the District has imposedand levied or may also impose and levy additional assessments, including for its operation,maintenance and administrative expenses, which could encumber the property burdenedby the Series 2012 Assessments.

7. There is no assurance that a liquid secondary market will exist for the 2012 Bondsin the event a Beneficial Owner thereof determines to solicit purchasers of the 2012 Bonds.Even if a liquid secondary market exists, as with any marketable securities, there can be noassurance as to the price for which the 2012 Bonds may be sold. Such price may be lower thanthat paid by the current Beneficial Owner of the 2012 Bonds, depending on the progress of theDevelopment, existing real estate and financial market conditions and other factors. There canalso be no assurance, in the event the District does not have sufficient moneys on hand tocomplete the remainder of the Ave Maria DRI CIP (excluding the 2006 Project which has beencompleted), that the District will be able to raise through the issuance of bonds or otherwise themoneys necessary to complete the Ave Maria DRI CIP.

8. In addition to legal delays that could result from bankruptcy, the ability of theDistrict to enforce collection of delinquent Series 2012 Assessments will be dependent uponvarious factors, including the delay inherent in any judicial proceeding to enforce the lien of theSeries 2012 Assessments and the value of the land which is the subject of such proceedings andwhich may be subject to sale. If the District has difficulty in collecting the Series 2012Assessments, the Series 2012 Reserve Account could be rapidly depleted and the ability of theDistrict to pay debt service could be materially adversely affected. As described under"SECURITY FOR AND SOURCE OF PAYMENT FOR THE 2012 BONDS - Debt ServiceReserve Fund Deficiency Agreement", the Developer has covenanted and agreed in theDeficiency Agreement to replenish the Series 2012 Reserve Account to the Series 2012 ReserveAccount Requirement; however, such obligation to replenish the Series 2012 Reserve Account isunsecured.

9. Owners should note that several mortgage lenders have, in the past, raised legalchallenges to the primacy of the liens similar to those of the Series 2012 Assessments in relationto the liens of mortgages burdening the same real property. All mortgagees holding liens on thesubject land in this transaction of which the District is aware will execute documents prior to theissuance of the 2012 Bonds acknowledging the statutory superiority of the Assessments.

10. The interest rate borne by the 2012 Bonds is, in general, higher than interest ratesborne by other bonds of governmental entities that do not involve the same degree of risk asinvestment in the 2012 Bonds. These higher interest rates are intended to compensate investorsin the 2012 Bonds for the risk inherent in a purchase of the 2012 Bonds. However, such higherinterest rates, in and of themselves, increase the amount of Series 2012 Assessments that theDistrict must levy in order to provide for payments of debt service on the 2012 Bonds, and, inturn, may increase the burden upon owners of lands within the District, thereby possiblyincreasing the likelihood of non-payment or delinquency in payment of such Series 2012Assessments.

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11. Various proposals are mentioned from time to time by members of the Congressof the United States of America and others concerning reform of the internal revenue (tax) lawsof the United States. Certain of these proposals, if implemented, could have the effect ofdiminishing the value of obligations of states and their political subdivisions, such as the 2012Bonds, by eliminating or changing the tax-exempt status of interest on certain of such bonds.Whether any of such proposals will ultimately become law, and if so, what effect such proposalscould have upon the value of bonds such as the 2012 Bonds, cannot be predicted. However, it ispossible that any such law could have a material and adverse effect upon the value of the 2012Bonds. The Indenture does not provide for any adjustment to the interest rates borne by the 2012Bonds in the event of a change in the tax-exempt status of the 2012 Bonds.

12. Some of the risk factors described herein, which, if materialized, would result in adelay in the collection of the Series 2012 Assessments, may not affect the timely payment ofdebt service on the 2012 Bonds because of the Series 2012 Reserve Account established by theDistrict for the 2012 Bonds. The ability of the Series 2012 Reserve Account to fund deficienciescaused by delinquent Series 2012 Assessments is dependent upon the amount, duration andfrequency of such deficiencies. Moneys on deposit in the Series 2012 Reserve Account may beinvested in certain obligations permitted under the Indenture. Fluctuations in interest rates andother market factors could affect the amount of moneys available in the Series 2012 ReserveAccount to make up deficiencies.

13. Prospective Bondholders should note that although the Indenture contains a Series2012 Reserve Account Requirement for the Series 2012 Reserve Account, and a correspondingobligation on the part of the District to replenish the Series 2012 Reserve Account to the Series2012 Reserve Account Requirement, if in fact either of those accounts are accessed for anypurpose, the District does not have a designated revenue source for replenishing those fundsexcept for the Developer's obligation under the Deficiency Agreement to replenish the Series2012 Reserve Account to the Series 2012 Reserve Account Requirement. The District will notbe permitted to assess real property burdened by the Series 2012 Assessments for the purpose ofreplenishing the Series 2012 Reserve Account.

14. While the District has represented to the Underwriter that it has selected itsmanager, financial advisor, counsel, engineer, corporate trustee and other professionals with theappropriate due diligence and care, and while the foregoing professionals have each representedin their respective areas as having the requisite expertise to accurately and timely perform theduties assigned to them in such roles, the Underwriter does not guaranty any portion of theperformance of these professionals. Failure on the part of any one of these professionals toperform their obligations could result in a delay in payment on the 2012 Bonds, and in the worstpossible situation, the non-payment of the 2012 Bonds.

15. No application for credit enhancement or a rating on the 2012 Bonds has beenmade.

16. Undeveloped or partially developed land is inherently less valuable thandeveloped land and provides less security to the Bondholders should it be necessary to instituteproceedings due to the nonpayment of the Series 2012 Assessments. Failure to completedevelopment or substantial delays in the completion of the development of the Development due

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to litigation or other causes may reduce the value of the Development and increase the length oftime during which Series 2012 Assessments will be payable from undeveloped property and mayaffect the willingness and ability of the owners of such property to pay the Series 2012Assessments when due.

17. The value of the land within the District, the success of the Development and thelikelihood of timely payment of principal and interest on the 2012 Bonds could be affected byenvironmental factors with respect to the land in the District. Should the land be contaminatedby hazardous materials, this could materially and adversely affect the value of the land in theDistrict, which could materially and adversely affect the success of the Development and thelikelihood of timely payment of the 2012 Bonds. The District has not performed, nor has theDistrict requested that there be performed on its behalf, any independent assessments of theenvironmental conditions within the District.

18. If the uniform collection methodology is used non ad valorem assessments maynot be withdrawn from the tax certificate sale for any bond and financing restructuring.

This section does not purport to summarize all risks that may be associated withpurchasing or owning the 2012 Bonds and prospective purchasers are advised to read thisLimited Offering Memorandum in its entirety (inclusive of Appendices) for a more completedescription of investment considerations relating to the 2012 Bonds.

THE DISTRICT

General

The District was created, established, chartered and incorporated in June 2004 as anindependent district, and a special, single purpose, local government, by the Act. The Districtencompasses approximately 10,805 gross acres of land (the "Land") and is located inunincorporated Collier County, Florida. The District has no health, safety and welfare powers ofa general purpose local government and its single purpose is to use its powers granted by the Actto manage the acquisition, construction, operation, maintenance and financing of expressed,limited and enumerated public infrastructure systems, facilities, services and improvements..

Board of Supervisors

The Act provides for the five-member Board of Supervisors (the "Board") to serve as thegoverning body of the District. Members of the Board ("Supervisors") must be citizens of theUnited States and residents of the state of Florida. Initially, the Supervisors are elected on an at-large basis by the owners of the property within the District. Ownership of land within theDistrict entitles the owner to one vote per acre (with fractions thereof rounded upward to thenearest whole number). Terms of office are four years and until a successor is chosen andqualifies. If, during a term of office, a vacancy occurs, the remaining Supervisors may fill thevacancy by an appointment of an interim Supervisor for the remainder of the unexpired term.The landowners present or voting by proxy at the annual landowners' meeting shall constitute aquorum for the purposes of conducting the business of the landowners. Action taken by theDistrict shall be upon a vote of the majority of a quorum of the Supervisors present unless

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general law or a rule of the District requires a greater number. Three Supervisors, howeverelected, constitute a quorum. All meetings of the Board are open to the public under Florida's"sunshine" or open meetings law.

At the initial election of the Board, the two Supervisors receiving the highest number ofvotes were elected for a term expiring on November 30, 2006, while the other three Supervisorsreceiving the next largest number of votes were elected to serve initial terms ending onNovember 30, 2008. The next election by the landowners was required to be held on the firstTuesday in November, 2006. Thereafter, an election was required to be held every two years inNovember on a date chosen and noticed by the Board. At the subsequent elections, the twocandidates receiving the highest number of votes will serve for four year terms, and the otherthree candidates will serve for two year terms.

The current Supervisors serving on the Board, their occupations and the term of eachSupervisor are set forth below:

Name Title Occupation Term ExpirationsThomas Peek Chairman Retired Professional Engineer November 2012Liesa Priddy Vice Chair Family-owned Rancher November 2012Douglas Baird Board Member Manager of Treasury Services at Barron Collier

Cos.November 2012

Vacant* Board Member - -Thomas DiFlorio Board Member Retired Police Officer and Resident of Ave

MariaNovember 2014

_______________* The Supervisor previously occupying the vacant Board seat, Paul Roney, recently resigned.

Once duly qualified and elected, as provided in the Act, Mr. Roney's replacement willcomplete the remainder of his term which ends in November 2014.

The Board has the option of calling a referendum on the question of whether certainmembers of the Board should be elected by qualified electors. The conditions precedent tocalling a referendum are that (i) the District has at least 500 qualified electors; (ii) ten percent ofthe qualified electors of the District have signed a petition filed with the Board and submitted tothe Supervisor of Elections of Collier County; and (iii) the election occurs at least sixty daysfollowing verification of the petition. If the referendum is approved, the Board will continue tocomprise five members and elections will continue as scheduled. If the referendum isdisapproved, Board elections will continue unchanged (that is, on a one-acre, one-vote basis),and there can be no referendum on the same question for at least two years.

If the referendum is approved, the Board will prepare a map of the District describing andlocating the urban areas within the District (the "Map"), which can be contested by anylandowner or elector in the District as provided in the Act. Once approved, the Map will be usedto determine the number of Supervisors to be elected by the qualified electors. The Map is to beupdated every five years, or sooner at the discretion of the Board. If the District is made up oftwenty-five percent urban areas or less, one Supervisor will be elected by qualified electors andthe remaining four Supervisors will be elected on a one-acre, one-vote principle. If the District isbetween twenty-five and fifty percent urban, two Supervisors will be elected by qualifiedelectors and the remaining three Supervisors will be elected on a one-acre, one-vote principle. If

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urban areas are at least fifty percent, but less than seventy percent of the District, threeSupervisors will be elected by qualified electors and the remaining two Supervisors will beelected on a one-acre, one-vote principle. If urban areas constitute at least seventy percent, butless than ninety percent of the District, four Supervisors will be elected by qualified electors andthe remaining Supervisor will be elected on a one-acre, one-vote principle. If urban areas are atleast ninety percent of the District, all five Supervisors will be elected by qualified electors.

Among other provisions, the Act gives the Board the right to, among other things: (i)dispose of real and personal property and to make and execute contracts and other instruments;(ii) borrow money, accept gifts, issue bonds, certificates, warrants, notes, bond anticipationnotes, and other evidence of indebtedness; (iii) levy taxes and assessments, and collect fees andother charges; (iv) exercise eminent domain powers; (v) assess and impose limited ad valoremand non ad valorem maintenance taxes, only if authorized and enacted by general law, andspecial assessments; (vi) finance, plan, design, acquire, construct, install, and operate (a) watermanagement and control for land within the District and to connect some or any of such facilitieswith roads and bridges; (b) water supply, sewer, wastewater, irrigation systems, and the like; (c)bridges, culverts, roadways, and works and improvements across or through any public right ofway, highway, grade, fill, or cut; (d) roads, provided they meet or exceed the countyspecifications, and street lights; (e) public transportation and parking facilities; (f) parks andfacilities for recreation, culture, and education; (g) fire prevention and control facilities; (h)insect control systems; (i) environmental mitigation and preservation areas; (j) school buildingsand related structures when authorized by the appropriate school board; (k) security facilities andsystems; (l) District offices, town centers, meeting facilities, etc; and (m) healthcare facilities;(vii) enter into impact fee credit agreements with Collier County; (viii) create other departmentsof the Board, as necessary, at noticed meetings; (ix) adopt rules and order regarding the businessof the District; (x) contract for consulting services regarding planning, engineering, legal, andother activities; and (xi) sue and be sued in the name of the District.

The Act does not empower the District to adopt and enforce land use plans or zoningordinances, and the Act does not empower the District to grant building permits; these functionsare performed by the County, as appropriate, acting through its governing body and departmentsof government.

The District Manager and Other Consultants

The chief administrative official of the District is the District Manager (as hereinafterdefined). The Act provides that a district manager has charge and supervision of the works of theDistrict and is responsible for preserving and maintaining any improvement or facilityconstructed or erected pursuant to the provisions of the Act, for maintaining and operating theequipment owned by the District, and for performing such other duties as may be prescribed bythe Board.

The District has retained Special District Services, Inc., Palm Beach Gardens, Florida, toserve as its district manager ("District Manager"). The District Manager's office is located at2501A Burns Road, Palm Beach Gardens, Florida 33410, telephone number: (561) 630-4922.

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The Act authorizes the Board to hire such employees and agents as it deems necessary.The District has employed the services of Young van Assenderp, P.A., Tallahassee, Florida toserve as general counsel to the District; Fishkind & Associates, Orlando, Florida to serve asAssessment Consultant and to prepare the Assessment Methodology; Nabors, Giblin &Nickerson, P.A., Tampa, Florida to serve as Bond Counsel for the District and Agnoli, Barber &Brundage, Inc., Naples, Florida to serve as District Engineer.

The 2006A Bonds

In addition to the 2006 Bond Anticipation Bonds, all of which will be refunded withproceeds of the 2012 Bonds, the District previously issued its $26,245,000 Ave MariaStewardship Community District (Collier County, Florida) Capital Improvement RevenueBonds, Series 2006A (the "2006A Bonds") on December 21, 2006 to finance a portion of theAve Maria DRI CIP. See "THE CAPITAL IMPROVEMENT PROGRAM AND THE 2006PROJECT" below for a description of the Ave Maria DRI CIP. The principal amount of 2006ABonds outstanding as of the date of this Limited Offering Memorandum is $24,545,000. The2006A Bonds are secured by Assessments imposed and levied on the District Lands benefitingfrom the portion of the Ave Maria DRI CIP financed with proceeds of the 2006A Bonds. Seealso "THE DEVELOPMENT - Property Taxes, Assessments, Homeowner's Association andOther Fees."

THE CAPITAL IMPROVEMENT PROGRAM AND THE 2006 PROJECT

In order to implement the single special purpose of the District, the District hasdeveloped a capital improvement plan to allow it to finance, acquire and construct master andneighborhood infrastructure attributable to all 10,805 acres within the District including masterand neighborhood improvements related to drainage and a stormwater management andcollection system (including related land acquisition); wastewater and water facilities;transportation improvements (including offsite improvements and related land acquisition);landscaping and entrance features; a master irrigation system; the cost of mitigation andrestoration of certain lands; and professional and permitting fees, all intended to serve the entireDistrict (collectively, the "District-wide Capital Improvement Program" or the "District-wideCIP"). The District Engineer has estimated the total cost of the District-wide CapitalImprovement Program to be approximately $650 million.

The portion of the District-wide CIP master infrastructure improvements attributable tothe Development and expected to be provided through the District include master infrastructureimprovements related to master drainage and a stormwater management and collection system(including related land acquisition); master transportation improvements (including offsiteimprovements and related land acquisition); a master irrigation system; the cost of mitigation andrestoration of certain lands; and professional and permitting fees (the "Ave Maria DRI CIP").The District Engineer has estimated the total cost of the Ave Maria DRI CIP to be approximately$94.1 million, approximately $44.9 million of which was funded with the proceeds of the 2006Bonds. The portion of the Ave Maria DRI CIP funded with the 2006 Bond Anticipation Bonds,which are being refunded with the 2012 Bonds, is referred to herein as the "2006 Project." The2006 Project was completed in February 2009.

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If Future Bonds are not issued or if issued but the proceeds therefrom are insufficient tocomplete the Ave Maria DRI CIP, the Developer has agreed, subject to certain limitations,pursuant to the terms of an agreement between the District and Developer regarding theacquisition and completion of certain improvements (the "Acquisition Agreement"), to fund andcomplete or, alternatively, provide sufficient funds to the District to complete the portion of theAve Maria DRI CIP not financed by the proceeds of the 2006 Bonds or the Future Bonds.However, if and to the extent this source of financing is inadequate to pay the cost to completethe Ave Maria DRI CIP, there can be no assurance of the willingness or ability of the Developerto make such funds available in the future, or the ability of the Developer to obtain financingfrom other sources. There is no legal obligation to the owners of either the 2012 Bonds to makeany such funds available for construction or development, or the payment of Assessmentsimposed and levied against property it owns. In the event lands which comprise all or anyportion of phases which are not currently under development are sold to other developers, theobligation to complete the Ave Maria DRI CIP associated with that land is anticipated to beassigned to the purchasers thereof. The Engineer's Report, as supplemented, which is attached as"APPENDIX A - ENGINEER'S REPORT," has additional information regarding thecomponents of the District-wide CIP and Ave Maria DRI CIP and a breakdown of estimatedcosts (excluding financing costs) of the District-wide CIP and Ave Maria DRI CIP.

THE LANDOWNER/DEVELOPER

The information appearing under this caption and under the caption "THEDEVELOPMENT" below has been furnished by the Developer for inclusion in thisLimited Offering Memorandum as a means for the prospective Bondholders to understandthe anticipated development plan and risks associated with the development and theprovision of infrastructure to the real property within the District and, although believed tobe reliable, such information has not been independently verified by the District or itscounsel, the Underwriter or its counsel, or Bond Counsel, and no person other than theDeveloper, subject to certain qualifications and limitations, makes any representation orwarranty as to the accuracy or completeness of such information. All information set forthunder the captions "THE LANDOWNER/DEVELOPER" and "THE DEVELOPMENT"are based on information available through and including March 31, 2012. In connectionwith the issuance of the 2012 Bonds, the Developer will certify that the information hereinunder the captions "THE LANDOWNER/DEVELOPER" and "THE DEVELOPMENT"does not contain any untrue statement of a material fact and does not omit to state anymaterial fact necessary in order to make the statements made herein, in the light of thecircumstances under which they are made, not misleading.

Ave Maria Development, LLLP, a Florida limited liability limited partnership (the"Developer"), was created on August 22, 2003. The equity in the Developer is owned .05% byNua Baile LLC and 49.95% by an affiliate of the University and .05% by Barron CollierCorporation and 49.95% by BCAM, LLLP, affiliates of Barron Collier Partnership, LLLP.

The Developer was organized to acquire, own, entitle, improve, and sell residential andcommercial tracts of lands specifically for the purpose of developing the town portion of AveMaria.

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Barron Collier

Barron Collier Partnership, LLLP ("Barron Collier") is a limited liability limitedpartnership organized under the laws of the State of Florida on January 7, 1991. The partnershipwas originally formed to operate and develop citrus groves and conduct farming operations insouthwest Florida. The partners formed the partnership by a contribution of land and other assetsdistributed to the partners from a related company, Barron Collier Companies ("BCC"). BarronGift Collier, Sr., the founder of Barron Collier Company, was a visionary. Having made hisfortune in streetcar advertising, he visited Southwest Florida in 1911 and was mesmerized by itsbeauty. During the early 1920s, he purchased 1.3 million acres of land that would later becomeCollier and Hendry Counties and was instrumental in shaping Southwest Florida's future.

Mr. Collier, Sr. died in 1939 and the management of the company was assumed by hissons, Sam, Miles and Barron. Sam and Miles both died in the early 1950s, leaving the companyto be managed by Barron, who became President and CEO. The Miles Collier and BarronCollier families later divided the holdings, allowing each family to operate its assets individually.

Over the years, BCC has grown from a land holding company to one of the largestdiversified companies in Southwest Florida. BCC's business ventures include extensiveagricultural operations (primarily citrus groves and vegetable farming), commercial, retail andresidential real estate development as well as oil exploration and mineral management. Today,operations of the company are directed by Co-Presidents Blake Gable and Katie Sproul. LamarGable serves as Chairman of the Board and serves on the Executive Committee with BarronCollier, Jr.'s children, Juliet Collier Sproul and Barron Gift Collier, III. Also on the Board arethird and fourth generations of the Collier family.

Thomas S. Monaghan

Although best known as the founder of Domino's Pizza and former owner of the DetroitTigers baseball franchise, Thomas S. Monaghan is currently devoting his attention full time tonon-profit endeavors, specifically focused on underwriting Catholic higher education. Thissupport primarily flows through the Ave Maria Foundation, which he founded in 1983 and forwhich he serves as chairman of the board.

In 1998, Mr. Monaghan provided the impetus for a major initiative in Catholic highereducation with the founding of Ave Maria Institute in Ypsilanti, Michigan (which later becameAve Maria College), a Catholic liberal arts institution designed to prepare students for leadershipin academics, professional occupations, and service to the greater community. He serves aschairman of the school's board of trustees.

The University was founded in 2003 and currently operates in Ave Maria, Florida. Mr.Monaghan serves as the University's chancellor.

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THE DEVELOPMENT

History

In 2002, the intersection of two visions created an opportunity for a wholly new approachto education and land planning. On one side, Thomas S. Monaghan, founder of Domino's Pizzaand chairman of the Ave Maria Foundation, dreamed of creating the first major Catholicuniversity in the United States in more than 40 years. At the same time, BCC was poised tousher in a revolutionary program in rural land planning.

The Rural Lands Stewardship Program (as discussed herein) developed for CollierCounty's eastern land is an innovative approach to protecting both the environment andagriculture, while promoting economic prosperity. As participants in the Rural LandsStewardship Program, Ave Maria has put into protection some 17,000 acres of vitally importantenvironmental lands.

The University is an intrinsic part of the town, and participating in town life is anenriching aspect of the University experience. Town residents also benefit from the cultural andacademic resources provided by the University.

The Ave Maria Community

The lands within the District contain approximately 10,805 acres located inunincorporated Collier County, Florida (the "County"). The Ave Maria DRI (the "Development"or "Ave Maria") is a 5,026 acre portion of the District and is believed to be the first modern towndeveloped in conjunction with a university of higher learning. Located 20 miles east of Interstate75 on what was once largely agricultural land, Ave Maria is the preeminent, large mixed useplanned community in the County. Ave Maria has been master planned to be a compact, self-sustaining town that reflects the community's rural roots while offering a full range of residentialoptions and commercial services to its residents. Ave Maria has been designed to human scale.Street networks, distinctive character, and environmental sustainability are integral to itsplanning.

Ave Maria is positioned as a new Florida "town" designed to include diversifiedresidential market segments; commercial development including professional office (general,medical, financial etc.), retail, entertainment and services, schools, parks, and recreational,governmental and institutional uses. All of these uses interact, creating a comprehensive "live,work, learn, play" environment with strong lifestyle considerations. The sheer size and scope ofthe community allows for the designation of Ave Maria as a "town" for marketing purposes. Thetraditional town message is one that is communicated by the architecture, landscape, streetappointments, and soft programming as well as the advertising and public relations activities.The theme is one that is used effectively to provide prospective purchasers with the sense ofplace and the sense of fit that they desire when selecting a new community. Ave Maria has beendeveloped as a true destination community with a range of home prices accessible to the majorityof potential purchasers in its market area.

Nearly 20% of the Development has been designated as the University campus.Connecting the University and the residential and recreational components of Ave Maria is a

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core town center anchored by the landmark Oratory and incorporating retail and commercialspace as well as residential condominiums.

Three commercial centers are to provide essential goods and services, entertainment anddining, enabling residents and students alike to live, work and play within the community, oftentraveling by foot or bicycle.

When completed, Ave Maria will contain over 8,600 residential dwellings in a widevariety of price ranges and neighborhoods. Residential dwellings will range from rentalapartments to condominiums and from starter to estate homes.

Community resources currently include an on-site fire/EMS building, a sheriff's office, anurgent care center and a Publix grocery store. A gas station is currently under construction.

The first phase of the University and town of Ave Maria, including residential housingand commercial areas opened for business in mid 2007.

Land Acquisition

The Developer currently owns 700 acres of land and has acquired and subsequently soldland as summarized in the table below:

Owned byDeveloper

Acquiredand Soldto Pulte

Acquiredand Soldto theDistrict

Acquiredand Soldto CommUsers

Acquiredand Soldto CollierCounty

Acquiredand

Donated tothe

University Total

Inside DRI 538.62 863.41 390.80 35.73 47.46 13.66 1,889.68Outside DRI 161.01 4.50 165.51

Total 699.63 863.41 395.30 35.73 47.46 13.66 2,055.19

The Developer also has a purchase option for the remaining 2,311 acres of land withinthe town portion of the Ave Maria DRI currently owned by two tenancies in common, oneconsisting of AMULT, LLC and Barron Collier Investments, Ltd. (an affiliate of Barron Collier)and the other consisting of AMULT, LLC and Barron Collier Partnership, LLLP. TheDeveloper's land, the land Pulte owns, or is acquiring, and the land consisting of 2,311 optionedacres, less land purchased by the District, will be encumbered by the Series 2012 Assessments.

Barron Collier retained approximately 750 acres within the DRI to be held under a giftagreement with Ave Maria University, and 194 of such acres have been gifted do date. Theremaining 556 acres have been set aside for future contributions to the University as needed forfuture University expansions. An affiliate of the University also owns 75 acres within theUniversity District of the DRI.

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Town of Ave Maria Development of Regional Impact

On June 14, 2005, the County Board of County Commissioners adopted Resolution No.05-235 as the Town of Ave Maria Development of Regional Impact ("DRI") No. 05-01("Development Order" or "DO") for a mixed use development located east of I-75. TheDevelopment Order land use is broken into two phases of development as depicted in thefollowing table.

Land UseMeasurement

Units Phase 1 Phase 2 TotalPhase Years 2005 - 2006 2007 - 2020

Residential Dwelling Units 6,010 4,990 11,000Assisted Living Facilities Beds - 450 450Retail/Service Square Feet 367,900 322,100 690,000Office Square Feet 276,600 233,400 510,000Civic, Community, Miscellaneous Square Feet 115,500 33,000 148,500Medical Facilities Square Feet 15,000 20,000 35,000Hotel Rooms 110 290 400University Students 3,150 2,850 6,000Public and Private (K-12) Students 1,120 1,980 3,100

The duration of the Development Order shall be a period of twenty (20) years from theeffective date or January 1, 2020. All applicable terms and conditions of the Development Orderare currently met.

Governmental Approvals

To facilitate the development of Ave Maria, the District was created and incorporated inJune 2004 as an independent special district by the Act.


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As stated, the DO allows the uses as detailed in the table above. However, the currentplan of development is expected to include the following:

Land UseMeasurement

Units TotalResidential:Single & Multi-Family Residential Dwelling Units 8,655Low Affordable Housing Dwelling Units 900ALF Apartments Dwelling Units 450

Retail/Entertainment/Service Sq. Footage 690,000Professional Office Sq. Footage 510,000Hotel Rooms 400Medical Facilities Sq. Footage 35,000Institutional - AM University Students 6,000Public and Private Schools (K-12) Students 2,400

The Development is governed overall by the DO. In addition, the Developer has enteredinto (i) a certain Developer Contribution Agreement dated April 26, 2005 and InterlocalAgreement - Reservation of Sufficient Road Public Facilities dated April 26, 2005, collectively,(the "Roadway Agreement") which provide for the donation of certain lands, construction ofcertain transportation improvements conferring an area-wide benefit on the transportationnetwork and reservation through DO buildout of transportation capacity subject to the terms andconditions of the Roadway Agreement. In order to ensure that sufficient water and wastewatercapacity is available for the Development, the Developer created a privately owned entity calledthe Ave Maria Utility Company, LLLP (the "AMUC"). AMUC was established specifically forthe DRI and provides water, wastewater and reclaimed water to Ave Maria. There are no currentpumpage or commitments other than those commitments required by the Development. AMUCsecured a franchise from Collier County Water and Wastewater Authority pursuant to anordinance adopted on November 30, 2004. AMUC received permits from the FloridaDepartment of Environmental Protection to construct a 1.0 mgd water service and .90 mgdwastewater treatment facility within the Development. Construction of the facility wascompleted in 2007.

The Developer has represented all conditions of the DO, Roadway Agreement, andRecorded Plats are currently being complied with.

The Development received the Dredge and Fill Permit on August 16, 2006 from theArmy Corps of Engineers relating to the lands within the Development. The South FloridaWater Management District has issued Environmental Resource Permits covering all the landswithin the Development. The District Engineer has certified there are no technical reasonsexisting at this time which would prohibit the continued implementation of the plans for theDevelopment as presented herein and that all permits not heretofore issued and which arenecessary to effect the improvements described herein have be obtained during the ordinarycourse of development. See "APPENDIX A - ENGINEER'S REPORT" attached hereto foradditional information.

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Developer Equity and Financing Plan

The Development has been funded with $147,650,000 in cash equity and an additional$47,683,654 in remaining loan proceeds from bank loans which, collectively, have funded costsincurred related to the following:

(i) Water distribution and wastewater transmission plants which are privately ownedand operated by the Developer;

(ii) "Town Center" building construction which consists of 70 residentialcondominium units and 98,630 square feet of retail/commercial space which is retained by theDeveloper and held for lease;

(iii) costs of creating, chartering and establishing the Ave Maria Stewardship District;

(iv) Tree farm inventory;

(v) Concrete batch plant investment;

(vi) Development and land entitlement and permitting process;

(vii) "Davita Building" construction which consists of 11,832 square feet ofretail/commercial space which is retained by the Developer and held for lease;

(viii) "Bank Building" construction which consists of 29,161 square feet ofretail/commercial space which is retained by the Developer and held for lease;

(ix) "Publix Building" construction which consists of 37,284 square feet ofretail/commercial space which is retained by the Developer and held for lease;

(x) Construction of the park of commerce infrastructure;

(xi) Construction of the affordable housing infrastructure;

(xii) Land purchases;

(xiii) Annual operating and maintenance costs; and

(xiv) Debt service.

The Developer currently has a town center loan, a water utility plant loan, a bankbuilding loan, a Davita building loan and a loan used to finance the construction of the Publixbuilding and certain infrastructure in the park of commerce and the affordable housingneighborhood. These loans have been made by the following financial institutions and areoutstanding in the following principal amounts:

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Financial InstitutionLoanAmount Outstanding Maturity Interest Rate Interest

Fifth Third Bank, N.A.(1) $20,000,000 $11,484,806 June 2012(2) LIBOR + 375 bps MonthlyWells Fargo Bank, N.A. $50,000,000 $13,317,094 August 2012(1) LIBOR + 300 bps MonthlyCollier County IndustrialDevelopment Authority $18,000,000 $16,895,000 October 2035 Variable Market

Rates Monthly

Fifth Third Bank, N.A. $6,594,540 $4,682,633 January 2019 LIBOR + 150 MonthlyAssurity LifeInsurance Company

$1,350,000 $1,304,121 November2020 6.5% Fixed Monthly

(1) Subject to the Series 2012 Assessments.(2) As of 3/31/12, the Developer is negotiating loan renewals and management anticipates the loans will be renewed prior to thematurity dates.

Residential Community

Pulte is the primary residential builder of Ave Maria. Along with DiVosta Homes("DiVosta") and Del Webb, the Pulte "Family of Builders" has an option to purchaseapproximately 7,500 residential units within the Development.

Each residential neighborhood has been strategically designed to address the wants andneeds of individuals and families at every stage in their lives. A variety of generations, cultures,and traditions will come together to provide a place to "live, work, learn and play." The Pulte"Family of Builders" first phase neighborhoods include:

The Pulte Neighborhoods:

(i) Hampton Village

(ii) Emerson Park

The Del Webb Community:

(i) Del Webb Naples

Pulte's Hampton Village and Emerson Park are centrally located with easy access tofamily-oriented amenities, such as the Water Park, North Park, and the future North CommunityCenter. The Pulte neighborhoods also feature homes strategically located within walking orbiking distance to the cultural and entertainment venues downtown. Village greens provide anopen atmosphere where neighbors can mingle.

DiVosta's BelleraWalk has been rebranded and this section of the development is a partof the Del Webb Community going forward.

Del Webb Naples provides the vibrant, active lifestyle for which the Del Webb name isknown. The community is built around a championship golf course and pro shop and will includea private "Club Campus" with a restaurant and an activities center. In addition, a full-timelifestyle director will coordinate fun activities for the entire community.

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In addition to Pulte, the Developer plans to offer 902 estate homes and other lots. TheDeveloper has developed townhome sites to be offered to third party builders within thecommunity as well. Within Ave Maria's town center, called "La Piazza," the Developer hasconstructed 70 luxury condominiums situated on two floors above office or retail spaceoverlooking the Oratory, Ave Maria's landmark.

The table set forth on the next page reflects Pulte's and the Developer's currentexpectations of the mix of residential unit types expected to secure the 2006 Bonds, the 2012Bonds and Future Bonds to be issued within the Development and the approximate base pricerange and square footage range, although there is no assurance that development will beconstructed as projected.

Note: Product mix, number of units, base square footage and price range are preliminary and subject to change.

Residential Development

Neighborhood residential development activities are well underway. Pulte has closed onseveral "superpads" with the Developer for a total of 962 dwelling units. 423 total residentialunits have been constructed. 385 finished units have been closed to third party purchasers.

The Pulte Neighborhoods:

(i) Hampton Village – the infrastructure for 167 units is 100% complete. Pulte hascompleted construction on 67 units and 63 of the finished units have been closed to third partypurchasers.

Ave Maria Residential Product Mix (securing the Bonds):

Product Type: No. of UnitsBase Sq. Footage

RangeBase PriceRange ($,000)

The Pulte Neighborhoods:Hampton Village: 422 1,762-3,446 $250-$390Emerson Park 234 1,570-3,514 $168-$290Other Neighborhoods (yet to be named) 2,688 Not Yet Released Not Yet Released

Del Webb Naples 4,220 1,157-2,611 $150-$260

Ave Maria Development, LLLP:Town Center Townhomes 100 Not Yet Released Not Yet ReleasedLa Piazza 70 1,173– 1,669 $210 – $320Custom Estate Homes and Other 902 Not Yet Released Not Yet Released

Total Residential Dwelling Units: 8,636

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(ii) Emerson Park – the infrastructure for 171 units is 100% complete. Pulte hascompleted construction on 91 units and 90 finished units have been closed to third partypurchasers.

The Del Webb Community:

(i) Del Webb Naples – the infrastructure for 438 of the 564 purchased units is 100%complete. The 18 hole golf course, pro shop, cart barn and maintenance facility are 100%complete. Pulte has completed construction on 147 units and 133 of the finished units have beenclosed to third party purchasers. Pulte has recently completed a model row of 8 homes withinthe community. In March of 2012, Pulte commenced construction of a 14,000 square foot DelWebb amenity center with an anticipated completion date of December 2012.

Ave Maria Development, LLLP:

(i) La Piazza – the construction of six buildings in the town center called La Piazza iscomplete. La Piazza includes 98,630 square feet of retail and office space as well as 70condominiums on the second and third floors of the buildings. 52 of the 70 condominiums haveclosed to third party purchasers.

(ii) Middlebrook Townhomes – the infrastructure for 326 units is 100% complete. 48units have been constructed and 47 of the finished units have been closed to third partypurchasers.

Ave Maria University

An affiliate of the University has invested more than $200 million for the first phase ofthe University, which ultimately intends to offer not only a full curriculum of traditional liberalarts, sciences and engineering programs, but also a comprehensive graduate program offeringmaster's and doctoral degrees to an estimated 6,000 students. The accompanying communityprovides single and multi-family housing in a wide range of styles and prices, along withcommercial and office facilities to accommodate the businesses and organizations needed tosupport the residential community and the academic institution.

Since the University's groundbreaking in February 2006, construction has beencompleted on over 670,000 square feet of buildings representing the following facilities: centralplant, science/math/technology building, student activity center, K-12 school, library, oratory,baseball facility, gym, guesthouse, St. Sebastion Hall (149 bed dorm), Xavier Hall (149 beddorm), Goretti Hall (149 bed dorm), Joseph Hall (157 bed dorm) and JPII/Mother Teresa Hall(554 bed dorm). Enrollment has steadily increased since opening and is estimated to be around1,000 students for the 2012/2013 school year.

Commercial/Office/Industrial Development

Ave Maria has gained both local and national media attention. There has been significantinterest and a number of negotiations are currently underway for various commercial uses.

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(i) La Piazza – the construction of six buildings in the town center called La Piazza iscomplete. La Piazza includes 98,630 square feet of retail and office spacecurrently occupied by 36 tenants as well as 70 condominiums on the second andthird floors of the buildings.

(ii) Bank Building – construction is complete on 29,161 square foot retail/commercialbuilding located within the town center.

(iii) Publix Building – construction is complete and Publix is open within a 37,284square foot retail building located in the town center.

(iv) Davita Building – construction is complete and the Davita Dialysis Center is openwithin a 11,832 square foot retail/commercial building located in the park ofcommerce.

(v) Gas Station – construction is 95% complete on a gas station/convenience storelocated within the park of commerce.

(vi) Park of Commerce – the infrastructure is 100% complete on 46 acres representing20 platted commercial lots ranging in size from 1.5 – 5 .5 acres.

(vii) Arthrex Park of Commerce - Construction began on the first phase of ArthrexCommerce Park in January 2012 and will be anchored by a major 197,000 squarefoot expansion by Arthrex, Inc., a world-renowned medical device manufacturer.The facility will create up to 300 new high-wage jobs which are expected to bepart of hundreds of other jobs created over the next few years. The first phase ofthe park is 57 acres, and will be expanded to 200 acres to accommodateanticipated growth. Current zoning allows for a wide variety of office, retail, andclean industrial uses.

Both sales and leasing of commercial property is available in several locations and atvarious pricing levels in Ave Maria. Office and industrial product include the sale of parcels aswell as build-to-suit facilities.

Recreational and Lifestyle Amenities

A focal point at the Ave Maria will be the incorporation of significant recreational andlifestyle amenities. The total amenity package is expected to cost over $40 million and will beimplemented by Pulte in phases over the life of the project. The scope of amenities will includea North Park, South Park, Water Park, Tennis Center, Del Webb Amenity Center and NorthCommunity Center. The North Park Phase I, South Park and Water Park are 100% complete.

Land Sale Information

The Developer plans to develop and offer 902 estate homes and other lots. TheDeveloper has developed townhome pad sites for sale to third party builders within thecommunity as well. Within Ave Maria's town center, called "La Piazza," the Developer has

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constructed 70 luxury condominiums situated on two floors above office or retail spaceoverlooking the Oratory, Ave Maria's landmark.

The Developer is selling superpads and/or raw land to Pulte who, in turn, finishes the lotsand builds the homes. Notwithstanding the foregoing, Pulte reserves the right, and haspreviously sold, certain of the lots to sub-builders. The superpads and/or raw land have legalentitlements. The physical condition of the superpads are a mass graded pad only. Internalstreets will have not been cut and lot terracing will not have been completed. Utilities aresupplied to the property line only.

Pursuant to a certain Option and Agreement for Purchase and Sale dated December 23,2004, there is a nominal base purchase price per unit and a specified percentage of the unit salesprice at the transfer of the unit to a third party purchaser.

Participating Builder

Pulte is a subsidiary of PulteGroup, Inc. ("PulteGroup"), a Michigan-based publiclytraded company (NYSE: PHM) organized in 1950 and incorporated in 1956. PulteGroup,through its various subsidiaries, is primarily engaged in the homebuilding business withoperations in 60 markets and 28 states. During its 61-year history, the company has constructedmore than 500,000 homes.

PulteGroup is subject to the informational requirements of the Securities Exchange Act of1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxystatements, and other information with the SEC. The file number of Pulte Homes with the SECis No-1-9804. The registration statement and these other SEC filings are available to you at theSEC's website at http://www.sec.gov. You may read and copy any filed document at the SEC'spublic reference rooms in Washington, D.C. at 100 F Street, Washington, D.C. 20549. Pleasecall the SEC at 1-800-SEC-0330 for further information on the public reference rooms. You alsomay inspect its SEC filings at the New York Stock Exchange, the exchange on which itscommon shares are listed, at 20 Broad Street, 7th Floor, New York, NY 10005. The most recentAnnual Report on Form 10-K of PulteGroup on file with the SEC and any other documents andreports filed with the SEC by PulteGroup subsequent to the date of such Annual Report(including Form 10-Q and Form 10K) through and including the end of the "underwritingperiod" (as defined in SEC Rule 15c2-12) are hereby incorporated herein by reference.

All documents subsequently filed by PulteGroup pursuant to the requirements of theExchange Act after the date of this Limited Offering Memorandum will be available forinspection in the same manner as described above.

Please visit PulteGroup's website for historical information, news and other financialreports. While the information contained herein regarding PulteGroup has been obtained fromSEC filings and PulteGroup's website, potential investors should review the SEC filings andPulteGroup's website themselves to assure they have the most recent information on PulteGroup.

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Marketing Plan

The residential development is marketed by Pulte. Currently, web sites for Ave Maria(www.avemaria.com), Ave Maria University (www.avemaria.edu) and Pulte (www.Pulte.com)are advertising for the town. The town generates both local and national media attention.

Pulte has constructed an 8,000 square foot sales/welcome center located in the Del Webbcommunity that opened in early 2011.

Pulte is developing three distinct communities.

The Developer has a cooperative marketing plan with the builder (Pulte) and also has acooperative marketing plan with Courtelis Company for the commercial space within Ave Maria.

Property Taxes, Assessments, Homeowner's Association and Other Fees

Homeowners within the District will pay ad valorem property taxes, and masterhomeowner association fees and non government assessments ("Master HOA Fees") as well ascommunity and neighborhood homeowner's association fees and non government assessments, inaddition to the special assessments and other government imposed and levied non ad valoremassessments securing the 2012 Bonds.

For a $200,000 single family home with a $50,000 homestead exemption ($150,000taxable value), based on the millage rates applicable during the fiscal year ended September 30,2011 (13.4287 mills total according to the Collier County Property Appraiser), the estimatedannual costs of living in the District (excluding the Series 2012 Bonds Long Term Assessment,mortgage payments, capital assessments and fees for utilities services and community andneighborhood association fees) is as follows:

Estimated Annual Taxes, Operation and Maintenance Assessments and Master HOA Fees

Ad Valorem Property Taxes $2,014.31(1)Operation and Maintenance Assessments 299.37(2)Master HOA Fees 385.00(3)

Total $2,698.68___________________________________________(1) Source: Collier County Property Appraiser(2) Includes assessment levied by the District to fund its operation and maintenance and street lighting budget but

does not include the assessments for debt service on the 2012 Bonds. The amount shown is an estimate based on"full buildout" of the Development. This amount will adjust for inflation and budget fluctuations over time.

(3) Master HOA fees are an estimate of dues at "full buildout" and do not include fee for the use of the amenityfacilities.

The Developer currently anticipates that funds derived from the community andneighborhood homeowner's association fees will range from $30.00 to approximately $400.00 amonth depending on which community and/or neighborhood the resident is in and may be usedby such association to primarily pay for costs of administering the said associations including theoperation and maintenance of limited access amenities and common areas of the respectivecommunity and neighborhood residences and enforcement of deed restrictions. These fee rangesexclude any initial capital contributions and are preliminary estimates only, which may increase

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or decrease over time due to a number of factors, including changes in maintenance and repaircosts, insurance costs, etc.

In addition to the fees, taxes and assessments described above, homeowners will besubject to annual Long Term Assessments levied for the retirement of the 2012 Bonds. Thetables below illustrate the annual Long Term Assessments for each of the product type for thoselots which are anticipated to secure the Bonds.

Product TypeSeries 2012 Bonds LongTerm Assessment(1)

Townhome $662Carriage Home/Attached Villa $662Detached Villa 46'/52' $1,271Single Family 52'/55' $1,271Single Family 60'/65' $1,271Single Family 70'/75' $1,271Single Family 90' $1,271

_______________________(1) 2012 Bonds Long Term Assessment grossed up for collection costs associated with tax collector and also the

necessary administrative costs incurred by both the property appraiser and the tax collector but assumes as ifpaid in November.

Competition

Due to this uniqueness and its location, Ave Maria does not currently have a primarycompetitor. In addition, offering new single family products with selling prices below $200,000,Ave Maria is priced significantly lower than other new communities in Collier County.

Rural Lands Stewardship Program

Anticipated continuing growth in Southwest Florida was the impetus for creating theRural Lands Stewardship Program, which was created explicitly to protect agriculture, theenvironment, and the economic viability of nearly 200,000 undeveloped rural acres in easternCollier County. An incentive-based system, Rural Stewardship allows a landowner to obtaincredits for protecting lands proven to support natural resources and agriculture, then to utilizethose credits in areas identified as suitable for development. Importantly, the number of creditsearned is commensurate with the environmental significance of the land, so property owners aremore highly rewarded for protecting more valuable lands.

As participants in the Rural Lands Stewardship Program, Ave Maria has put intoprotection some 17,000 acres of vitally important environmental lands. Included are areas withinCamp Keais Strand, an important flow way and habitat area, and areas within or adjacent to theOkaloacoochee Slough, a significant regional wildlife corridor and upland-wetland habitat.

The Rural Stewardship program has demonstrated such dramatic promise that it hasbecome a statewide, even nationwide, model for land planning in rural areas. It has won majorrecognition, including the 2003 Sustainable Florida Award and the 1000 Friends of Florida 2005Better Communities Award.

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TAX MATTERS

Opinion of Bond Counsel

In the opinion of Bond Counsel, the form of which is included as Appendix C hereto, theinterest on the 2012 Bonds is excludable from gross income and is not a specific item of taxpreference for federal income tax purposes under existing statutes, regulations, rulings and courtdecisions. However, interest on the 2012 Bonds is taken into account in determining adjustedcurrent earnings for purposes of computing the alternative minimum tax imposed on corporationspursuant to the Internal Revenue Code of 1986, as amended (the "Code"). Failure by the Districtto comply subsequently to the issuance of the 2012 Bonds with certain requirements of the Code,regarding the use, expenditure and investment of bond proceeds and the timely payment ofcertain investment earnings to the Treasury of the United States, may cause interest on the 2012Bonds to become includable in gross income for federal income tax purposes retroactive to theirdate of issue. The District has covenanted to comply with all provisions of the Code necessaryto, among other things, maintain the exclusion from gross income of interest on the 2012 Bondsfor purposes of federal income taxation. In rendering its opinion, Bond Counsel has assumedcontinuing compliance with such covenants.

Internal Revenue Code of 1986

The Code contains a number of provisions that apply to the 2012 Bonds, including,among other things, restrictions relating to the use of investment of the proceeds of the 2012Bonds and the payment of certain arbitrage earnings in excess of the "yield" on the 2012 Bondsto the Treasury of the United States. Noncompliance with such provisions may result in intereston the 2012 Bonds being included in gross income for federal income tax purposes retroactive totheir date of issue.

Collateral Tax Consequences

Except as described above, Bond Counsel will express no opinion regarding the federalincome tax consequences resulting from the ownership of, receipt or accrual of interest on, ordisposition of, the 2012 Bonds. Prospective purchasers of the 2012 Bonds should be aware thatthe ownership of the 2012 Bonds may result in other collateral federal tax consequences. Forexample, ownership of the 2012 Bonds may result in collateral tax consequences to various typesof corporations relating to (1) denial of interest deduction to purchase or carry such 2012 Bonds,(2) the branch profits tax, and (3) the inclusion of interest on the 2012 Bonds in passive incomefor certain Subchapter S corporations. In addition, the interest on the 2012 Bonds may beincluded in gross income by recipients of certain Social Security and Railroad Retirementbenefits.

PURCHASE, OWNERSHIP, SALE OR DISPOSITION OF THE 2012 BONDS ANDTHE RECEIPT OR ACCRUAL OF THE INTEREST THEREON MAY HAVE ADVERSEFEDERAL TAX CONSEQUENCES FOR CERTAIN INDIVIDUAL OR CORPORATEBONDHOLDERS, INCLUDING, BUT NOT LIMITED TO, THE CONSEQUENCESDESCRIBED ABOVE. PROSPECTIVE BONDHOLDERS SHOULD CONSULT WITHTHEIR TAX SPECIALISTS FOR INFORMATION IN THAT REGARD.

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Florida Taxes

In the opinion of Bond Counsel, the 2012 Bonds and interest thereon are exempt fromtaxation under the laws of the State, except as to estate taxes and taxes imposed by Chapter 220,Florida Statutes, on interest, income or profits on debt obligations owned by corporations, asdefined in said Chapter 220.

Other Tax Matters

Interest on the 2012 Bonds may be subject to state or local income taxation underapplicable state or local laws in other jurisdictions. Purchasers of the 2012 Bonds should consulttheir tax advisors as to the income tax status of interest on the 2012 Bonds in their particular stateor local jurisdictions.

During recent years legislative proposals have been introduced in Congress, and in somecases enacted, that altered certain federal tax consequences resulting from the ownership ofobligations that are similar to the 2012 Bonds. In some cases these proposals have containedprovisions that altered these consequences on a retroactive basis. Such alteration of federal taxconsequences may have affected the market value of obligations similar to the 2012 Bonds.From time to time, legislative proposals are pending which could have an effect on both thefederal tax consequences resulting from ownership of the 2012 Bonds and their market value.No assurance can be given that additional legislative proposals will not be introduced or enactedthat would or might apply to, or have an adverse effect upon, the 2012 Bonds.

Tax Treatment of Original Issue Discount

Bond Counsel is further of the opinion that the difference between the principal amountof the 2012 Bonds (collectively the "Discount Bonds") and the initial offering price to the public(excluding bond houses, brokers or similar persons or organizations acting in the capacity ofunderwriters or wholesalers) at which price a substantial amount of such Discount Bonds of thesame maturity was sold constitutes original issue discount which is excluded from gross incomefor Federal income tax purposes to the same extent as interest on the 2012 Bonds. Further, suchoriginal issue discount accrues actuarially on a constant interest rate basis over the term of eachDiscount Bond and the basis of each Discount Bond acquired at such initial offering price by aninitial purchaser thereof will be increased by the amount of such accrued original issue discount.The accrual of original issue discount may be taken into account as an increase in the amount oftax-exempt income for purposes of determining various other tax consequences of owning theDiscount Bonds, even though there will not be a corresponding cash payment. Owners of theDiscount Bonds are advised that they should consult with their own advisors with respect to thestate and local tax consequences of owning such Discount Bonds.

AGREEMENT BY THE STATE

Under the Act, the State pledges to the holders of any obligations issued thereunder,including the 2012 Bonds, that it will not limit or alter the rights of the District to own, acquire,construct, reconstruct, improve, maintain, operate or furnish the projects subject to the Act or tolevy and collect taxes, assessments, rentals, rates, fees, and other charges provided for in the Act

54

and to fulfill the terms of any agreement made with the holders of such 2012 Bonds and that itwill not in any way impair the rights or remedies of such holders.

LEGALITY FOR INVESTMENT

The Act provides that the 2012 Bonds are legal investments for savings banks, banks,trust companies, insurance companies, executors, administrators, trustees, guardians, and otherfiduciaries, and for any board, body, agency, instrumentality, county, municipality or otherpolitical subdivision of the State, and constitute securities which may be deposited by banks ortrust companies as security for deposits of state, county, municipal or other public funds, or byinsurance companies as required for voluntary statutory deposits.

SUITABILITY FOR INVESTMENT

In accordance with applicable provisions of Florida law, the 2012 Bonds may initially besold by the District only to "accredited investors" within the meaning of Chapter 517, FloridaStatutes and the rules promulgated thereunder. The limitation of the initial offering to "accreditedinvestors" does not denote restrictions on transfer in any secondary market for the 2012 Bonds.Investment in the 2012 Bonds poses certain economic risks. No dealer, broker, salesperson orother person has been authorized by the District or the Underwriter to give any information ormake any representations, other than those contained in this Limited Offering Memorandum.Additional information will be made available to each prospective investor, including the benefitof a site visit to the District, as such prospective investor deems necessary in order to make aninformed decision with respect to the purchase of the 2012 Bonds. Prospective investors areencouraged to request such additional information, visit the District and ask such questions. Suchrequests should be directed to the Underwriter at: MBS Capital Markets, LLC, 8583 StrawberryLane, Longmont, Colorado 80503, Attention: Kevin Mulshine.

DISCLOSURE REQUIRED BY FLORIDA BLUE SKY REGULATIONS

Rule 69W-400.003, Rules of Government Securities under Section 517.051(1), FloridaStatutes, promulgated by the Florida Department of Financial Services, Office of FinancialRegulation, Division of Securities and Finance ("Rule 69W-400.003"), requires the District todisclose each and every default as to the payment of principal and interest with respect toobligations issued or guaranteed by the District after December 31, 1975. Rule 69W-400.003further provides, however, that if the District, in good faith, believes that such disclosures wouldnot be considered material by a reasonable investor, such disclosures may be omitted. TheDistrict is not and has not since December 31, 1975 been in default as to principal and interest onits bonds or other debt obligations.

FINANCIAL INFORMATION

The Act requires that financial statements of the District be audited by an independentcertified public accountant at least once a year. The current fiscal year of the District

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commences October 1 and the audited financial statements are generally expected to be availablewithin 365 days after the end of each fiscal year. The Act further provides that the District'sbudget for the following fiscal year be adopted prior to October 1 of each year. The District'sfinancial statements for the 2011-2012 fiscal year are included herein as"APPENDIX F - AUDITED FINANCIAL STATEMENT OF THE DISTRICT FOR FISCALYEAR ENDING SEPTEMBER 30, 2011."

CONTINUING DISCLOSURE

In order to comply with the continuing disclosure requirements of Securities andExchange Commission Rule 15c2-12(b)(5) (the "Rule"), the District, the Developer, Pulte andDisclosure Services, LLC (as agent for MBS Capital Markets, LLC), as dissemination agent, willenter into one or more Continuing Disclosure Agreements on the date of issuance and delivery ofthe 2012 Bonds (as amended from time to time in accordance with the terms thereof, the"Continuing Disclosure Agreement"), pursuant to which the District, the Developer and Pultewill covenant for the benefit of Bondholders to provide certain financial information andoperating data relating to the District and the 2012 Bonds in each year (the "District AnnualReport") and to provide notices of the occurrence of certain enumerated events, and theDeveloper and Pulte will covenant to provide updates of certain financial information andoperating data relating to the Development (the "Developer Report"). The District AnnualReport, the Developer Report and notices of material events will be filed by the disseminationagent on behalf of the District with the Municipal Securities Rulemaking Board ("MSRB")through the MSRB's Electronic Municipal Market Access system ("EMMA") as set forth in theContinuing Disclosure Agreement. The specific nature of the information to be contained in theDistrict Annual Report, the Developer Report and the notices of material events is contained in"APPENDIX D - FORMS OF CONTINUING DISCLOSURE AGREEMENTS." Failure tocomply with the requirements of the Continuing Disclosure Agreement will not result in anEvent of Default under the Indenture. The District has not failed, in any material respect, tocomply with any continuing disclosure undertakings entered into pursuant to the Rule.

ENFORCEABILITY OF REMEDIES

The remedies available to the owners of the 2012 Bonds upon an Event of Default underthe Indenture are in many respects dependent upon judicial actions which are often subject todiscretion and delay. Under existing constitutional and statutory law and judicial decisions,including the federal bankruptcy code, the remedies specified by the Indenture and the 2012Bonds may not be readily available or may be limited. The various legal opinions to bedelivered concurrently with the delivery of the 2012 Bonds will be qualified, as to theenforceability of the remedies provided in the various legal instruments, by limitations imposedby bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditorsenacted before or after such delivery.

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LITIGATION

There is no litigation of any nature now pending or threatened restraining or enjoining theissuance, sale, execution or delivery of the 2012 Bonds, or in any way contesting or affecting thevalidity of the 2012 Bonds or any proceedings of the District taken with respect to the issuanceor sale thereof, or the pledge or application of any moneys or security provided for the paymentof the 2012 Bonds, or the existence or powers of the District.

VERIFICATION OF ARITHMETICAL COMPUTATIONS

The accuracy of the arithmetical computations of the adequacy of the amounts held in theEscrow Fund to pay when due, the principal of, premium, if any, and interest on the RefundedBonds (as defined in the section captioned "PLAN OF REFUNDING") have been verified by theVerification Agent.

RATING

No application for a rating has been made to any rating agency.

UNDERWRITING

MBS Capital Markets, LLC (the "Underwriter") has agreed pursuant to a contract withthe District, subject to certain conditions, to purchase the 2012 Bonds from the District at apurchase price of $28,166,763.00 (consisting of $29,100,000.00 par amount of the 2012 Bonds,less the Underwriter's discount in the amount of $378,300.00, less original issue discount in theamount of $554,937.00). The Underwriter's obligations are subject to certain conditionsprecedent and the Underwriter will be obligated to purchase all of the 2012 Bonds only if theyare fulfilled. The 2012 Bonds may be offered and sold to certain dealers, banks and others atprices lower than the initial offering prices, and such initial offering prices may be changed fromtime to time by the Underwriter.

VALIDATION

The 2012 Bonds were validated by final judgment of the Circuit Court for the TwentiethJudicial Circuit in and for Collier County, Florida, entered on September 18, 2006 (the"Judgment"). The appeal period from such final judgment has expired with no appeal beingtaken. The Judgment validates the form of the Indenture, the District's existence, its ability toexercise, and compliance with, its general and special powers and the first lien status of itsSpecial Assessments.

EXPERTS

Agnoli, Barber & Brundage, Inc. has served as the District Engineer (the "DistrictEngineer") and the inclusion of "APPENDIX A - ENGINEER'S REPORT" attached hereto has

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been approved by said firm. The Engineer's Report attached hereto as Appendix A should beread in its entirety for complete information with respect to the subjects discussed therein.Fishkind & Associates Inc. has served as Assessment Consultant to the District with respect tothe issuance and delivery of the 2012 Bonds. The Assessment Consultant has prepared theMaster Assessment Methodology, the Sub-Master Assessment Methodology for the Ave MariaStewardship District, the First Sub-Master Supplemental Assessment Methodology for the AveMaria Stewardship District and the Second Sub-Master Supplemental Assessment Methodologyfor the Ave Maria Stewardship District (collectively, the "Master Assessment Methodology")attached hereto as Appendix E.

LEGAL MATTERS

Certain legal matters related to the authorization, sale and delivery of the 2012 Bonds aresubject to the approval of Nabors, Giblin & Nickerson, P.A., Tampa, Florida, Bond Counsel.Certain legal matters will be passed upon for the District by its counsel, Young van Assenderp,P.A., Tallahassee, Florida, and for the Developer by its counsel, Akerman Senterfitt, Orlando,Florida. Greenberg Traurig, P.A., Orlando, Florida, has served as Underwriter's Counsel.

MISCELLANEOUS

Any statements made in this Limited Offering Memorandum involving matters ofopinion or estimates, whether or not expressly so stated, are set forth as such and not asrepresentations of fact, and no representations are made that any of the estimates will be realized.

The references herein to the 2012 Bonds and other documents referred to herein are briefsummaries of certain provisions thereof. Such summaries do not purport to be complete andreference is made to such documents for full and complete statements of such provisions.

This Limited Offering Memorandum is submitted in connection with the sale of the 2012Bonds and may not be reproduced or used, as a whole or as a part, for any purpose. This LimitedOffering Memorandum is not to be construed as a contract with the purchaser or the Owners orBeneficial Owners of any of the 2012 Bonds.


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This Limited Offering Memorandum has been duly authorized, executed and delivered bythe District.

AVE MARIA STEWARDSHIP COMMUNITYDISTRICT

By:/s/ Thomas PeekChairman, Board of Supervisors

APPENDIX A

ENGINEER'S REPORT

MASTER CAPITAL IMPROVEMENT PROGRAMFOR


PREPARED FOR:

BOARD OF SUPERVISORSAVE MARIA STEWARDSHIP COMMUNITY DISTRICT

THOMAS PEEKBRIAN GOGUEN

KATHLEEN PASSIDOMOHERBERT CAMBRIDGE

LIESA PRIDDY

ENGINEER:

AGNOLI, BARBER & BRUNDAGE, INC.7400 Tamiami Trail North, Suite 200

Naples, Florida 34108

MAY 2, 2006

1

I. INTRODUCTION

The Ave Maria Stewardship Community District (the District ) is a limited, single and

specialized purpose local government, established in accordance with applicable Florida

Statutes, whose purpose is to provide for the financing, acquisition and/or construction of

infrastructure improvements, including community development systems, facilities, services,

projects, and other miscellaneous improvements to Ave Maria (the Development ). The area

governed by the District comprises approximately 10,805 acres in unincorporated eastern

Collier County, Florida (the County ). The lands constituting the District are presently

intended for development into a master planned community.

A location map of the District is contained in the Appendix.

II. PURPOSE

The District was established for the purpose of providing the infrastructure, including

managing and financing the acquisition and/or construction, maintenance and operation of all

or a portion of the infrastructure necessary for community development within the District.

The purpose of this report is to provide a description of, and estimated cost to complete , all

potential infrastructure improvements that can be financed and/or acquired by the District.

The District is authorized to finance, acquire and/or, construct, operate and maintain certain

of the infrastructure improvements that are needed to serve the Development. A portion of

these infrastructure improvements may be completed by Ave Maria Development, LLLP, the

primary developer of the Development (the Developer ), and be acquired by the District

with proceeds of bonds issued by the District. The Developer may finance and construct the

balance of the infrastructure needed for the Development including the construction of any

recreation facilities that is not financed by the District.

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The proposed infrastructure improvements as outlined herein are necessary for the functional

development of the Ave Maria Community as required by the applicable general purpose

local government.

III. DEVELOPMENT DESCRIPTION

The Development is wholly contained within the boundary of the District. The District is located

within part of Sections 21, 22, 27, 28, 29, 30, and 33, and all of Sections 31 and 32, Township 47

South, Range 29 East; and part of Sections 4, 9, 16, 17, and 18, and all of Sections 5, 6, 7, and 8,

Township 48 South, Range 29 East; and part of Sections 1, 12, and 13, Township 48 South,

Range 28 East; and all of Section 36, Township 47 South, Range 28 East, Collier County,

Florida. The District is currently bounded by Immokalee Road (CR-846) on the north, Camp

Keais Road on the east, Oil Well Road (CR-858) on the south, and Camp Keais Strand on the

west. A legal description of the AMSCD boundary is included in the Appendix.

IV. LAND USE

As stated, the District consists of approximately 10,805 acres. The table below illustrates the

current land use plan.

Land Use Descriptions Measurements Units

Total

Residential DwellingUnits

18,200

Assisted Living Facilities Beds 750Retail, Entertainment, Service Square Feet 1,139,000Professional Office(General/Medical Financial, etc.)

Square Feet 841,500

Civic/Community/Miscellaneous Square Feet 245,000Medical Facility Square Feet 35,000Hotel Rooms 660University Students 6,000K-12 Schools (Private & Public) Students 5,200

3

V. GOVERNMENTAL ACTIONS

The District was created and established by a special act of the Florida Legislature, Chapter

2004-461, Laws of Florida. The Development received zoning approval from the County as a

Development of Regional Impact (DRI) as set forth in DO-05-01; and as a Stewardship

Receiving Area (Resolution 2005-234A). The DRI allows for residential dwelling units, retail

and service facilities, office and hotel uses, assisted living, community facilities, universities and

schools, religious, and recreational facilities. The current plan of development is expected to

include the uses listed in Section IV: Land Use.

All conditions of the zoning ordinance and the DRI Development Order are currently being

complied with. Planning, engineering and development activities are underway with permits

applied for or received. The following permits are required for development of the Ave Maria

Community:

A. ARMY CORPS OF ENGINEERS

Army Corps of EngineersNationwide PermitPermit Number: SAJ-2003-9416Issue Date: March 23, 2005

Army Corps of Engineers404 PermitPermit Number: N/AIssue Date: Currently Under Review

B. COLLIER COUNTY GOVERNMENT

Collier County GovernmentFinal Site DevelopmentPermit Number: SDP-2004-AR-6113Issue Date: April 06, 2005

Collier County GovernmentDevelopment ExcavationPermit Number: 59.902-AR-6117Issue Date: April 07, 2005

4

Collier County GovernmentRight -of-WayPermit Number: 21253-EIssue Date: April 19, 2005

Collier County GovernmentSRAPermit Number: SRA-2003-AR-4578Issue Date: June 14, 2003

Collier County Government/Department of Community AffairsDRIPermit Number: DRI-2004-AR-6293Issue Date: June 14, 2005

Collier County GovernmentInsubstantial ChangePermit Number: SDPI-2005-AR-7708Issue Date: July 22, 2005

Collier County GovernmentAve Maria Town and University SDP#2Permit Number: SDPA-2006-AR-9326Issue Date: Currently Under Review

Collier County GovernmentThe Estates at Ave Maria Phase 1Permit Number: PPL-2006-AR-9281Issue Date: Currently Under Review

Collier County GovernmentAve Maria Park of CommercePermit Number: PPL-2006-AR-9271Issue Date: Currently Under Review

Collier County GovernmentAve Maria North Sports Park, Tennis and Aquatic FacilityPermit Number: SDP-2006-AR-9178Issue Date: Currently Under Review

Collier County GovernmentBellera Walk at Ave Maria Phase 1APermit Number: PPL-2006-AR-9033Issue Date: Currently Under Review

5

Collier County GovernmentTraditional Pulte Phase 1 at Ave MariaPermit Number: PPL-2006-AR-8941Issue Date: Currently Under Review

Collier County GovernmentDivosta TND Phase 2 at Ave MariaPermit Number: PPL-2006-AR-8940Issue Date: Currently Under Review

Collier County GovernmentAve Maria Blvd. (Arc Road) Extension and Loop RoadPermit Number: PPL-2005-AR-8880Issue Date: Currently Under Review

Collier County GovernmentHampton Village at Ave MariaPermit Number: PPL-2005-AR-8879Issue Date: Currently Under Review

C. FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION

Florida Department of Environmental ProtectionSoftening Water Treatment PlantPermit Number: 233650-001-WCIssue Date: December 28, 2004

Florida Department of Environmental ProtectionDomestic Wastewater FacilityPermit Number: FLA376400Issue Date: April 25, 2005

Florida Department of Environmental ProtectionStormwater DischargeNOI: FLR10AN27Issue Date: May 18, 2005

Florida Department of Environmental ProtectionStormwater DischargeNOI: FLR10AN30Issue Date: May 18, 2005

6

Florida Department of Environmental ProtectionDryline Sewage Collection/TransmissionPermit Number: 249396-001-DWCIssue Date: June 13, 2005

Florida Department of Environmental ProtectionDryline Sewage Collection/TransmissionPermit Number: 249396-001-DWCIssue Date: June 22, 2005 - REVISED

Florida Department of Environmental ProtectionAve Maria Dryline Sewage Collection/TransmissionPermit Number: 249396-002-DWCIssue Date: June 22, 2005

Florida Department of Environmental ProtectionStormwater DischargeNOI: FLR10AW65Issue Date: June 30, 2005




Florida Department of Environmental ProtectionWater Distribution SystemPermit Number: 233650-002-DSIssue Date: July 6, 2005

Florida Department of Environmental ProtectionAve Maria University Water Distribution SystemPermit Number: 233650-003-DSIssue Date: July 11, 2005

7

Florida Department of Environmental ProtectionOratory Sewage Collection/TransmissionPermit Number: 249396-003-DWCIssue Date: November 15, 2005

Florida Department of Environmental ProtectionOratory Water Distribution SystemPermit Number: 218757-002-DSIssue Date: November 16, 2005

Florida Department of Environmental ProtectionTown Core Water DistributionPermit Number: 233650-004-DSIssue Date: December 21, 2005

Florida Department of Environmental ProtectionTown Core Sewage Collection/TransmissionPermit Number: 249396-004-DWCIssue Date: December 22, 2005

D. SOUTH FLORIDA WATER MANAGEMENT DISTRICT

Florida Department of Environmental ProtectionBellera Walk Sewage Collection/TransmissionPermit Number: 249396-005-DWCIssue Date: April 10, 2006

South Florida Water Management DistrictDewatering PermitPermit Number: 11-02317-WIssue Date: October 13, 2004

South Florida Water Management DistrictEnvironmental Resource PermitPermit Number: 11-02336-PIssue Date: October 13, 2004

South Florida Water Management DistrictConsumptive Use Permit IrrigationPermit Number: 11-02298-WIssue Date: November 10, 2004

8

South Florida Water Management DistrictConsumptive Use Permit Public WaterPermit Number: 11-02336-WIssue Date: November 10, 2004

South Florida Water Management DistrictEnvironmental Resource PermitPermit Number: 050412-18Issue Date: Currently Under Review

E. STATE OF FLORIDA FISH AND WILDLIFE CONSERVATIONCOMMISSION

State of Florida Fish and Wildlife Conservation CommissionCaracara TakeFWC Permit Number: WX05444Issue Date: October 07, 2005

State of Florida Fish and Wildlife Conservation CommissionMigratory Bird (Burrowing Owl)FWC Permit Number: WN05473Issue Date: November 07, 2005

It is our opinion that there are no technical reasons existing at this time which would prohibit the

implementation of the plans for the Development as presented herein and that all permits not

heretofore issued and which are necessary to effect the improvements described herein will be

obtained during the ordinary course of development. Therefore, there are no technical reasons

that would prohibit construction of the District's infrastructure that complies with, not

inconsistent with, and subject to the local government's comprehensive plan and development

standards, and Federal, State, and local environmental regulations.

VI. INFRASTRUCTURE BENEFIT

The District will provide funding, maintenance and operation of project-wide public

infrastructure that is provided through its limited, single and specialized purpose. These public

infrastructure improvements include stormwater management, public roadways, reclaimed water

transmission facilities and landscaping improvements to serve the entire District.

9

The proposed infrastructure improvements identified in this report are intended to provide

specific comprehensive public services to the Ave Maria Community Development properties

within the boundaries of the District. The construction and maintenance of the proposed

infrastructure improvements are necessary and will benefit the property for the intended use as a

master planned community. As noted, the District may construct, acquire, own, and operate all

or any portion of the proposed infrastructure. As also noted earlier, the Developer will construct

the infrastructure not constructed by the District subject to determination by the District's

engineer that such infrastructure meets or exceeds the construction standards of the District and

is therefore worthy of acquisition.

VII. INFRASTRUCTURE IMPROVEMENTS

The proposed infrastructure improvements addressed by this report are the master infrastructure

elements that will extend basic services to the various land uses located within the District. The

infrastructure elements include the cost of stormwater management, public roadways, reclaimed

water transmission facilities and landscaping improvements. The costs for

engineering/architectural design, inspection and verification of these elements as well as the

anticipated cost for professional service fees and permitting fees have been included.

Detailed descriptions of the proposed infrastructure improvements are provided as follows:

A. Drainage/Stormwater Management System

The stormwater management system improvements consist of a system of lakes,

interconnecting pipes, and control structures that provides both stormwater

retention and water quality improvements. These improvements were designed to

meet the permit criteria of the South Florida Water Management District

(SFWMD) and Collier County Development Services.

B. Roadways

The roadway improvements consist of the roadways of the community, and the

town center roadways. The subject roadways will serve the various land uses

10

within the District. The subject road drainage systems and fill material will be

maintained by the District along with the base, pavement, curb sidewalks, signing

and striping. The District roadways will be constructed within platted rights-of-

way. It is currently estimated that approximately 133 miles of roadway will be

contained within the District.

C. Master Irrigation System

A Master Irrigation System will be constructed consisting of a distribution

pumping system consisting of individual pump stations which will send reclaimed

water to several service areas. The District will receive reclaimed water from the

Ave Maria Utility Company in lined irrigation reservoirs spaced throughout the

development. The District will distribute the reclaimed water along with

supplemental water from ground water wells at a minimum pressure of 45 psi to

all customers including commercial, residential, and community sites.

D. Landscaping

Landscaping will be provided for the roadways, perimeter berms, lake littoral

areas, and community entrances. The landscaping will consist of sod, annual

flowers, shrubs, groundcover, littoral plantings, trees, fencing, walls, fountains,

lighting and irrigation systems.

E. Mitigation and Restoration

The District will provide for mitigation and restoration of existing preservation

areas located throughout the development, and outside the development as

required by government approvals. The mitigation will be provided for

preservation areas that will be unavoidably disturbed by construction of the

project. Restoration, which will consist of removal and control of exotic species,

hydro-period restoration, and supplemental plantings, will be provided for

remaining preservation areas.

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F. Land Acquisition and Public Facilities

The District may acquire lands to be utilized for public purposes, consisting of

roadway rights-of-way, storm water management areas, parks, and community

areas. The District may construct various public service buildings consisting of

District office and meeting facilities, emergency services buildings, community

buildings. The District may also construct public schools, subject to approval of

the Collier County Public School Board.

G. Water and Waste Water Utilities

The District may acquire and assume maintenance and operation of the water and

wastewater utility system consisting of the treatment, collection, distribution, and

disposal facilities and infrastructure.

All District infrastructure will be designed and constructed to meet or exceed, as verified through

field inspection, the applicable State and Collier County standards in order to reduce unnecessary

maintenance and operation expenses.

Professional Services and Permitting Fees

Permit review fees may be required by Collier County, SWFWMD, COE, and any other state or

local agencies that impose fees for impact and plan reviews. These fees vary with the magnitude

of the impact and size of the Development phases. Additionally, engineering, surveying, and

landscape architecture, and facilities and management services are required for the design

permitting, construction inspection, monitoring and verification of constructed quality,

certifications, and management and operation of the District improvements.

VIII. OPINION OF PROBABLE CONSTRUCTION COSTS

The following table presents a summary of the District financed improvements as described in

Section VII of this report. The Developer supplied cost estimates for all work required to

construct the project, separating the District management and operational funded items from the

Developer funded items. This information was used as a basis for the costs presented in the

12

table. These costs were verified by the District Engineer's independent reviews.

Item Estimated Cost

Drainage/Stormwater Management System $135,000,000

Roadways $137,000,000

Master Irrigation System $25,000,000

Landscaping $74,000,000

Mitigation and Restoration $40,000,000

Land Acquisition and Public Facilities $50,000,000

Water and Waste Water Utilities $190,000,000

TOTAL $651,000,000

Note: The above items include engineering design, surveying, permitting and projectadministration costs. These costs are estimated at 15% of the actual costs.

SUMMARY AND CONCLUSION

The provision of infrastructure, including construction, to the Development, as outlined above, is

necessary for the development of the lands within the District, and, such infrastructure is located

within the boundary of the District except as may be required in any development order or any

agreement the District has with a general purpose local government. The planning and design

of the Development is in accordance with current governmental regulatory requirements.

Pursuant to its purpose, the District will provide the infrastructure as required by the

development so long as the construction is in substantial compliance with the design and permits

as verified by field review.

Items of construction cost in this report are based on current plan quantities for the infrastructure

construction for the entire Development as shown on the approved preliminary plans, drawings,

specifications and development requirements, last revision. It is my professional opinion that

the infrastructure costs provided herein for the Development are reasonable to complete the

construction of the Development described herein , and that the construction standards and

13

methodology are such that they will facilitate future maintenance and operation of District

facilities, and that various components of the Development will benefit and add value to various

aspects of the District as will be defined in the assessment methodology report adopted by the

District. All such infrastructure cost are public improvements or community facilities as set

forth in Section 190.012 (1) and (2) of the Florida Statutes.

The Engineer recommends that in addition to the annual non-ad valorem assessments to be

levied and collected to pay debt service on the proposed bonds, the District should levy and

collect an annual Operating and Maintenance assessment to be determined, assessed and

levied by the District s Board of Supervisors upon the assessable real property within the District

for the purpose of defraying the cost and expenses of maintaining District-owned and maintained

improvements.

The estimate of the Development construction costs is only an estimate and not a guaranteed

maximum price. A portion of the cost is based on actual construction bids received by the

Developer. Where necessary, the estimated cost is based on historical unit prices or current

prices being experienced for on-going and similar types of work in the County, and quantities

as represented on the construction drawings. The labor market, future costs of equipment and

materials, and the actual construction process are all beyond our control. Due to this inherent

opportunity for fluctuation in cost, the total final cost may be more or less than this estimate.

The professional service for establishing the opinion of estimated construction cost is consistent

with the degree of care and skill exercised by members of the same profession under similar

circumstances.

________________________ May 2, 2006Daniel W. Brundage, P.E.District EngineerState of Florida Registration No. 18915

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APPENDIX

1. Location Map

2. AMSCD Boundary legal description and sketch

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AV

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SHIP C

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DISTR

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LEGAL DESCRIPTION

DESCRIPTION OF PART OF SECTIONS 21, 22, 27, 28, 29, 30, AND 33AND ALL OF SECTIONS 31 AND 32, TOWNSHIP 47 SOUTH, RANGE 29 EAST,AND PART OF SECTIONS 4, 9, 16, 17, AND 18AND ALL OF SECTIONS 5, 6, 7, AND 8, TOWNSHIP 48 SOUTH, RANGE 29EAST,AND PART OF SECTIONS 1, 12 AND 13, TOWNSHIP 48 SOUTH, RANGE 28EAST,AND ALL OF SECTION 36, TOWNSHIP 47 SOUTH, RANGE 28 EAST,COLLIER COUNTY, FLORIDA

COMMENCING AT THE NORTHWEST CORNER OF SECTION 27, TOWNSHIP 47SOUTH, RANGE 29 EAST, COLLIER COUNTY, FLORIDA.THENCE ALONG THE NORTH LINE OF SAID SECTION 27 NORTH 89°42'22"EAST 40.00 FEET TO THE INTERSECTION WITH THE WEST RIGHT-OF-WAYLINE OF CAMP KEAIS ROAD (80' RIGHT-OF-WAY) AND THE POINT OFBEGINNING OF THE PARCEL HEREIN DESCRIBED:

THENCE ALONG SAID RIGHT-OF-WAY LINE IN THE FOLLOWING TWENTY FOUR(24)DESCRIBED COURSES; 1) SOUTH 00°15'32" EAST 4936.39 FEET; 2) 395.35 feet along the arc of a non-tangentialcircularcurve concave west having a radius of 3,707.51 feet through acentral angleof 06°05'35" and being subtended by a chord which bears South02°47'23" West395.17 feet; 3) South 05°50'40" West 101.17 feet; 4) Thence South 89°37'49" West 7.63 feet; 5) SOUTH 00°14'32" EAST 73.58 FEET; 6) SOUTH 05°51'27" WEST 224.83 FEET;

7) 403.87 FEET ALONG THE ARC OF A NON-TANGENTIALCIRCULAR CURVE CONCAVE EAST HAVING A RADIUS OF 3,798.14 FEETTHROUGH A CENTRAL ANGLE OF 06°05'33" AND BEING SUBTENDED BY ACHORD WHICH BEARS SOUTH 02°45'21" WEST 403.68 FEET; 8) SOUTH 00°14'33" EAST 1,907.96 FEET; 9) SOUTH 00°22'10" EAST 2,609.43 FEET; 10) SOUTH 00°30'10" EAST 2,673.59 FEET; 11) SOUTH 00°35'31" EAST 2,684.14 FEET; 12) SOUTH 00°38'11" EAST 2,610.47 FEET; 13) SOUTH 00°30'34" EAST 200.03 FEET;

17

14) 202.91 FEET ALONG THE ARC OF A CIRCULAR CURVE CONCAVEEASTHAVING A RADIUS OF 2,702.95 FEET THROUGH CENTRAL ANGLE OF04°18'04" ANDBEING SUBTENDED BY A CHORD WHICH BEARS SOUTH 02°39'36" EAST202.86 FEET; 15) SOUTH 04°48'38" EAST 400.00 FEET; 16) SOUTH 05°08'04" EAST 95.99 FEET; 17) SOUTH 00°29'16" EAST 101.03 FEET; 18) CONTINUE ALONG SAID LINE SOUTH 00°29'16" EAST 1,609.23FEET; 19) SOUTH 00°59'03" EAST 2,660.06 FEET; 20) SOUTH 00°56'00" EAST 2,246.44 FEET; 21) 104.19 FEET ALONG THE ARC OF A NON-TANGENTIALCIRCULARCURVE CONCAVE WEST HAVING A RADIUS OF 461.33 FEET THROUGH ACENTRAL ANGLE OF 12°56'25" AND BEING SUBTENDED BY A CHORDWHICH BEARS SOUTH 05°33'57" WEST 103.97 FEET; 22) SOUTH 12°02'43" WEST 100.00 FEET; 23) 122.31 FEET ALONG THE ARC OF A CIRCULAR CURVE CONCAVEEASTHAVING A RADIUS OF 540.00 FEET THROUGH CENTRAL ANGLE OF12°58'40" AND BEING SUBTENDED BY A CHORD WHICH BEARS SOUTH05°33'23" WEST 122.05 FEET;

24) SOUTH 00°55'58" EAST 49.54 FEET TO THE NORTH RIGHT OFWAYLINE OF OIL WELL ROAD (100' RIGHT OF WAY)

THENCE ALONG SAID NORTH RIGHT OF WAY IN THE FOLLOWING EIGHT (8)DESCRIBEDCOURSES; 1) SOUTH 88°57'46" WEST 2,595.92 FEET; 2) SOUTH 88°54'34" WEST 2,641.05 FEET; 3) SOUTH 88°57'06" WEST 2,570.04 FEET; 4) SOUTH 88°55'37" WEST 2,702.71 FEET; 5) SOUTH 88°56'50" WEST 2,645.03 FEET; 6) SOUTH 88°56'28" WEST 2,639.06 FEET; 7) SOUTH 89°44'55" WEST 2,676.56 FEET; 8) SOUTH 89°44'33" WEST 0.82 FEET TO THE WEST LINE OFTHOSELANDS DESCRIBED IN O.R. BOOK 2493, PAGE 2779-2796;

THENCE ALONG SAID LINE NORTH 01°11'28" WEST 2,637.90 FEET TO THENORTH LINE OF THOSE LANDS DESCRIBED IN O.R. BOOK 2493, PAGE2779-2796;THENCE ALONG SAID LINE NORTH 89°32'26" EAST 1,332.28 FEET TO A

18

NORTHWESTCORNER OF THOSE LANDS DESCRIBED IN O.R. BOOK 2009 PAGE 1554-1558;THENCE ALONG THE NORTH LINE OF SAID LANDS NORTH 89°32'26" EAST360.40 FEET TO THE INTERSECTION WITH THE WEST LINE OF THOSELANDS DESCRIBED IN O.R. BOOK 2943 PAGE 2779-2796;

THENCE ALONG THE WEST LINE OF SAID LANDS NORTH 01°11'02" WEST2,688.15 FEET TO THE INTERSECTION WITH SOUTH LINE OF SECTION 12,TOWNSHIP 48 SOUTH, RANGE 28 EAST,

THENCE ALONG SAID LINE SOUTH 89°24'56" WEST 151.63 FEET TO THEINTERSECTION WITH THE WEST LINE OF THOSE LANDS DESCRIBED IN O.R.BOOK 2493 PAGE 2779-2796;

THENCE ALONG THE WEST LINE OF SAID LANDS NORTH 00°44'30" WEST5,387.66 FEET TO THE INTERSECTION WITH THE NORTH LINE OF SAIDSECTION 12;THENCE ALONG SAID NORTH LINE NORTH 89°00'09" EAST 23.81 FEET TOINTERSECTION WITH THE WEST LINE OF THOSE LANDS DESCRIBED IN O.R.BOOK 2493 PAGES 2779-2796;

THENCE ALONG THE WEST LINE OF SAID LANDS NORTH 00°43'12" WEST5,312.87 FEET TO THE SOUTH LINE OF SECTION 36, TOWNSHIP 47SOUTH, RANGE 28 EAST;THENCE ALONG SAID SOUTH LINE SOUTH 89°28'47" WEST 1,591.63 FEET;THENCE CONTINUE ALONG SAID SOUTH LINE SOUTH 89°28'47" WEST2,658.12 FEET TO THE SOUTH WEST CORNER OF SAID SECTION 36;THENCE ALONG THE WEST LINE OF SAID SECTION 36 NORTH 00°12'02"WEST2,594.56 FEET;

THENCE CONTINUE ALONG THE WEST LINE OF SAID SECTION 36 NORTH00°13'09" EAST 2,595.59 FEET TO THE NORTHWEST CORNER OF SAIDSECTION 36;

THENCE ALONG THE NORTH LINE OF SAID SECTION 36 NORTH 89°57'18"EAST 2,678.23 FEET;

THENCE CONTINUE ALONG THE NORTH LINE OF SAID SECTION NORTH89°57'18" EAST 2,678.23 FEET TO THE NORTH EAST CORNER OF SAIDSECTION 36;THENCE ALONG THE WEST LINE OF SECTION 30, TOWNSHIP 47 SOUTH,RANGE 29 EAST, NORTH 00°13'04" WEST 2,580.06 FEET;

THENCE CONTINUE ALONG SAID WEST LINE OF SAID SECTION 30 NORTH00°10'45" WEST 2,527.41 FEET TO THE SOUTH RIGHT OF WAY LINE OF

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IMMOKALEE ROAD (100' RIGHT OF WAY)

THENCE ALONG SAID RIGHT OF WAY LINE FOR THE FOLLOWING NINE (9)DESCRIBEDCOURSES; 1) SOUTH 89°43'35" EAST 0.74 FEET; 2) NORTH 87°40'12" EAST 2,582.06 FEET; 3) NORTH 87°38'44" EAST 2,630.49 FEET; 4) NORTH 87°41'38" EAST 2,640.92 FEET; 5) NORTH 87°46'05" EAST 2,645.58 FEET; 6) NORTH 89°37'45" EAST 2,687.06 FEET; 7) NORTH 89°39'06" EAST 780.08 FEET; 8) 3,074.23 feet along the arc of a non-tangentialcircularcurve concave northwest having a radius of 1,960.26 feet througha centralangle of 89°51'20" and being subtended by a chord which bearsNorth44°42'37" East 2,768.73 ;

9) North 00°27'14" West 663.14 feet TO THE INTERSECTIONWITHTHE SOUTH RIGHT-OF-WAY LINE OF SAID CAMP KEAIS ROAD;

THENCE ALONG SAID RIGHT-OF-WAY LINE IN THE FOLLOWING SEVEN (7)DESCRIBED COURSES:

1) South 89°56'24" East 266.14 feet;2) 722.56 feet along the arc of a non-tangential circular

curve concavesouthwest having a radius of 460.00 feet through a central angleof89°59'58" and being subtended by a chord which bears South44°56'23" East650.54 feet;

3) South 00°03'36" West 600.00 feet;4) 529.01 feet along the arc of a circular curve concave

west having aradius of 760.00 feet through central angle of 39°52'53" andbeing subtendedby a chord which bears South 20°00'02" West 518.39 feet;

5) South 39°56'29" West 543.45 feet;6) 589.90 feet along the arc of a circular curve concave

east having aradius of 840.00 feet through central angle of 40°14'11" andbeing subtendedby a chord which bears South 19°49'24" West 577.85 feet;

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7) South 00°17'42" East 60.83 feet TO THE THE POINT OFBEGINNING.

CONTAINING 10805.08 ACRES, MORE OR LESS.

SUBJECT TO EASEMENTS AND RESTRICTIONS OF RECORD.BEARINGS ARE BASED ON THE WEST HALF OF THE SOUTH LINE OF SECTION16,TOWNSHIP 48 SOUTH, RANGE 29 EAST, COLLIER COUNTY, FLORIDA BEINGSOUTH 88°54'34" WEST.

Mike Maxwell, P.L.SWilson Miller8-25-03

APPENDIX B

COPY OF MASTER TRUST INDENTUREAND FORM OF SECOND SUPPLEMENTAL TRUST INDENTURE

MASTER TRUST INDENTURE


TO

U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE

Dated as of December 1, 2006

1.2

[THIS PAGE INTENTIONALLY LEFT BLANK] [THIS PAGE INTENTIONALLY LEFT BLANK]

____________________________________________________________

____________________________________________________________

SSECOND SUPPLEMENTAL TRUST INDENTURE

AVE MARIA STEWARDSHIP

COMMUNITY DISTRICT

TO

U.S. BANK NATIONAL ASSOCIATION,

AS TRUSTEE

Dated as of June 1, 2012

____________________________________________________________

____________________________________________________________

i

TTABLE OF CONTENTS

This Table of Contents is incorporated herein for ease of reference onlyand shall not be deemed a part of the Second Supplemental Trust Indenture.

ARTICLE IDEFINITIONS

Section 101. Definitions .................................................................................................. 6

ARTICLE IIAUTHORIZATION, ISSUANCE AND PROVISIONS OF SERIES 2012

BONDSSection 201. Authorization of Series 2012 Bonds; Book-Entry Only Form................... 9Section 202. Amounts and Terms.................................................................................. 11Section 203. Authentication. ......................................................................................... 11Section 204. Denominations.......................................................................................... 12Section 205. Appointment of Paying Agent.................................................................. 12Section 206. Appointment of Bond Registrar. .............................................................. 12Section 207. Conditions Precedent to Issuance of Series 2012 Bonds. ........................ 12

ARTICLE IIIREDEMPTION OF SERIES 2012 BONDS

Section 301. Bonds Subject to Redemption. ................................................................. 13

ARTICLE IVDEPOSIT OF SERIES 2012 BOND PROCEEDS AND APPLICATIONTHEREOF; ESTABLISHMENT OF ACCOUNTS AND OPERATION

THEREOFSection 401. Establishment of Accounts ....................................................................... 14Section 402. Use of Series 2012 Bond Proceeds........................................................... 14Section 403. Costs of Issuance Account........................................................................ 15Section 404. Series 2012 Reserve Account; Debt Service Reserve Fund Deficiency

Agreement............................................................................................... 15Section 405. Amortization Installments. ....................................................................... 17Section 406. Tax Covenants and Rebate Accounts. ...................................................... 17Section 407. Establishment of Series 2012 Revenue Account in Revenue Fund;

Application of Revenues and Investment Earnings................................ 17

ARTICLE V

ii

CCONCERNING THE TRUSTEESection 501. Acceptance by Trustee.............................................................................. 21Section 502. Limitation of Trustee's Responsibility...................................................... 21Section 503. Trustee's Duties. ....................................................................................... 21

ARTICLE VIADDITIONAL BONDS

Section 601. No Parity Bonds; Limitation on Parity Assessments. .............................. 22

ARTICLE VIIMISCELLANEOUS

Section 701. Confirmation of Master Indenture............................................................ 22Section 702. Continuing Disclosure Agreement. .......................................................... 22Section 703. Additional Covenant Regarding Assessments.......................................... 23Section 704. Collection of Assessments........................................................................ 23Section 705. Covenants with Regard to Enforcement and Collection of Delinquent

Assessments. ........................................................................................... 24Section 706. Requisite Owners for Direction or Consent. ............................................ 25Section 707. Provisions Relating to Bankruptcy or Insolvency of a Taxpayer............. 25Section 708. Additional Event of Default; Remedies. .................................................. 26Section 709. Amendment of First Supplemental Indenture. ......................................... 27

Exhibit A - Form of BondsExhibit B - Tax Regulatory Covenants

SSECOND SUPPLEMENTAL

TRUST INDENTURE

THIS SECOND SUPPLEMENTAL TRUST INDENTURE (the "SecondSupplemental Indenture") dated as of June 1, 2012, from AAVE MARIASTEWARDSHIP COMMUNITY DISTRICT (the "District") to UU.S BANK,NATIONAL ASSOCIATION, as Trustee (the "Trustee"), a national bankingassociation authorized to accept and execute trusts of the character herein setout, with its designated corporate trust office and post office address locatedat 225 East Robinson Street, Suite 250, Orlando, Florida 32801.

WHEREAS, the District is a public body, corporate and politic, anindependent, limited, special, and single purpose local government createdand established by Chapter 2004-461, Laws of Florida, as amended (the"Act"), and an independent special district, under section 189.404, FloridaStatutes, as amended; and

WHEREAS, the District has entered into a Master Trust Indenture,dated as of December 1, 2006 (the “Master Indenture”) with the Trustee tosecure the issuance of its Ave Maria Stewardship Community DistrictCapital Improvement Revenue Bonds (the “Bonds”), issuable in one or moreseries from time to time; and

WHEREAS, pursuant to Resolution No. 2006-05 (the "BondResolution") adopted by the Governing Body on June 12, 2006, the Districthas authorized the issuance, sale and delivery of not to exceed $825,000,000of Bonds, to be issued in one or more Series of Bonds as authorized under theMaster Indenture, which Bonds were validated by final judgment of theCircuit Court of Collier County, Florida on September 18, 2006; and

WHEREAS, the Governing Body of the District duly adoptedResolution No. 2006-03, on June 12, 2006, providing for the acquisition,construction and installation of assessable capital improvements (the"Capital Improvement Program"), providing estimated Costs of the CapitalImprovement Program, defining assessable property to be benefited by theCapital Improvement Program, defining the portion of the Costs of theCapital Improvement Program with respect to which Assessments will beimposed and the manner in which such Assessments shall be levied againstsuch benefited property within the District, directing the preparation of anassessment roll, and, stating the intent of the District to issue Bonds of theDistrict secured by such Assessments to finance the costs of the acquisition,

2

construction and installation of the Capital Improvement Program (the"Preliminary Assessment Resolution") and the Governing Body of the Districtduly adopted Resolution No. 2006-07, on August 1, 2007 following a publichearing conducted in accordance with the Act, to fix and establish theAssessments and the benefited property, as amended and supplemented byResolution 2012-04, duly adopted on June 6, 2012 supplementing theprevious Resolutions with respect to the Series 2001 Bonds (hereinafterdefined) (collectively, the "Assessment Resolution"); and

WWHEREAS, pursuant to Resolution No 2007-01, adopted by theGoverning Body of the District on November 14, 2006, the District authorizedissued, sold and delivered its Ave Maria Stewardship Community DistrictCapital Improvement Revenue Bonds, Series 2006A and its Ave MariaStewardship Community District Bond Anticipation Bonds, Series 2006(collectively, the "2006 Bonds"), which were issued under a FirstSupplemental Trust Indenture, dated as of December 1, 2006 (the “FirstSupplemental Indenture”), from the District to the Trustee in the aggregateprincipal amount of $52,465,000, and further designated "$26,245,000 AveMaria Stewardship Community District Capital Improvement RevenueBonds, Series 2006A" (the "2006A Bonds") and $26,220,000 of its Ave MariaStewardship Community District Bond Anticipation Bonds, Series 2006 (the"2006 Bond Anticipation Bonds") as an issue of Bonds under the MasterIndenture; and

WHEREAS, the District has determined that it is necessary anddesirable at this time to issue, sell and deliver Bonds to currently refund andredeem all of the Outstanding principal amount of the 2006 BondAnticipation Bonds; and

WHEREAS, pursuant to Resolution No 2012-03, adopted by theGoverning Body of the District on May 17, 2012 (the "Award Resolution"), theDistrict has authorized the issuance, sale and delivery of not to exceed$30,000,000 of its Ave Maria Stewardship Community District CapitalImprovement Revenue Refunding Bonds, Series 2012 (the "Series 2012Bonds"), which are issued hereunder in the aggregate principal amount of$29,100,000 as an issue of Bonds under the Master Indenture, and hasauthorized the execution and delivery of the Master Indenture and thisSecond Supplemental Indenture to secure the issuance of the Series 2012Bonds and to set forth the terms of the Series 2012 Bonds; and

WHEREAS, the District will apply the proceeds of the Series 2012Bonds to: (i) currently refund and redeem all of the Outstanding principal

3

amount of the 2006 Bond Anticipation Bonds; (ii) pay certain costs associatedwith the issuance of the Series 2012 Bonds; and (iii) make a deposit into theSeries 2012 Reserve Account for the benefit of all of the Series 2012 Bonds;and

WWHEREAS, the Series 2012 Bonds will be payable from and secured byAssessments imposed, levied and collected by the District with respect toproperty specially benefited by the Series 2006 Project, a portion of whichwas financed with the proceeds of the Series 2006 Bond Anticipation Bonds(the "Series 2012 Assessments"), which, together with the Series 2012Pledged Funds will comprise the Series 2012 Trust Estate, which shallconstitute a "Series Trust Estate" as defined in the Master Indenture; and

WHEREAS, the execution and delivery of the Series 2012 Bonds and ofthis Second Supplemental Indenture have been duly authorized by theGoverning Body of the District and all things necessary to make the Series2012 Bonds, when executed by the District and authenticated by the Trustee,valid and binding legal obligations of the District and to make this SecondSupplemental Indenture a valid and binding agreement and, together withthe Master Indenture, a valid and binding lien on the Series 2012 TrustEstate have been done;

NOW THEREFORE, KNOW ALL MEN BY THESE PRESENTS, THISSECOND SUPPLEMENTAL TRUST INDENTURE WITNESSETH:

That the District, in consideration of the premises, the acceptance bythe Trustee of the trusts hereby created, the mutual covenants hereincontained, the purchase and acceptance of the Series 2012 Bonds by thepurchaser or purchasers thereof, and other good and valuable consideration,receipt of which is hereby acknowledged, and in order to further secure thepayment of the principal and Redemption Price of, and interest on, all Series2012 Bonds Outstanding (as defined in the Master Indenture) from time totime, according to their tenor and effect, and such other payments required tobe made under the Master Indenture or hereunder, and such other paymentsdue under any Letter of Credit Agreement or Liquidity Agreement (asdefined in the Master Indenture), and to further secure the observance andperformance by the District of all the covenants, expressed or implied in theMaster Indenture, in this Second Supplemental Indenture and in the Series2012 Bonds: (a) has executed and delivered this Second SupplementalIndenture and (b) does hereby, in confirmation of the Master Indenture,grant, bargain, sell, convey, transfer, assign and pledge unto the Trustee, andunto its successors in the trusts under the Master Indenture, and to them

4

and their successors and assigns forever, all right, title and interest of theDistrict, in, to and under, subject to the terms and conditions of the MasterIndenture and the provisions of the Master Indenture pertaining to theapplication thereof for or to the purposes and on the terms set forth in theMaster Indenture the revenues derived by the District from the Series 2012Assessments (the "Series 2012 Pledged Revenues") and the Funds andAccounts (except for the Series 2012 Rebate Account) established hereby (the"Series 2012 Pledged Funds and Accounts") which shall comprise a part ofthe Trust Estate securing the Series 2012 Bonds (the "Series 2012 TrustEstate");

TTO HAVE AND TO HOLD all the same by the Master Indenturegranted, bargained, sold, conveyed, transferred, assigned and pledged, oragreed or intended so to be, to the Trustee and its successors in said trustand to it and its assigns forever;

IN TRUST NEVERTHELESS, except as in each such case mayotherwise be provided in the Master Indenture, upon the terms and trusts inthe Indenture set forth for the equal and proportionate benefit, security andprotection of all and singular the present and future Owners of the Series2012 Bonds issued or to be issued under and secured by this SecondSupplemental Indenture, without preference, priority or distinction as to lienor otherwise, of any one Series 2012 Bond over any other Series 2012 Bond byreason of priority in their issue, sale or execution;

PROVIDED FURTHER HOWEVER, that if the District, its successorsor assigns, shall well and truly pay, or cause to be paid, or make dueprovision for the payment of the principal and Redemption Price of the Series2012 Bonds or any Series 2012 Bond of a particular maturity issued, securedand Outstanding under this Second Supplemental Indenture and the interestdue or to become due thereon, at the times and in the manner mentioned inthe Series 2012 Bonds and this Second Supplemental Indenture, according tothe true intent and meaning thereof, and shall well and truly keep, performand observe all the covenants and conditions pursuant to the terms of theMaster Indenture and this Second Supplemental Indenture to be kept,performed and observed by it, and shall pay or cause to be paid to the Trusteeall sums of money due or to become due to it in accordance with the termsand provisions of the Master Indenture and this Second SupplementalIndenture, then upon such final payments, this Second SupplementalIndenture and the rights hereby granted shall cease and terminate, withrespect to all Series 2012 Bonds or any Series 2012 Bond of a particular

5

maturity, otherwise this Second Supplemental Indenture shall remain in fullforce and effect;

TTHIS SECOND SUPPLEMENTAL INDENTURE FURTHERWITNESSETH, and it is expressly declared, that all Series 2012 Bondsissued and secured hereunder are to be issued, authenticated and deliveredand all of the rights and property pledged to the payment thereof are to bedealt with and disposed of under, upon and subject to the terms, conditions,stipulations, covenants, agreements, trusts, uses and purposes as in theMaster Indenture (except as amended directly or by implication by thisSecond Supplemental Indenture), including this Second SupplementalIndenture, expressed, and the District has agreed and covenanted, and doeshereby agree and covenant, with the Trustee and with the respective Owners,from time to time, of the Series 2012 Bonds, as follows:

6

AARTICLE IDEFINITIONS

Section 101. Definitions All terms used herein that are defined in therecitals hereto are used with the same meaning herein unless the contextclearly requires otherwise. All terms used herein that are defined in theMaster Indenture are used with the same meaning herein (including the useof such terms in the recitals hereto and the granting clauses hereof) unless (i)expressly given a different meaning herein or (ii) the context clearly requiresotherwise. In addition, unless the context clearly requires otherwise, thefollowing terms used herein shall have the following meanings:

"Bond Depository" shall mean the securities depository from time totime under Section 201 hereof, which may be the District.

"Bond Participants" shall mean those broker-dealers, banks and otherfinancial institutions from time to time for which the Bond Depository holdsBonds as securities depository.

"Capital Improvement Program" shall mean the program of assessablecapital improvements established by the District in the AssessmentProceedings, a portion of which is comprised of the Series 2006 Projectfinanced, in part, with the proceeds of the Series 2006 Bond AnticipationBonds.

“Collateral Assignment Agreement” shall mean the CollateralAssignment Agreement, dated as of June 7, 2012, between the District andMaster Developer.

“Completion Agreement” shall mean the Completion Agreement, datedas of June 7, 2012, between the District and Master Developer.

“Debt Service Reserve Fund Deficiency Agreement” shall mean theDebt Service Reserve Fund Deficiency Agreement, dated as of the date ofinitial issuance and delivery of the Series 2012 Bonds among the Ave MariaDevelopment, LLLP, a Florida limited liability limited partnership (the"Master Developer"), the District and the Trustee.

"Delinquent Assessment Interest" shall mean Series 2012 AssessmentInterest deposited by the District with the Trustee on or after May 1 of the

7

year in which such Assessment Interest has, or would have, becomedelinquent under State law applicable thereto.

""Delinquent Assessment Principal" shall mean Series 2012 AssessmentPrincipal deposited by the District with the Trustee on or after May 1 of theyear in which such Series 2012 Assessment Principal has, or would have,become delinquent under State law applicable thereto.

"DTC" shall mean The Depository Trust Company, New York, NewYork.

“Escrow Deposit Agreement” shall mean the Escrow DepositAgreement between the District and the Trustee, as escrow agent, relating tothe payment and redemption of the Outstanding 2006 Bond AnticipationBonds.

“Foreclosure Proceeds” shall mean the proceeds from the foreclosure ofthe lien of the Series 2012 Assessments, including any interest and penaltiescollected pursuant to the Assessment Statutes.

“Government Obligations” shall mean direct obligations of, orobligations the timely payment of principal of and interest on which areunconditionally guaranteed by, the United States of America.

"Interest Payment Date" shall mean each May 1 and November 1,commencing November 1, 2012.

“Majority Owners” shall mean the Beneficial Owners of more than fiftypercent (50%) of the principal amount of the Series 2012 Bonds thenOutstanding.

"Nominee" shall mean the nominee of the Bond Depository, which maybe the Bond Depository, as determined from time to time pursuant to thisSupplemental Indenture.

“Redemption Date” shall mean each Interest Payment Date, in thecase of redemption of a portion of the Series 2012 Bonds, or, any date in thecase of a redemption of all of the Outstanding Series 2012 Bonds.

"Series 2012 Assessment Principal" shall mean the principal andinterest of Series 2012 Assessments received by the District which

8

corresponds to a proportionate amount of the principal and interest of theSeries 2012 Bonds.

""Series 2012 Assessment Interest" shall mean the interest on the Series2012 Assessments which is pledged to the Series 2012 Bonds.

"Series 2012 Assessment Principal" shall mean the principal amount ofSeries 2012 Assessments received by the District which represent aproportionate amount of the principal of and Amortization Installments ofthe Series 2012 Bonds, other than applicable Delinquent AssessmentPrincipal and Series 2012 Prepayment Principal.

"Series 2012 Assessment Proceedings" shall mean the proceedings ofthe District with respect to the establishment, levy and collection of theSeries 2012 Assessments which include Resolutions No. 2006-04, 2006-05,2006-07 and 2012-04, adopted by the Governing Body of the District, and anysupplemental proceedings undertaken by the District with respect to theSeries 2012 Assessments.

"Series 2012 Assessment Revenues" shall mean all revenues derived bythe District from the Series 2012 Assessments.

"Series 2012 Bonds" shall mean $29,100,000 Ave Maria StewardshipCommunity District Capital Improvement Revenue Refunding Bonds, Series2012.

“Series 2012 Investment Obligations” shall mean and includes any ofthe following securities, if and to the extent that such securities are legalinvestments for funds of the District;

(i) Government Obligations;

(ii) Bonds, debentures, notes or other evidences of indebtednessissued by any of the following agencies or such other government - sponsoredagencies which may presently exist or be hereafter created; provided that,such bonds, debentures, notes or other evidences of indebtedness are fullyguaranteed as to both principal and interest by the United States of America;Bank for Cooperatives; Federal Intermediate Credit Banks; FederalFinancing Bank; Federal Home Loan Bank System; Export-Import Bank ofthe United States; Farmers Home Administration; Small BusinessAdministration; Inter-American Development Bank; International Bank forReconstruction and Development; Federal Land Banks; the Federal National

9

Mortgage Association; the Government National Mortgage Association; theTennessee Valley Authority; or the Washington Metropolitan Area TransitAuthority;

(iii) shares of money market mutual funds that invest only in theobligations described in (i) and (ii) above, including money market mutualfunds of the Trustee bank meeting such criteria.

Under all circumstances, the Trustee shall be entitled to request and toreceive from the District a certificate of an Authorized Officer setting forththat any investment directed by the District is permitted under theIndenture.

""Series 2012 Pledged Revenues" shall mean the Series 2012Assessments.

"Series 2012 Prepayment Principal" shall mean the excess amount ofSeries 2012 Assessment Principal received by the District over the Series2012 Assessment Principal included within an Assessment appearing on anyoutstanding and unpaid tax bill, whether or not mandated to be prepaid inaccordance with the Series 2012 Assessment Proceedings.

"Series 2012 Reserve Account Requirement" shall mean the lesser of: (i)Maximum Annual Debt Service Requirement for all Outstanding Series 2012Bonds, (ii) 125% of the average annual debt service for all Outstanding Series2012 Bonds, or (iii) 10% of the proceeds of the Series 2012 Bonds calculatedas of the date of original issuance thereof.

ARTICLE IIAUTHORIZATION, ISSUANCE AND PROVISIONS OF SERIES 2012

BONDS

Section 201. Authorization of Series 2012 Bonds; Book-Entry OnlyForm The Series 2012 Bonds are hereby authorized to be issued in oneSeries in the aggregate principal amount of $29,100,000 for the purposesenumerated in the recitals hereto to be designated "Ave Maria StewardshipCommunity District Capital Improvement Revenue Refunding Bonds, Series

10

2012." The Series 2012 Bonds shall be substantially in the form set forth asExhibit A to this Second Supplemental Indenture. Each Series 2012 Bondshall bear the designation "2012R" and shall be numbered consecutively from1 upwards.

The Series 2012 Bonds shall be initially issued in the form of a separatesingle certificated fully registered Series 2012 Bond for each maturitythereof. Upon initial issuance, the ownership of each such Series 2012 Bondshall be registered in the registration books kept by the Bond Registrar in thename of Cede & Co., as Nominee of DTC, the initial Bond Depository. Exceptas provided in this Section 201, all of the Outstanding Series 2012 Bondsshall be registered in the registration books kept by the Bond Registrar in thename of Cede & Co., as Nominee of DTC.

With respect to Series 2012 Bonds registered in the registration bookskept by the Bond Registrar in the name of Cede & Co., as Nominee of DTC,the District, the Trustee, the Bond Registrar and the Paying Agent shall haveno responsibility or obligation to any such Bond Participant or to any indirectBond Participant. Without limiting the immediately preceding sentence, theDistrict, the Trustee, the Bond Registrar and the Paying Agent shall have noresponsibility or obligation with respect to (i) the accuracy of the records ofDTC, Cede & Co. or any Bond Participant with respect to any ownershipinterest in the Series 2012 Bonds, (ii) the delivery to any Bond Participant orany other person other than an Owner, as shown in the registration bookskept by the Bond Registrar, of any notice with respect to the Series 2012Bonds, including any notice of redemption, or (iii) the payment to any BondParticipant or any other person, other than an Owner, as shown in theregistration books kept by the Bond Registrar, of any amount with respect toprincipal of, premium, if any, or interest on the Series 2012 Bonds. TheDistrict, the Trustee, the Bond Registrar and the Paying Agent shall treatand consider the person in whose name each Series 2012 Bond is registeredin the registration books kept by the Bond Registrar as the absolute owner ofsuch Series 2012 Bond for the purpose of payment of principal, premium andinterest with respect to such Series 2012 Bond, for the purpose of givingnotices of redemption and other matters with respect to such Series 2012Bond, for the purpose of registering transfers with respect to such Series2012 Bond, and for all other purposes whatsoever. The Paying Agent shallpay all principal of, premium, if any, and interest on the Series 2012 Bondsonly to or upon the order of the respective Owners, as shown in theregistration books kept by the Bond Registrar, or their respective attorneysduly authorized in writing, as provided herein and all such payments shall be

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valid and effective to fully satisfy and discharge the District's obligationswith respect to payment of principal of, premium, if any, and interest on theSeries 2012 Bonds to the extent of the sum or sums so paid. No person otherthan an Owner, as shown in the registration books kept by the BondRegistrar, shall receive a certificated Series 2012 Bond evidencing theobligation of the District to make payments of principal, premium, if any, andinterest pursuant to the provisions hereof. Upon delivery by DTC to theDistrict of written notice to the effect that DTC has determined to substitutea new Nominee in place of Cede & Co., and subject to the provisions hereinwith respect to Record Dates, the words "Cede & Co." in this SecondSupplemental Indenture shall refer to such new Nominee of DTC; and uponreceipt of such a notice the District shall promptly deliver a copy of the sameto the Trustee, Bond Registrar and the Paying Agent.

Upon receipt by the Trustee or the District of written notice from DTC:(i) confirming that DTC has received written notice from the District to theeffect that a continuation of the requirement that all of the OutstandingSeries 2012 Bonds be registered in the registration books kept by the BondRegistrar in the name of Cede & Co., as Nominee of DTC, is not in the bestinterest of the beneficial owners of the Series 2012 Bonds or (ii) to the effectthat DTC is unable or unwilling to discharge its responsibilities and nosubstitute Bond Depository willing to undertake the functions of DTChereunder can be found which is willing and able to undertake such functionsupon reasonable and customary terms, the Series 2012 Bonds shall no longerbe restricted to being registered in the registration books kept by the BondRegistrar in the name of Cede & Co., as Nominee of DTC, but may beregistered in whatever name or names Owners transferring or exchangingthe Series 2012 Bonds shall designate, in accordance with the provisionshereof.

SSection 202. Amounts and Terms The Series 2012 Bonds shall beone Term Bond, shall bear interest at the fixed interest rates per annum andshall mature in the amounts and on the dates set forth below:

Series Principal Amount Maturity Date Interest Rate CUSIP

2012 $29,100,000 May 1, 2042 6.70% 05355AAB3

Section 203. Authentication. Each Series 2012 Bond shall be datedJune 1, 2012. Each Series 2012 Bond also shall bear its date ofauthentication. Each Series 2012 Bond shall bear interest from the InterestPayment Date to which interest has been paid next preceding the date of its

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authentication, unless the date of its authentication: (i) is an InterestPayment Date to which interest on such Series 2012 Bond has been paid, inwhich event such Series 2012 Bond shall bear interest from its date ofauthentication; or (ii) is prior to the first Interest Payment Date for theSeries 2012 Bonds, in which event, such Series 2012 Bond shall bear interestfrom its date. Interest on the Series 2012 Bonds shall be due and payable oneach May 1 and November 1, commencing November 1, 2012, and shall becomputed on the basis of a 360-day year of twelve 30-day months.

SSection 204. Denominations. The Series 2012 Bonds shall be issuedin Authorized Denominations; provided, however, that the Series 2012 Bondsshall be delivered to the initial purchasers thereof only in aggregate principalamounts of $100,000 or integral multiples of Authorized Denominations inexcess of $100,000.

Section 205. Appointment of Paying Agent. The District appoints theTrustee as Paying Agent for the Series 2012 Bonds.

Section 206. Appointment of Bond Registrar. The District appointsthe Trustee as Bond Registrar for the Series 2012 Bonds.

Section 207. Conditions Precedent to Issuance of Series 2012 Bonds.In addition to complying with the requirements set forth in the MasterIndenture in connection with the issuance of the Series 2012 Bonds, all theSeries 2012 Bonds shall be executed by the District for delivery to theTrustee and thereupon shall be authenticated by the Trustee and delivered tothe District or upon its order, but only upon the further receipt by theTrustee of:

(a) Certified copies of the Assessment Proceedings;

(b) Executed copies of the Master Indenture and this SecondSupplemental Indenture;

(c) A Bond Counsel opinion to the effect that: (i) the District has theright and power under the Act as amended to the date of such opinion toauthorize, execute and deliver the Master Indenture and this SecondSupplemental Indenture, and the Master Indenture and this SecondSupplemental Indenture have been duly and lawfully authorized, executedand delivered by the District, are in full force and effect and are valid andbinding upon the District and enforceable in accordance with their respectiveterms; (ii) the Master Indenture, as amended and supplemented by thisSecond Supplemental Indenture, creates the valid pledge which it purports to

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create of the Series 2012 Trust Estate in the manner and to the extentprovided in the Master Indenture and this Second Supplemental Indenture;and (iii) the Series 2012 Bonds are valid, binding, special obligations of theDistrict, enforceable in accordance with their terms and the terms of theMaster Indenture and this Second Supplemental Indenture, subject tobankruptcy, insolvency or other laws affecting the rights of creditorsgenerally and entitled to the benefits of the Act as amended to the date ofsuch opinion, and the Series 2012 Bonds have been duly and validlyauthorized and issued in accordance with law and the Master Indenture andthis Second Supplemental Indenture;

(d) The District Counsel opinion required by the Master Indenture;

(e) A certificate of an Authorized Officer to the effect that, upon theauthentication and delivery of the Series 2012 Bonds, the District will not bein default in the performance of the terms and provisions of the MasterIndenture or this Second Supplemental Indenture;

(f) A certified copy of the final judgment of validation in respect ofBonds issued under the Indenture together with a certificate of no appeal.

AARTICLE IIIREDEMPTION OF SERIES 2012 BONDS

Section 301. Bonds Subject to Redemption. The Series 2012 Bondsare subject to redemption prior to maturity as provided in the form thereofset forth as Exhibit A to this Second Supplemental Indenture. Interest onSeries 2012 Bonds which are called for redemption shall be paid on theRedemption Date from the respective Series 2012 Interest Accountcorresponding to the Series 2012 Bonds to be called or from the Series 2012Revenue Account to the extent monies in the corresponding Series 2012Interest Account are insufficient for such purpose.

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AARTICLE IVDEPOSIT OF SERIES 2012 BOND PROCEEDS AND APPLICATIONTHEREOF; ESTABLISHMENT OF ACCOUNTS AND OPERATION

THEREOF

Section 401. Establishment of Accounts There are herebyestablished, the following Funds and Accounts.

(a) There is hereby established with the Trustee a Series 2012 Costsof Issuance Account.

(b) There are hereby established within the Debt Service Fund heldby the Trustee: (i) a Series 2012 Debt Service Account and therein a Series2012 Sinking Fund Account and a Series 2012 Interest Account; and (ii) aSeries 2012 Redemption Account, and, therein a Series 2012 PrepaymentSubaccount and an Optional Redemption Subaccount;

(c) There is hereby established within the Reserve Fund held by theTrustee a Series 2012 Reserve Account, which shall be held for the benefit ofall of the Series 2012 Bonds, without distinction as to Series 2012 Bonds andwithout privilege or priority of one Series 2012 Bonds over another;

(d) There is hereby established within the Revenue Fund held by theTrustee a Series 2012 Revenue Account; and

(e) There is hereby established within the Rebate Fund held by theTrustee a Series 2012 Rebate Account.

Section 402. Use of Series 2012 Bond Proceeds. The net proceeds ofsale of the Series 2012 Bonds, $28,166,763.00 (comprised of a par amount of$29,100,000, minus underwriter’s discount of $378,300.00, minus an originalissue discount of $554,937.00, together with $748,912.09 transferred from theSeries 2006 Bond Anticipation Bonds Reserve Account, will, as soon aspracticable upon the delivery thereof to the Trustee by the District pursuantto Section 207 of the Master Indenture, be applied as follows:

(a) $2,254,065.00, representing the Series 2012 Reserve AccountRequirement shall be deposited to the credit of the Series 2012 ReserveAccount;

(b) $203,882.09, representing the costs of issuance relating to theSeries 2012 Bonds shall be deposited to the credit of the Series 2012 Costs ofIssuance Account; and

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(c) $26,457,728.00 shall be deposited in the Escrow Fund pursuantto the Escrow Deposit Agreement and applied to the payment andredemption of all of the Outstanding Series 2006 Bond Anticipation Bonds.

SSection 403. Costs of Issuance Account. The amount depositedin the Series 2012 Costs of Issuance Account shall, at the written direction ofan Authorized Officer to the Trustee, be used to pay the costs of issuancerelating to the Series 2012 Bonds. On the later to occur of: (X) six (6) monthsfollowing the date of closing, or (Y) the receipt by the Trustee of the writtendirection of an Authorized Officer, any amounts remaining in the Series 2012Costs of Issuance Account for which a requisition has not been received shallbe transferred over and deposited into the Series 2012 Interest Account andused for the purposes permitted therefor.

Section 404. Series 2012 Reserve Account; Debt Service ReserveFund Deficiency Agreement. Amounts on deposit in the Series 2012 ReserveAccount shall be used, only for the purpose of making payments into theSeries 2012 Interest Account and the Series 2012 Sinking Fund Account topay Debt Service on the Series 2012 Bonds, when due, without distinction asto Series 2012 Bonds and without privilege or priority of one Series 2012Bond over another, to the extent the moneys on deposit in such Accountstherein and available therefor are insufficient and for no other purpose,except as specified in this Second Supplemental Indenture; provided,however, that the Trustee shall first draw the amount of any insufficiencyunder the Debt Service Reserve Fund Deficiency Agreement prior towithdrawing moneys from the Series 2012 Reserve Account. On the fifth (5th)Business Day preceding any Interest Payment Date, the Trustee shalldetermine the amount on deposit in the Series 2012 Interest Account and theSeries 2012 Sinking Fund Account and if the amounts on deposit therein willbe insufficient to pay the principal or interest on the Series 2012 Bondscoming due on such Interest Payment Date and shall provide notice to theMaster Developer under the Reserve Fund Deficiency Agreement of theamount of such insufficiency, which, pursuant to the Reserve Fund DeficiencyAgreement shall be required to be deposited with the Trustee, in immediatelyavailable funds, on the Business Day preceding such Interest Payment Datefor deposit into the Funds and Accounts as to which such insufficiency exists.

Any amount drawn under the Debt Service Reserve Fund DeficiencyAgreement shall be reimbursed from funds which otherwise would bedeposited into the Series 2012 Reserve Account to restore a withdrawaltherefrom or a deficiency therein, but only after the amount on deposit in theSeries 2012 Reserve Account is equal to the Series 2012 Reserve Account

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Requirement and all other requirements for payment under the Debt ServiceReserve Fund Deficiency Agreement have been satisfied. In the event thatfor whatever reason funds are not made available to the Trustee for paymentof Debt Service under the Debt Service Reserve Fund Deficiency Agreementon or before the Interest Payment Date, the Trustee shall draw the amount ofsuch insufficiency from the Series 2012 Reserve Account and thereafterrestore the amount withdrawn from funds drawn under the Debt ServiceReserve Fund Deficiency Agreement.

Such Accounts shall consist only of cash and Series 2012 InvestmentObligations.

For purposes of repayment of draws thereunder only, and not for anyother purpose including but not limited to the enforcement of remedialprovisions, the Debt Service Reserve Fund Deficiency Agreement shallconstitute a Credit Facility Agreement under the Indenture and the MasterDeveloper shall constitute a Credit Facility Issuer under the Indenture. Forthe avoidance of doubt, the Master Developer will not be considered a CreditFacility Issuer, and the Debt Service Reserve Fund Deficiency Agreementwill not be considered a Credit Facility Agreement for purposes of Section1105 of the Master Indenture.

The provisions set forth above relating to the Debt Service ReserveFund Deficiency Agreement shall be inapplicable from and after the date oftermination of the Debt Service Reserve Fund Deficiency Agreement, asprovided therein.

Anything herein or in the Master Indenture to the contrarynotwithstanding, on the forty-fifth (45th) day preceding each Redemption Date(or, if such forty-fifth (45th) day is not a Business Day, on the first Businessday preceding such forty-fifth (45th) day), the Trustee is hereby authorizedand directed to recalculate the Series 2012 Reserve Account Requirement andto transfer any excess on deposit in the Series 2012 Reserve Account into theSeries 2012 Prepayment Subaccount of the Series 2012 Redemption Accountand applied to the extraordinary mandatory redemption of the Series 2012Bonds; provided, however that no amounts shall be due and owing under theDebt Service Reserve Fund Deficiency Agreement.

On the earliest date on which there is on deposit in the Series 2012Reserve Account, sufficient monies, after taking into account other moniesavailable therefor, to pay and redeem all of the Outstanding Series 2012Bonds, together with accrued interest and redemption premium, if any, on

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such Series 2012 Bonds to the earliest date of redemption permitted thereinand herein, then the Trustee shall transfer the amount on deposit in theSeries 2012 Reserve Account into the Series 2012 Prepayment Subaccount inthe Series 2012 Redemption Account to pay and redeem all of theOutstanding Series 2012 Bonds on the earliest date permitted for redemptiontherein and herein; provided, however, that there shall be no amounts dueand owing under the Debt Service Reserve Fund Deficiency Agreement.

Anything in the Master Indenture or herein to the contrarynotwithstanding, amounts on deposit in a Series 2012 Reserve Account shall,upon the occurrence and continuance of an Event of Default, be subject to afirst charge by the Trustee for its fees and expenses, including fees andexpenses of collection of Delinquent Assessments; however, the Trustee shallnot be entitled to draw funds therefor pursuant to the Debt Service ReserveFund Deficiency Agreement.

SSection 405. Amortization Installments. (a) The AmortizationInstallments are established for the Series 2012 Bonds shall be as set forth inthe form of Bonds attached hereto.

(b) Upon any redemption of Series 2012 Bonds (other than Series2012 Bonds redeemed in accordance with scheduled AmortizationInstallments and other than Series 2012 Bonds redeemed at the direction ofthe District accompanied by a cash flow certificate as required by Section506(b) of the Master Indenture), the District shall cause to be recalculatedand delivered to the Trustee revised Amortization Installments recalculatedso as to amortize the Outstanding Series 2012 Bonds in substantially equalannual installments of principal and interest (subject to rounding toAuthorized Denominations of principal) over the remaining term of the Series2012 Bonds.

Section 406. Tax Covenants and Rebate Accounts. The Districtshall comply with the Tax Regulatory Covenants set forth as Exhibit B to thisSecond Supplemental Indenture, as amended and supplemented from time totime in accordance with their terms.

Section 407. Establishment of Series 2012 Revenue Account inRevenue Fund; Application of Revenues and Investment Earnings. (a)

The Trustee is hereby authorized and directed to establish within theRevenue Fund a Series 2012 Revenue Account into which the Trustee shalldeposit any and all amounts required to be deposited therein by this Section407 or by any other provision of the Master Indenture or this Supplemental

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Indenture, and any other amounts or payments specifically designated by theDistrict pursuant to a written direction or by a Supplemental Indenture forsaid purpose. The Series 2012 Revenue Account shall be held by the Trusteeseparate and apart from all other Funds and Accounts held under theIndenture and from all other moneys of the Trustee.

(b) The Trustee shall deposit into the Series 2012 Revenue Accountthe amounts other than Series 2012 Assessment Revenues required to bedeposited therein in accordance with the provisions of this SupplementalIndenture. The District shall deposit Series 2012 Assessment Revenues withthe Trustee immediately upon receipt together with a written accountingsetting forth the amounts of such Series 2012 Assessment Revenues in thefollowing categories which shall be deposited by the Trustee into the Fundsand Accounts established hereunder as follows:

(i) Series 2012 Assessment Principal, which shall be depositedinto the Series 2012 Sinking Fund Account;

(ii) Series 2012 Prepayment Principal and ForeclosureProceeds, which shall be deposited into the Series 2012 PrepaymentSubaccount in the Series 2012 Redemption Account;

(iii) Delinquent Assessment Principal, which shall first beapplied to restore the amount of any withdrawal from the Series 2012Reserve Account to pay the principal of Series 2012 Bonds and then toreimburse any draw for such purpose under the Debt Service Reserve FundDeficiency Agreement, and, the balance, if any, shall be deposited into theSeries 2012 Sinking Fund Account;

(iv) Delinquent Assessment Interest, which shall first beapplied to restore the amount of any withdrawal from the Series 2012Reserve Account to pay the interest on Series 2012 Bonds and then toreimburse any draw for such purpose under the Debt Service Reserve FundDeficiency Agreement, and, the balance, if any, deposited into the Series 2012Revenue Account; and

(v) all other Series 2012 Assessment Revenues, which shall bedeposited into the Series 2012 Revenue Account.

Notwithstanding the provisions of (iii) and (iv) above, the Trustee shallnot reimburse any draw under the Debt Service Reserve Fund DeficiencyAgreement unless the amount on deposit in the Series 2012 Reserve Accountis equal to the Series 2012 Reserve Account Requirement, but shall instead

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deposit any amount that otherwise be reimbursed under the Debt ServiceReserve Deficiency Agreement into the Series 2012 Reserve Account until theamount on deposit therein is equal to the Series 2012 Reserve AccountRequirement.

(c) On the forty-fifth (45th) day preceding each Redemption Date (orif such forty-fifth (45th) day is not a Business Day, on the Business Day nextpreceding such forty-fifth (45th) day), the Trustee shall determine the amounton deposit in the Series 2012 Prepayment Subaccount and, if the balancetherein is greater than zero, shall transfer from the Series 2012 RevenueAccount for deposit into the Series 2012 Prepayment Subaccount, an amountsufficient to increase the amount on deposit therein to an integral multiple of$5,000, and, shall thereupon give notice and cause the extraordinarymandatory redemption of the Series 2012 Bonds on the next succeedingRedemption Date in the maximum aggregate principal amount for whichmoneys are then on deposit in the Series 2012 Prepayment Subaccount inaccordance with the provisions for extraordinary redemption of Series 2012Bonds set forth in the respective form of Series 2012 Bond attached hereto,Section 301 hereof, and Article III of the Master Indenture.

(d) On May 1 and November 1 (or if such May 1 or November 1 is nota Business Day, on the Business Day preceding such May 1 or November 1),the Trustee shall transfer amounts on deposit in the Series 2012 RevenueAccount to the Funds and Accounts designated below in the followingamounts and in the following order of priority:

FFIRST, from the Series 2012 Revenue Account to the Series 2012Interest Account of the Debt Service Fund, an amount equal to the amount ofinterest payable on all Series 2012 Bonds then Outstanding on such May 1 orNovember 1 less any amount already on deposit in the Series 2012 InterestAccount not previously credited;

SECOND, to the Series 2012 Sinking Fund Account, the amount, ifany, equal to the difference between the Amortization Installments of allSeries 2012 Bonds subject to mandatory sinking fund redemption on suchMay 1, and the amount already on deposit in the Series 2012 Sinking FundAccount not previously credited;

THIRD, to the Series 2012 Reserve Account, the amount, if any, whichis necessary to make the amount on deposit therein equal to the Series 2012Reserve Account Requirement with respect to the Series 2012 Bonds; and

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FFOURTH, if the amount on deposit in the Series 2012 Reserve Accountis equal to the Series 2012 Reserve Account Requirement, the amountnecessary to reimburse any draw under the Debt Service Reserve FundDeficiency Agreement; and

FIFTH, the balance shall be retained in the Series 2012 RevenueAccount.

(e) On any date required by the Tax Regulatory Covenants, theDistrict shall give the Trustee written direction, and the Trustee shall,transfer from the Series 2012 Revenue Account to the Rebate Accountestablished for the Series 2012 Bonds in the Rebate Fund in accordance withthe Master Indenture, the amount due and owing to the United States, whichamount shall be paid, to the United States, when due, in accordance withsuch Tax Regulatory Covenants.

(f) On or after each November 2, the balance on deposit in the Series2012 Revenue Account shall be paid over to the District at the writtendirection of an Authorized Officer and used for any lawful purpose of theDistrict; provided, however, that on the date of such proposed transfer theamount on deposit in the Series 2012 Reserve Account shall be equal to theSeries 2012 Reserve Account Requirement, and, provided further, that theTrustee shall not have actual knowledge of an Event of Default under theMaster Indenture or hereunder relating to the Series 2012 Bonds, includingthe payment of Trustee's fees and expenses then due.

(g) Anything herein or in the Master Indenture to the contrarynotwithstanding, earnings on investments in all of the Funds and Accountsheld as security for the Series 2012 Bonds shall be invested only in Series2012 Investment Obligations, and further, earnings on the Series 2012Interest Account shall be retained, as realized, in such Account and used forthe purpose of such Account. Earnings on investments in the Series 2012Sinking Fund Account and the Series 2012 Redemption Account and theSubaccounts therein shall be deposited, as realized, to the credit of the Series2012 Revenue Account and used for the purpose of such Account.

Earnings on investments in the Series 2012 Reserve Account shall bedisposed of as follows:

(i) if there was no deficiency (as defined in Section 509 of theMaster Indenture) in the Series 2012 Reserve Account as of the most recentdate on which amounts on deposit in the Series 2012 Reserve Account were

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valued by the Trustee, and if no withdrawals have been made from the Series2012 Reserve Account since such date which have created a deficiency, and ifthere is no unreimbursed draw under the Debt Service Reserve FundDeficiency Agreement then earnings on the Series 2012 Reserve Accountshall be deposited into the Series 2012 Revenue Account and used for thepurpose of such Account; and

(ii) if as of the last date on which amounts on deposit in theSeries 2012 Reserve Account were valued by the Trustee there was adeficiency (as defined in Section 509 of the Master Indenture), or if there isan unreimbursed draw under the Debt Service Reserve Fund DeficiencyAgreement or if after such date withdrawals have been made from the Series2012 Reserve Account and have created such a deficiency, then earnings oninvestments in the Series 2012 Reserve Account shall be retained in theSeries 2012 Reserve Account until the amount on deposit therein is equal tothe Series 2012 Reserve Account Requirement, and, thereafter earnings inthe Series 2012 Reserve Account shall be deposited into the Series 2012Revenue Account and used for the purpose of such Account.

AARTICLE VCONCERNING THE TRUSTEE

Section 501. Acceptance by Trustee. The Trustee accepts the trustsdeclared and provided in this Second Supplemental Indenture and agrees toperform such trusts upon the terms and conditions set forth in the MasterIndenture.

Section 502. Limitation of Trustee's Responsibility. TheTrustee shall not be responsible in any manner for the due execution of thisSecond Supplemental Indenture by the District or for the recitals containedherein, all of which are made solely by the District.

Section 503. Trustee's Duties. Except as otherwise expresslystated in this Second Supplemental Indenture, nothing contained hereinshall limit the rights, benefits, privileges, protection and entitlements inuringto the Trustee under the Master Indenture, including, particularly, ArticleVI thereof.

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AARTICLE VIADDITIONAL BONDS

Section 601. No Parity Bonds; Limitation on Parity Assessments.The District covenants and agrees that so long as there are any Series

2012 Bonds Outstanding, it shall not cause or permit to be caused any lien,charge or claim against the Series 2012 Trust Estate.

The District further covenants and agrees that so long as there are anySeries 2012 Bonds Outstanding, it shall not levy or impose Assessments forcapital projects on lands subject to the Series 2012 Assessments without thewritten consent of the Majority Owners; provided, however, that theforegoing limitation shall not apply if a principal amount of the Series 2012Assessments equaling at least seventy-five percent (75%) of the then-Outstanding principal amount of the Series 2012 Bonds have been levied onlands within the District with respect to which there exists a separate taxparcel identification number for such parcel and a certificate of occupancyhas been issued for a structure thereon.

ARTICLE VIIMISCELLANEOUS

Section 701. Confirmation of Master Indenture. As supplemented bythis Second Supplemental Indenture, the Master Indenture is in all respectsratified and confirmed, and this Second Supplemental Indenture shall beread, taken and construed as a part of the Master Indenture so that all of therights, remedies, terms, conditions, covenants and agreements of the MasterIndenture, except insofar as modified herein, shall apply and remain in fullforce and effect with respect to this Second Supplemental Indenture and tothe Series 2012 Bonds issued hereunder.

Section 702. Continuing Disclosure Agreement.Contemporaneously with the execution and delivery hereof, the District hasexecuted and delivered a Continuing Disclosure Agreement in order tocomply with the requirements of Rule 15c2-12 promulgated under theSecurities and Exchange Act of 1934. The District covenants and agrees tocomply with the provisions of such Continuing Disclosure Agreement;however, as set forth therein, failure to so comply shall not constitute anEvent of Default hereunder, but, instead shall be enforceable by mandamus,injunction or any other means of specific performance.

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SSection 703. Additional Covenant Regarding Assessments. Inaddition, and not in limitation of, the covenants contained elsewhere in thisSupplemental Indenture and in the Master Indenture, the District covenantsto comply with the terms of the proceedings heretofore adopted with respectto the Series 2012 Assessments, including the Master AssessmentMethodology Report dated June 12, 2006 (the "Master Methodology Report"),as supplemented by the Sub-Master Assessment Methodology Report,adopted November 14, 2006, revised November 30, 2006 (the "Sub-MasterMethodology Report"), as supplemented by the First Sub-MasterSupplemental Assessment Methodology Report, adopted November 14, 2006,revised November 30, 2006 (the "First Sub-Master SupplementalMethodology Report"), as supplemented by the Second Sub-MasterSupplemental Assessment Methodology Report, adopted May 16, 2012,revised June 6, 2012 (the "Second Sub-Master Supplemental MethodologyReport") (collectively, the Master Methodology Report, as supplemented bythe Sub-Master Methodology Report, as supplemented by the First Sub-Master Methodology Report, as supplemented by the Second Sub-MasterSupplemental Methodology Report are hereinafter referred to as the“Report”), and to levy the Series 2012 Assessments and required paymentsset forth in Section 3.4 of each Report, in such manner as will generate fundssufficient to pay the principal of and interest on the Series 2012 Bonds, whendue.

Section 704. Collection of Assessments. Anything in thisSupplemental Indenture or in the Master Indenture to the contrarynotwithstanding but subject to the sentence immediately succeeding, Series2012 Assessments levied on platted lots and pledged hereunder to secure theSeries 2012 Bonds shall be collected pursuant to the uniform method for thecollection of Series 2012 Assessments set forth in the Act (the “UniformMethod”). To the extent the District is not able to collect such Series 2012Assessments pursuant to the Uniform Method, the District may elect tocollect and enforce such Series 2012 Assessments pursuant to any thenavailable and commercially reasonable method under the Act, Chapter 170,Florida Statutes, Chapter 173, Florida Statutes Chapter 197, FloridaStatutes, or any successor statutes thereto.

Series 2012 Assessments levied on unplatted lots and pledgedhereunder to secure the Series 2012 Bonds shall be collected directly by theDistrict pursuant to the Act and the procedures Chapters 170, 173 and 197,Florida Statutes, and not pursuant to the Uniform Method, in each case

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unless otherwise directed by the Trustee acting at the direction of, theMajority Owners.

SSection 705. Covenants with Regard to Enforcement and Collection ofDelinquent Assessments. This Section 705 shall apply to the enforcementand collection of Delinquent Assessments on tax parcels not owned by enduser/home owners and not collected by the Uniform Method. Anything hereinor in the Master Indenture to the contrary notwithstanding, the Districtcovenants and agrees that upon the occurrence and continuance of an Eventof Default, it will take such actions to enforce the remedial provisions of theIndenture, the provisions for the collection of Delinquent Assessments, theprovisions for the foreclosure of liens of Delinquent Assessments and willtake such other appropriate remedial actions as shall be directed by theTrustee acting at the direction of the Majority Owners.

If any property shall be offered for sale for the nonpayment of anySeries 2012 Assessment and no person or persons shall purchase suchproperty for an amount equal to the full amount due on the Series 2012Assessments (principal, interest, penalties and costs, plus attorneys’ fees, ifany), the property may then be purchased by the District for an amount equalto the balance due on the Series 2012 Assessments (principal, interest,penalties and costs, plus attorneys’ fees, if any), from any legally availablefunds of the District and the District shall receive the property in itscorporate name or in the name of a special purpose entity title to the propertyfor the benefit of the Owners of the Series 2012 Bonds; provided that theTrustee shall have the right, acting at the direction of the Majority Owners todirect the District with respect to any action taken pursuant to this Section.The District, either through its own action, or actions caused to be takenthrough the Trustee, shall have the power and shall lease or sell suchproperty, and deposit all of the net proceeds of any such lease or sale into theSeries 2012 Revenue Account. The District, either through its own actions, oractions caused to be taken through the Trustee, agrees that it shall, afterbeing provided with assurances satisfactory to it of payment of its fees, costsand expenses for doing so, be required to take the measures provided by lawfor sale of property acquired by it as trustee for the Owners of the Series 2012Bonds within thirty (30) days after the receipt of the request therefore signedby the Trustee or the Majority Owners. The Trustee may, upon directionfrom the Majority Owners, pay costs associated with any actions taken by theDistrict pursuant to this paragraph or Section 708 from any moneys legallyavailable for such purpose held under the Indenture.

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SSection 706. Requisite Owners for Direction or Consent. Anything inthe Master Indenture to the contrary notwithstanding, any direction orconsent or similar provision which requires fifty-one percent of the Owners,shall in each case be deemed to refer to, and shall mean, the MajorityOwners.

Section 707. Provisions Relating to Bankruptcy or Insolvency of aTaxpayer. This Section 707 and Section 708 shall apply only with respect toa tax parcel which is not owned by an end user/home owner. The provisionsof this Section 707 shall apply both before and after the commencement,whether voluntary or involuntary, of any case, proceeding or other action byor against any owner of any tax parcel subject to the Series 2012Assessments (an “Insolvent Taxpayer”) under any existing or future law ofany jurisdiction relating to bankruptcy, insolvency, reorganization,assignment for the benefit of creditors, or relief of debtors (a “Proceeding”),except where such tax parcel shall be homestead property. For as long as anySeries 2012 Bonds remain outstanding, in any Proceeding involving theDistrict, any Insolvent Taxpayer, the Series 2012 Bonds or the Series 2012Assessments, the District shall be obligated to act in accordance withdirection from the Trustee with regard to all matters directly or indirectlyaffecting the Series 2012 Bonds or for as long as any of the Series 2012 Bondsremain Outstanding. The District agrees that it shall not be a defense to abreach of the foregoing covenant that it has acted upon advice of counsel innot complying with this covenant.

The District acknowledges and agrees that, although the Series 2012Bonds were issued by the District, the Owners of the Series 2012 Bonds arecategorically a party with a financial stake in the transaction and,consequently, a party with a vested interest in a Proceeding. In the event ofany Proceeding involving any Insolvent Taxpayer:

(a) the District hereby agrees that it shall not make any election, giveany consent, commence any action or file any motion, claim, obligation, noticeor application or take any other action or position in any Proceeding or in anyaction related to a Proceeding that affects, either directly or indirectly, theSeries 2012 Assessments, the Series 2012 Bonds or any rights of the Trusteeunder the Indenture that is inconsistent with any direction from the Trustee;

(b) the Trustee shall have the right, but is not obligated to, vote in anysuch Proceeding any and all claims of the District, and, if the Trustee choosesto exercise such right, the District shall be deemed to have appointed theTrustee as its agent and granted to the Trustee an irrevocable power of

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attorney coupled with an interest, and its proxy, for the purpose of exercisingany and all rights and taking any and all actions available to the District inconnection with any Proceeding of any Insolvent Taxpayer, including withoutlimitation, the right to file and/or prosecute any claims, to vote to accept orreject a plan, and to make any election under Section 1111(b) of the UnitedStates Bankruptcy Code; and

(c) the District shall not challenge the validity or amount of any claimsubmitted in such Proceeding by the Trustee in good faith or any valuationsof the lands owned by any Insolvent Taxpayer submitted by the Trustee ingood faith in such Proceeding or take any other action in such Proceeding,which is adverse to the Trustee’s enforcement of the District claim withrespect to the Series 2012 Assessments or receipt of adequate protection (asthat term is defined in the United States Bankruptcy Code).

Without limiting the generality of the foregoing, the District agreesthat the Trustee shall have the right (i) to file a proof of claim with respect tothe Series 2012 Assessments and the Completion Agreement, (ii) to deliver tothe District a copy thereof, together with evidence of the filing with theappropriate court or other authority, and (iii) to defend any objection filed tosaid proof of claim.

Nothing in this Section 707 shall preclude the District from becoming aparty to a Proceeding in order to enforce a claim for operation andmaintenance Assessments, and the District shall be free to pursue such aclaim in such manner as it shall deem appropriate in its sole and absolutediscretion.

SSection 708. Additional Event of Default; Remedies. Section 902 ofthe Master Indenture is hereby amended with respect to the Series 2012Bonds by inserting at the conclusion thereof the following paragraphs:

“(h) Any portion of the Series 2012 Assessments shall have becomeDelinquent Assessments and the terms of the Indenture require the Trusteeto withdraw funds from the Series 2012 Reserve Account to pay debt serviceon the Series 2012 Bonds (regardless of whether the Trustee does or does not,at the direction of the Majority Owners, actually withdraw such funds fromthe Series 2012 Reserve Account to pay debt service on the Series 2012Bonds); and

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Section 9.04 of the Master Indenture is hereby amended with respect tothe Series 2012 Bonds by inserting at the conclusion thereof the followingparagraph:

“The District covenants and agrees that, upon the occurrence andcontinuance of an Event of Default, it will take such actions to enforce theremedial provisions of the Indenture, the provisions for the collection ofDelinquent Assessments, and the provisions for the foreclosure of liens ofDelinquent Assessments, and will take such other appropriate remedialactions as shall be directed by the Trustee acting at the direction of, and onbehalf of, the Majority Owners. Notwithstanding anything to the contraryherein and, unless otherwise directed by the Majority Owners, to the extentallowed pursuant to Federal or State law, the District acknowledges andagrees that (i) upon failure of any property owner to pay Series 2012Assessments collected directly by the District when due, that the entireamount of Delinquent Assessments, with interest and penalties thereon,shall immediately become due and payable and the District shall promptly,but in any event within ninety (90) days, cause to be commenced thenecessary legal proceedings from the foreclosure of liens of DelinquentAssessments, including interest and penalties and (ii) the foreclosureproceedings shall be prosecuted to a sale and conveyance of the propertyinvolved in said proceedings as may then be provided by law in suits toforeclose mortgages.”

SSection 709. Amendment of First Supplemental Indenture. The FirstSupplemental Indenture is hereby amended and supplemented byincorporating therein the provisions of Sections 706 through 708 hereof as iffully set forth therein at the conclusion of Section 706 thereof. Thisamendment sets forth additional rights for the Owners of the Series 2006Bonds which remain Outstanding thereunder and accordingly is anamendment described in Section 1101(e) of the Master Indenture which doesnot require consent of the Owners. Except as expressly amended andsupplemented as set forth above in this Section 709, the provisions of theFirst Supplemental Indenture shall remain in full force and effect and arehereby ratified and confirmed.

IN WITNESS WHEREOF, Ave Maria Stewardship Community Districthas caused these presents to be signed in its name and on its behalf by itsChairman, and its official seal to be hereunto affixed and attested by itsSecretary, thereunto duly authorized, and to evidence its acceptance of thetrusts hereby created, the Trustee has caused these presents to be signed inits name and on its behalf by its duly Vice President.

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SSEAL AVE MARIA STEWARDSHIPCOMMUNITY DISTRICT

Attest:

By:______________________________Secretary Chairman, Board of Supervisors

U.S. BANK NATIONALASSOCIATION,as Trustee

By:______________________________Vice President

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EEXHIBIT A

FORM OF SERIES 2012 BONDS

[TEXT OF SERIES 2012 BOND FACE]

No. 2012R- $$

United States of AmericaState of Florida

AVE MARIA STEWARDSHIP COMMUNITY DISTRICTCAPITAL IMPROVEMENT REVENUE REFUNDING BOND,

SERIES 2012

Interest Maturity DatedRate Date Date CUSIP6.70% May 1, 2042 June 7, 2012 05355AAB3

Registered Owner: CEDE & CO.

Principal Amount:

AVE MARIA STEWARDSHIP COMMUNITY DISTRICT, anindependent special district duly established and existing pursuant toChapter 2004-461, Laws of Florida, as amended (the "District"), for valuereceived, hereby promises to pay (but only out of the sources hereinaftermentioned) to the registered Owner set forth above, or registered assigns, onthe maturity date shown hereon, unless this Bond shall have been called forredemption in whole or in part and payment of the Redemption Price (asdefined in the Indenture mentioned hereinafter) shall have been duly madeor provided for, the principal amount shown above and to pay (but only out ofthe sources hereinafter mentioned) interest on the outstanding principalamount hereof from the most recent Interest Payment Date to which interesthas been paid or provided for, or, if no interest has been paid, from the DatedDate shown above on May 1 and November 1 of each year (each, an "InterestPayment Date"), commencing on November 1, 2012, until payment of saidprincipal sum has been made or provided for, at the rate per annum set forthabove. Notwithstanding the foregoing, if any Interest Payment Date is not aBusiness Day (as defined in the Indenture hereinafter mentioned), then allamounts due on such Interest Payment Date shall be payable on the firstBusiness Day succeeding such Interest Payment Date, but shall be deemedpaid on such Interest Payment Date. The interest so payable, and punctuallypaid or duly provided for, on any Interest Payment Date will, as provided in

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the Indenture (as hereinafter defined), be paid to the registered Owner hereofat the close of business on the regular record date for such interest, whichshall be the fifteenth (15th) day of the calendar month next preceding suchInterest Payment Date, or, if such day is not a Business Day on the BusinessDay immediately preceding such day; provided, however, that on or after theoccurrence and continuance of an Event of Default under clause (a) of Section902 of the Master Indenture (hereinafter defined), the payment of interestand principal or Redemption Price or Amortization Installments shall bemade by the Paying Agent (hereinafter defined) to such person, who, on aspecial record date which is fixed by the Trustee, which shall be not morethan fifteen (15) and not less than ten (10) days prior to the date of suchproposed payment, appears on the registration books of the Bond Registraras the registered Owner of this Bond. Any payment of principal, MaturityAmount or Redemption Price shall be made only upon presentation hereof atthe designated corporate trust office of U.S. Bank National Association,located in Orlando, Florida, or any alternate or successor paying agent(collectively, the "Paying Agent"). Payment of interest shall be made bycheck or draft (or by wire transfer to the registered Owner set forth above ifsuch Owner requests such method of payment in writing on or prior to theregular record date for the respective interest payment to such account asshall be specified in such request, but only if the registered Owner set forthabove owns not less than $1,000,000 in aggregate principal amount of theSeries 2012 Bonds, as defined below). Interest on this Bond will be computedon the basis of a 360-day year of twelve 30-day months.

This Bond is one of a duly authorized issue of bonds of the Districtdesignated "Capital Improvement Revenue Refunding Bonds, Series 2012" inthe aggregate principal amount of $29,100,000 (the "Series 2012 Bonds") (theSeries 2012 Bonds together with any other Bonds issued under and governedby the terms of, the Master Indenture, are hereinafter collectively referred toas the "Bonds"), under a Master Trust Indenture, dated as of December 1,2006 (the "Master Indenture"), between the District and U.S. Bank NationalAssociation, located in Orlando, Florida, as trustee (the "Trustee"), asamended and supplemented by a Second Supplemental Indenture, dated as ofJune 1, 2012 (the "Supplemental Indenture"), between the District and theTrustee (the Master Indenture as amended and supplemented by theSupplemental Indenture is hereinafter referred to as the "Indenture"). TheSeries 2012 Bonds are issued in an aggregate principal amount of$29,100,000 to: (i) refund and redeem all of the Outstanding principalamount of the District’s Bond Anticipation Bonds, Series 2006; (ii) paycertain costs associated with the issuance of the Series 2012 Bonds; and (iii)

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make a deposit into the Series 2012 Reserve Account for the benefit of all ofthe Series 2012 Bonds.

NEITHER THIS BOND NOR THE INTEREST AND PREMIUM, IFANY, PAYABLE HEREON SHALL CONSTITUTE A GENERALOBLIGATION OR GENERAL INDEBTEDNESS OF THE DISTRICTWITHIN THE MEANING OF THE CONSTITUTION AND LAWS OFFLORIDA. THIS BOND AND THE SERIES OF WHICH IT IS A PART ANDTHE INTEREST AND PREMIUM, IF ANY, PAYABLE HEREON ANDTHEREON DO NOT CONSTITUTE EITHER A PLEDGE OF THE FULLFAITH AND CREDIT OF THE DISTRICT OR A LIEN UPON ANYPROPERTY OF THE DISTRICT OTHER THAN AS PROVIDED IN THEMASTER INDENTURE OR IN THE SUPPLEMENTAL INDENTUREAUTHORIZING THE ISSUANCE OF THE SERIES 2012 BONDS. NOOWNER OR ANY OTHER PERSON SHALL EVER HAVE THE RIGHT TOCOMPEL THE EXERCISE OF ANY AD VALOREM TAXING POWER OFTHE DISTRICT OR ANY OTHER PUBLIC AUTHORITY ORGOVERNMENTAL BODY TO PAY DEBT SERVICE OR TO PAY ANYOTHER AMOUNTS REQUIRED TO BE PAID PURSUANT TO THEMASTER INDENTURE, THE SUPPLEMENTAL INDENTURE, OR THESERIES 2012 BONDS. RATHER, DEBT SERVICE AND ANY OTHERAMOUNTS REQUIRED TO BE PAID PURSUANT TO THE MASTERINDENTURE, THE SUPPLEMENTAL INDENTURE, OR THE SERIES2012 BONDS, SHALL BE PAYABLE SOLELY FROM, AND SHALL BESECURED SOLELY BY, THE SERIES 2012 PLEDGED REVENUES ANDTHE SERIES 2012 PLEDGED FUNDS PLEDGED TO THE SERIES 2012BONDS, ALL AS PROVIDED HEREIN, IN THE MASTER INDENTUREAND IN THE SUPPLEMENTAL INDENTURE.

All acts, conditions and things required by the Constitution and laws ofthe State of Florida and the ordinances and resolutions of the District tohappen, exist and be performed precedent to and in the issuance of this Bondand the execution of the Indenture, have happened, exist and have beenperformed as so required. This Bond shall not be valid or become obligatoryfor any purpose or be entitled to any benefit or security under the Indentureuntil it shall have been authenticated by the execution by the Trustee of theCertificate of Authentication endorsed hereon.

IIN WITNESS WHEREOF, Ave Maria Stewardship Community Districthas caused this Bond to bear the signature of the Chairman of its Board ofSupervisors and the official seal of the District to be impressed or imprinted

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hereon and attested by the signature of the Secretary to the Board ofSupervisors.

Attest: AAVE MARIA STEWARDSHIPCOMMUNITY DISTRICT

By:Secretary Chairman, Board of Supervisors

[Official Seal]

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[[FORM OF CERTIFICATE OF AUTHENTICATION FOR SERIES2012 BONDS]

This Bond is one of the Bonds of the Series designated herein, describedin the within-mentioned Indenture.

U.S. BANK NATIONALASSOCIATION,as Trustee

Date of Authentication: By:Vice President

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[[TEXT OF SERIES 2012 BOND]

This Bond is issued under and pursuant to the Constitution and laws ofthe State of Florida, particularly Chapter 2004-461, Laws of Florida, asamended, and other applicable provisions of law and pursuant to theIndenture, executed counterparts of which Indenture are on file at thecorporate trust office of the Trustee. Reference is hereby made to theIndenture for the provisions, among others, with respect to the custody andapplication of the proceeds of Bonds issued under the Indenture, thecollection and disposition of revenues and the funds charged with andpledged to the payment of the principal, Maturity Amount and RedemptionPrice of, and the interest on, the Bonds, the nature and extent of the securitythereby created, the covenants of the District with respect to the levy andcollection of Assessments (as defined in the Indenture), the terms andconditions under which the Bonds are or may be issued, the rights, duties,obligations and immunities of the District and the Trustee under theIndenture and the rights of the Owners of the Bonds, and, by the acceptanceof this Bond, the Owner hereof assents to all of the provisions of theIndenture. The Series 2012 Bonds are equally and ratably secured by theSeries 2012 Trust Estate, without preference or priority of one Series 2012Bond over another. The Supplemental Indenture does not authorize theissuance of any additional Bonds ranking on a parity with the Series 2012Bonds as to the lien and pledge of the Series 2012 Trust Estate.

The Series 2012 Bonds are issuable only as registered bonds withoutcoupons in current interest form in denominations of $5,000 or any integralmultiple thereof (an "Authorized Denomination"); provided, however, that theSeries 2012 Bonds shall be delivered to the initial purchasers thereof only inaggregate principal amounts of $100,000 or integral multiples of AuthorizedDenominations in excess of $100,000. This Bond is transferable by theregistered Owner hereof or his duly authorized attorney at the designatedcorporate trust office of the Trustee in Orlando, Florida, as Bond Registrar(the "Bond Registrar"), upon surrender of this Bond, accompanied by a dulyexecuted instrument of transfer in form and with guaranty of signaturereasonably satisfactory to the Bond Registrar, subject to such reasonableregulations as the District or the Bond Registrar may prescribe, and uponpayment of any taxes or other governmental charges incident to suchtransfer. Upon any such transfer a new Bond or Bonds, in the sameaggregate principal amount as the Bond or Bonds transferred, will be issuedto the transferee. At the corporate trust office of the Bond Registrar inOrlando, Florida, in the manner and subject to the limitations and conditions

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provided in the Master Indenture and without cost, except for any tax orother governmental charge, Bonds may be exchanged for an equal aggregateprincipal amount of Bonds of the same maturity, of AuthorizedDenominations and bearing interest at the same rate or rates.

The Series 2012 Bonds are subject to redemption prior to maturity atthe option of the District in whole or in part at any time on or after May 1,2022 at the Redemption Price of the principal amount of the Series 2012Bonds or portions thereof to be redeemed together with accrued interest tothe redemption date.

The Series 2012 Bonds are subject to mandatory redemption in part bythe District by lot prior to their scheduled maturity from moneys in theSeries 2012 Sinking Fund Account established under the SupplementalIndenture in satisfaction of applicable Amortization Installments (as definedin the Master Indenture) at the Redemption Price of the principal amountthereof, without premium, together with accrued interest to the date ofredemption on May 1 of the years and in the principal amounts set forthbelow:

MMay 1of the Year


May 1of the Year


2013 $310,000 2028 $855,0002014 335,000 2029 910,0002015 355,000 2030 975,0002016 380,000 2031 1,040,0002017 410,000 2032 1,115,0002018 435,000 2033 1,190,0002019 465,000 2034 1,275,0002020 500,000 2035 1,365,0002021 535,000 2036 1,455,0002022 570,000 2037 1,560,0002023 610,000 2038 1,665,0002024 650,000 2039 1,780,0002025 700,000 2040 1,905,0002026 745,000 2041 2,035,0002027 795,000 2042 2,180,000*

As more particularly set forth in the Master Indenture andSupplemental Indenture, any Series 2012 Bonds that are purchased by theDistrict with amounts held to pay an Amortization Installment will be

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cancelled and the principal amount so purchased will be applied as a creditagainst the applicable Amortization Installment of Series 2012 Bonds.Amortization Installments are also subject to recalculation, as provided inthe Supplemental Indenture, as the result of the redemption of Series 2012Bonds so as to reamortize the remaining Outstanding principal balance of theSeries 2012 Bonds as set forth in the Supplemental Indenture.

The Series 2012 Bonds are subject to Extraordinary MandatoryRedemption prior to maturity, in whole on any date or in part on any InterestPayment Date or under the circumstances set forth in (c) below, in themanner determined by the Bond Registrar at the Redemption Price of 100%of the principal amount thereof, without premium, together with accruedinterest to the date of redemption, if and to the extent that any one or more ofthe following shall have occurred:

(a) from Prepayments of Series 2012 Assessments (as defined in theIndenture) deposited into the Series 2012 Prepayment Subaccount of theSeries 2012 Redemption Account or from Foreclosure Proceeds; or

(b) from amounts transferred to the Series 2012 PrepaymentSubaccount of the Series 2012 Redemption Account resulting from areduction in the Series 2012 Reserve Account Requirement as provided for inthe Indenture, and, on the date on which the amount on deposit in the Series2012 Reserve Account, together with other moneys available therefor, aresufficient to pay and redeem all of the Series 2012 Bonds then Outstanding,including accrued interest thereon.

If less than all of the Series 2012 Bonds of a Series shall be called forredemption, the particular Series 2012 Bonds or portions of Series 2012Bonds of a Series to be redeemed shall be selected by lot by the Registrar asprovided in the Indenture.

Notice of each redemption of Series 2012 Bonds is required to be mailedby the Bond Registrar, postage prepaid, not less than thirty (30) nor morethan forty-five (45) days prior to the redemption date to each registeredOwner of Series 2012 Bonds to be redeemed at the address of such registeredOwner recorded on the bond register maintained by the Bond Registrar. Onthe date designated for redemption, notice having been given and money forthe payment of the Redemption Price being held by the Paying Agent, all asprovided in the Indenture, the Series 2012 Bonds or such portions thereof socalled for redemption shall become and be due and payable at theRedemption Price provided for the redemption of such Series 2012 Bonds or

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such portions thereof on such date, interest on such Series 2012 Bonds orsuch portions thereof so called for redemption shall cease to accrue, suchSeries 2012 Bonds or such portions thereof so called for redemption shallcease to be entitled to any benefit or security under the Indenture and theOwners thereof shall have no rights in respect of such Series 2012 Bonds orsuch portions thereof so called for redemption except to receive payments ofthe Redemption Price thereof so held by the Paying Agent. Further notice ofredemption shall be given by the Bond Registrar to certain registeredsecurities depositories and information services as set forth in the Indenture,but no defect in said further notice nor any failure to give all or any portion ofsuch further notice shall in any manner defeat the effectiveness of a call forredemption if notice thereof is given as above prescribed.

The Owner of this Bond shall have no right to enforce the provisions ofthe Master Indenture or to institute action to enforce the covenants therein,or to take any action with respect to any Event of Default under theIndenture, or to institute, appear in or defend any suit or other proceedingwith respect thereto, except as provided in the Indenture.

In certain events, on the conditions, in the manner and with the effectset forth in the Indenture, the principal of all the Series 2012 Bonds thenOutstanding under the Indenture may become and may be declared due andpayable before the stated maturities thereof, with the interest accruedthereon.

Modifications or alterations of the Master Indenture or of anyindenture supplemental thereto may be made only to the extent and in thecircumstances permitted by the Master Indenture.

Any moneys held by the Trustee or any Paying Agent in trust for thepayment and discharge of any Bond which remain unclaimed for six (6) yearsafter the date when such Bond has become due and payable, either at itsstated maturity dates or by call for earlier redemption, if such moneys wereheld by the Trustee or any Paying Agent at such date, or for six (6) yearsafter the date of deposit of such moneys if deposited with the Trustee orPaying Agent after the date when such Bond became due and payable, shallbe paid to the District, and thereupon and thereafter no claimant shall haveany rights against the Paying Agent to or in respect of such moneys.

If the District deposits or causes to be deposited with the Trustee cashor Federal Securities (as defined in the Indenture) sufficient to pay theprincipal or redemption price of any Bonds becoming due at maturity or by

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call for redemption in the manner set forth in the Indenture, together withthe interest accrued to the due date, the lien of the Series 2012 Bonds as tothe Trust Estate shall be discharged, except for the rights of the Ownersthereof with respect to the funds so deposited as provided in the Indenture.

This Bond shall have all the qualities and incidents, includingnegotiability, of investment securities within the meaning and for all thepurposes of the Uniform Commercial Code of the State of Florida.

This Bond is issued with the intent that the laws of the State of Floridashall govern its construction.

CCERTIFICATE OF VALIDATION

This Bond refunds Bonds which were validated by judgment of theCircuit Court for Collier County, Florida rendered on September 18, 2006.

Chairman

[FORM OF BOND COUNSEL OPINION]

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[[FORM OF ABBREVIATIONS FOR SERIES 2012 BONDS]

The following abbreviations, when used in the inscription on the face ofthe within Bond, shall be construed as though they were written out in fullaccording to applicable laws or regulations.

TEN COM as tenants in common

TEN ENT as tenants by the entireties

JU TEN as joint tenants with the right of survivorship and not astenants in common

UNIFORM TRANSFER MIN ACT - __________ Custodian __________under Uniform Transfer to Minors Act __________ (Cust.)(Minor) (State)

Additional abbreviations may also be used

though not in the above list.

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[[FORM OF ASSIGNMENT FOR SERIES 2012 BONDS]

For value received, the undersigned hereby sells, assigns and transfersunto

_____________________ within Bond and all rights thereunder, andhereby irrevocably constitutes and appoints_________________________________, attorney to transfer the said Bond on thebooks of the District, with full power of substitution in the premises.

Dated:

Social Security Number or Employer

Identification Number of Transferee:

Signature guaranteed:

NOTICE: Signature(s) must be guaranteed by an institution which is aparticipant in the Securities Transfer Agent Medallion Program (STAMP) orsimilar program.

NOTICE: The assignor's signature to this Assignment must correspondwith the name as it appears on the face of the within Bond in everyparticular without alteration or any change whatever.

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EEXHIBIT B

TO SECOND SUPPLEMENTAL TRUST INDENTURE

TAX REGULATORY COVENANTS

These Tax Regulatory Covenants are intended to set forth certainduties and requirements necessary for compliance with Section 148(f) of theInternal Revenue Code of 1986, as amended (the "Code") to the extentnecessary to preserve the tax-exempt treatment of interest on the Ave MariaStewardship Community District Capital Improvement Revenue RefundingBonds, Series 2012 (the "Bonds"). These Covenants are based upon Section148(f) and Treasury Regulations Sections 1.148-0 through 1.148-11, 1.149(b)-1 and (d)-1, and 1.150-0 through 1.150-2 (the "Regulations"). However, theyare not intended to be exhaustive. Since the requirements of such Section148(f) are subject to amplification and clarification, it may be necessary tosupplement or modify these Covenants from time to time to reflect anyadditional or different requirements of such Section and the Regulations or tospecify that action required hereunder is no longer required or that somefurther or different action is required to maintain or assure the exemptionfrom federal income tax of interest with respect to the Bonds.

The Bonds will be issued pursuant to a Master Trust Indenture, datedas of December 1, 2006 (the "Master Indenture"), from Ave MariaStewardship Community District (the "District") and U.S. Bank NationalAssociation, Orlando, Florida, as trustee (the "Trustee"), as amended andsupplemented by a Second Supplemental Trust Indenture, dated as of June 1,2012 (the "Supplemental Indenture") (the Master Indenture, as amended andsupplemented by the Supplemental Indenture is hereinafter referred to asthe "Indenture").

SECTION 1. TAX COVENANTS. Pursuant to the Indenture, theDistrict has made certain covenants designed to assure that the interest withrespect to the Bonds is and shall remain excludable from gross income forpurposes of federal income taxation. The District shall not, directly orindirectly, use or permit the use of any proceeds of the Bonds or any otherfunds or take or omit to take any action that would cause the Bonds to be"arbitrage bonds" within the meaning of Section 148 of the Code or thatwould cause interest on the Bonds to be included in gross income for federalincome tax purposes under the provisions of the Code. The District shallcomply with all other requirements as shall be determined by Bond Counselto be necessary or appropriate to assure that interest on the Bonds will be

B-2

excludable from gross income for purposes of federal income taxation. Tothat end, the District shall comply with all requirements of Section 148 of theCode to the extent applicable to the Bonds.

SSECTION 2. DEFINITIONS. Capitalized terms used herein, nototherwise defined herein, shall have the same meanings set forth in theIndenture and in the District's Certificate as to Arbitrage and Certain OtherTax Matters relating to the Bonds.

"Bond Counsel" means Nabors, Giblin & Nickerson, P.A., Tampa,Florida or such other firm of nationally recognized bond counsel as may beselected by the District.

"Bond Year" means any one-year period (or shorter period from theIssue Date) ending on the close of business on the day preceding theanniversary of the Issue Date.

"Code" means the Internal Revenue Code of 1986, as amended.

"Computation Date" means each date selected by the District as acomputation date pursuant to Section 1.148-3(e) of the Regulations and theFinal Computation Date.

"Fair Market Value" means, when applied to a Nonpurpose Investment,the Fair Market Value of such Investment as determined in accordance withSection 4 hereof.

"Final Computation Date" means the date the Bonds are discharged.

"Gross Proceeds" means, with respect to the Bonds:

(1) mounts constituting Sale Proceeds of the Bonds.

(2) mounts constituting Investment Proceeds of the Bonds.

(3) mounts constituting Transferred Proceeds of the Bonds.

(4) other amounts constituting Replacement Proceeds of the Bonds,including Pledged Moneys.

"Investment Proceeds" means any amounts actually or constructivelyreceived from investing proceeds of the Bonds.

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"Investment Property" means any security, obligation or other propertyheld principally as a passive vehicle for the production of income, within themeaning of Section 1.148-1(b) of the Regulations.

"Issue Date" means June 7, 2012.

"Net Proceeds" means Sale Proceeds, less the portion of such Proceedsinvested in a reasonably required reserve or replacement fund under theCode.

"Nonpurpose Investment" shall have the meaning ascribed to suchterm in Section 148(b)(2) of the Code and shall include any InvestmentProperty in which Gross Proceeds are invested which is not acquired to carryout the governmental purpose of the Bonds, e.g., obligations acquired withGross Proceeds that are invested temporarily until needed for thegovernmental purpose of the Bonds, that are used to discharge a prior issue,or that are invested in a reasonably required reserve or replacement fund.

"Nonpurpose Payments" shall include the payments with respect toNonpurpose Investments specified in Section 1.148-3(d)(1)(i)-(v) of theRegulations.

"Nonpurpose Receipts" shall include the receipts with respect toNonpurpose Investments specified in Section 1.148-3(d)(2)(i)-(iii) of theRegulations.

"Pledged Moneys" means moneys that are reasonably expected to beused directly or indirectly to pay debt service on the Bonds (or to reimburse amunicipal bond insurer) or as to which there is a reasonable assurance thatsuch moneys or the earnings thereon will be available directly or indirectly topay debt service on the Bonds (or to reimburse a municipal bond insurer) ifthe District encounters financial difficulties.

"Pre-Issuance Accrued Interest" means amounts representing interestthat has accrued on an obligation for a period of not greater than one yearbefore its issue date but only if those amounts are paid within one year afterthe Issue Date.

"Proceeds" means any Sale Proceeds, Investment Proceeds andTransferred Proceeds of the Bonds.

"Qualified Administrative Costs" means reasonable, directadministrative costs, other than carrying costs, such as separately stated

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brokerage and selling commissions that are comparable to those chargednongovernmental entities in transactions not involving tax-exempt bondproceeds, but not legal and accounting fees, recordkeeping, custody or similarcosts. In addition, with respect to a guaranteed investment contract orinvestments purchased for a yield restricted defeasance escrow, such costswill be considered reasonable if (1) the amount of the fee the District treats asa Qualified Administrative Cost does not exceed the lesser of (a) $30,000, or(b) the greater of (x) .2% of the "computational base", or (y) $3,000; and (2)the District does not treat as Qualified Administrative Costs more than$85,000 in brokers' commissions or similar fees with respect to all guaranteedinvestment contracts and investments for yield restricted defeasance escrowspurchased with Gross Proceeds of the issue. For purposes of this definitiononly, "computational base" shall mean, with respect to guaranteedinvestment contracts, the amount of Gross Proceeds the District reasonablyexpects, as of the date the contract is acquired, to be deposited in theguaranteed investment contract over the term of the contract and forinvestments other than guaranteed investment contracts, "computationalbase" shall mean the amount of Gross Proceeds initially invested in suchinvestments. The above-described safe harbor dollar amounts shall beincreased each calendar year after 2004 for cost-of-living adjustmentspursuant to Section 1.148-5(e) of the Regulations.

"Rebatable Arbitrage" means, as of any Computation Date, the excessof the future value of all Nonpurpose Receipts over the future value of allNonpurpose Payments.

"Rebate Fund" means the Rebate Fund established pursuant to theIndenture and described in Section 3 hereof.

"Regulations" means Treasury Regulations Sections 1.148-0 through1.148-11, 1.149(b)-1 and (d)-1, and 1.150-0 through 1.150-2, as amended, andany regulations amendatory, supplementary or additional thereto.

"Replacement Proceeds" means amounts that have a sufficiently directnexus to the Bonds or to the governmental purpose of the Bonds to concludethat the amounts would have been used for that governmental purpose if theProceeds of the Bonds were not used or to be used for that governmentalpurpose. For this purpose, governmental purposes include the expected useof amounts for the payment of debt service on a particular date. The mereavailability or preliminary earmarking of amounts for a governmentalpurpose, however, does not in itself establish a sufficient nexus to cause thoseamounts to be Replacement Proceeds. Replacement Proceeds include, but are

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not limited to, amounts held in a sinking fund or a pledged fund. For thesepurposes, an amount is pledged to pay principal of or interest on the Bonds ifthere is reasonable assurance that the amount will be available for suchpurposes in the event that the issuer encounters financial difficulties.

"Sale Proceeds" means any amounts actually or constructively receivedby the District from the sale of the Bonds, including amounts used to payunderwriter's discount or compensation and interest other than Pre-IssuanceAccrued Interest. Sale Proceeds shall also include, but are not limited to,amounts derived from the sale of a right that is associated with a Bond andthat is described in Section 1.148-4(b)(4) of the Regulations.

"Tax-Exempt Investment" means (i) an obligation the interest on whichis excluded from gross income pursuant to Section 103 of the Code, (ii) UnitedStates Treasury-State and Local Government Series, Demand DepositSecurities, and (iii) stock in a tax-exempt mutual fund as described in Section1.150-1(b) of the Regulations. Tax-Exempt Investment shall not include aspecified private activity bond as defined in Section 57(a)(5)(C) of the Code.For purposes of these Covenants, a tax-exempt mutual fund includes anyregulated investment company within the meaning of Section 851(a) of theCode meeting the requirements of Section 852(a) of the Code for theapplicable taxable year; having only one class of stock authorized andoutstanding; investing all of its assets in tax exempt obligations to the extentpracticable; and having at least 98% of (1) its gross income derived frominterest on, or gain from the sale of or other disposition of, tax exemptobligations or (2) the weighted average value of its assets represented byinvestments in tax exempt obligations.

"Transferred Proceeds" shall have the meaning provided therefor inSection 1.148-9 of the Regulations.

"Universal Cap" means the value of all then outstanding Bonds.

"Value" (of a Bond) means with respect to a Bond issued with not morethan two percent original issue discount or original issue premium, theoutstanding principal amount, plus accrued unpaid interest; for any otherBond, its present value.

"Value" (of an Investment) shall have the following meaning in thefollowing circumstances:

(1) General Rules. Subject to the special rules in the followingparagraph, an issuer may determine the value of an investment on a date

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using one of the following valuation methods consistently applied for allpurposes relating to arbitrage and rebate with respect to that investment onthat date:

(a) an investment with not more than two percent originalissue discount or original issue premium may be valued at its outstandingstated principal amount, plus accrued unpaid interest on such date;

(b) a fixed rate investment may be valued at its present valueon such date; and

(c) an investment may be valued at its Fair Market Value onsuch date.

(2) Special Rules. Yield restricted investments are to be valued atpresent value provided that (except for purposes of allocating TransferredProceeds to an issue, for purposes of the Universal Cap and for investmentsin a commingled fund other than a bona fide debt service fund unless it is acertain commingled fund):

(a) an investment must be valued at its Fair Market Valuewhen it is first allocated to an issue, when it is disposed of and when it isdeemed acquired or deemed disposed of, and provided further that;

(b) in the case of Transferred Proceeds, the Value of aNonpurpose Investment that is allocated to Transferred Proceeds of arefunding issue on a transfer date may not exceed the Value of thatinvestment on the transfer date used for purposes of applying the arbitragerestrictions to the refunded issue.

"Yield on the Bonds" or "Bond Yield" means, for all Computation Dates,the Yield expected as of the date hereof on the Bonds over the term of suchBonds computed by:

(i) using as the purchase price of the Bonds, the amount atwhich such Bonds were sold to the public within the meaning of Sections1273 and 1274 of the Code; and

(ii) assuming that all of the Bonds will be paid at theirscheduled maturity dates or in accordance with any mandatory redemptionrequirements.

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"Yield" means, generally, the discount rate which, when used incomputing the present value of all the unconditionally payable payments ofprincipal and interest on an obligation and all the payments for qualifiedguarantees paid and to be paid with respect to such obligation, produces anamount equal to the present value of the issue price of such obligation.Present value is computed as of the date of issue of the obligation. There are,however, many additional specific rules contained in the Regulations whichapply to the calculation and recalculation of yield for particular obligationsand such rules should be consulted prior to calculating the yield for the Bondson any Computation Date. Yield shall be calculated on a 360-day year basiswith interest compounded monthly. For this purpose the purchase price of aNonpurpose Investment or a Tax-Exempt Investment is its Fair MarketValue, as determined pursuant to Section 4 of these Covenants, as of the datethat it becomes allocated to Gross Proceeds of the Bonds.

SSECTION 3. REBATE REQUIREMENTS.

(a) The District shall pay to the United States Government at thetimes and in the amounts determined hereunder, the Rebatable Arbitrage.For purposes of determining the Rebatable Arbitrage, the District shall makesuch calculations or cause the calculations to be made by competent taxcounsel or other financial or accounting advisors or persons to ensure correctapplication of the rules contained in the Code and the Regulations relating toarbitrage rebate.

(b) pursuant to the Indenture, there has been established a fundseparate from any other fund or account established and maintained underthe Indenture designated the "Rebate Fund." The District or itsdesignated agent shall administer the Rebate Fund and continuously investall amounts held in the Rebate Fund in Governmental Obligations (asdefined in the Indenture) or Tax-Exempt Investments.

(c) Within 30 days after any Computation Date, the District shallcalculate or cause to be calculated the Rebatable Arbitrage or any penaltydue pursuant to Section 3(f) hereof. Immediately following such calculations,but in no event later than 60 days following the Computation Date (90 daysin the case of any penalty payment due pursuant to Section 3(f) hereof), theDistrict shall remit an amount which when added to the future value ofprevious rebate payments shall not be less than 90% (100% with respect tothe Computation Date on the final repayment or retirement of the Bonds) ofthe Rebatable Arbitrage or 100% of any penalty due pursuant to Section 3(f)hereof as of the applicable Computation Date.

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Each payment shall be accompanied by Internal Revenue Service Form8038-T.

(d) The obligation to pay Rebatable Arbitrage to the United States,as described herein, shall be treated as satisfied with respect to the Bonds if(i) Gross Proceeds are expended for the governmental purpose of the Bondsby no later than the date which is six months after the Issue Date and if it isnot anticipated that any other Gross Proceeds will arise during theremainder of the term of the Bonds and (ii) the requirement to pay RebatableArbitrage, if any, to the United States with respect to the portion of theReserve Account allocable to the Bonds is met. For purposes of the precedingsentence, Gross Proceeds do not include (i) amounts deposited in a bona fidedebt service fund, so long as the funds therein constitute bona fide debtservice funds, or a reasonably required reserve or replacement fund (asdefined in Section 1.148-1 of the Regulations and meeting the requirementsof Section 1.148-2(f) of the Regulations), (ii) amounts that, as of the IssueDate, are not reasonably expected to be Gross Proceeds but that becomeGross Proceeds after the date which is six months after the Issue Date, (iii)amounts representing Sale or Investment Proceeds derived from any PurposeInvestment (as defined in Section 1.148-1 of the Regulations) and earnings onthose payments, and (iv) amounts representing any repayments of grants (asdefined in Section 1.148-6(d)(4) of the Regulations). If Gross Proceeds are infact expended by such date, then Rebatable Arbitrage need not be calculatedand no payment thereof to the United States Department of Treasury need bemade. Use of Gross Proceeds to redeem Bonds shall not be treated as anexpenditure of such Gross Proceeds.

Notwithstanding the foregoing, if Gross Proceeds which werereasonably expected to be Gross Proceeds on the Issue Date actually becomeavailable after the date which is six months after the Issue Date, then therequirements described herein relating to the calculation of RebatableArbitrage and the payment thereof to the United States must be satisfied,except that no such calculation or payment need be made with respect to theinitial six month period. Any other amounts not described in this Section3(d) which constitute proceeds of the Bonds, other than a bona fide debtservice fund, will be subject to rebate.

(e) As an alternative to Section 3(d) above, the obligation of theDistrict to pay Rebatable Arbitrage to the United States, as described herein,shall be treated as satisfied with respect to the Bonds if (i) the rebaterequirement is met for all proceeds of the Bonds other than Gross Proceeds

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(as defined in Section 3(d) hereof) and (ii) the Gross Proceeds are expendedfor the governmental purposes of the issue within the periods set forth below:

(i) at least 15% of such Gross Proceeds are spent within thesix-month period beginning on the Issue Date;

(ii) at least 60% of such Gross Proceeds are spent within the 1-year period beginning on the Issue Date; and

(iii) at least 100% of such Gross Proceeds are spent within the18-month period beginning on the Issue Date.

As set forth in Section 1.148-7(d)(2) of the Regulations, for purposes ofthe expenditure requirements set forth in this Section 3(e), 100% of the GrossProceeds of the Bonds shall be treated as expended for the governmentalpurposes of the issue within the 18-month period beginning on the Issue Dateif such requirement is met within the 30-month period beginning on the IssueDate and such requirement would have been met within such 18-monthperiod but for a reasonable retainage (not exceeding 5% of the Net Proceedsof the Bonds). If Gross Proceeds are in fact expended by such dates, thenRebatable Arbitrage need not be calculated and no payment thereof to theUnited States Department of Treasury need be made. Any failure to satisfythe final spending requirement shall be disregarded if the District exercisesdue diligence to complete the project financed by the Bonds and the amountof the failure does not exceed the lesser of (i) 3% of the issue price of theBonds or (ii) $250,000. Use of Gross Proceeds to redeem the Bonds shall notbe treated as an expenditure of such Gross Proceeds. For purposes of thisSection 3(e), "Gross Proceeds" shall be modified as described in Section 3(d)above.

(f) As an alternative to Sections 3(d) and (e) above, the obligation topay Rebatable Arbitrage to the United States, as described herein, shall betreated as satisfied with respect to the Bonds if the Available ConstructionProceeds (as defined in Section 148(f)(4)(c)(vi) of the Code and describedbelow) are expended for the governmental purposes of the issue within theperiods set forth below:

(i) at least 10% of such Available Construction Proceeds arespent within the six-month period beginning on the Issue Date;

(ii) at least 45% of such Available Construction Proceeds arespent within the 1-year period beginning on the Issue Date;

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(iii) at least 75% of such Available Construction Proceeds arespent within the eighteen-month period beginning on the Issue Date; and

(iv) at least 100% of such Available Construction Proceeds arespent within the 2-year period beginning on the Issue Date.

For purposes of this Section 3(f), the term Available ConstructionProceeds means the Net Proceeds of the Bonds, increased by earnings on theNet Proceeds and earnings on all of the foregoing earnings, and reduced bythe amount of the Net Proceeds used to pay issuance costs (including bondinsurance premium). Notwithstanding the foregoing, Available ConstructionProceeds shall not include amounts earned on the Reserve Account after theearlier of the close of the two-year period beginning on the Issue Date or thedate construction is substantially completed. Any amounts which constituteproceeds of the Bonds other than Available Construction Proceeds andamounts on deposit in a bona fide debt service fund will be subject to rebate.

As set forth in Section 148(f)(4)(C)(iii) of the Code, for purposes of theexpenditure requirements set forth in this Section 3(f), 100% of AvailableConstruction Proceeds of the Bonds shall be treated as expended for thegovernmental purposes of the issue within the 2-year period beginning on theIssue Date if such requirement is met within the 3-year period beginning onthe Issue Date and such requirement would have been met within such 2-year period but for a reasonable retainage (not exceeding 5% of the NetProceeds of the Bonds). Use of available construction proceeds to redeem theBonds shall not be treated as an expenditure of such proceeds.

Any failure to satisfy the final spending requirement shall bedisregarded if the District exercises due diligence to complete the projectfinanced by the Bonds and the amount of the failure does not exceed thelesser of (i) 3% of the issue price of the Bonds or (ii) $250,000.

For purposes of Section 148(f)(4)(C)(vii) of the Code, in the event theDistrict fails to meet the expenditure requirements referred to above, theDistrict may elect to pay, in lieu of the Rebatable Arbitrage otherwiserequired to be paid with respect to such Gross Proceeds, a penalty withrespect to the close of each 6-month period after the Issue Date equal to 1.5%of the amount of the Available Construction Proceeds of the Bonds which, asof the close of such period, are not spent as required by the expenditureprovisions set forth above. The penalty referred to above shall cease to applyonly after the Bonds (including any refunding bonds issued with respect

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thereto) are no longer outstanding. The District makes no election in regardto the above-described penalty.

In order to qualify for the exemption from the obligation to payRebatable Arbitrage to the United States pursuant to this Section 3(f), atleast 75% of the Available Construction Proceeds must be used forconstruction expenditures (as defined in Section 1.148-7(g) of theRegulations) with respect to property which is owned by a governmental unitor an organization described in Section 501(c)(3) of the Code. The term"construction" includes reconstruction and rehabilitation of existing propertyand rules similar to the rules of Section 142(b)(1)(B) of the Code shall apply.If only a portion of an issue is to be used for construction expenditures, suchportion and the other portion of such issue may, at the election of the issuer,be treated as separate issues for purposes of this Section 3(f) (although theremaining portion may not be entitled to the benefits of Section 3(d) hereof).The District does not elect to treat any portion of the Bonds as a separateissue.

(g) The District shall keep proper books of records and accountscontaining complete and correct entries of all transactions relating to thereceipt, investment, disbursement, allocation and application of the moneysrelated to the Bonds, including moneys derived from, pledged to, or to be usedto make payments on the Bonds. Such records shall, at a minimum, beadequate to enable the District or its consultants to make the calculations forpayment of Rebatable Arbitrage as required by this Arbitrage RebateStatement. The records required to be maintained under this Section 3(g)shall be retained by the District until six years after the retirement of thelast obligation of the Bonds or for such other period as the United StatesTreasury may by regulations otherwise provide. Such records shall at leastspecify the account or fund to which each investment (or portion thereof) is tobe allocated and shall set forth, in the case of each investment security, (i) itspurchase price (including the amount of accrued interest to be statedseparately), (ii) identifying information, including par amount, coupon rate,and payment dates, (iii) the amount received at maturity or its sale price, asthe case may be, including accrued interest, (iv) the amounts and dates of anypayments made with respect thereto, (v) the dates of acquisition anddisposition or maturity, (vi) the amount of original issue discount or premium(if any), (vii) the frequency of periodic payments (and actual dates andamounts of receipts), (viii) the period of compounding, (ix) the transactioncosts (e.g., commissions) incurred in acquiring, carrying or disposing of theNonpurpose Investments, and (x) market price data sufficient to establish

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that the purchase price (disposition price) was not greater than (less than)the arm's-length price (see Section 4 below) on the date of acquisition(disposition) or, if earlier, on the date of a binding contract to acquire (disposeof) such Nonpurpose Investment.

SSECTION 4. MARKET PRICE RULES. Except as provided below,the District agrees to comply with the requirements relating to the "FairMarket Value" of acquired Nonpurpose Investments, as defined in Section1.148-5(d) of the Regulations ("Fair Market Value"). All investmentsrequired to be made pursuant to these Covenants shall be made to the extentpermitted by law. In this regard, the District agrees, among other things,that it will not acquire or cause to be acquired a Nonpurpose Investment (orany other investment acquired with Gross Proceeds or on deposit in theRebate Account) for a price in excess of its Fair Market Value or sell any suchinvestment at a price (determined without any reduction for transactioncosts) less than its Fair Market Value, except as provided below. For thispurpose, the following rules shall apply:

(a) Established securities markets. Except as otherwise providedbelow, any market especially established to provide a security or obligation toan issuer of municipal obligations shall not be treated as an establishedmarket and shall be rebuttably presumed to be acquired or disposed of for aprice that is not its Fair Market Value.

(b) Arm's-length price. Any transaction in which a NonpurposeInvestment is directly purchased with Gross Proceeds, or in which aNonpurpose Investment allocable to Gross Proceeds is disposed of, shall beundertaken in an arm's-length manner, and no amount shall be paid toreduce the yield on the Nonpurpose Investment.

(c) Safe harbor for establishing Fair Market Value for guaranteedinvestment contracts and Nonpurpose Investments purchased for a yieldrestricted defeasance escrow. In the case of a guaranteed investmentcontract or Nonpurpose Investments purchased for a yield restricteddefeasance escrow, the purchase price shall not be considered to be an arm's-length price unless all the following conditions are met:

(i) The District makes a bona fide solicitation ("Bona FideSolicitation") for the purchase of the investment that satisfies all of thefollowing requirements:

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(1) The bid specifications are in writing and are timelyforwarded to potential providers;

(2) The bid specifications include all terms of the bid thatmay directly or indirectly affect the yield or the cost of the investment;

(3) The bid specifications include a statement notifyingpotential providers that submission of a bid is a representation that thepotential provider did not consult with any other potential provider about itsbid, that the bid was determined without regard to any other formal orinformal agreement that the potential provider has with the District or anyother person (whether or not in connection with the bond issue), and that thebid is not being submitted solely as a courtesy to the District or any otherperson for purposes of satisfying these requirements;

(4) The terms of the bid specifications are such thatthere is a legitimate business purpose for each term other than to increasethe purchase price or reduce the yield of the investment (e.g., for solicitationsof Nonpurpose Investments for a yield restricted defeasance escrow, the holdfirm period must be no longer than the District reasonably requires);

(5) For purchases of guaranteed investment contractsonly, the terms of the solicitation take into account the District's reasonablyexpected deposit and draw down schedule for the amounts to be invested;

(6) All potential providers have an equal opportunity tobid (e.g., no potential provider is given the opportunity to review other bidsbefore providing a bid); and

(7) At least three providers are solicited for bids thathave an established industry reputation as a competitive provider of the typeof investments being purchased.

(ii) The bids received by the District must meet all of thefollowing requirements:

(1) The District receives at least three bids fromproviders that the District solicited under a Bona Fide Solicitation and thatdo not have a material financial interest in the issue. A lead underwriter in anegotiated underwriting transaction is deemed to have a material financialinterest in the issue until 15 days after the issue date of the issue. Inaddition, any entity acting as a financial advisor with respect to the purchaseof the investment at the time the bid specifications are forwarded to potential

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providers has a material financial interest in the issue. A provider that is arelated party to a provider that has a material financial interest in the issueis deemed to have a material financial interest in the issue.

(2) At least one of the three bids described in paragraph(c) (ii)(1) above is from a provider that has an established industry reputationas a competitive provider of the type of investments being purchased; and

(3) If the District uses an agent to conduct the biddingprocess, the agent did not bid to provide the investment.

(iii) The winning bid must meet the following requirements:

(1) Guaranteed investment contracts. If the investmentis a guaranteed investment contract, the winning bid is the highest yieldingbona fide bid (determined net of any broker's fees).

(2) Other Nonpurpose Investments. If the investment isnot a guaranteed investment contract, the following requirements are met:

(A) The winning bid is the lowest cost bona fide bid(including any broker's fees). The lowest bid is either the lowest cost bid forthe portfolio or, if the District compares the bids on an investment-by-investment basis, the aggregate cost of a portfolio comprised of the lowestcost bid for each investment. Any payment received by the District from aprovider at the time a guaranteed investment contract is purchased (e.g., anescrow float contract) for a yield restricted defeasance escrow under a biddingprocedure meeting these requirements is taken into account in determiningthe lowest cost bid.

(B) The lowest cost bona fide bid (including anybroker's fees) is not greater than the cost of the most efficient portfoliocomprised exclusively of State and Local Government Series Securities fromthe United States Department of the Treasury, Bureau of Public Debt. Thecost of the most efficient portfolio of State and Local Government SeriesSecurities is to be determined at the time that bids are required to besubmitted pursuant to the terms of the bid specifications. If such State andLocal Government Series Securities are not available for purchase on theday that bids are required to be submitted because sales of those securitieshave been suspended, the cost comparison described in this paragraph is notrequired.

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(iv) The provider of the investments or the obligor on theguaranteed investment contract certifies the administrative costs that it pays(or expects to pay) to third parties in connection with supplying theinvestment.

(d) The District shall retain certificates and records documentingcompliance with the above requirements until three years after the lastoutstanding Bond is redeemed including, but not limited to, the following:

(i) For purchases of guaranteed investment contracts, a copyof the contract, and for purchases of Nonpurpose Investments other thanguaranteed investment contracts, the purchase agreement or confirmation;

(ii) The receipt or other record of the amount actually paid bythe District for the investments, including a record of any administrativecosts paid by the District and the certification required in paragraph (c)(iv)above;

(iii) For each bid that is submitted, the name of the person andentity submitting the bid, the time and date of the bid, and the bid results;

(iv) The bid solicitation form and, if the terms of the purchaseagreement or the guaranteed investment contract deviated from the bidsolicitation form or a submitted bid is modified, a brief statement explainingthe deviation and stating the purpose for the deviation; and

(v) For purchase of Nonpurpose Investments other thanguaranteed investment contracts, the cost of the most efficient portfolio ofState and Local Government Series Securities, determined at the time thatthe bids were required to be submitted.

SSECTION 5. MODIFICATION UPON RECEIPT OF BONDCOUNSEL OPINION. Notwithstanding any provision of these Covenants, ifthe District shall receive an opinion of Bond Counsel that any specified actionrequired under these Covenants is no longer required or that some further ordifferent action is required to maintain or assure the exclusion from federalgross income of interest with respect to the Bonds, the District mayconclusively rely on such opinion in complying with the requirements of theseCovenants and the covenants herein shall be deemed to be modified to thatextent. These Covenants shall be amended or modified by the parties heretoin any manner which is necessary to comply with such regulations as may bepromulgated by the United States Treasury Department from time to time.

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SSECTION 6. ACCOUNTING FOR GROSS PROCEEDS. In orderto perform the calculations required by the Code and the Regulations, it isnecessary to track the investment and expenditure of all Gross Proceeds. Tothat end, the District must adopt reasonable and consistently appliedmethods of accounting for all Gross Proceeds. Appendix I hereto sets forth adescription of the required allocation and accounting rules with which theDistrict agrees to comply.

SECTION 7. ADMINISTRATIVE COSTS OF INVESTMENTS.Except as otherwise provided in this Section 7, an allocation of GrossProceeds to a payment or receipt on a Nonpurpose Investment is not adjustedto take into account any costs or expenses paid, directly or indirectly, topurchase, carry, sell or retire the Nonpurpose Investment (administrativecosts). Thus, administrative costs generally do not increase the payments for,or reduce the receipts from, Nonpurpose Investments.

In determining payments and receipts on Nonpurpose Investments,Qualified Administrative Costs are taken into account by increasingpayments for, or reducing the receipts from, the Nonpurpose Investments.Qualified Administrative Costs are reasonable, direct administrative costs,other than carrying costs, such as separately stated brokerage or sellingcommissions, but not legal and accounting fees, recordkeeping, custody andsimilar costs. General overhead costs and similar indirect costs of theDistrict such as employee salaries and office expenses and costs associatedwith computing Rebatable Arbitrage are not Qualified Administrative Costs.

Allocation and accounting rules are provided in Appendix I attachedhereto.

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AAPPENDIX I

ALLOCATION AND ACCOUNTING RULES

(a) General Rule. Any issuer may use any reasonable, consistentlyapplied accounting method to account for Gross Proceeds, investments andexpenditures of an issue. An accounting method is "consistently applied" if itis applied uniformly within a Fiscal Period (as hereinafter defined) andbetween Fiscal Periods to account for Gross Proceeds of an issue and anyamounts that are in a commingled fund.

(b) Allocation of Gross Proceeds to an Issue. Amounts are allocable toonly one issue at a time as Gross Proceeds. Amounts cease to be allocated toan issue as Proceeds only when those amounts (i) are allocated to anexpenditure for a governmental purpose; (ii) are allocated to TransferredProceeds of another issue of obligations; or (iii) cease to be allocated to thatissue at retirement of the issue or under the Universal Cap.

(c) Allocation of Gross Proceeds to Investments. Upon the purchaseor sale of a Nonpurpose Investment, Gross Proceeds of an issue are notallocated to a payment for that Nonpurpose Investment in an amount greaterthan, or to a receipt from that Nonpurpose Investment in an amount lessthan, the Fair Market Value of the Nonpurpose Investment as of thepurchase or sale date. The Fair Market Value of a Nonpurpose Investment isadjusted to take into account Qualified Administrative Costs allocable to theinvestment. Thus, Qualified Administrative Costs increase the payments for,or decrease the receipts from, a Nonpurpose Investment.

(d) Allocation of Gross Proceeds to Expenditures. Reasonableaccounting methods for allocating funds from different sources toexpenditures for the same governmental purpose include a "specific tracing"method, a "gross-proceeds-spent-first" method, a "first-in-first-out" method ora ratable allocation method, so long as the method used is consistentlyapplied. An allocation of Gross Proceeds of an issue to an expenditure mustinvolve a current outlay of cash for a governmental purpose of the issue. Acurrent outlay of cash means an outlay reasonably expected to occur not laterthan five banking days after the date as of which the allocation of GrossProceeds to the expenditure is made.

(e) Commingled Funds. Any fund or account that contains bothGross Proceeds of an issue and amounts in excess of $25,000 that are not

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Gross Proceeds of that issue if the amounts in the fund or account areinvested and accounted for collectively, without regard to the source of thefunds deposited therein, constitutes a "commingled fund." All payments andreceipts (including deemed payments and receipts) on investments held by acommingled fund must be allocated (but not necessarily distributed) amongeach different source of funds invested in the commingled fund in accordancewith a consistently applied, reasonable ratable allocation method.Reasonable ratable allocation methods include, without limitation, methodsthat allocate payments and receipts in proportion to either (i) the averagedaily balances of the amounts in the commingled fund from each differentsource of funds during any consistent time period within its fiscal year, but atleast quarterly (the "Fiscal Period"); or (ii) the average of the beginning andending balances of the amounts in the commingled fund from each differentsource of funds for a Fiscal Period that does not exceed one month.

Funds invested in the commingled fund may be allocated directly toexpenditures for governmental purposes pursuant to a reasonableconsistently applied accounting method. If a ratable allocation method isused to allocate expenditures from the commingled fund, the same ratableallocation method must be used to allocate payments and receipts oninvestments in the commingled fund.

Generally a commingled fund must treat all its investments as if soldat Fair Market Value either on the last day of the fiscal year or on the lastday of each Fiscal Period. The net gains or losses from these deemed sales ofinvestments must be allocated to each different source of funds invested inthe commingled fund during the period since the last allocation. This mark-to-market requirement does not apply if (i) the remaining weighted averagematurity of all investments held by a commingled fund during a particularfiscal year does not exceed 18 months, and the investments held by thecommingled fund during that fiscal year consist exclusively of obligations; or(ii) the commingled fund operated exclusively as a reserve fund, sinking fundor replacement fund for two or more issues of the same issuer. Subject to theUniversal Cap limitation, and the principle that amounts are allocable toonly one issue at a time as Gross Proceeds, investments held by acommingled fund must be allocated ratably among the issues served by thecommingled fund in proportion to either (i) the relative values of the bonds ofthose issues; (ii) the relative amounts of the remaining maximum annualdebt service requirements on the outstanding principal amounts of thoseissues; or (iii) the relative original stated principal amounts of theoutstanding issues.

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(f) Universal Cap. Amounts that would otherwise be Gross Proceedsallocable to an issue are allocated (and remain allocated) to the issue only tothe extent that the Value of the Nonpurpose Investments allocable to thoseGross Proceeds does not exceed the Value of all outstanding bonds of theissue. Nonpurpose Investments allocated to Gross Proceeds in a bona fidedebt service fund for an issue are not taken into account in determining theValue of the Nonpurpose Investments, and those Nonpurpose Investmentsremain allocated to the issue. To the extent that the Value of theNonpurpose Investments allocable to the Gross Proceeds of an issue exceedthe Value of all outstanding bonds of that issue, an issuer should seek theadvice of Bond Counsel for the procedures necessary to comply with theUniversal Cap.

(g) Expenditure for Working Capital Purposes. Subject to certainexceptions, the Proceeds of an issue may only be allocated to "working capitalexpenditures" as of any date to the extent that those expenditures exceed"available amounts" as of that date (i.e., "proceeds-spent-last").

For purposes of this section, "working capital expenditures" include allexpenditures other than "capital expenditures." "Capital expenditures" arecosts of a type properly chargeable (or chargeable upon proper election) to acapital account under general federal income tax principles. Such costsinclude, for example, costs incurred to acquire, construct or improve land,buildings and equipment having a reasonably expected useful life in excess ofone year. Thus, working capital expenditures include, among other things,expenditures for current operating expenses and debt service.

For purposes of this section, "available amount" means any amountthat is available to an issuer for working capital expenditure purposes of thetype financed by the issue. Available amount excludes Proceeds of the issuebut includes cash, investments and other amounts held in accounts orotherwise by an issuer for working capital expenditures of the type beingfinanced by the issue without legislative or judicial action and without alegislative, judicial or contractual requirement that those amounts bereimbursed. Notwithstanding the preceding sentence, a "reasonable workingcapital reserve" is treated as unavailable. A working capital reserve isreasonable if it does not exceed five percent of the actual working capitalexpenditures of an issuer in the fiscal year before the year in which thedetermination of available amounts is made. For purpose of the precedingsentence only, in determining the working capital expenditures of an issuerfor a prior fiscal year, any expenditures (whether capital or working capital

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expenditures) that are paid out of current revenues may be treated asworking capital expenditures.

The proceeds-spent-last requirement does not apply to expenditures topay (i) any Qualified Administrative Costs; (ii) fees for qualified guarantees ofthe issue or payments for a qualified hedge for the issue; (iii) interest on theissue for a period commencing on the Issue Date and ending on the date thatis the later of three years from the Issue Date or one year after the date onwhich the financed project is placed in service; (iv) the United States for yieldreduction payments (including rebate payments) or penalties for the failureto meet the spend down requirements associated with certain spendingexceptions to the rebate requirement; (v) costs, other than those described in(i) through (iv) above, that do not exceed five percent of the Sale Proceeds ofan issue and that are directly related to capital expenditures financed by theissue (e.g., initial operating expenses for a new capital project); (vi) principalor interest on an issue paid from unexpected excess sale or InvestmentProceeds; (vii) principal or interest on an issue paid from investmentearnings on a reserve or replacement fund that are deposited in a bona fidedebt service fund; and (viii) principal, interest or redemption premium on aprior issue and, for a crossover refunding issue, interest on that issue.Notwithstanding the preceding paragraph, the exceptions described above donot apply if the allocation merely substitutes Gross Proceeds for otheramounts that would have been used to make those expenditures in a mannerthat gives rise to Replacement Proceeds.

APPENDIX C

FORM OF OPINION OF BOND COUNSEL

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FFORM OF OPINION OF NABORS, GIBLIN & NICKERSON, P.A.,WITH RESPECT TO THE SERIES 2012 BONDS

Upon delivery of the Series 2012 Bonds in definitive form, Nabors, Giblin&Nickerson, P.A., Tampa, Florida, Bond Counsel, proposes to render its opinionwith respect to such Series 2012 Bonds in substantially the following form:

(Date of Closing)

Board of SupervisorsAve Maria Stewardship Community District

Re: $29,100,000 Ave Maria Stewardship Community DistrictCapital Improvement Revenue Refunding Bonds, Series2012

We have served as bond counsel in connection with the issuance by Ave MariaStewardship Community District (the "District"), a public body, corporate and politic,and an independent, limited, special, and single purpose local government created andestablished under Chapter 2004-461, Laws of Florida, as amended (the "Act"), and anindependent special district, under section 189.404, Florida Statutes, as amended, ofits $29,100,000 Ave Maria Stewardship Community District Capital ImprovementRevenue Refunding Bonds, Series 2012 (the “Series 2012 Bonds”). The Series 2012Bonds are being issued under and pursuant to the Constitution and laws of the State ofFlorida, a Master Trust Indenture (the "Master Indenture"), dated as of December 1,2006 and a Second Supplemental Trust Indenture, dated as of June 1, 2012(collectively, the Master Indenture as amended and supplemented by the SecondSupplemental Indenture is hereinafter referred to as the "Indenture"), each from theDistrict to U.S. BankNational Association, Orlando, Florida as trustee (the "Trustee")and resolutions adopted by the Board of Supervisors of the District on June 12, 2006and May 16, 2012 (collectively, the "Bond Resolution"). The Series 2012 Bonds areissued for the purposes of: (i) currently refunding and redeeming all of theOutstandingprincipal amount of the District’s $26,220,000 Ave Maria Stewardship CommunityDistrict Bond Anticipation Bonds, Series 2006 (the “Series 2006 Bond AnticipationBonds”); (ii) paying certain costs associated with the issuance of the Series 2012 Bonds;

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and (iii) making a deposit into the Series 2012 Reserve Account for the benefit of all ofthe Series 2012 Bonds. The Series 2012 Bonds refund Bonds which were validated byfinal judgment of the Circuit Court of Collier, Florida rendered on September 18, 2006,the appeal period for which has expired with no appeal having been taken. The Series2012 Bonds are payable from and secured by the Series 2012 Assessments on propertywithin the District specially benefited by the assessable improvements financed in partwith the proceeds of the Series 2006 Bond Anticipation Bonds, and also by the Series2012 Pledged Revenues and Series 2012 Pledged Funds comprising the Series 2012Trust Estate. We have examined the law and such certified proceedings and otherpapers as we have deemed necessary to render this opinion. Unless the contextindicates otherwise, all terms not otherwise defined herein shall have the meaningascribed to such terms in the Indenture.

The Series 2012 Bonds recite that neither the Series 2012 Bonds nor the interestand premium, if any, payable thereon shall constitute a general obligation or generalindebtedness of the District within the meaning of the Constitution and laws of theState of Florida. The Series 2012 Bonds and the interest and premium, if any, payablethereon do not constitute either a pledge of the full faith and credit of the District or alien upon any property of the District other than as provided in the Indentureauthorizing the issuance of the Series 2012 Bonds. NoOwner or any other person shallever have the right to compel the exercise of any ad valorem taxing power of theDistrict or any other public authority or governmental body to pay debt service or topay any other amounts required to be paid pursuant to the Indenture or the Series2012 Bonds. Rather, debt service and any other amounts required to be paid pursuantto the Indenture or the Series 2012 Bonds, shall be payable solely from, and shall besecured solely by the Series 2012 Pledged Revenues, together with the Series 2012Pledged Funds comprising the Series 2012 Trust Estate pledged to the Series 2012Bonds, all as provided in the Series 2012 Bonds and in the Indenture.

The opinions set forth below are expressly limited to, and we opine only withrespect to, the laws of the State of Florida and the federal income tax laws of theUnited States of America.

On the basis of our review, we are of the opinion that:

1. The District has been duly established and validly exists as a public body,corporate and politic, and as an independent, limited, special, and single purpose localgovernment under the Act and as an independent special district, under section189.404, Florida Statutes, as amended.

2. The District has the right and power under the Act to authorize, executeand deliver the Indenture, and the Indenture has been duly and lawfully authorized,executed and delivered by the District, is in full force and effect and is valid and

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binding upon the District and enforceable in accordance with its terms. The Indenturecreates the valid pledge which it purports to create of the Series 2012 Trust Estate,including the Series 2012 Assessments, in the manner and to the extent provided inthe Indenture.

3. The Series 2012 Bonds are the valid, binding, special obligations of theDistrict, enforceable in accordance with their terms and with the terms of theIndenture and are entitled to the benefits of the Indenture and the Act as amended tothe date hereof, and the Series 2012 Bonds have been duly and validly authorized andissued in accordance with law and the Indenture.

4. The Series 2012 Bonds and interest thereon are exempt from taxationunder the laws of the State of Florida, except as to estate taxes and taxes imposed byChapter 220, Florida Statutes, on interest, income or profits on debt obligations ownedby corporations, as defined in said Chapter 220.

5. Under existing statutes, regulations, rulings and court decisions, theinterest on the Series 2012 Bonds (a) is excluded from gross income for federal incometax purposes; and (b) is not an item of tax preference for purposes of the federalalternative minimum tax imposed on individuals and corporations; however, it shouldbe noted that with respect to certain corporations, such interest is taken into account indetermining adjusted current earnings for the purpose of computing the alternativeminimum tax imposed on such corporations. The opinion set forth in clause (a) aboveis subject to the condition that the Board comply with all requirements of the InternalRevenue Code of 1986, as amended, that must be satisfied subsequent to the issuanceof the Series 2012 Bonds in order that interest thereon be (or continues to be) excludedfrom gross income for federal income tax purposes. Failure to comply with certain ofsuch requirements could cause the interest on the Series 2012 Bonds to be so includedin gross income retroactive to the date of issuance of the Series 2012 Bonds. TheDistrict has covenanted to comply with all such requirements. Ownership of the Series2012 Bondsmay result in collateral federal tax consequences to certain taxpayers. Weexpress no opinion regarding such federal tax consequences arising with respect to theSeries 2012 Bonds.

The opinions expressed above as to enforceability may be limited by anyapplicable bankruptcy, insolvency, moratorium, reorganization or other similar lawsaffecting creditors' rights generally, or by the exercise of judicial discretion inaccordance with general principles of equity.

Except as may expressly be set forth in an opinion delivered by us to theunderwriters of the Series 2012 Bonds on the date hereof (upon which only they mayrely), (1) we have not been engaged or undertaken to review the accuracy, completenessor sufficiency of the Limited OfferingMemorandum or other offering material relating

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to the Series 2012 Bonds and we express no opinion relating thereto, and (2) we havenot been engaged or undertaken to review the compliance with laws of the State ofFlorida or the United States with regard to the sale or distribution of the Series 2012Bonds and we express no opinion relating thereto.

We have examined the form of the Series 2012 Bonds and, in our opinion, theform of the Series 2012 Bonds is regular and proper.

Very truly yours,NABORS, GIBLIN & NICKERSON, P.A.

APPENDIX D

FORMS OF CONTINUING DISCLOSURE AGREEMENTS

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CONTINUING DISCLOSURE AGREEMENT

This CONTINUING DISCLOSURE AGREEMENT (the "Disclosure Agreement")dated as of June 1, 2012 is executed and delivered by the AVE MARIA STEWARDSHIPCOMMUNITY DISTRICT (the "District"), AVE MARIA DEVELOPMENT, LLLP, aFlorida limited liability limited partnership (the "Developer") and joined in by the DisclosureRepresentative and the Trustee (as such terms are herein defined), in connection with theissuance of $29,100,000 Ave Maria Stewardship Community Development District CapitalImprovement Revenue Refunding Bonds, Series 2012 (the "Bonds"). The Bonds are beingissued pursuant to a Master Trust Indenture, dated as of December 1, 2006 (the "MasterIndenture"), from the District to U. S Bank National Association, as Trustee (the "Trustee") assupplemented by a Second Supplemental Trust Indenture, dated as of June 1, 2012 (the"Supplemental Indenture" and together with the Master Indenture, the "Indenture"). For goodand valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and inconsideration of the mutual promises and other considerations contained herein, the District andthe Developer covenant and agree as follows:

1. Purpose of the Disclosure Agreement. This Disclosure Agreement is beingexecuted and delivered by the District and the Developer for the benefit of the Owners of theBonds and to assist the Participating Underwriter of the Bonds in complying with the applicableprovisions of Rule 15c2-12(b)(5) promulgated by the Securities and Exchange Commission("SEC") pursuant to the Securities Exchange Act of 1934, as amended from time to time (the"Rule"). The District and the Developer have no reason to believe that this DisclosureAgreement does not satisfy the requirements of the Rule and the execution and delivery of thisDisclosure Agreement is intended to comply with the Rule. To the extent it is later determinedby a court of competent jurisdiction, a governmental regulatory agency, or an attorneyspecializing in federal securities law that the Rule requires the District or the Developer toprovide additional information, the District and the Developer, as applicable, agree to promptlyprovide such additional information.

The provisions of this Disclosure Agreement are supplemental and in addition to theprovisions 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 shallanything 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 applyto any capitalized term used in this Disclosure Agreement unless otherwise defined in thisSection, the following capitalized terms shall have the following meanings:

"Annual Report" shall mean any Annual Report provided by the District pursuant to, andas described in, Sections 3 and 4 of this Disclosure Agreement.

"Assessments" shall mean the non-ad valorem special assessments pledged to thepayment of the Bonds pursuant to the Indenture.

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"Business Day" means any day other than a Saturday, Sunday or a day on which theDistrict is required, or authorized or not prohibited by law (including executive orders), to closeand is closed.

"Development" shall have meaning ascribed thereto in the Limited OfferingMemorandum.

"Disclosure Representative" shall mean the person or entity serving as District Managerfrom time to time or such other officer or employee of the District as the District shall designatein writing to the Trustee and the Dissemination Agent from time to time.

"Dissemination Agent" shall mean the District, acting in its capacity as DisseminationAgent hereunder, or any successor Dissemination Agent designated in writing by the District andwhich has filed with the District and Trustee a written acceptance of such designation.

"Fiscal Year" shall mean the period commencing on October 1 and ending onSeptember 30 of the next succeeding year, or such other period of time provided by applicablelaw.

"Developer Report" shall mean any Developer Report provided by the Developer, itssuccessors or assigns pursuant to, and as described in, Sections 5 and 6 of this DisclosureAgreement.

"Limited Offering Memorandum" shall mean the final offering document relating to theBonds.

"Listed Event" shall mean any of the events listed in Section 7(a) of this DisclosureAgreement.

"MSRB" means the Municipal Securities Rulemaking Board.

"Obligated Person(s)" shall mean, with respect to the Bonds, those person(s) who eithergenerally or through an enterprise fund or account of such persons are committed by contract orother arrangement to support payment of all or a part of the obligations on such Bonds, whichperson(s) shall include the District and, for the purposes of this Disclosure Agreement only, theDeveloper for so long as the Developer is the owner of (or is responsible for developing as thecase may be) at least twenty percent (20%) of the lands which have been determined by theDistrict to be lands benefited by the project financed with proceeds of the Bonds or areresponsible for payment of at least twenty percent (20%) of the Assessments.

"Owners" shall have the meaning ascribed thereto in the Indenture with respect to theBonds and shall include beneficial owners of the Bonds, including those that have the power,directly or indirectly, to vote or consent with respect to, or to dispose of ownership of any Bonds(including persons holding Bonds through nominees, depositories or other intermediaries), or aretreated as the owner of any Bonds for federal income tax purposes.

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"Participating Underwriter" shall mean, MBS Capital Markets, LLC, in its capacity as theoriginal underwriter of the Bonds required to comply with the Rule in connection with offeringof the Bonds.

"Repository" or "EMMA" shall mean each entity authorized and approved by theSecurities and Exchange Commission from time to time to act as a repository for purposes ofcomplying with the Rule. The Repositories currently approved by the Securities and ExchangeCommission may be found by visiting the Securities and Exchange Commission's website athttp://www.sec.gov/info/municipal/nrmsir.htm. As of the date hereof, the Repository recognizedby the Securities and Exchange Commission for such purpose is the Municipal SecuritiesRulemaking Board, which currently accepts continuing disclosure submissions through itsElectronic Municipal Market Access ("EMMA") web portal at "http://emma.msrb.org.".

"State" shall mean the State of Florida.

3. Content of Annual Reports.

(a) The District's Annual Report shall contain or incorporate by reference thefollowing, which includes an update of the financial and operating data of the District to theextent presented in the Limited Offering Memorandum. All information in the Annual Reportshall be presented for the immediately preceding Fiscal Year and, to the extent available, thecurrent Fiscal Year:

(i) The amount of Assessments levied.

(ii) The amount of Assessments collected from property owners.

(iii) If available, the amount of delinquencies greater than 150 days, and, in theevent that delinquencies amount to more than ten percent (10%) of the amounts ofAssessments due in any year, a list of delinquent property owners.

(iv) The amount of tax certificates sold, if any, and the balance, if any,remaining for sale.

(v) All fund balances in all Funds and Accounts for the Bonds. The Districtshall provide any Owners and the Dissemination Agent with this information morefrequently than annually within thirty (30) days of the written request of the Owners.

(vi) The total amount of Bonds Outstanding.

(vii) The amount of principal and interest due on the Bonds.

(viii) The most recent audited financial statements of the District, which shall beprepared in accordance with governmental accounting standards promulgated by theGovernment Accounting Standards Board.

(b) To the extent any of the items set forth in subsections (i) through (vii) above areincluded in the audited financial statements referred to in subsection (viii) above, they do not

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have to be separately set forth. Any or all of the items listed above may be incorporated byreference from other documents, including offering documents of debt issues of the District orrelated public entities, which have been submitted to the Repository or the SEC. If the documentincorporated by reference is a final offering document, it must be available from the MSRB. TheDistrict shall clearly identify each such other document so incorporated by reference.

4. Provision of Annual Reports.

(a) Subject to the following sentence, the District shall provide the Annual Report tothe Dissemination Agent no later than 180 days after the close of the District's Fiscal Year,commencing with the Fiscal Year ended September 30, 2012 (the "Annual Filing Date"). TheAnnual Report may be submitted as a single document or as separate documents comprising apackage, and may cross-reference other information as provided in Section 3(b) of thisDisclosure Agreement; provided that the audited financial statements of the District may besubmitted separately from the balance of the Annual Report, and may be submitted inaccordance with State law, which currently requires such audited financial statements to beprovided up to, but no later than, nine (9) months after the close of the District's Fiscal Year.The District shall cause the Dissemination Agent to provide to each Repository (i) thecomponents of an Annual Report which satisfies the requirements of this subsection 4(a) and (ii)any information provided to Owners and the Dissemination Agent pursuant to Section 3(a)(v) ofthis Disclosure Agreement. In furtherance thereof, the Dissemination Agent shall request theAnnual Report (which request shall be in writing and may be made via e-mail to the DisclosureRepresentative) at least thirty (30) days prior to the Annual Filing Date. If the District's FiscalYear changes, the District shall give notice of such change in the same manner as for a ListedEvent under Section 7.

(b) If on the fifteenth (15th) day prior to each Annual Filing Date the DisseminationAgent has not received a copy of the Annual Report, the Dissemination Agent shall contact theDisclosure Representative by telephone and in writing (which may be by e-mail) to remind theDistrict of its undertaking to provide the Annual Report pursuant to this Section 4. Upon suchreminder, the Disclosure Representative shall either (i) provide the Dissemination Agent with anelectronic copy of the Annual Report in accordance with Section 4(a) above, or (ii) instruct theDissemination Agent in writing that the District will not be able to file the Annual Report withinthe time required under this Disclosure Agreement, state the date by which the Annual Report forsuch year will be provided and instruct the Dissemination Agent that a Listed Event as describedin Section 7(a)(xii) has occurred and to immediately send a notice to the MSRB in substantiallythe form attached as Exhibit A.

(c) If the Dissemination Agent has not received an Annual Report by 12:00 noon onthe first business day following the Annual Filing Date for the Annual Report, a Listed Eventdescribed in Section 7(a)(xii) shall have occurred and the District hereby directs theDissemination Agent to immediately send a notice to the MSRB in substantially the formattached as Exhibit A.

(d) The Dissemination Agent shall:

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(i) determine each year prior to the date for providing the Annual Report thename and address of the Repository required by the Rule; and

(ii) promptly upon fulfilling its obligations under subsection (a) above, file anotice with the District stating that the Annual Report has been provided pursuant to thisDisclosure Agreement and stating the date(s) it was provided.

5. Developer Information.

(a) The Developer, so long as it is an Obligated Person for purposes of thisDisclosure Agreement, shall prepare a Developer Report no later than thirty (30) days after theend of each calendar quarter commencing June 30, 2012 (the "Quarterly Reporting Date"). Atsuch time as the Developer is no longer an Obligated Person, the Developer will no longer beobligated to prepare any quarterly Developer Report pursuant to this Disclosure Agreement.

(b) Each quarterly Developer Report shall address the following information, to theextent applicable to the portion of the Development owned by the Developer:

(i) The percentage of infrastructure improvements that have been completedwith the proceeds of the Bonds.

(ii) The number of homes planned on property subject to the Assessments.

(iii) The number and type of property (lots, parcels, raw land, etc.) sold tobuilders and the name of each builder.

(iv) The number and type of property (lots, parcels, raw land, etc.) sold toretail buyers.

(v) The number of homes constructed.

(vi) The number of homes under construction.

(vii) The number of homes under contract with end users.

(viii) The number of homes sold and closed to end users.

(ix) The estimated date of complete build-out of residential units.

(x) The number of units, type of units and square footage of commercialproperty or other non-residential uses planned on property which is being assessed torepay the Bonds.

(xi) The number and type of property (parcels, raw land, etc.) sold for non-residential development, if any.

(xii) The square footage of non-residential property constructed, if any.

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(xiii) Whether the Developer has made any bulk sale of the land, subject to theAssessments other than in the ordinary course of business.

(xiv) The anchor (more than ten percent (10%) of the square footage) tenants ofnon-residential property, if any.

(xv) The status of development approvals for the Development (as defined inthe Limited Offering Memorandum).

(xvi) Materially adverse changes or determinations to permits/approvals for theDevelopment which necessitate changes to the Developer's land-use plans.

(xvii) Updated plan of finance (i.e., status of any credit enhancement, issuanceof additional bonds to complete project, draw on credit line of Developer, additionalmortgage debt, etc.).

(c) Any of the items listed in subsection (b) above may be incorporated by referencefrom other documents which have been submitted to EMMA or the SEC. The Developer shallclearly identify each such other document so incorporated by reference.

(d) If the Developer sells, assigns or otherwise transfers ownership of real property inthe Development to a third party, which will in turn be an Obligated Person for purposes of thisDisclosure Agreement as a result thereof, including but not limited to, any third party which willown at least twenty percent (20%) of the real property within the Development subject to theAssessments (a "Transfer"), the Developer hereby agrees to require such third party to complywith the disclosure obligations of the Developer hereunder for so long as such third party is anObligated Person hereunder, to the same extent as if such third party were a party to thisDisclosure Agreement. The Developer shall promptly notify the District and the DisseminationAgent in writing of any Transfer. For purposes of Sections 5 and 6 hereof, the term "Developer"shall be deemed to include the Developer and any third party that becomes an Obligated Personhereunder as a result of a Transfer. In the event that the Developer remains an Obligated Personhereunder following any Transfer, nothing herein shall be construed to relieve the Developerfrom its obligations hereunder.

6. Provision of Developer Reports.

(a) The Developer shall provide a Developer Report which contains the informationin Section 5(b) of this Disclosure Agreement to the Dissemination Agent no later than theQuarterly Reporting Date for such Developer Report. Within thirty (30) days of the QuarterlyReporting Date, the Dissemination Agent shall file the Developer Report provided to it by theDeveloper with each Repository (the "Quarterly Filing Date").

(b) If on the seventh (7th) day prior to each Quarterly Reporting Date theDissemination Agent has not received a copy of the Developer Report due on such QuarterlyReporting Date, the Dissemination Agent shall contact the Developer by telephone and in writing(which may be by e-mail) to remind the Developer of its undertaking to provide the DeveloperReport pursuant to Section 5. Upon such reminder, the Developer shall either (i) provide theDissemination Agent with an electronic copy of the Developer Report in accordance with

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Section 6(a) above, or (ii) instruct the Dissemination Agent in writing that such Obligated Partywill not be able to file the Developer Report within the time required under this DisclosureAgreement and state the date by which such Developer Report will be provided.

(c) If the Dissemination Agent has not received a Developer Report that contains, at aminimum, the information in Section 5(b) of this Disclosure Agreement by 12:00 noon on thefirst business day following each Quarterly Reporting Date, a Listed Event described in Section7(a)(xii) shall have occurred and the District and the Developer hereby direct the DisseminationAgent to send a notice to each Repository in substantially the form attached as Exhibit A, with acopy to the District. The Dissemination Agent shall file such notice no later than thirty (30) daysfollowing the applicable Quarterly Reporting Date.

7. Reporting of Significant Events.

(a) Pursuant to the provisions of this Section 7, the District shall give, orcause to be given, notice of the occurrence of any of the following events with respect to theBonds to the Dissemination Agent in writing in sufficient time in order to allow theDissemination Agent to file notice of the occurrence of such Listed Event in a timely manner notin excess of ten (10) business days after the occurrence of the event, with the exception of theevent described in number 15 below, which notice shall be given in a timely manner:

1. principal and interest payment delinquencies;

2. non-payment related defaults, if material;

3. unscheduled draws on debt service reserves reflecting financialdifficulties;

4. unscheduled draws on credit enhancements reflecting financialdifficulties;

5. substitution of credit or liquidity providers, or their failure to perform;

6. adverse tax opinions, the issuance by the Internal Revenue Service ofproposed or final determinations of taxability, Notices of Proposed Issue(IRS Form 5701 TEB) or other material notices or determinations withrespect to the tax status of the Bonds, or other material events affecting thetax status of the Bonds;

7. modifications to rights of the holders of the Bonds, if material;

8. Bond calls, if material, and tender offers;

9. defeasances;

10. release, substitution, or sale of property securing repayment of the Bonds,other than in the normal course of business, if material;

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11. ratings changes;

12. an Event of Bankruptcy or similar event of an Obligated Person;

13. the consummation of a merger, consolidation, or acquisition involving anObligated Person or the sale of all or substantially all of the assets of theObligated Person, other than in the ordinary course of business, the entryinto a definitive agreement to undertake such an action or the terminationof a definitive agreement relating to any such actions, other than pursuantto its terms, if material; and

14. appointment of a successor or additional trustee or the change of name ofa trustee, if material; and

15. notice of any failure on the part of the District to meet the requirements ofSection 3 hereof.

(b) The notice required to be given in paragraph 7(a) above shall be filed withthe MSRB, in electronic format as prescribed by the MSRB.

8. Identifying Information.

In accordance with the Rule, all disclosure filings submitted in pursuant to this DisclosureAgreement to any Repository must be accompanied by identifying information as prescribed bythe Repository. Such information may include, but not be limited to:

(a) the category of information being provided;

(b) the period covered by any annual financial information, financialstatement or other financial information or operation data;

(c) the issues or specific securities to which such documents are related(including CUSIPs, District name, state, issue description/securities name,dated date, maturity date, and/or coupon rate);

(d) the name of any Obligated Person other than the District;

(e) the name and date of the document being submitted; and

(f) contact information for the submitter.

9. Termination of Disclosure Agreement. This Disclosure Agreement shallterminate upon the defeasance, prior redemption or payment in full of all of the Bonds.

10. Dissemination Agent. The District may, from time to time, appoint or engage aDissemination 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 successorDissemination Agent. If at any time there is not any other designated Dissemination Agent, the

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District shall be the Dissemination Agent. The initial Dissemination Agent shall be DisclosureServices, LLC, as agent of MBS Capital Markets, LLC.

11. Amendment; Waiver. Notwithstanding any other provision of this DisclosureAgreement, the District and the Developer may amend this Disclosure Agreement, and anyprovision of this Disclosure Agreement may be waived, if such amendment or waiver issupported by an opinion of counsel expert in federal securities laws, acceptable to the District, tothe effect that such amendment or waiver would not, in and of itself, cause the undertakingsherein to violate the Rule if such amendment or waiver had been effective on the date hereof buttaking into account any subsequent change in or official interpretation of the Rule.

Notwithstanding the above provisions of this Section 11, no amendment to the provisionsof Sections 5 and 6 hereof may be made without the consent of the Developer as long as theDeveloper is an Obligated Person.

In the event of any amendment or waiver of a provision of this Disclosure Agreement, theDistrict shall describe such amendment in the next Annual Report, and shall include, asapplicable, a narrative explanation of the reason for the amendment or waiver and its impact onthe type (or, in the case of a change in accounting principles, on the presentation) of financialinformation or operating data being presented by the District. In addition, if the amendmentrelates to the accounting principles to be followed in preparing financial statements: (i) notice ofsuch change shall be given in the same manner as for a Listed Event under Section 7(c); and (ii)the Annual Report for the year in which the change is made should present a comparison (innarrative form and also, if feasible, in quantitative form) between the financial statements asprepared on the basis of the new accounting principles and those prepared on the basis of theformer accounting principles.

12. Additional Information. Nothing in this Disclosure Agreement shall be deemedto prevent the District or the Developer from disseminating any other information, using themeans of dissemination set forth in this Disclosure Agreement or any other means ofcommunication, or including any other information in any Annual Report, Developer Report ornotice of occurrence of a Listed Event, in addition to that which is required by this DisclosureAgreement. If the District chooses to include any information in any Annual Report or notice ofoccurrence of a Listed Event in addition to that which is specifically required by this DisclosureAgreement, or if the Developer chooses to include any information in any Developer Report inaddition to that which is specifically required by this Disclosure Agreement, neither the Districtnor the Developer, as applicable, shall have any obligation under this Disclosure Agreement toupdate such information or include it in any future Annual Report, any future Developer Reportor notice of occurrence of a Listed Event. The Developer agrees to provide the District with acopy of any information in addition to the Developer Report provided by it to the DisseminationAgent or any Repository.

13. Default. In the event of a failure of the District, the Disclosure Representative,the Developer or the Dissemination Agent to comply with any provision of this DisclosureAgreement, the Trustee may (and, at the request of any Participating Underwriter or the Ownersof at least 25% aggregate principal amount of Outstanding Bonds and receipt of indemnitysatisfactory to the Trustee, shall), or any beneficial owner of a bond may take such actions as

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may be necessary and appropriate, including seeking mandate or specific performance by courtorder, to cause the District, the Disclosure Representative, the Developer or the DisseminationAgent, as the case may be, to comply with its obligations under this Disclosure Agreement. Adefault under this Disclosure Agreement by the Developer shall not be deemed a default by theDistrict hereunder and no default hereunder shall be deemed an Event of Default under theIndenture, and the sole remedy under this Disclosure Agreement in the event of any failure of theDistrict, the Disclosure Representative, the Developer or the Dissemination Agent, to complywith this Disclosure Agreement shall be an action to compel performance.

14. Duties of Dissemination Agent. The Dissemination Agent shall have only suchduties as are specifically set forth in the applicable written dissemination agent agreementbetween the District and such Dissemination Agent and in this Disclosure Agreement. TheDissemination Agent shall have no obligation to notify any other party hereto of an event thatmay constitute a Listed Event. The District, the Disclosure Representative and the Developerrepresent and warrant that they will supply, in a timely fashion, any information reasonablyrequested by the Dissemination Agent that is necessary in order for the Dissemination Agent tocarry out its duties under this Disclosure Agreement. The District, the Disclosure Representativeand the Developer acknowledge and agree that the information to be collected and disseminatedby the Dissemination Agent will be provided by the District, the Disclosure Representative, theDeveloper and others. The Dissemination Agent's duties do not include authorship or productionof any materials, and the Dissemination Agent shall have no responsibility hereunder for thecontent of the information provided to it by the District, the Disclosure Representative, or theDeveloper as thereafter disseminated by the Dissemination Agent.

15. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of theDistrict, the Disclosure Representative, the Developer, the Dissemination Agent, the Trustee, theParticipating Underwriter and Owners of the Bonds (the Dissemination Agent, ParticipatingUnderwriter and Owners of the Bonds being hereby deemed express third party beneficiaries ofthis Agreement), and shall create no rights in any other person or entity.

16. Counterparts. This Disclosure Agreement may be executed in severalcounterparts, each of which shall be an original and all of which shall constitute but one and thesame instrument.

17. District, Disclosure Representative and Trustee Cooperation. The District,the Disclosure Representative and the Trustee agree that the Dissemination Agent, in suchcapacity hereunder, may receive, upon request, from the District, the Disclosure Representativeand the Trustee, on a timely basis, any information or reports within their respective control theDissemination Agent requests in furtherance of the Dissemination Agent's duties hereunder,including balances in the Funds and Accounts established under the Indenture and such otherinformation as it deems necessary to review compliance by the other parties hereto with theirrespective obligations hereunder. In furtherance thereof, the District, through its DisclosureRepresentative, agrees to provide the Dissemination Agent with a certified copy of any non-advalorem assessment roll provided to the County Tax Collector promptly after its delivery to theCounty Tax Collector and a certified copy of any non-ad valorem assessment roll relating toproperty within the District which is invoiced by the District, and in each case no later thanSeptember 30 of the current Fiscal Year, and the adopted budget for the upcoming Fiscal Year

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by September 30 of the current year. In addition, the District acknowledges and agrees that anymodifications to assessment methodologies which affect the Assessments and any "true up"implementations regarding such Assessments shall be adopted by District resolution and that theDistrict, through its Disclosure Representative, will provide the Dissemination Agent and theTrustee with notice of such resolution(s) within 30 days of adoption.

18. Governing Law. This Disclosure Agreement shall be governed by the laws ofthe State of Florida and Federal law and venue shall be in any state or federal court havingjurisdiction in Collier County, Florida.

19. Binding Effect. This Disclosure Agreement shall be binding upon each party andupon each successor and assignee of each party and shall inure to the benefit of, and beenforceable by, each party and each successor and assignee of each party.

[SIGNATURE PAGES TO FOLLOW]

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SIGNATURE PAGE FORCONTINUING DISCLOSURE AGREEMENT(Ave Maria Stewardship Community District)

IN WITNESS WHEREOF, the undersigned has executed this Disclosure Agreement asof the date and year set forth above.

ATTEST AVE MARIA STEWARDSHIPCOMMUNITY DISTRICT:

_____________________________ By:Secretary Chairman, Board of Supervisors

DEVELOPER:

AVE MARIA DEVELOPMENT, LLLP, aFlorida limited liability limited partnership

By: BARRON COLLIER CORPORATION,a Florida corporation, its Managing Partner

By:Name:Title: _________________________________

By: NUA BAILE, LLC, a Florida limitedliability company, a general partner

By:Name:Title: _________________________________

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Joined by Disclosure Services, LLC, as agent for MBS Capital Markets, LLC, asDisclosure Representative for purposes of Section 4, Section 7, Section 13, Section 14, Section15 and Section 17 only.

DISCLOSURE REPRESENTATIVE:

DISCLOSURE SERVICES, LLC,as agent for MBS Capital Markets, LLC

By:Name:_______________________________Title:________________________________

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Joined by U.S. Bank National Association, as Trustee for purposes of Section 13, Section15 and Section 17 only.

TRUSTEE:

U.S BANK NATIONAL ASSOCIATION

By:Name:_______________________________Title:________________________________

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EXHIBIT A

NOTICE TO REPOSITORIESOF FAILURE TO FILE ANNUAL REPORT/DEVELOPER REPORT

Name of District: Ave Maria Stewardship Community District

Name of Bond Issue: $29,100,000 Ave Maria Stewardship Community Development DistrictCapital Improvement Revenue Refunding Bonds, Series 2012

Date of Issuance: June 7, 2012

NOTICE IS HEREBY GIVEN that [the District has not provided an Annual Report asrequired by Section 4(a)] [the Developer has not provided a Developer Report which contains theinformation required by Section 5(b)] of the Continuing Disclosure Agreement dated as of June,1, 2012, between the District and the Developer named therein, and joined in by the DisclosureRepresentative and Trustee named therein, executed and delivered in connection with the above-referenced Bonds. The [District][Developer] has advised the undersigned that it anticipates thatthe [Annual Report][Developer Report] will be filed by ______________, 20____].

Dated: ____________________

[DISSEMINATION AGENT]

cc: DistrictDeveloper

CONTINUING DISCLOSURE AGREEMENT

This CONTINUING DISCLOSURE AGREEMENT (the "Disclosure Agreement")dated as of June 1, 2012 is executed and delivered by the AVE MARIA STEWARDSHIPCOMMUNITY DISTRICT (the "District"), PULTE HOME CORPORATION (the"Homebuilder") and joined in by the Disclosure Representative and the Trustee (as such termsare herein defined), in connection with the issuance of $29,100,000 Ave Maria StewardshipCommunity Development District Capital Improvement Revenue Refunding Bonds, Series 2012(the "Bonds"). The Bonds are being issued pursuant to a Master Trust Indenture, dated as ofDecember 1, 2006 (the "Master Indenture"), from the District to U. S Bank National Association,as Trustee (the "Trustee") as supplemented by a Second Supplemental Trust Indenture, dated asof June 1, 2012 (the "Supplemental Indenture" and together with the Master Indenture, the"Indenture"). For good and valuable consideration, the receipt and sufficiency of which ishereby acknowledged, and in consideration of the mutual promises and other considerationscontained herein, the District and the Homebuilder covenant and agree as follows:

1. Purpose of the Disclosure Agreement. This Disclosure Agreement is beingexecuted and delivered by the District and the Homebuilder for the benefit of the Owners of theBonds and to assist the Participating Underwriter of the Bonds in complying with the applicableprovisions of Rule 15c2-12(b)(5) promulgated by the Securities and Exchange Commission("SEC") pursuant to the Securities Exchange Act of 1934, as amended from time to time (the"Rule"). The District and the Homebuilder have no reason to believe that this DisclosureAgreement does not satisfy the requirements of the Rule and the execution and delivery of thisDisclosure Agreement is intended to comply with the Rule. To the extent it is later determinedby a court of competent jurisdiction, a governmental regulatory agency, or an attorneyspecializing in federal securities law that the Rule requires the District or the Homebuilder toprovide additional information, the District and the Homebuilder, as applicable, agree topromptly provide such additional information.

The provisions of this Disclosure Agreement are supplemental and in addition to theprovisions 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 shallanything 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 applyto any capitalized term used in this Disclosure Agreement unless otherwise defined in thisSection, the following capitalized terms shall have the following meanings:

"Annual Report" shall mean any Annual Report provided by the District pursuant to, andas described in, Sections 3 and 4 of this Disclosure Agreement.

"Assessments" shall mean the non-ad valorem special assessments pledged to thepayment of the Bonds pursuant to the Indenture.

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"Business Day" means any day other than a Saturday, Sunday or a day on which theDistrict is required, or authorized or not prohibited by law (including executive orders), to closeand is closed.

"Development" shall have meaning ascribed thereto in the Limited OfferingMemorandum.

"Disclosure Representative" shall mean the person or entity serving as District Managerfrom time to time or such other officer or employee of the District as the District shall designatein writing to the Trustee and the Dissemination Agent from time to time.

"Dissemination Agent" shall mean the District, acting in its capacity as DisseminationAgent hereunder, or any successor Dissemination Agent designated in writing by the District andwhich has filed with the District and Trustee a written acceptance of such designation.

"Fiscal Year" shall mean the period commencing on October 1 and ending onSeptember 30 of the next succeeding year, or such other period of time provided by applicablelaw.

"Homebuilder Report" shall mean any Homebuilder Report provided by theHomebuilder, its successors or assigns pursuant to, and as described in, Sections 5 and 6 of thisDisclosure Agreement.

"Limited Offering Memorandum" shall mean the final offering document relating to theBonds.

"Listed Event" shall mean any of the events listed in Section 7(a) of this DisclosureAgreement.

"MSRB" means the Municipal Securities Rulemaking Board.

"Obligated Person(s)" shall mean, with respect to the Bonds, those person(s) who eithergenerally or through an enterprise fund or account of such persons are committed by contract orother arrangement to support payment of all or a part of the obligations on such Bonds, whichperson(s) shall include the District and, for the purposes of this Disclosure Agreement only, theHomebuilder for so long as the Homebuilder is the owner of (or is responsible for developing asthe case may be) at least twenty percent (20%) of the lands which have been determined by theDistrict to be lands benefited by the project financed with proceeds of the Bonds or areresponsible for payment of at least twenty percent (20%) of the Assessments.

"Owners" shall have the meaning ascribed thereto in the Indenture with respect to theBonds and shall include beneficial owners of the Bonds, including those that have the power,directly or indirectly, to vote or consent with respect to, or to dispose of ownership of any Bonds(including persons holding Bonds through nominees, depositories or other intermediaries), or aretreated as the owner of any Bonds for federal income tax purposes.

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"Participating Underwriter" shall mean, MBS Capital Markets, LLC, in its capacity as theoriginal underwriter of the Bonds required to comply with the Rule in connection with offeringof the Bonds.

"Repository" or "EMMA" shall mean each entity authorized and approved by theSecurities and Exchange Commission from time to time to act as a repository for purposes ofcomplying with the Rule. The Repositories currently approved by the Securities and ExchangeCommission may be found by visiting the Securities and Exchange Commission's website athttp://www.sec.gov/info/municipal/nrmsir.htm. As of the date hereof, the Repository recognizedby the Securities and Exchange Commission for such purpose is the Municipal SecuritiesRulemaking Board, which currently accepts continuing disclosure submissions through itsElectronic Municipal Market Access ("EMMA") web portal at "http://emma.msrb.org.".

"State" shall mean the State of Florida.

3. Content of Annual Reports.

(a) The District's Annual Report shall contain or incorporate by reference thefollowing, which includes an update of the financial and operating data of the District to theextent presented in the Limited Offering Memorandum. All information in the Annual Reportshall be presented for the immediately preceding Fiscal Year and, to the extent available, thecurrent Fiscal Year:

(i) The amount of Assessments levied.

(ii) The amount of Assessments collected from property owners.

(iii) If available, the amount of delinquencies greater than 150 days, and, in theevent that delinquencies amount to more than ten percent (10%) of the amounts ofAssessments due in any year, a list of delinquent property owners.

(iv) The amount of tax certificates sold, if any, and the balance, if any,remaining for sale.

(v) All fund balances in all Funds and Accounts for the Bonds. The Districtshall provide any Owners and the Dissemination Agent with this information morefrequently than annually within thirty (30) days of the written request of the Owners.

(vi) The total amount of Bonds Outstanding.

(vii) The amount of principal and interest due on the Bonds.

(viii) The most recent audited financial statements of the District, which shall beprepared in accordance with governmental accounting standards promulgated by theGovernment Accounting Standards Board.

(b) To the extent any of the items set forth in subsections (i) through (vii) above areincluded in the audited financial statements referred to in subsection (viii) above, they do not

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have to be separately set forth. Any or all of the items listed above may be incorporated byreference from other documents, including offering documents of debt issues of the District orrelated public entities, which have been submitted to the Repository or the SEC. If the documentincorporated by reference is a final offering document, it must be available from the MSRB. TheDistrict shall clearly identify each such other document so incorporated by reference.

4. Provision of Annual Reports.

(a) Subject to the following sentence, the District shall provide the Annual Report tothe Dissemination Agent no later than 180 days after the close of the District's Fiscal Year,commencing with the Fiscal Year ended September 30, 2012 (the "Annual Filing Date"). TheAnnual Report may be submitted as a single document or as separate documents comprising apackage, and may cross-reference other information as provided in Section 3(b) of thisDisclosure Agreement; provided that the audited financial statements of the District may besubmitted separately from the balance of the Annual Report, and may be submitted inaccordance with State law, which currently requires such audited financial statements to beprovided up to, but no later than, nine (9) months after the close of the District's Fiscal Year.The District shall cause the Dissemination Agent to provide to each Repository (i) thecomponents of an Annual Report which satisfies the requirements of this subsection 4(a) and (ii)any information provided to Owners and the Dissemination Agent pursuant to Section 3(a)(v) ofthis Disclosure Agreement. In furtherance thereof, the Dissemination Agent shall request theAnnual Report (which request shall be in writing and may be made via e-mail to the DisclosureRepresentative) at least thirty (30) days prior to the Annual Filing Date. If the District's FiscalYear changes, the District shall give notice of such change in the same manner as for a ListedEvent under Section 7.

(b) If on the fifteenth (15th) day prior to each Annual Filing Date the DisseminationAgent has not received a copy of the Annual Report, the Dissemination Agent shall contact theDisclosure Representative by telephone and in writing (which may be by e-mail) to remind theDistrict of its undertaking to provide the Annual Report pursuant to this Section 4. Upon suchreminder, the Disclosure Representative shall either (i) provide the Dissemination Agent with anelectronic copy of the Annual Report in accordance with Section 4(a) above, or (ii) instruct theDissemination Agent in writing that the District will not be able to file the Annual Report withinthe time required under this Disclosure Agreement, state the date by which the Annual Report forsuch year will be provided and instruct the Dissemination Agent that a Listed Event as describedin Section 7(a)(xii) has occurred and to immediately send a notice to the MSRB in substantiallythe form attached as Exhibit A.

(c) If the Dissemination Agent has not received an Annual Report by 12:00 noon onthe first business day following the Annual Filing Date for the Annual Report, a Listed Eventdescribed in Section 7(a)(xii) shall have occurred and the District hereby directs theDissemination Agent to immediately send a notice to the MSRB in substantially the formattached as Exhibit A.

(d) The Dissemination Agent shall:

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(i) determine each year prior to the date for providing the Annual Report thename and address of the Repository required by the Rule; and

(ii) promptly upon fulfilling its obligations under subsection (a) above, file anotice with the District stating that the Annual Report has been provided pursuant to thisDisclosure Agreement and stating the date(s) it was provided.

5. Homebuilder Information.

(a) The Homebuilder, so long as it is an Obligated Person for purposes of thisDisclosure Agreement, shall prepare a Homebuilder Report no later than thirty (30) days afterthe end of each calendar quarter commencing June 30, 2012, provided, however, that so long asthe Homebuilder is a reporting company, such thirty (30) days shall be extended to the date offiling of its respective 10K or 10Q, if later, as the case may be (each, a "Quarterly ReceiptDate"). At such time as the Homebuilder is no longer an Obligated Person, the Homebuilder willno longer be obligated to prepare any quarterly Homebuilder Report pursuant to this DisclosureAgreement.

(b) Each quarterly Homebuilder Report shall incorporate by reference the informationcontained in the 10K or 10Q referenced above and shall address the following information, to theextent applicable to the portion of the Development owned by the Homebuilder:

(i) The percentage of infrastructure improvements that have been completedwith the proceeds of the Bonds.

(ii) The number of homes planned on property subject to the Assessments.

(iii) The number and type of property (lots, parcels, raw land, etc.) sold tobuilders and the name of each builder.

(iv) The number and type of property (lots, parcels, raw land, etc.) sold toretail buyers.

(v) The number of homes constructed.

(vi) The number of homes under construction.

(vii) The number of homes under contract with end users.

(viii) The number of homes sold and closed to end users.

(ix) The estimated date of complete build-out of residential units.

(x) The number of units, type of units and square footage of commercialproperty or other non-residential uses planned on property which is being assessed torepay the Bonds.

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(xi) The number and type of property (parcels, raw land, etc.) sold for non-residential development, if any.

(xii) The square footage of non-residential property constructed, if any.

(xiii) Whether the Homebuilder has made any bulk sale of the land, subject tothe Assessments other than in the ordinary course of business.

(xiv) The anchor (more than ten percent (10%) of the square footage) tenants ofnon-residential property, if any.

(xv) The status of development approvals for the Development (as defined inthe Limited Offering Memorandum).

(xvi) Materially adverse changes or determinations to permits/approvals for theDevelopment which necessitate changes to the Homebuilder's land-use plans.

(xvii) Updated plan of finance (i.e., status of any credit enhancement, issuanceof additional bonds to complete project, draw on credit line of Homebuilder, additionalmortgage debt, etc.).

(c) Any of the items listed in subsection (b) above may be incorporated by referencefrom other documents which have been submitted to EMMA or the SEC. The Homebuilder shallclearly identify each such other document so incorporated by reference.

(d) If the Homebuilder sells, assigns or otherwise transfers ownership of real propertyin the Development to a third party, which will in turn be an Obligated Person for purposes ofthis Disclosure Agreement as a result thereof, including but not limited to, any third party whichwill own at least twenty percent (20%) of the real property within the Development subject to theAssessments (a "Transfer"), the Homebuilder hereby agrees to require such third party to complywith the disclosure obligations of the Homebuilder hereunder for so long as such third party is anObligated Person hereunder, to the same extent as if such third party were a party to thisDisclosure Agreement. The Homebuilder shall promptly notify the District and theDissemination Agent in writing of any Transfer. For purposes of Sections 5 and 6 hereof, theterm "Homebuilder" shall be deemed to include the Homebuilder and any third party thatbecomes an Obligated Person hereunder as a result of a Transfer. In the event that theHomebuilder remains an Obligated Person hereunder following any Transfer, nothing hereinshall be construed to relieve the Homebuilder from its obligations hereunder.

6. Provision of Homebuilder Reports.

(a) The Homebuilder shall provide a Homebuilder Report which contains theinformation in Section 5(b) of this Disclosure Agreement to the Dissemination Agent no laterthan the Quarterly Receipt Date for such Homebuilder Report. Within thirty (30) days of theQuarterly Receipt Date, the Dissemination Agent shall file the Homebuilder Report provided toit by the Homebuilder with each Repository (the "Quarterly Filing Date").

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(b) If on the seventh (7th) day prior to each Quarterly Receipt Date the DisseminationAgent has not received a copy of the Homebuilder Report due on such Quarterly Receipt Date,the Dissemination Agent shall contact the Homebuilder by telephone and in writing (which maybe by e-mail) to remind the Homebuilder of its undertaking to provide the Homebuilder Reportpursuant to Section 5. Upon such reminder, the Homebuilder shall either (i) provide theDissemination Agent with an electronic copy of the Homebuilder Report in accordance withSection 6(a) above, or (ii) instruct the Dissemination Agent in writing that such Obligated Partywill not be able to file the Homebuilder Report within the time required under this DisclosureAgreement and state the date by which such Homebuilder Report will be provided.

(c) If the Dissemination Agent has not received a Homebuilder Report that contains,at a minimum, the information in Section 5(b) of this Disclosure Agreement by 12:00 noon onthe first business day following each Quarterly Receipt Date, a Listed Event described in Section7(a)(xii) shall have occurred and the District and the Homebuilder hereby direct theDissemination Agent to send a notice to each Repository in substantially the form attached asExhibit A, with a copy to the District. The Dissemination Agent shall file such notice no laterthan thirty (30) days following the applicable Quarterly Receipt Date.

7. Reporting of Significant Events.

(a) Pursuant to the provisions of this Section 7, the District shall give, orcause to be given, notice of the occurrence of any of the following events with respect to theBonds to the Dissemination Agent in writing in sufficient time in order to allow theDissemination Agent to file notice of the occurrence of such Listed Event in a timely manner notin excess of ten (10) business days after the occurrence of the event, with the exception of theevent described in number 15 below, which notice shall be given in a timely manner:

1. principal and interest payment delinquencies;

2. non-payment related defaults, if material;

3. unscheduled draws on debt service reserves reflecting financialdifficulties;

4. unscheduled draws on credit enhancements reflecting financialdifficulties;

5. substitution of credit or liquidity providers, or their failure to perform;

6. adverse tax opinions, the issuance by the Internal Revenue Service ofproposed or final determinations of taxability, Notices of Proposed Issue(IRS Form 5701 TEB) or other material notices or determinations withrespect to the tax status of the Bonds, or other material events affecting thetax status of the Bonds;

7. modifications to rights of the holders of the Bonds, if material;

8. Bond calls, if material, and tender offers;

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9. defeasances;

10. release, substitution, or sale of property securing repayment of the Bonds,other than in the normal course of business, if material;

11. ratings changes;

12. an Event of Bankruptcy or similar event of an Obligated Person;

13. the consummation of a merger, consolidation, or acquisition involving anObligated Person or the sale of all or substantially all of the assets of theObligated Person, other than in the ordinary course of business, the entryinto a definitive agreement to undertake such an action or the terminationof a definitive agreement relating to any such actions, other than pursuantto its terms, if material; and

14. appointment of a successor or additional trustee or the change of name ofa trustee, if material; and

15. notice of any failure on the part of the District to meet the requirements ofSection 3 hereof.

(b) The notice required to be given in paragraph 7(a) above shall be filed withthe MSRB, in electronic format as prescribed by the MSRB.

8. Identifying Information.

In accordance with the Rule, all disclosure filings submitted in pursuant to this DisclosureAgreement to any Repository must be accompanied by identifying information as prescribed bythe Repository. Such information may include, but not be limited to:

(a) the category of information being provided;

(b) the period covered by any annual financial information, financialstatement or other financial information or operation data;

(c) the issues or specific securities to which such documents are related(including CUSIPs, District name, state, issue description/securities name,dated date, maturity date, and/or coupon rate);

(d) the name of any Obligated Person other than the District;

(e) the name and date of the document being submitted; and

(f) contact information for the submitter.

9. Termination of Disclosure Agreement. This Disclosure Agreement shallterminate upon the defeasance, prior redemption or payment in full of all of the Bonds.

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10. Dissemination Agent. The District may, from time to time, appoint or engage aDissemination 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 successorDissemination Agent. If at any time there is not any other designated Dissemination Agent, theDistrict shall be the Dissemination Agent. The initial Dissemination Agent shall be DisclosureServices, LLC, as agent of MBS Capital Markets, LLC.

11. Amendment; Waiver. Notwithstanding any other provision of this DisclosureAgreement, the District and the Homebuilder may amend this Disclosure Agreement, and anyprovision of this Disclosure Agreement may be waived, if such amendment or waiver issupported by an opinion of counsel expert in federal securities laws, acceptable to the District, tothe effect that such amendment or waiver would not, in and of itself, cause the undertakingsherein to violate the Rule if such amendment or waiver had been effective on the date hereof buttaking into account any subsequent change in or official interpretation of the Rule.

Notwithstanding the above provisions of this Section 11, no amendment to the provisionsof Sections 5 and 6 hereof may be made without the consent of the Homebuilder as long as theHomebuilder is an Obligated Person.

In the event of any amendment or waiver of a provision of this Disclosure Agreement, theDistrict shall describe such amendment in the next Annual Report, and shall include, asapplicable, a narrative explanation of the reason for the amendment or waiver and its impact onthe type (or, in the case of a change in accounting principles, on the presentation) of financialinformation or operating data being presented by the District. In addition, if the amendmentrelates to the accounting principles to be followed in preparing financial statements: (i) notice ofsuch change shall be given in the same manner as for a Listed Event under Section 7(c); and (ii)the Annual Report for the year in which the change is made should present a comparison (innarrative form and also, if feasible, in quantitative form) between the financial statements asprepared on the basis of the new accounting principles and those prepared on the basis of theformer accounting principles.

12. Additional Information. Nothing in this Disclosure Agreement shall be deemedto prevent the District or the Homebuilder from disseminating any other information, using themeans of dissemination set forth in this Disclosure Agreement or any other means ofcommunication, or including any other information in any Annual Report, Homebuilder Reportor notice of occurrence of a Listed Event, in addition to that which is required by this DisclosureAgreement. If the District chooses to include any information in any Annual Report or notice ofoccurrence of a Listed Event in addition to that which is specifically required by this DisclosureAgreement, or if the Homebuilder chooses to include any information in any HomebuilderReport in addition to that which is specifically required by this Disclosure Agreement, neitherthe District nor the Homebuilder, as applicable, shall have any obligation under this DisclosureAgreement to update such information or include it in any future Annual Report, any futureHomebuilder Report or notice of occurrence of a Listed Event. The Homebuilder agrees toprovide the District with a copy of any information in addition to the Homebuilder Reportprovided by it to the Dissemination Agent or any Repository.

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13. Default. In the event of a failure of the District, the Disclosure Representative,the Homebuilder or the Dissemination Agent to comply with any provision of this DisclosureAgreement, the Trustee may (and, at the request of any Participating Underwriter or the Ownersof at least 25% aggregate principal amount of Outstanding Bonds and receipt of indemnitysatisfactory to the Trustee, shall), or any beneficial owner of a bond may take such actions asmay be necessary and appropriate, including seeking mandate or specific performance by courtorder, to cause the District, the Disclosure Representative, the Homebuilder or the DisseminationAgent, as the case may be, to comply with its obligations under this Disclosure Agreement. Adefault under this Disclosure Agreement by the Homebuilder shall not be deemed a default bythe District hereunder and no default hereunder shall be deemed an Event of Default under theIndenture, and the sole remedy under this Disclosure Agreement in the event of any failure of theDistrict, the Disclosure Representative, the Homebuilder or the Dissemination Agent, to complywith this Disclosure Agreement shall be an action to compel performance.

14. Duties of Dissemination Agent. The Dissemination Agent shall have only suchduties as are specifically set forth in the applicable written dissemination agent agreementbetween the District and such Dissemination Agent and in this Disclosure Agreement. TheDissemination Agent shall have no obligation to notify any other party hereto of an event thatmay constitute a Listed Event. The District, the Disclosure Representative and the Homebuilderrepresent and warrant that they will supply, in a timely fashion, any information reasonablyrequested by the Dissemination Agent that is necessary in order for the Dissemination Agent tocarry out its duties under this Disclosure Agreement. The District, the Disclosure Representativeand the Homebuilder acknowledge and agree that the information to be collected anddisseminated by the Dissemination Agent will be provided by the District, the DisclosureRepresentative, the Homebuilder and others. The Dissemination Agent's duties do not includeauthorship or production of any materials, and the Dissemination Agent shall have noresponsibility hereunder for the content of the information provided to it by the District, theDisclosure Representative, or the Homebuilder as thereafter disseminated by the DisseminationAgent.

15. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of theDistrict, the Disclosure Representative, the Homebuilder, the Dissemination Agent, the Trustee,the Participating Underwriter and Owners of the Bonds (the Dissemination Agent, ParticipatingUnderwriter and Owners of the Bonds being hereby deemed express third party beneficiaries ofthis Agreement), and shall create no rights in any other person or entity.

16. Counterparts. This Disclosure Agreement may be executed in severalcounterparts, each of which shall be an original and all of which shall constitute but one and thesame instrument.

17. District, Disclosure Representative and Trustee Cooperation. The District,the Disclosure Representative and the Trustee agree that the Dissemination Agent, in suchcapacity hereunder, may receive, upon request, from the District, the Disclosure Representativeand the Trustee, on a timely basis, any information or reports within their respective control theDissemination Agent requests in furtherance of the Dissemination Agent's duties hereunder,including balances in the Funds and Accounts established under the Indenture and such otherinformation as it deems necessary to review compliance by the other parties hereto with their

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respective obligations hereunder. In furtherance thereof, the District, through its DisclosureRepresentative, agrees to provide the Dissemination Agent with a certified copy of any non-advalorem assessment roll provided to the County Tax Collector promptly after its delivery to theCounty Tax Collector and a certified copy of any non-ad valorem assessment roll relating toproperty within the District which is invoiced by the District, and in each case, no later thanSeptember 30 of the current Fiscal Year, and the adopted budget for the upcoming Fiscal Yearby September 30 of the current year. In addition, the District acknowledges and agrees that anymodifications to assessment methodologies which affect the Assessments and any "true up"implementations regarding such Assessments shall be adopted by District resolution and that theDistrict, through its Disclosure Representative, will provide the Dissemination Agent and theTrustee with notice of such resolution(s) within 30 days of adoption.

18. Governing Law. This Disclosure Agreement shall be governed by the laws ofthe State of Florida and Federal law and venue shall be in any state or federal court havingjurisdiction in Collier County, Florida.

19. Binding Effect. This Disclosure Agreement shall be binding upon each party andupon each successor and assignee of each party and shall inure to the benefit of, and beenforceable by, each party and each successor and assignee of each party.

[SIGNATURE PAGES TO FOLLOW]

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IN WITNESS WHEREOF, the undersigned has executed this Disclosure Agreement asof the date and year set forth above.

ATTEST AVE MARIA STEWARDSHIPCOMMUNITY DISTRICT:

_____________________________ By:Secretary Chairman, Board of Supervisors

HOMEBUILDER:

PULTE HOME CORPORATION

By: ____________________________________Name: __________________________________Title: __________________________________

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Joined by Disclosure Services, LLC, as agent for MBS Capital Markets, LLC, asDisclosure Representative for purposes of Section 4, Section 7, Section 13, Section 14, Section15 and Section 17 only.

DISCLOSURE REPRESENTATIVE:

DISCLOSURE SERVICES, LLC,as agent for MBS Capital Markets, LLC

By:Name:_______________________________Title:________________________________

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Joined by U.S. Bank National Association, as Trustee for purposes of Section 13, Section15 and Section 17 only.

TRUSTEE:

U.S BANK NATIONAL ASSOCIATION

By:Name:_______________________________Title:________________________________

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EXHIBIT A

NOTICE TO REPOSITORIESOF FAILURE TO FILE ANNUAL REPORT/HOMEBUILDER REPORT

Name of District: Ave Maria Stewardship Community District

Name of Bond Issue: $29,100,000 Ave Maria Stewardship Community Development DistrictCapital Improvement Revenue Refunding Bonds, Series 2012

Date of Issuance: June 7, 2012

NOTICE IS HEREBY GIVEN that [the District has not provided an Annual Report asrequired by Section 4(a)] [the Homebuilder has not provided a Homebuilder Report whichcontains the information required by Section 5(b)] of the Continuing Disclosure Agreementdated as of June 1, 2012, between the District and the Homebuilder named therein, and joined inby the Disclosure Representative and Trustee named therein, executed and delivered inconnection with the above-referenced Bonds. The [District][Homebuilder] has advised theundersigned that it anticipates that the [Annual Report][Homebuilder Report] will be filed by______________, 20____].

Dated: ____________________

[DISSEMINATION AGENT]

cc: DistrictHomebuilder

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APPENDIX E

MASTER ASSESSMENT METHODOLOGYincluding

Master Assessment Methodology (including the Sub-Master Assessment Methodology and theFirst Sub-Master Supplemental Assessment Methodology for the Ave Maria Stewardship

District)

and

Second Sub-Master Supplemental Assessment Methodology for the Ave Maria StewardshipDistrict (relating to the 2012 Bonds)

MASTER ASSESSMENT METHODOLOGY REPORT


June 12, 2006

Prepared for

Board of Supervisors Ave Maria Stewardship Community District

Prepared by

Fishkind & Associates, Inc. 12051 Corporate Boulevard Orlando, Florida 32817 407-382-3256 Fishkind.Com

1.0 Introduction

1.1 Purpose

This report provides a Master Assessment Methodology ("Assessment Methodology" or "Methodology") for the Ave Maria Stewardship District ("District"). The Methodology described herein has two goals: (1) determining the special and peculiar benefits that flow to the properties in the District as a logical connection from the infrastructure systems and facilities constituting enhanced use and increased enjoyment of the property; and (2) apportion the special benefits on a basis that is fair and reasonable. The District has adopted a Capital Improvements Program ("Improvement Plan" or "CIP") that will allow for the development of property within the District. The District plans to fund the CIP through a combination of debt financing with the proceeds of bonds payable from special assessments, bonds payable from revenues of various systems comprising a portion of the CIP and contributions of components of the CIP by the developer(s) and other parties, or combinations of the foregoing. Any debt repaid from the proceeds of non-ad valorem special assessments are intended to satisfy the statutory and Constitutional tests necessary and the two case law tests in order for such non-ad valorem special assessments to constitute liens, co-equal with the liens of State, County, municipal and school board taxes, against properties within the boundary of the District that receive special benefits from the CIP. The Methodology herein is intended to set forth a framework to apportion the special and peculiar benefits from the portions of the CIP financed with the proceeds bonds payable from and secured by non-ad valorem special assessments (the "Assessments") imposed and levied on the properties. The report is designed to conform to the requirements of the Constitution, Chapters 170 and 197, F.S. and Chapter 2004-461 , Laws of Florida with respect Assessments and is consistent with our understanding of the case law on this subject.

1.2 Background

The Ave Maria Stewardship District serves acreage within the Ave Maria Development of Regional Impact ("Ave Maria") acreage. Ave Maria is a mixeduse development on approximately 10,805 acres in unincorporated Collier County ("County"), Florida. Pursuant to the Development Order, the Collier County Board of County Commissioners has granted development rights for the anticipated development units within the District.

The Town of Ave Maria within the District boundaries is anticipated to be developed over an estimated twenty-five year time frame. In general, the Town of Ave Maria will have a variety of multifamily and single family product types, commercial/retail space, office space, schools, churches, a university and recreational opportunities. Table 1 below outlines the Ave Maria development program.

Table 1. The Town of Ave Maria Development Program

Land Use Descriptions Residential Assisted Living Facilities Retail, Entertainment, Service Professional Office (General, Medical, Financial, etc.) Civic/Community/Mise Medical Facility Hotel Ave Maria University K-12 Schools (Private & Public)

Measurement Units Dwelling Units Beds Square Feet Square Feet Square Feet Square Feet Rooms Students Students

Source: Developer

1.3 Special Benefits and General Benefits

Total 18,200

750 1,139,000

841,500 245,000

35,000 660

6,000 5,200

Improvements undertaken by the District create both special benefits and general benefits. However, the general benefits to the public at large are incidental in nature and are readily distinguishable from the special and peculiar benefits which flow as a logical connection from the systems, facilities and services to property within the District in order to develop such property and use it for residential, commercial, educational and other purposes. Absent the District's CIP, there would be no infrastructure to support development of land within the District and such development would be prohibited by law.

While the general public and property owners outside the District will benefit from the provision of District infrastructure, these benefits are incidental to the benefits derived from property within the District's CIP which is dependent upon the District's Improvement Program to obtain, or to maintain, development entitlements. This fact alone clearly distinguishes the special and peculiar benefits which District properties receive compared to those properties lying outside of the District's boundaries and establishes that the CIP has a nexus to the value and the use and enjoyment of the lands within the District.

1.4 Requirements of a Valid Assessment Methodology

Valid special assessments under Florida law have two requirements. First, the properties assessed must receive a special and peculiar benefit as a logical connection from the systems and services constituting improvements. The courts recognize the special benefits which flow as a logical connection peculiar to the property as enhanced enjoyment and increased use of the property which in turn may result in decreased insurance premiums, increased value and marketability. Second, the assessments must be fairly and reasonably apportioned in relation to the benefit received by the various properties being assessed.

If these two tests for lienability are determined in a manner that is informed and non-arbitrary by the Board of Supervisors of the District, as a legislative determination, then the special assessments may be levied, imposed and collected as first liens on the property. Florida courts have found that it is not necessary to calculate benefit with mathematical precision at the time of imposition and levy so long as the levying and imposition process is not arbitrary, capricious, or unfair.

1.5 Scope of Report

The CIP and therefore the financing of the components thereof have been estimated by the District's Consulting Engineer based upon good faith estimates provided by the Developer of the development and related infrastructure provision program that will span a number of years. Accordingly, there can be no assurance on the date hereof that such costs are attainable. Moreover, it is not possible at this time to contemplate the entirety of the Development (hereinafter defined) with any particularity. Therefore, the estimated par value of bonds required will likely change. This Report is intended to establish a maximum benefit (unless altered by subsequent proceedings) based upon current knowledge and to establish a framework for subsequent Reports which will detail with greater specificity the apportionment of benefit peculiar to specific properties and land uses and which will be determined by subsequent proceedings of the District's Board in accordance with one of the many statutory methods set out in the District Act. The Act permits the District to establish separate phased units, which presumably will differ not only on the timing of their development, but also based upon the composition of the uses of property within each area and the differences in the special and peculiar benefits that each use receives. If and when the District issues bonds or other debt instruments to finance infrastructure one or more supplemental reports will be devised. The supplemental reports will describe the specific size and terms of the bonds or other debt being issued.

The Master Assessment Methodology must be used to determine the first lien status of the assessment to be imposed on the acreage. The fact that the property is acreage versus platted units in the beginning does not change the fundamental legal requirement of the Master Assessment Methodology for the imposition of the assessment as a lien on the property. Just as with the Master Assessment methodology, the supplemental assessment methodology reports will apply algorithms and the principles set forth in the act and related statutory methodology with more specificity to result in the actual levy of the assessments on platted parcels.

2.0 Finance Plan

2.1 Master Development Program

Ave Maria Development, LLLP is the "Master Developer" of the property within the District. The Master Developer will develop the land in preparation for selling land to third-party developers for development into Neighborhoods (which alone or together with other Neighborhoods will constitute phased units) as well as developing some of the residential and commercial projects themselves. The Town of Ave Maria Development Program for the District as detailed in Table 1. The Development Program is the matrix of the allowable uses under the Ave Maria DRI, which lies entirely within the District boundaries.

Development within the District will consist of a variety of single family and multifamily residential unit types, office and commercial/retail square footage, hotels, churches, schools, recreational facilities including parks and golf courses, event parking, and other uses. As the Ave Maria community progresses in its development and the District issues bonds to fund infrastructure, supplemental assessment reports will be developed that will detail the particulars for an assessment area from a specific bond issue, together with the special and peculiar benefits to the lands benefited by the portions of the CIP financed with that issue, establishing the logical connection flowing from the system, facility and service to the property.

2.2 Capital Improvement Program

The District Engineer has identified certain infrastructure that may be provided by the District and has provided a cost estimate for the District's CIP. The CIP is detailed in the Master Capital Improvement Program for the Ave Maria Community Stewardship District dated April 19, 2006 as prepared by Agnoli, Barber & Brundage, Inc.

The C/P consists of roadways, the drainage/storm water management system, master irrigation system, landscaping, mitigation and restoration, land acquisition and public facilities and water and wastewater utilities that will be developed along with the community.

Table 2 of this Master Assessment Methodology report summarizes the costs associated with the proposed Master Infrastructure Improvements.

Table 2. Capital Improvement Program for AMUSCD.

Capital Improvement Drainage/Stormwater Management System Roadways Master Irrigation System Landscaping Mitigation and Restoration

Land Acquisition and Public Facilities Water and Waste Water Utilities

TOTAL

Estimated Cost $135,000,000 $13 7,000,000

$25,000,000 $74,000,000 $40,000,000 $50,000,000

$190,000,000 $651,000,000

Source: District Engineer's Report, April 19, 2006

2.3 Local Infrastructure

As property is developed, roads, water and sewer, stormwater management, recreation and other public infrastructure systems facilities and services may be authorized by applicable law to be financed, constructed, acquired, owned and/or operated by the District and, with respect to which the District may levy and impose Assessments. Those facilities and the special benefits peculiar to the property, in this case the acreage which precedes any platting of the property, are comprised of drainage and stormwater management system, roadways, master irrigation system, landscaping, mitigation and restoration, land acquisition and public facilities, and water and waste water utilities. The Act contemplates the financing of such infrastructure from time to time within platted units within the District and any such Assessments must be imposed and levied pursuant to separate and distinct proceedings under the Act and then applicable law.

2.4 Bond Requirements

The District intends to finance a portion of the CIP by issuing bonds. These bonds will be issued in one or more series. A number of items comprise the final par bond requirements. These items may include but are not limited to capitalized interest, a debt service reserve fund, underwriter's discount, and issuance costs. For purposes of this Methodology, allowances have been made for such items.

As the finance plan is implemented a supplemental report detailing the particulars of each specific bond issue will detail the terms, interest rates, and costs associated with a specific series of bonds, the level of funding for the construction/acquisition account, the capitalized interest account, the debt service reserve fund account, as well as the underwriter's discount, and issuance costs. Table 3 shows an estimate of the par amount of bonds required to fund the CIP. ·

Table 3. Estimated AMUSCD Bonds Par Amount.

Category Capital Improvement Plan Capitalized Interest Debt Service Reserve Underwriter's Discount Cost of Issuance Rounding

Total

Total $651,000,000

$98,419,800 $59,584,094 $10,662,145

$500,000 -$1,039

------------------$820,165,000

Source: Fishkind & Associates

3.0 Assessment Methodology

3.1 Structure- Master Infrastructure Improvements

Special and peculiar benefits flow as a logical connection to the property from the systems, facilities and services provided as a logical consequence to the property within the boundary of the District. These special benefits are peculiar to the acreage and later down to the actual platted units or parcel. The special benefits that justify imposing the assessment on the acreage include enhanced enjoyment and increased use, which may result in such positive consequences as increased value and marketability and decreased insurance premiums when levied on the various platted units or parcels of property. First the District Engineer identifies the CIP costs then the Assessment Methodology Consultant allocates those costs and debt per acre (and later in the process per parcel) for the provision of the systems and facilities, which constitute the CIP. The best determination involves whether there is a special benefit peculiar to such property, different in kind and degree that any general benefit, so long as the special benefit flows peculiar to the property as a logical connection from the components of the CIP. Then a dollar amount of a proposed assessment is identified using various formulas. Then there is a determination of whether that dollar amount itself can be a first lien later to be levied on the platted units. Then there is an apportionment of the benefits so that no dollar amount as assessment exceeds any determination of special and peculiar benefit to the property and that the amount levied on different property owners is fair and reasonable.

The District's engineer determines the costs for the CIP and an estimate of the bond amount required to finance the CIP is calculated. The Assessment Methodology associated with the CIP is a two-step process. First, the special and peculiar benefits of the CIP will be determined and imposed upon the undeveloped land within the District. Second, the per acre Assessments previously imposed will be levied on to developed and platted parcels within assessment areas for the applicable phased units in accordance with the more specific uses and special benefits peculiar to each platted parcel in the supplemental methodology reports.

3.2 Initial Apportionment of Benefits from Systems, Facilities and Services constituting the CIP as a system of improvements to land currently undeveloped Acres

Initially, the District is comprised of a bundle of undeveloped acres with the potential for development pursuant to, and consistent with, the DRI, but upon the acquisition, construction, installation, equipping operation and maintenance of certain infrastructure. The District's CIP identifies the master Infrastructure Improvements needed for the Development pursuant to the DRI which will transform the undeveloped acres into developed platted parcels. Therefore, initially, there is a system of interlinked improvements necessary in order to develop each developable acre within the District, and, because the specific development cannot be initially determined on any one acre of land, each acre of land is benefited equally. This "proportionate per acre" special benefit from the systems and facilities constituting the components of the CIP is illustrated by the fact that if all of the land were sold in its undeveloped state, its value to a willing buyer would be as a whole and would include the value of the land with development rights from the DRI, adjusted for the cost of development (of which the CIP would be a significant component) and further adjusted for parcelspecific development costs. Thus, each acre would be valued equally since, until development is located, development could presumably occur on any one acre as on any other. These special benefits are peculiar to the acres of property within the District, are assessed and imposed equally and are real even though there is no platted parcel. As development occurs and development rights are absorbed by some acres and other acres are put to other uses, including public uses, the value of the remaining acres and acres put to other uses is adjusted to reflect the development rights (and corresponding infrastructure benefits) which have been used and the effect that those uses have on the remaining undeveloped acres. As supplemental reports are issued, as described above, such reports will take into account the relative benefits derived from the use and enjoyment of the property which is given to the developed and platted property and that which is retained in the yet to be developed property.

The foregoing discussion demonstrates that the systems, facilities and services constituting the CIP result in special benefits peculiar to the property, whether the property is in acreage or in platted parcels. Such special and peculiar benefits include enhanced enjoyment and increased use, which may result in such positive consequences as increased value and marketability and decreased insurance premiums. The dollar amount of these special and peculiar benefits is not known but is capable of being computed with mathematical certainty in the future. As of the date of this assessment, the dollar amount of the special assessment levy per acre is $75,905.15.

3.3 Assignment of Assessments

It is useful to consider three broad states or conditions of development within the District. The initial condition is the "unplatted state". At this point infrastructure may or may not be installed but in general, home sites or other development units have not been defined and all of the developable land within the District is considered unplatted acreage ("Unplatted Acres"). In the unplatted state, all of the lands within the District receive benefit from the components of the financed CIP and assessments would be imposed upon all of the land within the District on an equal acre basis to repay the bonds.

The second condition is the interim or "approved state". At this point, a developer would have received approval for a site development plan from the County. By virtue of the County granting an approval for its site development plan for a neighborhood or non-residential land, certain development rights are committed to and peculiar to that Neighborhood or non-residential land, thereby changing the character and value of the land by enhancing the capacity of the Unplatted Acres within a neighborhood or the non-residential land with the special and peculiar benefits flowing from components of the District's CIP and establishing the requisite Jlogical connection for the flow of the special benefits peculiar to the property, while also incurring at the same time a corresponding increase in the responsibility for the payment of the levied assessment to amortize its portion of the debt associated with those improvements. Therefore, if the District has issued bonds to fund a portion of the CIP at the time a neighborhood or non-'residential land receives site development plan approval , in the event that District issues bonds which have or will benefit the lands within such area, the District will designate such area, or in combination with other such areas, as an assessment area, and, pursuant to a supplemental assessment methodology report, allocate a portion of this debt to such assessment area in the "approved state". In all cases, appropriate credit shall be given for infrastructure comprising a portion of the CIP that is donated or contributed in lieu of assessments.

This apportionment of benefit in such supplemental methodology report shall be based on accepted practices for the fair and equitable apportionment of special and peculiar benefits in accordance with then applicable law and the procedure for the imposition, levy and collection of non ad valorem special assessments as set forth in the District Act and in conformity with the Constitution and law of the State applicable to such assessments.

Development enters its third and "platted state", as property is platted. Land becomes platted property ("Platted Property") when single family units are platted or multifamily and non-residential land uses receive a building permit and a separate tax parcel identification number is issued for such parcel. At this point, and only at this point, is the use and enjoyment of the property fixed and determinable and it is only at this point that the ultimate special and peculiar benefit can be determined flowing from the components of the CIP peculiar to such platted parcel. At this point, a specific apportionment of assessment will be fixed and determinable from the supplemental assessment report.

3.4 True-Up Mechanism- Master Infrastructure

Until such time as bonds are issued, the lien of the Assessments imposed pursuant to this methodology are inchoate ("Inchoate Assessments"), meaning that the lien of the Assessments cannot exceed the amount established hereby but that such lien will not be activated until bonds are issued which represent a charge and liability against the Inchoate Assessment amount. In essence, the Inchoate Assessment represents an upper limit on the Assessments. As bonds are issued and all, or a portion of, the Assessment becomes a liability for the repayment of a proportionate portion of the bonded debt, the Assessments are collectible to the extent set forth in the supplemental assessment methodology issued in correspondence to such bonds ("Funded Assessments").

In order to assure that the Funded Assessment per acre for the benefits from the CIP will not be disproportionately apportioned to any acre, each supplemental methodology shall apply a "true up" test, to ensure that, due to the level of development on any one parcel of land, the Assessments on any other parcel of land cannot exceed the special and peculiar benefit which can be apportioned to such parcel in accordance with any then-applicable assessment methodology.

4.0 Assessment Determination

4.1 Special and Peculiar Benefit to the Property

Construction and/or acquisition by the District of its proposed CIP constituting systems, facilities and services which are provided in differing amounts and are dependent on the type of land use receiving the special benefits peculiar to those properties which flow from the logical relationship to the properties.

One example of this differentiation is the concept that various land uses will generate differing demands on the District's proposed roadway infrastructure. Another example is that it can be demonstrated that each land use will receive a different level of surface water benefit that relates to that land use's density and intensity of development.

These determinations are reviewed in the light of the special and peculiar benefits peculiar to the property which flow to the properties as a result of their logical connection from the improvements in fact actually provided .

The special and peculiar benefits within an assessment area of a phased unit shall be determined relative to each parcel of land and identified for each improvement in accordance with a supplemental methodology report.

There are certain portions of the property such as public and private utility sites within the District boundary that will receive special and peculiar benefits in varying degrees from the component systems and facilities of the District's CIP. Those special and peculiar benefits will be determined in the future through supplemental assessment methodology reports. One example of this type of property is the Lee County Electrical Coop power line easement and adjacent substation land that is there purely for the provision of electrical power to the site and related sites along their transmission system. Another example is the private utility company for the Town of Ave Maria that will provide water and waste water treatment facilities.

The Board in their discretion may elect to exempt these properties from the duty to pay for their portion of the special and peculiar benefits and to the degree that this decision affects the payment of debt that funds these special · and peculiar benefits, will seek to offset this reduced cash flow through other methods including the contribution of additional CIP or lands from the land owner.

4.2 Reasonable and Fair Apportionment of the Duty to Pay

The special and peculiar benefits from the component systems and facilities of the District's CIP have been determined and apportioned to the undeveloped land on an equal acre basis. As land receives certain development approvals as described in this Report, the benefits will be apportioned as provided in supplemental methodology reports

The duty to pay the non-ad valorem special assessments during the initial period as set forth above is fairly and reasonably apportioned because the special and peculiar benefits to the property flowing from the acquisition and/or construction of the District's CIP (and the concomitant responsibility for the payment of the resultant and allocated debt) have been apportioned to the property according to the reasonable estimates of the special and peculiar benefits including enhanced enjoyment and increased use, which may result in such positive consequences as increased value and marketability and decreased insurance premiums and conferred on the land as provided by the District's CIP for the reasons set forth above.

Accordingly, no acre of property within the District will be assessed for the payment of any non-ad valorem special assessment pursuant to this Master Methodology in an amount greater than the determined special benefit peculiar to that property and having a nexus to the value of the property or the use and enjoyment thereof.

5.0 Assessment Roll

As described above, the debt associated with the District's CIP will be initially distributed on an equal acreage basis across all of the undeveloped, acreage within the District. As development units are defined (Platted Property) they will be assessed in the manner described herein, which may not be on a relatively equal basis with the special assessments as provided for in the Supplemental Assessment Methodology Reports.

The following Appendix I shows the initial assessments on a per acre basis for the CIP. The acreage shown represents 100% of the gross acreage within the District.

APPENDIX 1

Initial Per Acre Assessment Roll

FOLIO# Sec-Twn-Rng Acreage Owner Par Amount 00138120205 22-47-29 44.97 BCI,Ltd. $3,413,455 00138440008 29-47-29 659.24 BCP, Ltd./AMULT, LLC $50,039,710 00138480107 29-47-29 539.72 BCP, Ltd./AMUL T, LLC $40,967,527 00138480000 30-47-29 78.58 BCI, Ltd./AMULT, LLC $5,964,627 00115280003 16-48-29 1,785.37 BCI, Ltd./AMUL T, LLC $135,518,775 00138521309 31-47-29 504.25 BCP, Ltd./AMULT, LLC $38,275,171 00138560001 32-47-29 1,257.51 BCP, Ltd./AMUL T, LLC $95,451,484 00138600000 33-47-29 502.16 BCI, Ltd./AMUL T, LLC $38,116,530 00138521008 31-47-29 74.55 Monaghan, Thomas $5,658,729 00138560409 32-47-29 557.64 BCP, Ltd./AMUL T, LLC $42,327,747 00138560302 32-47-29 192.36 Ave Maria University, Inc. $14,601 '114 00226280507 05-48-29 45.69 Divosta $3,468,106 00138600301 33-47-29 579.64 Ave Maria Development, LLLP $43,997,660 00226240204 04-48-29 1,775.55 BCP, Ltd./AMULT, LLC $134,773,387 00227000508 16-48-29 3.95 LCEC $299,825 00226440004 08-48-29 2,122.57 BCP, Ltd./AMULT, LLC $161,113,992 00222960106 13-48-28 80.93 BCI, Ltd./AMUL T, LLC $6,143,004 00227080502 18-48-29 0.45 BCI, Ltd./AMUL T, LLC ~341157

10,805.13 $820,165,000

[THIS PAGE INTENTIONALLY LEFf BLANK)

. ' ' . ~ ... ~ : ,:;

AVE MARIA DRI SUB-MASTER ASSESSMENT METHODOLOGY REPORT


Adopted November 14, 2006 Revised November 30, 2006

Prepared for

Board of Supervisors Ave Maria Stewardship Community District

Prepared by

Fish kind & Associates, Inc. 12051 Corporate Boulevard Orlando, Florida 32817 407-382-3256 Fishkind.Com

1.0 Introduction

1.1 Purpose

This report supplements the Ave Maria Stewardship District Master Assessment Methodology report ("Master Methodology") dated March 15, 2006 and previously approved by the Board of Supervisors of the Ave Maria Stewardship District (the "District") at its meeting on June 12, 2006. The Master Methodology allocates the debt to be incurred by the District to provide infrastructure improvements to properties in the District. This Ave Maria DRI Sub-Master Report ("Sub-Master Methodology") shows how the Master Methodology is applied in the context of defining the Ave Maria DRI (as described herein sub-assessment area boundaries, its Capital Improvement Program, its development program and how the inchoate debt initially defined in the Master Methodology is proportionately allocated over the newly defined acreage.

The Methodology described herein and in the Master Methodology have two goals: (1) determining the special and peculiar benefits that flow to the properties in the District as a logical connection from the infrastructure systems and facilities constituting enhanced use and increased enjoyment of the property; and (2) apportion the special benefits on a basis that is fair and reasonable. The District has adopted a master Capital Improvements Program ("Improvement Plan" or "CIP") that will allow for the development of property within the District. The District plans to fund the CIP through a combination of debt financing with the proceeds of bonds payable from special assessments, bonds payable from revenues of various systems comprising a portion of the CIP and contributions of components of the CIP by the developer(s) and other parties, or combinations of the foregoing. Any debt repaid from the proceeds of non-ad valorem special assessments are intended to satisfy the statutory and Constitutional tests necessary and the two case law tests in order for such nonad valorem special assessments to constitute liens, co-equal with the liens of State, County, municipal and school board taxes, against properties within the boundary of the District that receive special benefits from the CIP. The Methodology herein is intended to set forth a framework to apportion the special and peculiar benefits from the portions of the CIP financed with the proceeds bonds payable from and secured by non-ad valorem special assessments (the "Assessments") imposed and levied on the properties. The report is designed to conform to the requirements of the Constitution, Chapters 170 and 197, F.S. and Chapter 2004-461, Laws of Florida with respect Assessments and is consistent with our understanding of the case law on this subject.

1.2 Background

The acreage contained within the Town of Ave Maria Development of Regional Impact No. 05-01 (the "Ave Maria DRI") is wholly contained within the boundaries of the District. The Ave Maria DRI is a mixed-use development on approximately 5,027 acres in unincorporated Collier County ("County"), Florida. Pursuant to the Ave Maria DRI development order, the Collier County Board of County Commissioners has granted development rights for the anticipated development units within the District.

The Ave Maria DRI is anticipated to be developed over an estimated eleven year time frame. In general, the Ave Maria DRI will have a variety of multifamily and single family product types, commercial/retail space, office space, schools, churches, a university and recreational opportunities. Table 1 below outlines the Ave Maria development program.

Table 1. The Ave Maria DRI Development Program

Land Use Descriptions Residential Assisted Living Facilities Retail, Entertainment, Service Professional Office (General, Medical, Financial, etc.) Civic/Community/Mise Medical Facility Hotel Ave Maria University K-12 Schools (Public/Private)

Measurement Units Dwelling Units Beds Square Feet Square Feet Square Feet Square Feet Rooms Students Students

Source: Developer

1.3 Special Benefits and General Benefits

Total 9,814

450 690,000 510,000

35,000 400

6,000 2,400

Improvements undertaken by the District create both special benefits and general benefits: However, the general benefits to the public at large are incidental in nature and are readily distinguishable from the special and peculiar benefits which flow as a logical connection from the systems, facilities and services to property within the District in order to develop such property and use it for residential ; commercial, educational and other purposes. Absent the District's CIP, there would be no infrastructure to support development of land within the District and such development would be prohibited by law.

While the general public and property owners outside the District will benefit from the provision of District infrastructure, these benefits are incidental to the benefits derived from property within the District's CIP which is dependent upon the District's Improvement Program to obtain, or to maintain, development entitlements. This fact alone clearly distinguishes the special and peculiar benefits which District properties receive compared to those properties lying outside of the District's boundaries and establishes that the CIP has a nexus to the value and the use and enjoyment of the lands within the District.

1 .4 Requirements of a Valid Assessment Methodology

Valid special assessments under Florida law have two requirements. First, the properties assessed must receive a special and peculiar benefit as a logical connection from the systems and services constituting improvements. The courts recognize the special benefits which flow as a logical connection peculiar to the property as enhanced enjoyment and increased use of the property which in turn may result in decreased insurance premiums, increased value and marketability. Second, the assessments must be fairly and reasonably apportioned in relation to the benefit received by the various properties being assessed.

If these two tests for lienability are determined in a manner that is informed and non-arbitrary by the Board of Supervisors of the District, as a legislative determination, then the special assessments may be levied, imposed and collected as first liens on the property. Florida courts have found that it is not necessary to calculate benefit with mathematical precision at the time of imposition and levy so long as the levying and imposition process is not arbitrary, capricious, or unfair.

1.5 Scope of Report

The Ave Maria DRI CIP and therefore the financing of the components thereof have been estimated by the District's Consulting Engineer as documented in the Sub-Master Supplemental Engineer's Report dated November 14, 2006. Accordingly, there can be no assurance on the date hereof that such costs are attainable. Moreover, it is not possible_at this time to contemplate the entirety of the Development (hereinafter defined) with any particularity. Therefore, the estimated par value of bonds required will likely change.

This Report is intended to apportion the maximum benefit (unless altered by subsequent proceedings) for the Ave Maria DRI based upon current knowledge and to establish a framework for subsequent Ave Maria DRI Reports which will detail with greater specificity the apportionment of benefit peculiar to specific properties and land uses and which will be determined by subsequent proceedings of the District's Board in accordance with one of the many statutory methods set out in the District Act. The Act permits the District to establish separate phased units, which presumably will differ not only on the timing of their development, but also based upon the composition of the uses of property within each area and the differences in the special and peculiar benefits that each use receives. If and when the District issues bonds or other debt instruments to finance infrastructure one or more supplemental reports will be devised. The supplemental reports will describe the specific size and terms of the bonds or other debt being issued.

The Master Assessment Methodology must be used to determine the first lien status of the assessment to be imposed on the acreage. The fact that the property is acreage versus platted units in the beginning does not change the fundamental legal requirement of the Master Assessment Methodology for the imposition of the assessment as a lien on the property. Just as with the Master Assessment methodology, the supplemental assessment methodology reports will apply algorithms and the principles set forth in the act and related statutory methodology with more specificity to result in the actual levy of the assessments on platted parcels.

2.0 Finance Plan

2.1 Ave Maria DRI Development Program

Ave Maria Development, LLLP is the ~·Master Developer" of the property within the District. The Master Developer will develop the Ave Maria DRI lands in preparation for selling land to third-party developers for development into neighborhoods (which alone or together with other neighborhoods will constitute phased units} as well as developing some of the residential and commercial projects themselves. The Ave Maria DRI Development Program within the District is detailed in Table 1 and is the matrix of the allowable uses under the Ave Maria DRI.

Development within the Ave Maria DRI will consist of a variety of single family and multifamily residential unit types, office and commercial/retail square footage, hotels, churches, schools, recreational facilities including parks and golf courses, event parking, and other uses.

As the Ave Maria DRI community progresses in its development and the District issues bonds to fund infrastructure, supplemental assessment reports will be developed that will detail the particulars for an assessment area from a specific bond issue, together with the special and peculiar benefits to the lands benefited by the portions of the Ave Maria DRI CIP financed with that issue, establishing the logical connection flowing from the system, facility and service to the property.

2.2 Ave Maria DRI Financing Program

Agnoli, Barber & Brundage, Inc., ("District Engineer") has identified certain Master infrastructure that may be provided ·by the District and has provided a cost estimate for the District's CIP. The Master CIP is detailed in the Master Capital Improvement Program for the Ave Maria Community Stewardship District dated April 19, 2006 as prepared by the District Engineer.

The Master CIP consists of roadways, the drainage/storm water management system, master irrigation system, landscaping, mitigation and restoration, land acquisition and public facilities and water and wastewater utilities that will be developed along with the community.

Through this Sub-Master Methodology Report, a portion of the debt required to fund the Master CIP is being allocated to the Ave Maria DRI acreage on a percentage basis using a proportionate share of acreage method. Since the Ave Maria DRI acreage (5,027) is 46.52% of the total District acreage (10,805), 46.52% of the Master inchoate lien established in the Master Methodology Assessment proceedings has been allocated to the Ave Maria DRI area (the "Ave Maria DRIInchoate Lien").

Table 2 of this Sub-Master Methodology report summarizes the method and inchoate lien apportionment to the Ave Maria DRI acreage.

Table 2. Master Inchoate Lien Apportionment to Ave Maria DRI Acreage.

Total District Acreage

Total Ave Maria DRI Acreage

%Ave Maria DRI Acreage to Total District Acreage

Master Inchoate Lien Established in Master Assessment Proceedings

Total Inchoate (inactive) Assessment Lien

Total AMSD Acreage

Total inchoate Assessment Lien per Acre

Sub-Master Inchoate Lien Established on Proportionate Acreage Basis

Total inchoate (inactive) Assessment Lien

Total Ave Maria DRI Acreage

Total Inchoate Assessment Lien per Acre

Source: Fishkind & Associates, Inc.

10,805

5,027

47%

$820,165,000

10,805

. $75,906

$381 ,575,000

5,027

$75,905

2.3 Local Infrastructure

As property is developed, roads, water and sewer, stormwater management, recreation and other public infrastructure systems facilities and services may be authorized by applicable law to be financed, constructed, acquired, owned and/or operated by the District and, with respect to which the District may levy and impose Assessments. Those facilities and the special benefits peculiar to the property, in this case the acreage which precedes any platting of the property, are comprised of drainage and stormwater management system, roadways, master irrigation system, landscaping, mitigation and restoration, land acquisition and public facilities, and water and waste water utilities. The Act contemplates the financing of such infrastructure from time to time within platted units within the District and any such Assessments must be imposed and levied pursuant to separate and distinct proceedings under the Act and then applicable law.


3.1 Structure- Master Infrastructure Improvements

Special and peculiar benefits flow as a logical connection to the property from the systems, facilities and services provided as a logical consequence to the property within the boundary of the District. These special benefits are peculiar to the acreage and later down to the actual platted units or parcel. The special benefits that justify imposing the assessment on the acreage include enhanced enjoyment and increased use, which may result in such positive consequences as increased value and marketability and decreased insurance premiums when levied on the various platted units or parcels of property. First the District Engineer identifies the Ave Maria DRI CIP costs then the Assessment Methodology Consultant allocates those costs and debt per acre (and later in the process per parcel) for the provision of the systems and facilities, which constitute the Ave Maria DRI CIP. The best determination involves whether there is a special benefit peculiar to such property, different in kind and degree that any general benefit, so long as the special benefit flows peculiar to the property as a logical connection from the components of the Ave Maria DRI CIP. Then a dollar amount of a proposed assessment is identified using various formulas. Then there is a determination of whether that dollar amount itself can be a first lien later to be levied on the platted units. Then there is an apportionment of the benefits so that no dollar amount as assessment exceeds any determination of special and peculiar benefit to the property and that the amount levied on different property owners is fair and reasonable.

The District's engineer determines the costs for the Ave Maria DRI CIP and an estimate of the bond amount required to finance the Ave Maria DRI CIP is calculated. The Assessment Methodology associated with the Ave Maria DRI CIP is a two-step process. First, the special and peculiar benefits of the Ave Maria DRI ClP will be determined and imposed upon the undeveloped land within the District. Second, the per acre Assessments previously imposed will be levied on to developed and platted parcels within assessment areas for the applicable phased units in accordance with the more specific uses and special benefits peculiar to each platted parcel in the supplemental methodology reports.

3.2 Initial Apportionment of Benefits from Systems, Facilities and Services constituting the Ave Maria ClP as a system of improvements to land that is currently in an undeveloped state

Initially, the District is comprised of a bundle of undeveloped acres with the potential for development pursuant to, and consistent with, the DRI, but upon the acquisition, construction, installation, equipping operation and maintenance of certain infrastructure. The District's Ave Maria DRI ClP identifies the master Infrastructure Improvements needed for the Development pursuant to the DRI which will transform the undeveloped acres into developed platted parcels. Therefore, initially, there is a system of interlinked improvements necessary in order to develop each developable acre within the District, and, because the specific development cannot be initially determined on any one acre of land, each acre of land is benefited equally. This "proportionate per acre" special benefit from the systems and facilities constituting the components of the Ave Maria DRI CIP is illustrated by the fact that if all of the land were sold in its undeveloped state, its value to a willing buyer would be as a whole and would include the value of the land with development rights from the DRI, adjusted for the cost of development (of whjch the Ave Maria DRI CIP would be a significant component} and further adjusted for parcel-specific development costs. Thus, each acre would be valued equally since, until development is located; development could presumably occur on any one acre as on any other. These special benefits are peculiar to the acres of property within the District, are assessed and imposed equally and are real even though there is no platted parcel. As development occurs and development rights are absorbed by some acres and other acres are put to other uses, including public uses, the value of the remaining acres and acres put to other uses is adjusted to reflect the development rights (and corresponding infrastructure benefits} which have been used and the effect that those uses have on the remaining undeveloped acres. As supplemental reports are issued, as described above, such reports will take into account the relative benefits derived from the use and enjoyment of the property which is given to the developed and platted property and that which is retained in the yet to be developed property.

The systems, facilities and services constituting the Ave Maria DRI CIP result in special benefits peculiar to the property, whether the property is in acreage or in platted parcels. Such special and peculiar benefits include enhanced enjoyment and increased use, which may result in such positive consequences as increased value and marketability and decreased insurance premiums. The dollar amount of these special and peculiar benefits is not known but is capable of being computed with mathematical certainty in the future. As of the date of this assessment, the dollar amount of the special assessment levy per acre remains $75,905.15 as outlined in the Master Methodology.

3.3 Assignment of Assessments

It is useful to consider three broad states or conditions of development within the District. The initial condition is the "unplatted state". At this point infrastructure may or may not be installed but in general, home sites or other development units have not been defined and all of the developable land within the District is considered unplatted acreage ("Unplatted Acres"). In the unplatted state, all of the lands within the District receive benefit from the components of the financed Ave Maria DRI CIP and assessments would be imposed upon all of the land within the District on an equal acre basis to repay the bonds.

The second condition is the interim or "approved state". At this point, a developer would have received approval for a site development plan from the County. By virtue of the County granting an approval for its site development plan for a neighborhood or non-residential land, certain development rights are committed to and peculiar to that Neighborhood or non-residential land, thereby changing the character and value of the land by enhancing the capacity of the Unplatted Acres within a neighborhood or the non-residential land. with the special and peculiar benefits flowing from components of the District's Ave Maria DRI CIP and establishing the requisite logical connection for the flow of the special benefits peculiar to the property, while also incurring at the same time a corresponding increase in the responsibility for the payment of the levied assessment to amortize its portion of the debt associated with those improvements. Therefore, if the District has issued bonds to fund a portion of the Ave Maria DRI CIP at the time a neighborhood or non-residential land receives site development plan approval, in the event that District issues bonds which have or will benefit the lands within such area, the District will designate such area, or in combination with other such areas, as an assessment area, and, pursuant to a supplemental assessment methodology report, allocate a portion of this debt to such assessment area in the "approved state". In all cases, appropriate credit shall be given for infrastructure comprising a portion of the Ave Maria DRI CIP that is donated or contributed in lieu of assessments.

This apportionment of benefit in such supplemental methodology report shall be based on accepted practices for the fair and equitable apportionment of special and peculiar benefits in accordance with then applicable law and the procedure for the imposition, levy and collection of non ad valorem special assessments as set forth in the District Act and in conformity with the Constitution and law of the State applicable to such assessments.

Development enters its third and "platted state", as property is platted. Land becomes platted property ("Platted Property") when single family units are platted or multifamily and non-residential land uses receive a building permit and a separate tax parcel identification number is issued for such parcel. At this point, and only at this point, is the use and enjoyment of the property fixed and determinable and it is only at this point that the ultimate special and peculiar benefit can be determined flowing from the components of the Ave Maria DRI CIP peculiar to such platted parcel. At this point, a specific apportionment of assessment will be fixed and determinable from the supplemental assessment report.

3.4 True-Up Mechanism - Master Infrastructure

Until such time as bonds are issued, the lien of the Assessments imposed pursuant to this methodology are inchoate ("Inchoate Assessments"), meaning that the lien of the Assessments cannot exceed the amount .established hereby but that such lien will not be activated until bonds are issued which represent a charge and liability against the Inchoate Assessment amount. In essence, the Inchoate Assessment represents an upper limit on the Assessments. As bonds are issued and all, or a portion of, the Assessment becomes a liability for the repayment of a proportionate portion of the bonded debt, the Assessments are collectible to the extent set forth in the supplemental assessment methodology issued in correspondence to such bonds ("Funded Assessments").

In order to assure that the Funded Assessment per acre for the benefits from the Ave Maria DRI CIP will not be disproportionately apportioned to any acre, each supplemental methodology shall apply a "true up" test, to ensure that, due to the level of development on any one parcel of land, the Assessments on any other parcel of land cannot exceed the special and peculiar benefit which can be apportioned to such parcel in accordance with any then-applicable assessment methodology.

4.0 Assessment Determination

4.1 Special and Peculiar Benefit to the Property

Construction and/or acquisition by the District of its proposed Ave Maria DRI CIP constituting systems, facilities and services which are provided in differing amounts and are dependent on the type of land use receiving the special benefits peculiar to those properties which flow from the logical relationship to the properties.

One example of this differentiation is the. concept that various land uses will generate differing demands on the District's proposed roadway infrastructure. Another example is that it can be demonstrated that each land use will receive a different level of surface water benefit that relates to that land use's density and intensity of development.

These determinations are reviewed in the light of the special and peculiar benefits peculiar to the property which flow to the properties as a result of their logical connection from the improvements in fact actually provided.

The special and peculiar benefits within an assessment area of a phased unit shall be determined relative to each parcel of land and identified for each improvement in accordance with a supplemental methodology report.

There are certain portions of the property such as public and private utility sites within the District boundary that will receive special and peculiar benefits in varying degrees from the component systems and facilities of the District's Ave Maria DRI CIP. Those special and peculiar benefits will be determined in the future through supplemental assessment methodology reports. One example of this type of property is the Lee County Electrical Coop power line easement and adjacent substation land that is there purely for the provision of electrical power to the site and related sites along their transmission system. Another example is the private utility company for the Ave Maria community that will provide water and waste water treatment facilities.

The Board in their discretion may elect to exempt these properties from the duty to pay for their portion of the special and peculiar benefits and to the degree that this decision affects the payment of debt that funds these special and peculiar benefits, will seek to offset this reduced cash flow through other methods including the contribution of additional Ave Maria DRI CIP or lands from the land owner.


The special and peculiar benefits from the component systems and facilities of the District's Ave Maria DRI CIP have been determined and apportioned to the undeveloped land on an equal acre basis. As land receives certain development approvals as described in this Report, the benefits will be apportioned as provided in supplemental methodology reports

The duty to pay the non-ad valorem special assessments during the initial period as set forth above is fairly and reasonably apportioned because the special and peculiar benefits to the property flowing from the acquisition and/or construction of the District's Ave Maria DRI CIP (and the concomitant responsibility for the payment of the resultant and allocated debt) have been apportioned to the property according to the reasonable estimates of the special and peculiar benefits including enhanced enjoyment and increased use, which may result in such positive consequences as increased value and marketability and decreased insurance premiums and conferred on the land as provided by the District's Ave Maria DRI CIP for the reasons set forth above.

Accordingly, no acre of property within the District will be assessed for the payment of any non-ad valorem special assessment pursuant to this Master Methodology in an amount greater than the determined special benefit peculiar to that property and having a nexus to the value of the property or the use and enjoyment thereof.

5.0 Assessment Roll

As described above, the debt associated with the District's Ave Maria DRI CIP will be initially distributed on an equal acreage basis across all of the undeveloped, acreage within the District. As development units are defined {Platted Property) they will be assessed in the manner described herein, which may not be on a relatively equal basis with the special assessments as provided for in the Supplemental Assessment Methodology Reports.

The following Appendix I shows the initial assessments on a per acre basis for the CIP. The acreage shown represents 100% ofthe gross acreage within the District.

(Note: This tax toll will be adjusted down to cover the Ave Maria DRI submaster supplemental report acreage {5,027 acres less the contributed acres) and will be adopted prior to bond closing.

(Note: This tax toll will be adjusted down to cover the Ave Maria DRI submaster supplemental report acreage (5,027 acres less the contributed acres) and will be adopted prior to bond closing.

APPENDIX 1

Initial Per Acre Assessment Roll

FOLIO# Sec-Twn-Rng Acreage Owner Par Amount

00138120205 22-47-29 44.97 BCI, Ltd. $1,588,102 00138440008 29-47-29 659.24 BCP, ltd./AMULT, LLC $23,280,867 00138480107 29-47-29 539.72 BCP, Ltd./AMUL T, LLC $19,060,054 00138480000 30-47-29 78.58 BCI, Ltd./AMUL T, LLC $2,775,030 00115280003 16-48-29 1,785.37 BCI, Ltd./AMUL T, LLC $63,049,818 00138521309 31-47-29 504.25 BCP, Ltd./AMULT, LLC $17,807,441 00138560001 32-47-29 1,257.51 BCP, Ltd./AMUL T, LLC $44,408,597 00138600000 33-47-29 502.16 BCI, Ltd./AMUL T, LLC $17,733,633 00138521008 31-47-29 74.55 Monaghan, Thomas $2,632,711 00138560409 32-47-29 557.64 BCP, Ltd./AMULT, LLC $19,692,893 00138560302 32-47-29 192.36 Ave Maria University, Inc. $6,793,137 00226280507 05-48-29 45.69 Divosta $1 ,613,529 00138600301 33-47-29 579.64 Ave Maria Development, LLLP $20,469,817 00226240204 04-48-29 1,775.55 BCP, Ltd./AMULT, LLC $62,703,028 00227000508 16-48-29 3.95 LCEC $139,493 00226440004 08-48-29 2,122.57 BCP, Ltd./AMUL T, LLC $74,957,938 00222960106 13-48-28 80.93 BCI, Ltd./AMUL T, LLC $2,858,019 00227080502 18-48-29 0.45 BCI, Ltd./AMUL T, LLC $15,892

10,805.13 $381,580,000

FIRST SUB-MASTER FINAL SUPPLEMENTAL ASSESSMENT METHODOLOGY FOR AVE MARIA STEWARDSHIP DISTRICT

Preliminary Adoption November 14, 2006 Revised December 15, 2006 Final Adoption December 20, 2006

Prepared for

Board of Supervisors Ave Maria Stewardship District

Prepared by

Fishkind & Associates, Inc. 12051 Corporate Boulevard Orlando, Florida 32817 407-382-3256 Fishkind.Com

FIRST SUB-MASTER FINAL SUPPLEMENTAL ASSESSMENT METHODOLOGY

AVE MARIA STEWARDSHIP DISTRICT

1.0 Introduction

1.1 Purpose

This report (the "Sub-Master First Supplemental") supplements the Master Assessment Methodology Report ("Master Methodology") dated and approved June 6, 2006 and the Sub-Master Methodology Report ("SubMaster Methodology") dated and approved November 14, 2006. The Master Methodology allocates the debt to be incurred by the District to provide certain master infrastructure improvements to properties in the District while the Sub-Master Methodology further refines that debt allocation to the Ave Maria DRI acreage. The Sub-Master First Supplemental also determines the special and peculiar benefits arising from the costs outlined in the Supplemental Sub-Master Engineer's Report adopted November 14, 2006, as revised November 27, 2006 ("Supplemental Engineer's Report") and that flow to the parcels of land within the District. Those benefits peculiar to the property are then apportioned in a manner that is fair and reasonable. Finally, the SubMaster First Supplemental determines that none of the actual capital improvement assessments being levied exceed the special and peculiar benefits arising from the use and enjoyment of such improvements.

The District intends to issue Capital Improvement Revenue Bonds, Series 2006A (the "2006A Bonds") and Bond Anticipation Bonds (the "2006 BASs"), collectively (the "Bonds") to fund a portion of the Ave Maria DRI master improvements as more fully described in the Sub-Master Supplemental Engineer's Report dated November 14, 2006.

1.2 Background

The acreage contained within the Town of Ave Maria Development of Regional Impact No. 05-01 (the "Ave Maria DRI") is wholly contained within the boundaries of the District. The Ave Maria DRI is a mixed-use development on approximately 5,027 acres in unincorporated Collier County ("County"), Florida. Pursuant to the Ave Maria DRI, the Collier County Board of County Commissioners granted certain development rights for the anticipated development within the District.

1

The Ave Maria DRI is anticipated to be developed over an estimated eleven year time frame. In general, Ave Maria will have a variety of multifamily and single family product types, commercial/retail space, office space, schools, churches, a university and recreational opportunities. Table 1 below outlines the Ave Maria DRI development program.


Land Use Descriptions Residential Assisted Living Facilities Retail, Entertainment, Service Professional Office (General, Medical, Financial, etc.) Civic/Community/Mise Medical Facility Hotel

Measurement Units Dwelling Units Beds Square Feet Square Feet Square Feet Square Feet Rooms

Total 9,814

450 690,000 510,000

Ave Maria University Students

35,000 400

6,000 2,400 K-12 School (Public/Private) Students

Source: Developer

1.3 Use of Specific Numbers within the Tables of the Supplemental Methodology

Great diligence has been used to define the components of the Development Program defined in Table 1, the estimated par bond requirements shown in Tables 3, and the Par Debt Allocations shown in Table 5. The Ave Maria DRI Development Program, the par value of bonds, and the resultant allocations are subject to change. They are used within this report to illustrate the application of the algorithms and principles used in the Sub-Master First Supplemental.

2.0 Finance Plan

2.1 Ave Maria DRI Capital Improvement Program

As stated, the District Engineer has identified certain infrastructure that may be provided by the District and has provided a cost estimate for the District's Ave Maria DRI CIP. Details of the Ave Maria DRI CIP can be found in the District Engineer's Supplemental Engineer's Report. Table 2 on the next page summarizes the Ave Maria DRI CIP.

2

Table 2. Ave Maria DRI Capital Improvement Program.

Capital Improvement Program

Roadways

Master Irrigation System

Mitigation and Restoration

Drainage/Stormwater Management

Total

Ave Maria DRICIP

$70,367,537

$9,500,000

$3,500,000

$10,750.000

$94,117,537 Source: Supplemental Engineer's Report


The District intends to finance all or a portion of the Ave Maria DRI CIP by issuing one or more series of short or long term bonds. A number of items comprise the final par bond requirements. The source of repayment for the 2006A Bonds are long term assessments on benefiting properties while the 2006 BASs are short term debt instruments that (in essence) convert to long-term bonds once the additional permanent "A" bonds are issued to redeem the 2006 BASs. The proceeds of the Bonds will provide the funding for a portion of the Ave Maria DRI CIP. Allowances have been made for capitalized interest, debt service reserve, underwriter's discount, issuance costs, and rounding. Table 3 on the next page illustrates the bond sizing to fund a portion of the Ave Maria DRI CIP.

(Rest of page left intentionally blank)

3

Table 3. Ave Maria Stewardship District Bond Sizing

Sources and Uses Total

Par Amount $102,125,000

Construction I Acquisition Fund $74,544,628

Debt Service Reserve Fund $7,419,270

Capitalized Interest Fund $18,382,500

Underwriter's Discount $1 ,327,625

Cost of Issuance $450,000 Contingency $997

Rate 6.00%

Capitalized Interest Period 3 Source: Fishkind & Associates, Inc.


3.1 Structure

The Sub-Master First Supplemental is a three-step process. First the District's engineer determines the costs for the Ave Maria DRI CIP. Secondly, the Methodology Consultant ("MC") will determine the amount of bonds required to finance the Ave Maria DRI CIP. Third, the special and peculiar benefits flow from the Ave Maria DRI CIP to land parcels within the District. To determine these benefits the District engineer first estimates the costs for all systems and facilities needed to support the Ave Maria DRI Development Program. Then the costs for all improvements are bonded and allocated to the benefited properties. The MC then apportions fairly and reasonably the special and peculiar benefits that flow to the properties. The Sub-Master First Supplemental detailed herein provides the mechanism by which the costs and debt were allocated and the special and peculiar benefits were apportioned to the assessable acres within the District for levy and collection.

3.2 Assessment Allocation

The District is undertaking the responsibility of providing all or a portion of the master infrastructure to support vertical development within the Ave Maria DRI. As designed, the Ave Maria DRI CIP is an integrated system of improvements that confer special and peculiar benefits to the lands within the District.

4

3.3 The 2006A Bond Assessments

The District shall allocate the costs and debt to provide the Ave Maria DRI CIP to the Development Program. In the case of the Ave Maria DRI, the primary measurement is trip generation since the Ave Maria DRI CIP is heavily focused on road construction. In addition, the irrigation infrastructure parallels the roadways and the land acquisition component of the Ave Maria DRI largely associated with these uses.

The MC utilized trip generation figures from the International Transportation Engineers (ITE) trip generation book as applied to the various land categories being developed within the District (see Table 4). From there, the MC applied an internal trip generation discount to the appropriate uses within the District where many of those trips will remain within each development node and will not have to go out to the main roadways within the District to get to services since Ave Maria is designed as a "walkable community".

The percentage of actual trips generated was calculated after the discount. From that point of departure, the MC calculated the percentage of trips that represent the portion of the special and peculiar benefit apportioned to the low affordable housing, assisted living apartments, the retail/entertainment/service component, professional office, hotel, medical facilities and Ave Maria University. The fair and equitable share of debt apportioned to the low .affordable housing, assisted living apartments, the retail/entertainment/service component, professional office, hotel, medical facilities and Ave Maria University is being extinguished pre-financing by a real property contribution in lieu of assessments to the District effectuated by Ave Maria Development, LLC as described herein. Accordingly, the trips as a percentage of the total discounted trips for those uses were reallocated over the remaining uses so that the remaining land use categories were apportioned their fair and equitable share of the debt.

3.4 Real Property Contributions

In order to implement the Ave Maria DRI CIP, it is in the District's best interest to obtain certain parcels of real property. The cost of acquiring such property is incorporated and documented in the Supplemental Engineer's Report of project costs. The owner of the necessary real property has agreed to transfer title for such property to the District in return for a reduction or corresponding credit to special assessments to be levied upon benefited properties retained by the landowner. The value of the property to be transferred to the District is appraised at $19,572,909. Therefore, that amount is reflected as a credit to the project cost, prior to financing to extinguish anticipated liens for certain properties and uses set forth in schedule.

5

Based on the foregoing and this benefit analysis, each residential and non-residential use that is developed within the District will have some benefit arising from the Ave Maria DRI CIP. Table 4 below shows the combined benefit apportionment percentage on a per unit basis for each unit within the Development Program.

Special attention needs to be made with regard to any recreational or homeowner association facility currently planned for the Project. Those facilities directly benefit from the Ave Maria DRI CIP. However, pursuant to Chapter 193.0235, Florida Statutes, any benefit to the common elements resulting from the CIP are exempt from assessments. Therefore, such facilities have not been included in this methodology and accordingly, any benefit arising from the Ave Maria DRI CIP is prorated accordingly against the remaining assessable lands within the District.

Table 4. Ave Maria Stewardship Benefit Apportionment

Percent External Adjusted Total Debt Residential -Assessable Of Total ITE Trips Generation New Trips Trip Reapportionment Product Total Units Trips Trip Factor Generated Discount Generated Percent % of Other Uses

Town home 1,296 8.26% 4.22 5,469 0.00% 5,469 8.30% Carriage Home/Attached Villa 2,927 18.66% 4.22 12,352 0.00% 12,352 18.74% Detached Villa 46'/52' 2,027 24.83% 8.11 16,439 0.00% 16,439 24.94% Single Family 52'/55' 1,215 14.89% 8.11 9,854 0.00% 9,854 14.95% Single Family 60'/65' 288 3.53% 8.11 2,336 0.00% 2,336 3.54% Single Family 70'/75' 261 3.20% 8.11 2,117 0.00% 2,117 3.21% Single Family 90' 450 5.51 % 8.11 3,650 0 .00% 3,650 5.54%

Subtotal - Assessable Units 8,464 78.88% 79.20%

Residential - Non-Assessable Total Units Low Affordable Housing 900 2.09% 6.16 5,544 75.00% 1,386 2.10% ALF Apartments 450 0.99% 1.46 657 75.00% 164 0.25%

Non Residential Total Sq. Ft./ Units

Retaii/EntertainmenUService 690,000 6.25% 0.03 20,700 80.00% 4,140 6.28% Professional Office 510,000 3.85% 0.01 5,100 50.00% 2,550 3.87% Hotel 400 3.88% 8.02 3,208 20.00% 2,566 3.89% Medical Facilities 35,000 0.79% 0.03 1,050 50.00% 525 0.80% Institutional - AM University 6,000 2.92% 2.30 13,800 86.00% 1,932 2.93% Private K-12 School 900 0.33% 2.48 2 232 80.00% 446 0.68%

100.00% 104,507 65,926 100.00%

Table 5 on the next page shows how the special and peculiar benefit from the Ave Maria DRI CIP has been apportioned pre-financing based on the benefit apportionment analysis above. The pre-financing allocation from the Ave Maria DRI CIP determines the amount of the real property contribution discussed above. The total debt apportionment with the land contribution included as if financed is reallocated to the product types not being paid down by the land contribution. Finally, the total par debt apportionment per unit is determined, the total annualized par debt assessment apportionment and the gross annual assessment per unit is calculated.

6

10.47% 23.66% 31.48% 18.87% 4.47% 4.05% 6.99%

100.00%

Table 5. Ave Maria DRI Par Debt Allocation Pre Land Contribution

Total Total Total Debt Annualized

Benefit Adjusted% Allocation Total Par Par Debt Gross Allocation Trip (Post Debt Assessment Annual

Number of Units

%Trip Generation Allocation

(Pre- Generation Financing} Allocation Allocation Assessment Land Use financing) Allocation (1} Per Unit Per Unit (2) Per Unit (3)

Town home $7,807.892 10.47% $10,696,692 $8,254 $600 Carriage Home/Attached Villa Detached Villa 46'/52'

1,296 2,927 2,027 1,215

8.30% 18.74% 24.94% 14.95%

$17,634,027 23.66% $23.468,803 31.48%

$24,158,34 7 $8,254 $600 $32,151,901 $15,862 $1,152

Single Family 52'/55' Single Family 60'/65' Single Family 70'/75' Single Family 90'

288 261 ~

8.464

3.54% 3.21% 5.54%

$14,067,388 18.87% $3,334.492 4.47% $3,021,883 4.05%

$5,210,14 6.99% 100.0%

$19,272,106 $15,862 $1,152 $4,568,203 $15,862 $1,152 $4,139,934 $15,862 $1,152 p 137 817 $15,862 $1 152

$102,125,000 Wgt. Average: $877

Low Affordable Housing ALF Apartments

900 450

2.10% $1,978,698 0.25% $234.489

Retaii/EntertainmenVService Professional Office

690,000 510,000

400 35,000 6,000

900

6.28% 3.87% 3.89% 0.80% 2.93% 0.68%

$5,910,397 $3,640.462 $3,663,875 Hotel ubtotal: $19,572,909

Medical Facilities Institutional - AM University Private K-12 School

$749,507 $2,758,185

$637 295 $94,117,537 Total 100.00%

(1) Adjusted trip generation debt re-allocation post land contribution post land contribution in lieu of assessment lien. (2) Total Annualized Par Debt Allocation Per Unit sets the not to exceed maximum assessment cap. Assumes paid in

November. Preliminary, Subject to Change (3) Adjusted Trip Generation Re-Allocation Post Land Contribution in lieu of Assessment. Grossed up for Collection

Costs but Assumes as if Paid in November. Preliminary, Subject to Change

Table 6 on the next page shows the approximate annual assessments required to amortize the 2006A Bonds over a 30 year period. It is important to note that the 2006A Bonds are expected to be allocated to the first 2,500 assessable units of the total 8,464 potential assessable units on a first platted, first assigned basis as described herein. The remaining 5,964 units are expected to receive their permanent assessment in accordance with future bond issuance.

The total annualized par debt assessment shown in Table 6 is net of any applicable discount allowances and collection fees. The net annual and gross annual assessments shown include such allowances and discounts. Table 6 also represents a fair and reasonable allocation of the debt incurred by the District.


7

$612 $612

$1,176 $1,176 $1,176 $1,176 lllli

$894

Table 6. Expected Ave Maria DRI Debt Allocation and Annual Assessments

Town of Ave Total Maria DRI No. Annualized

05-01- Total Debt Expected Adjusted Trip Allocation

Units in First Generation (Post Land Use Issue (1) Allocation% Financing)

Total Par Par Debt Debt Assessment

Allocation Allocation Per Unit Per Unit

Net Annual Assessment

per Unit (2)

Gross Annual

Assessment per Unit (3)

Townhome 383 10.47% $2,748,932 $7,181 $469 $479

Carriage Home/Attached Villa 865 23.66% $6,208,429 $7,181 $469 $479

Detached Villa 46'/52' 599 31.48% $8,262,684 $13,801 $902 $920

Single Family 52'/55' 359 18.87% $4,952,719 $13,801 $902 $920

Single Family 60'/65' 86 4.47% $1,173,978 $13,721 $899 $918

Single Family 70'/75' 77 4.05% $1,063,917 $13,801 $902 $920

Single Family 90' 133 6.99% ~1 834 340 $13 801 $902 $920

Total 2 500 100.00% $26 245 000 Wahtd. Ava.: $686 $700

(1) This mix of units in the first issuance may change based on market conditions and other factors. (2) Net Annual Assessment Per Unit grossed up for collection costs associated with property appraiser and tax

collector but assumes as if paid in November. (3) Gross Annual Assessment Per Unit grossed up for early payment discounts & collection costs associated with

property appraiser and tax collector. Source: Fishkind & Associates, Inc.

3.5 The 2006 BAB Assessments

As previously discussed, the District is issuing Bond Anticipation Bonds which it is anticipated will be redeemed and replaced by Bonds of the District to be issued in the future to correspond to and supplement the development program and construction of the Ave Maria DRI CIP. At the time the Bonds are issued to redeem and replace the 2006 BABs, it is intended that a further supplemental assessment methodology will allocate benefits and the corresponding debt in order to establish assessments payable from that date in no more than thirty annual installments of principal and interest. The District has caused interest to be funded on the 2006 BABs for a period of three (3) years (the "Funded Capitalized Interest"), the maximum amount permitted to be funded from the proceeds of Bonds under federal tax law. In the event that Bonds have not been issued to replace the 2006 BABs after the expenditure of the Funded Capitalized Interest, Assessments shall be collected by the District to fund the additional interest ("Unfunded Capitalized Interest") on the 2006 BABs until their maturity or redemption.

8

$499

$499

$959

$959

$956

$959

$959

Because this Unfunded Capitalized Interest represents carry costs on the otherwise assessable improvements which have not been allocated to platted parcels, the assessments in respect to the Unfunded Capitalized Interest shall be imposed and levied on the unplatted property within the Ave Maria DRI on a per acre basis in the same manner and in the same proportion as the 2006A Bond Assessments which have not yet been allocated to platted parcels. In addition, in order to ensure a source of repayment of the 2006 BASs in the event that Bonds are not issued to refund and replace the 2006 BASs, there is imposed an assessment in an amount equal to the unpaid principal amount thereof, which shall become due and payable on the due date of the 2006 BASs. Such assessment corresponding to the unpaid principal amount of the 2006 BASs shall be apportioned in the same manner as the Unfunded Capitalized Interest Assessments imposed in respect of the 2006 BASs.

Because, absent the restrictions imposed by federal tax law, the District could have avoided the collection of the assessments corresponding to the Unfunded Capitalized Interest on the 2006 BASs, the assessments corresponding to the Unfunded Capitalized Interest on the 2006 BASs shall be treated for all purposes as a separate assessable improvement and shall not affect the ability to collect assessments for the other components of the Ave Maria DRI CIP other than the Unfunded Capitalized Interest on the 2006 BASs in thirty (30) annual installments of principal and interest.


A reasonable estimate of the proportion of special and peculiar benefits received from the improvements is expressed in residential units in Table 5.

The determination has been made that the duty to pay the non-ad valorem special assessments and the determined special and peculiar benefits are fairly and reasonably apportioned because the special and peculiar benefits to the property deriving from the acquisition and/or construction of the District's improvements (and the concomitant responsibility for the payment of the resultant and allocated debt) have been apportioned to the property according to reasonable estimates of the special and peculiar benefits provided consistent with each land use category.

9

Accordingly, no acre or parcel of property within the boundary of the District will be assessed for the payment of any non-ad valorem special assessment more than the determined special benefit peculiar to that property.

The per unit allocation amounts in Table 5 represent the anticipated per unit debt allocations assuming all anticipated residential units are built in the proportions planned, and the entire proposed Infrastructure Program is developed or acquired and financed by the District.

5.0 True-Up Mechanism

In order to assure that the District's debt will not build up on the remaining undeveloped acres as the development progresses, the District shall apply the following true up test.

The test is that the debt per acre remaining on the undeveloped acres is never allowed to increase above its ceiling debt per acre level. Initially, the ceiling level of debt per acre is calculated as the total amount of debt for the Ave Maria DRI CIP divided by the number of acres within the SubMaster District Boundaries. In this case the ceiling is calculated as $102,125,000 divided by the 5,027 acres in the Sub-Master boundaries, equaling $20,315 per acre. Thus, every time the test is applied the debt on the unallocated Units must remain equal to or lower than $20,315 per acre. If not, the District would require a density reduction payme11t in an amount sufficient to reduce the remaining debt per acre to the ceiling amount.

This test shall be applied at the time 50% of the Units within the District are platted. The second test shall be applied at the time 75% of the Units within the District are platted. The third test shall be .applied at the time 90% of the Units within the District are platted. Table 7 shows the true-up allocations at each particular test period. A True Up test may also be applicable if, after the project is entirely platted, the development plan changes requiring an amendment to existing plats within the District. Since all of the property has been platted and the debt assigned, the trueup tests described above will only be applicable if there are amendments to the existing plat that result in a different Unit count or configuration. Table 7 on the next page shows the true-up mechanism at each time interval .

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Table 7. Ave Maria Stewardship District True-Up Mechanism

True Up Analysis Cumulative Units

Unallocated Units Debt Per Acre

50% 1,250 1,250

$20,315

75% 1,875

625 $20,315


90% 2,250

250 $20,315

If at the time the 50%, 75% or 90% tests are given it is determined that the ceiling debt is breached, the District may suspend the true up payment if the landowners can show that there is sufficient development potential in the remaining acreage to build the densities required to amortize the bonds. A determination of the suspension of a required true up payment will be made at the sole discretion of the District.

5.1 Clarifications and Amplifications

All assessments levied run with the land. It is the responsibility of the landowner of record to make or cause to be made any required true up payments due. The District will not release any liens on property for which true up payments are due until provision for such payment has been satisfactorily made.

The owner of record at the time the annual assessment roll is developed will have the responsibility to make the annual assessment payments, but in all cases true up payments must be made to enable the District to meet its. de~t service obligations.

A determination of a true up payment will be at the sole discretion of the District. Prior to platting, all assessable acreage will be assessed on a per acre basis.

6.0 Assessment Roll

As described above, the debt associated with the Ave Maria DRI CIP will be initially distributed on an equal acreage basis across all of the benefiting acreage within the District. As plats are approved lots will be assessed in the manner described herein.

The following Appendix I Tax Roll shows the initial assessments on a per acre basis for the Ave Maria DRI CIP.

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APPENDIX 1 Initial Per Acre Assessment Roll

Land 100% in Ave Maria DRI

Folio Number 00138600301 00226280507 00226440004 22671000048 22671000284 22671000307 22671000323 22671000349 22671000365 22671000381 22671000488 22671000585 22671000682 22671000789 22671000886 22671000983 22671001089 22671001186 22671001283 22671001788 22671002305 22671002800 22671003304 22671003809 22671004303 22671004808 22671005302 22671005328 22671005344

Subtotal

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Acres 306.81 45.60

515.21 0.96 0.09 0.00 0.04 0.07 0.07

26.70 4.13 2.75 8.06

10.65 8.65

19.33 20.51 14.76 3.10

71.82 10.56 6.39 3.49 3.26 6.08 0.18 0.01 0.07

192.35 --------------1,281.67

Par Amount $3,202,606.61

$475,996.32 $5,377,959.19

$10,007.85 $912.02

$6.02 $427.24 $711.69 $711.51

$278,666.98 $43,080.25 $28,740.66 $84,083.90

$111 '197.95 $90,278.83

$201,805.10 $214,086.65 $154,028.02 $32,332.58

$749,697.69 $110,221.23

$66,699.14 $36,463.34 $34,000.23 $63,423.68 $1,837.37

$76.54 $719.03

$2,007,878.21 ------------------------$13,378,655.81

Land Partially in Ave Maria DRI

Folio Number Acres Par Amount 00115280003 162.93 $1 '700,686.99 00138521008 74.30 $775,588.50 00138521309 2.45 $25,533.44 00138560001 457.74 $4,778,051.11 00138560409 557.34 $5,817,824.08 00138600000 443.06 $4,624,819.38 00138600301 30.74 $320,846.66 00138680101 0.05 $490.58 00226240204 1,082.48 $11 ,299,453.98 00226440004 899.02 $9,384,400.13 00227080502 0.00 $24.37 22671000022 1.88 $19,611.85 22671000064 33.27 $347,317.15 22671001801 0.02 $161.02

------- ------------------- ------------Subtotal · 3,745.26 $39,094,809.24

------- ============ -------Total 5,026.93 $52,473,465.05

Note: The owner of the necessary real property identified in the tax roll has agreed to transfer title for such property to the District in accordance with the Real Property Contribution Agreement dated December 21 , 2006 and in return for a reduction or corresponding credit to special assessments to be levied upon such benefited properties. At the time of the transfer, the lien on the contributed real properties wHI be reapportioned to the remaining non-platted acres.

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SECOND SUB-MASTER FINAL SUPPLEMENTAL ASSESSMENT METHODOLOGY FOR THEAVE MARIA STEWARDSHIP COMMUNITY DISTRICT

Preliminary Adoption May 16, 2012 Final Adoption June 6, 2012

Prepared for

Board of Supervisors Ave Maria Stewardship District

Prepared by

Fishkind & Associates, Inc. 1415 Panther Lane, Suite 346 Naples, FL 34109 (239) 254-8585 Fishkind.Com

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________________________________________________________________

SECOND SUB-MASTERFINAL SUPPLEMENTAL ASSESSMENT METHODOLOGY

AVE MARIA STEWARDSHIP COMMUNITY DISTRICT ________________________________________________________________

1.0 Introduction

1.1 Purpose

This report (the “Sub-Master Second Supplemental”) supplements the Master Assessment Methodology Report (“Master Methodology”) dated and approved June 6, 2006 and the Sub-Master Methodology Report (“Sub-Master Methodology”) dated and approved November 14, 2006. The Master Methodology determines the validity of the assessments and allocates the debt to be incurred by the District to provide certain master infrastructure improvements to properties in the District while the Sub-Master Methodology further refines that debt allocation to the Ave Maria DRI acreage. The Sub-Master Second Supplemental also determines the special and peculiar benefits arising from the Capital Improvement Plan (“CIP”) outlined in the Supplemental Sub-Master Engineer’s Report adopted November 14, 2006, as revised November 27, 2006 (“Supplemental Engineer’s Report”) and that flow to the parcels of land within the District. Those benefits are then apportioned peculiar to the property in a manner that is fair and reasonable. Finally, the Sub-Master Second Supplemental determines that none of the actual capital improvement assessments being levied exceed the special and peculiar benefits.

The District intends to issue Capital Improvement Revenue Bonds, Series 2012A Bonds (the “2012A Bonds”) that will replace the Series 2006 Bond Anticipation Bonds (the “2006 BABs”) that are maturing on November ___, 2012 and are being redeemed with the 2012A Bonds, to fund a portion of the Ave Maria DRI master improvements as more fully described in the Sub-Master Supplemental Engineer’s Report dated November 14, 2006.

The determination of the special and peculiar benefits and allocation of debt is a normal process that is fully contemplated based on what happened in 2006 and is for existing improvements and has nothing to do with any new undertaking.

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1.2 Background

The acreage contained within the Town of Ave Maria Development of Regional Impact No. 05-01 (the “Ave Maria DRI”) is wholly contained within the boundaries of the District. The Ave Maria DRI is a mixed-use development on approximately 5,027 acres in unincorporated Collier County (“County”), Florida. Pursuant to the Ave Maria DRI, the Collier County Board of County Commissioners granted certain development rights for the anticipated development within the District.

The Ave Maria DRI has been under development for five (5) years and is anticipated to be fully developed over a remaining estimated 15 year time frame. Overall, Ave Maria will have a variety of multifamily and single family product types, commercial/retail space, office space, schools, churches, a university and recreational opportunities. Table 1 below outlines the full Ave Maria DRI development program.


Land Use Descriptions Measurement Units TotalResidential Dwelling Units 9,814Assisted Living Facilities Beds 450Retail, Entertainment, Service Square Feet 690,000Professional Office (General, Medical, Financial, etc.) Square Feet 510,000Civic/Community/Misc Square Feet -Medical Facility Square Feet 35,000Hotel Rooms 400Ave Maria University Students 6,000K-12 School (Public/Private) Students 2,400

Source: Developer

1.3 Use of Specific Numbers within the Tables of the Supplemental Methodology

Great diligence has been used to define the components of the Development Program defined in Table 1, the estimated par bond requirements shown in Tables 3, and the Par Debt Allocations shown in Table 5. The Ave Maria DRI Development Program, the par value of bonds, and the resultant allocations are subject to change. They are used within this report to illustrate the application of the algorithms and principles used in the Sub-Master First Supplemental.

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2.0 Finance Plan

2.1 Ave Maria DRI Capital Improvement Program

As stated, the District Engineer has identified certain infrastructure that may be provided by the District and has provided a cost estimate for the District’s Ave Maria DRI CIP. Details of the Ave Maria DRI CIP can be found in the District Engineer’s Supplemental Engineer’s Report. Table 2 below summarizes the Ave Maria DRI CIP.

Table 2. Ave Maria DRI Capital Improvement Program.

Capital Improvement Program Ave Maria

DRI CIP

Roadways $70,367,537

Master Irrigation System $9,500,000

Mitigation and Restoration $3,500,000

Drainage/Stormwater Management $10,750,000

Total

$94,117,537Source: Supplemental Engineer’s Report


The District has financed most of the Ave Maria DRI CIP by issuing the Series 2006A and Series 2006BABs. A number of items comprise the final par bond requirements. The source of repayment for the 2006A Bonds are long term assessments that have been imposed and levied on specially benefiting properties and the source of repayment for the 2012A Bonds will also be long term assessments that will be imposed and levied on the specially benefitting properties as determined by this Sub-Master Second Supplemental report. The proceeds of the Bonds have provided the funding for a portion of the Ave Maria DRI CIP. Allowances have been made for capitalized interest, debt service reserve, underwriter’s discount, issuance costs, and rounding. Table 3 on the next page illustrates the 2012A bond sizing that has been used to fund a portion of the Ave Maria DRI CIP.

4

Table 3. Ave Maria Stewardship Community District 2012A Bond Sizing

Sources and Uses Total

Par Amount $29,100,000.00

Original Issue Discount ($554,937.00)

Liquidation of 2006 Reserve Fund $748,912.09

Refunding Escrow Deposits ($26,457,728.00)

Debt Service Reserve Fund at MADS ($2,254.065.00)

Cost of Issuance ($200,000.00)

Underwriter’s Discount ($378,300.00)

Contingency ($3,382.09)

Rate 6.70%

Source: MBS Capital Markets, LLC

Assessment Methodology

3.1 Structure

The Sub-Master Second Supplemental is a three-step process. First the District’s engineer determines the costs for the Ave Maria DRI CIP. Secondly, the Methodology Consultant (“MC”) will determine the amount of bonds required to finance the Ave Maria DRI CIP. Third, the special benefits flow from the Ave Maria DRI CIP peculiar to land parcels within the District. In order for the MC to determ ine these benefits the District engineer first estimates the costs for all systems and facilities needed to support the Ave Maria DRI Development Program. Then the costs for all improvements are bonded and allocated to the benefited properties. The MC determines and then apportions fairly and reasonably the special and benefits that flow peculiar to the properties. The Sub-Master Second Supplemental detailed herein provides the mechanism by which the costs and debt were allocated and the special and peculiar benefits were determined and apportioned to the assessable acres within the District for levy and collection. The Ave Maria Stewardship Community District Board of Supervisors will make the actual determinations and apportionment and may use this assessment methodology to do so.

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3.2 Assessment Allocation

The District is undertaking the responsibility of providing all or a portion of the master infrastructure to support vertical development within the Ave Maria DRI. As designed, the Ave Maria DRI CIP is an integrated system of improvements that confer special and peculiar benefits to the lands within the District.

3.3 The 2012A Bond Assessments

The District shall allocate the costs and debt to provide the Ave Maria DRI CIP to the Development Program. In the case of the Ave Maria DRI, the primary measurement is trip generation since the Ave Maria DRI CIP is heavily focused on road construction. In addition, the irrigation infrastructure parallels the roadways and the land acquisition component of the Ave Maria DRI largely associated with these uses.

The MC utilized trip generation figures from the International Transportation Engineers (ITE) trip generation book as applied to the various land categories being developed within the District (see Table 4). From there, the MC applied an internal trip generation discount to the appropriate uses within the District where many of those trips will remain within each development node and will not have to go out to the main roadways within the District to get to services since Ave Maria is designed as a “walkable community”.

The percentage of actual trips generated was calculated after the discount. From that point of departure, the MC calculated the percentage of trips that represent the portion of the special and peculiar benefit apportioned to the low affordable housing, assisted living apartments, the retail/entertainment/service component, professional office, hotel, medical facilities and Ave Maria University. The fair and equitable share of debt allocation to the low affordable housing, assisted living apartments, the retail/entertainment/service component, professional office, hotel, medical facilities and Ave Maria University was extinguished pre-financing by a real property contribution in lieu of assessments to the District effectuated by Ave Maria Development, LLC as described herein. Accordingly, the trips as a percentage of the total discounted trips for those uses were reallocated over the remaining uses so that the remaining land use categories were allocated their fair and equitable share of the debt.

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The proportionate special benefit is peculiar to the property. The determinate special benefits flow from the CIP. It is a Logical connection from the CIP. Added use and enhanced enjoyment of the property are two of those special to the property. The special benefits are then apportioned, fairly and reasonable, resulting in the proportionate magnitude special benefit peculiar to the properties. The dollar amount of the assessment does not exceed the value of the benefit.

3.4 Real Property Contributions

In order to implement the Ave Maria DRI CIP, it is in the District’s best interest to obtain certain parcels of real property. The cost of acquiring such property is incorporated and documented in the Supplemental Engineer’s Report of project costs. The owner of the necessary real property transferred title for such property to the District in return for a reduction or corresponding credit to special assessments that were imposed and levied upon benefited properties that received special and peculiar benefit. The value of the property that was transferred to the District is appraised at $19,572,909. Therefore, that amount is reflected as a credit to the project cost, prior to financing to extinguish anticipated liens for certain properties and uses set forth in Table 5.

Based on the foregoing and this special benefit analysis, each property for residential and non-residential use that is developed within the District will have some benefit arising from the Ave Maria DRI CIP. Table 4 on the next page shows the combined special benefit apportionment percentage on a per unit basis peculiar to each unit within the Development Program.

Special attention needs to be made with regard to any recreational or homeowner association facility currently planned for the Project. The properties for facilities directly received special and peculiar benefit from the Ave Maria DRI CIP. However, pursuant to Section 193.0235, Florida Statutes, the owner of the common elements that receives any special and peculiar benefit from the CIP are exempt from assessments. Therefore, such facilities have not been included in this methodology and accordingly, any special and peculiar benefit flowing from the Ave Maria DRI CIP is apportioned accordingly against the remaining assessable lands within the District.


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Table 4. Ave Maria Stewardship Special Benefit Apportionment

Percent External Adjusted Total Debt Residential – Assessable Of Total ITE Trips Generation New Trips Trip Reapportionment Product Total Units Trips Trip Factor Generated Discount Generated Percent % of

Townhome 1,296 8.26% 4.22 5,469 0.00% 5,469 8.30% 10.47% Carriage Home/Attached Villa 2,927 18.66% 4.22 12,352 0.00% 12,352 18.74% 23.66% Detached Villa 46'/52' 2,027 24.83% 8.11 16,439 0.00% 16,439 24.94% 31.48% Single Family 52'/55' 1,215 14.89% 8.11 9,854 0.00% 9,854 14.95% 18.87% Single Family 60'/65' 288 3.53% 8.11 2,336 0.00% 2,336 3.54% 4.47% Single Family 70'/75' 261 3.20% 8.11 2,117 0.00% 2,117 3.21% 4.05% Single Family 90' 450 5.51% 8.11 3,650 0.00% 3,650 5.54% 6.99%

Subtotal - Assessable Units 8,464 78.88% 79.20% 100.00%

Residential - Non-Assessable Total Units Low Affordable Housing 900 2.09% 6.16 5,544 75.00% 1,386 2.10% ALF Apartments 450 0.99% 1.46 657 75.00% 164 0.25%

Non Residential Total Sq. Ft. / Units

Retail/Entertainment/Service 690,000 6.25% 0.03 20,700 80.00% 4,140 6.28% Professional Office 510,000 3.85% 0.01 5,100 50.00% 2,550 3.87% Hotel 400 3.88% 8.02 3,208 20.00% 2,566 3.89% Medical Facilities 35,000 0.79% 0.03 1,050 50.00% 525 0.80% Institutional - AM University 6,000 2.92% 2.30 13,800 86.00% 1,932 2.93% Private K-12 School 900 0.33% 2.48 2,232 80.00% 446 0.68%

100.00% 104,507 65,926 100.00%

Table 5 on the next page shows how the special benefits from the Ave Maria DRI CIP have been apportioned peculiar to the property pre-financing, based on the benefit apportionment analysis above. The pre-financing allocation from the Ave Maria DRI CIP determines the amount of the real property contribution discussed above. The total debt allocation with the land contribution included as if financed is reallocated to the product types not being paid down by the land contribution. The total annualized par debt will be amortized by assessments based upon apportioned special and peculiar benefit and the gross annual assessment per unit is calculated.


8

Table 5. Ave Maria DRI Par Debt Allocation Pre Land Contribution

Land Use Number of

Units

% Trip GenerationAllocation

Total Benefit Allocation

(Pre-financing)

Adjusted % Trip GenerationAllocation

Total Debt Allocation

(Post Financing) (1)

Total Par Debt Allocation Per Unit

TotalAnnualized Par

Debt Assessment

Allocation Per Unit (2)

GrossAnnual

Assessment Per Unit (3)

Townhome 1,296 8.30% $7,807,892 10.47% $10,696,692 $8,254 $600 $612 Carriage Home/Attached Villa 2,927 18.74% $17,634,027 23.66% $24,158,347 $8,254 $600 $612

Detached Villa 46'/52' 2,027 24.94% $23,468,803 31.48% $32,151,901 $15,862 $1,152 $1,176 Single Family 52'/55' 1,215 14.95% $14,067,388 18.87% $19,272,106 $15,862 $1,152 $1,176 Single Family 60'/65' 288 3.54% $3,334,492 4.47% $4,568,203 $15,862 $1,152 $1,176 Single Family 70'/75' 261 3.21% $3,021,883 4.05% $4,139,934 $15,862 $1,152 $1,176 Single Family 90' 450 5.54% $5,210,14 6.99% $7,137,817 $15,862 $1,152 $1,176

8,464 100.0% $102,125,000 Wgt. Average: $877 $894

Low Affordable Housing 900 2.10% $1,978,698 ALF Apartments 450 0.25% $234,489

Retail/Entertainment/Service 690,000 6.28% $5,910,397 Professional Office 510,000 3.87% $3,640,462 Hotel 400 3.89% $3,663,875 Subtotal: $19,572,909 Medical Facilities 35,000 0.80% $749,507 Institutional - AM University 6,000 2.93% $2,758,185 Private K-12 School 900 0.68% $637,295

Total 100.00% $94,117,537

(1) Adjusted trip generation debt re-allocation post land contribution post land contribution in lieu of assessment lien. (2) Total Annualized Par Debt Allocation Per Unit sets the not to exceed maximum assessment cap. Assumes paid in November. Preliminary, Subject to

Change (3) Adjusted Trip Generation Re-Allocation Post Land Contribution in lieu of Assessment. Grossed up for Collection Costs but Assumes as if Paid in

November. Preliminary, Subject to Change

Table 6 on the next page shows the approximate annual assessments required to amortize the 2012A Bonds over a 30 year period. It is important to note that the 2006A Bonds were allocated to the first 2,500 assessable units of the total 8,464 potential assessable units on a first platted, first assigned basis as described herein. The 2012 A Bonds will be allocated to the second 2,500 assessable units of the total 8,464 potential assessable units again on a first platted, first assigned basis as described herein. The remaining 3,464 units are expected to receive their permanent assessment in accordance with future bond issuance(s).

The total annualized par debt assessment shown in Table 6 is net of any applicable discount allowances and collection fees. The net annual and gross annual assessments shown include such allowances and discounts. Table 6 also represents a fair and reasonable allocation of the debt incurred by the District.


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Table 6. Expected Ave Maria DRI Debt Allocationand Annual Assessments

Land Use

Town of Ave Maria DRI No.

05-01 – Expected Units in Second

Issue (1)

Adjusted Trip Generation

Allocation %

Total Debt Allocation

(Post Financing)

Total Par Debt

Allocation Per Unit

TotalAnnualized

Par Debt Assessment

Allocation Per Unit

Net Annual Assessment

per Unit (2)

GrossAnnual

Assessment per Unit

(3)

Townhome 383 10.47% $3,047,968 $7,962 $622 $635 662

Carriage Home/Attached Villa 865 23.66% $6,883,798 $7,962 $622 $635 662

Detached Villa 46'/52' 599 31.48% $9,161,521 $15,302 $1,196 $1,221 1,271

Single Family 52'/55' 359 18.87% $5,491,489 $15,302 $1,196 $1,221 1,271

Single Family 60'/65' 86 4.47% $1,301,686 $15,302 $1,196 $1,221 1,271

Single Family 70'/75' 77 4.05% $1,179,653 $15,302 $1,196 $1,221 1,271

Single Family 90' 133 6.99% $2,033,885 $15,302 $1,196 $1,221 1,271

Total 2,500 100.00% $29,100,000 Wghtd. Avg.: $910 $928 $967


(1) This mix of units in the first issuance may change based on market conditions and other factors.

(2) Net Annual Assessment Per Unit grossed up for collection costs associated with tax collector and also the necessary administrative costs incurred by both the property appraiser and tax collector but assumes as if paid in November. Section 197.3632 (2) and Section 197.3632 (8) (c).

(3) Gross Annual Assessment Per Unit grossed up for early payment discounts & collection costs associated with property appraiser and tax collector and also the necessary administrative costs incurred by both the property appraiser and tax collector but assumes as if paid in November. Section 197.3632 (2) and Section 197.3632 (8) (c).

4.0 Reasonable and Fair Apportionment of the Special Benefits Peculiar to the Property

A reasonable estimate of the proportion of special and peculiar benefits received from the improvements is expressed in residential units in Table 5.

The determination has been made that the duty to pay the non-ad valorem special assessments and the determined special benefits are fairly and reasonably apportioned peculiar to the property within each land use category.

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Accordingly, no acre or parcel of property within the boundary of the District will be assessed for the payment of any non-ad valorem special assessment more than the determined special benefit peculiar to that property.

The per unit allocation amounts in Table 5 represent the anticipated per unit debt allocations assuming all anticipated residential units are built in the proportions planned, and the entire proposed Infrastructure Program is developed or acquired and financed by the District.

5.0 True-Up Mechanism

In order to assure that the District’s debt will not build up on the remaining undeveloped acres as the development progresses, the District shall apply the following true up test.

The test is that the debt per acre remaining on the undeveloped acres is never allowed to increase above its ceiling debt per acre level. Initially, the ceiling level of debt per acre is calculated as the total amount of debt for the Ave Maria DRI CIP divided by the number of acres within the Sub-Master District Boundaries. In this case the ceiling is calculated as $102,125,000 divided by the 5,027 acres in the Sub-Master boundaries, equaling $20,315 per acre. Thus, every time the test is applied the debt on the unallocated Units must remain equal to or lower than $20,315 per acre. If not, the District would require a density reduction payment in an amount sufficient to reduce the remaining debt per acre to the ceiling amount.

This test shall be applied at the time 50% of the Units within the District are platted. The second test shall be applied at the time 75% of the Units within the District are platted. The third test shall be applied at the time 90% of the Units within the District are platted. Table 7 shows the true-up allocations at each particular test period. A True Up test may also be applicable if, after the project is entirely platted, the development plan changes requiring an amendment to existing plats within the District. Since all of the property has been platted and the debt assigned, the true-up tests described above will only be applicable if there are amendments to the existing plat that result in a different Unit count or configuration. Table 7 on the next page shows the true-up mechanism at each time interval.

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Table 7. Ave Maria Stewardship District True-Up Mechanism

True Up Analysis 50% 75% 90% Cumulative Units 4,232 6,348 7,618 Unallocated Units 4,232 2,116 846

Debt Per Acre $20,315 $20,315 $20,315 Source: Fishkind & Associates, Inc.

If at the time the 50%, 75% or 90% tests are given it is determined that the ceiling debt is breached, the District may suspend the true up payment if the landowners can show that there is sufficient development potential in the remaining acreage to build the densities required to amortize the bonds. A determination of the suspension of a required true up payment will be made at the sole discretion of the District.

5.1 Clarifications and Amplifications

All assessments levied run with the land. It is the responsibility of the landowner of record to make or cause to be made any required true up payments due. The District will not release any liens on property for which true up payments are due until provision for such payment has been satisfactorily made. The owner of record at the time the annual assessment roll is developed will have the responsibility to make the annual assessment payments, but in all cases true up payments must be made to enable the District to meet its debt service obligations. A determination of a true up payment will be at the sole discretion of the District. Prior to platting, all assessable acreage will be assessed on a per acre basis.

6.0 Assessment Roll

As described above, the debt associated with the Ave Maria DRI CIP will be initially distributed on an equal acreage basis across all of the acreage within the District. Each acre within the District will be assessed equally since, until development is located, development could presumably occur on any one acre as on any other. As plats are approved lots will be assessed in the manner described herein.

The following Appendix I Tax Roll shows the initial assessments on a per acre basis for the Ave Maria DRI CIP.

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APPENDIX 1Initial Per Acre Assessment Roll

Folio Number Acres Par Amount 115280003 4.20 $45,218.27138560001 302.29 $3,254,530.89138560810 10.57 $113,799.30138600000 247.09 $2,660,233.68138600301 233.12 $2,509,829.11138601025 86.35 $929,666.02226240204 767.28 $8,260,731.29226440004 835.51 $8,995,312.79226441702 1.45 $15,611.07226446008 75.62 $814,144.12

22671000381 0.36 $3,875.8522671000682 0.61 $6,567.4122671000789 4.23 $45,541.2522673900049 19.70 $212,095.2022673900463 13.34 $143,621.8322673900560 7.37 $79,347.2922673900667 7.26 $78,163.0022673900764 13.87 $149,327.9422673900861 5.30 $57,061.1522673900968 13.08 $140,822.6022673901064 10.83 $116,598.5322673901103 5.57 $59,968.0322673901161 10.64 $114,552.9422673901268 13.65 $146,959.3722673901365 7.46 $80,316.2522687000029 6.14 $66,104.80

Total 2,702.89 $29,100,000.00

Note: The owner of the necessary real property identified in the Property Appraiser’s tax roll has agreed to transfer title for such property to the District in accordance with the Real Property Contribution Agreement dated December 21, 2006 and in return for a reduction or corresponding credit to special assessments to be levied upon such specially benefited properties. At the time of the transfer, the lien on the contributed real properties will change consistent with the apportionment of the special benefit peculiar to the remaining non-platted acres.

APPENDIX F

AUDITED FINANCIAL STATEMENT OF THE DISTRICT FORFISCAL YEAR ENDING SEPTEMBER 30, 2011

AVE MARIA STEWARDSHIP COMMUNITY DISTRICT COLLIER COUNTY, FLORIDA

FINANCIAL REPORT FOR THE FISCAL YEAR ENDED

SEPTEMBER 30, 2011


TABLE OF CONTENTS

Page

INDEPENDENT AUDITOR’S REPORT 1

MANAGEMENT’S DISCUSSION AND ANALYSIS 2-5

BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements:

Statement of Net Assets 6 Statement of Activities 7 Fund Financial Statements:

Balance Sheet – Governmental Funds 8 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets 9 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds 10 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 11 Notes to the Financial Statements 12-20

REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues, Expenditures and Changes in Fund Balance –

Budget and Actual – General Fund 21Notes to Required Supplementary Information 22

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING ANDCOMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIALSTATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENTAUDITING STANDARDS 23

MANAGEMENT LETTER REQUIRED BY CHAPTER 10.550 OF THE RULESOF THE AUDITOR GENERAL OF THE STATE OF FLORIDA 24-26

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Our discussion and analysis of Ave Maria Stewardship Community District, Collier County, Florida (the “District”) provides a narrative overview of the District’s financial activities for the fiscal year ended September 30, 2011. Please read it in conjunction with the District’s Independent Auditor’s Report, basic financial statements, accompanying notes and supplementary information to the basic financial statements.

FINANCIAL HIGHLIGHTS

The assets of the District exceeded its liabilities at the close of the most recent fiscal year resulting in a net asset balance of $10,914,315.

The change in the District’s total net assets in comparison with the prior year was ($1,307,571), a decrease. The key components of the District’s net assets and change in net assets are reflected in the table in the government-wide financial analysis section.

At September 30, 2011, the District’s governmental funds reported combined ending fund balances of $4,258,740, an increase of $64,428 in comparison with the prior year. A portion of fund balance is restricted for debt service and capital projects and the remainder is unassigned fund balance which is available for spending at the District’s discretion.

OVERVIEW OF FINANCIAL STATEMENTS

This discussion and analysis are intended to serve as the introduction to the District’s basic financial statements. The District’s basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.

Government-Wide Financial Statements

The government-wide financial statements are designed to provide readers with a broad overview of the District’s finances, in a manner similar to a private-sector business.

The statement of net assets presents information on all the District’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the District is improving or deteriorating.

The statement of activities presents information showing how the government’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods.

The government-wide financial statements include all governmental activities that are principally supported by Developer contributions and assessment revenues. The District does not have any business-type activities. The governmental activities of the District include the general government (management) and maintenance functions.

Fund Financial Statements

A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The District has one fund category: governmental funds.

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OVERVIEW OF FINANCIAL STATEMENTS (Continued)

Governmental Funds

Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a District’s near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the District’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The District maintains three individual governmental funds for external reporting. Information is presented separately in the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, debt service fund and capital projects funds. The general, debt service and capital project funds are all considered to be major funds.

The District adopts an annual appropriated budget for its general fund. A budgetary comparison schedule has been provided for the general fund to demonstrate compliance with the budget.

Notes to the Financial Statements

The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements.

GOVERNMENT-WIDE FINANCIAL ANALYSIS

As noted earlier, net assets may serve over time as a useful indicator of an entity’s financial position. In the case of the District, assets exceeded liabilities at the close of the most recent fiscal year.

Key components of the District’s net assets are reflected in the following table:

2011 2010Assets, excluding capital assets 5,344,421$ 5,428,508$ Capital assets, net of depreciation 58,019,043 59,809,806Total assets 63,363,464 65,238,314Liabilities, excluding long-term liabilities 1,244,149 1,366,428 Long-term liabilities 51,205,000 51,650,000Total liabilities 52,449,149 53,016,428Net assetsInvested in capital assets, net of related debt 7,713,520 9,095,023 Restricted for debt service 2,841,725 2,887,845 Unrestricted 359,070 239,018 Total net assets 10,914,315$ 12,221,886$

NET ASSETSSEPTEMBER 30,

The District’s net assets reflects its investment in capital assets (e.g. land, land improvements, and infrastructure); less any related debt used to acquire those assets that is still outstanding. These assets are used to provide services to residents; consequently, these assets are not available for future spending. Although the District’s investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

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GOVERNMENT-WIDE FINANCIAL ANALYSIS (Continued)

The restricted portion of the District’s net assets represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets may be used to meet the District’s other obligations.

The District’s net assets decreased during the most recent fiscal year. The majority of the decrease represents the extent to which the cost of operations and depreciation expense exceeded ongoing program revenues.

Key elements of the change in net assets are reflected in the following table:

2011 2010Revenues:Program revenues

Charges for services 1,336,994$ 1,319,938$ Operating grants and contributions 3,351,644 3,533,269 Capital grants and contributions - 2,054,000

General revenuesUnrestricted investment earnings 5,775 3,932

Total revenues 4,694,413 6,911,139 Expenses:

General government 138,007 160,188 Maintenance and operations 3,276,534 3,324,952 Interest 2,587,443 2,608,435

Total expenses 6,001,984 6,093,575 Change in net assets (1,307,571) 817,564 Net assets beginning 12,221,886 11,404,322Net assets ending 10,914,315$ 12,221,886$

CHANGES IN NET ASSETSFOR THE FISCAL YEAR ENDED SEPTEMBER 30,

As noted above and in the statement of activities, the cost of all governmental activities during the fiscal year ended September 30, 2011 was $6,001,984. The majority of the costs of the District’s activities were paid by program revenues. Program revenues comprised primarily of assessments, reclaimed water revenue, and Developer contributions. The majority of the decrease in program revenues is due to the receipt of non-cash contributions from the Developer in the form of land conveyed to the District in a prior fiscal year, which did not occur in the current fiscal year.

GENERAL BUDGETING HIGHLIGHTSAn operating budget was adopted and maintained by the governing board for the District pursuant to the requirements of Florida Statutes. The budget is adopted using the same basis of accounting that is used in preparation of the fund financial statements. The legal level of budgetary control, the level at which expenditures may not exceed budget is in the aggregate. Any budget amendments that increase the aggregate budgeted appropriations must be approved by the Board of Supervisors. The general fund budget for the fiscal year ended September 30, 2011 was amended to decrease revenues by $298,780 and decrease appropriations by $167,147. The decrease in revenues is primarily the result of lower Developer contributions and the decrease in appropriations is primarily due to lower maintenance and operations and payroll. Actualgeneral fund expenditures did not exceed appropriations for the fiscal year ended September 30, 2011.

The variance between budgeted and actual general fund revenues for the 2011 fiscal year is the result of additional Developer contributions. The actual general fund expenditures for the 2011 fiscal year were lower than budgeted amounts due primarily to anticipated costs which were not incurred in the current fiscal year.

5

CAPITAL ASSETS

At September 30, 2011, the District had $63,391,332 invested in land and infrastructure, for its governmental activities. In the government-wide financial statements depreciation of $5,372,289 has been taken, which resulted in a net book value of $58,019,043. More detailed information about the District’s capital assets is presented in the notes of the financial statements.

CAPITAL DEBT

At September 30, 2011, the District had $51,205,000 in Bonds outstanding for its governmental activities. More detailed information about the District’s capital debt is presented in the notes of the financial statements.

ECONOMIC FACTORS AND OTHER EVENTS

The District does not anticipate any major projects or significant changes to its infrastructure maintenance program for the subsequent fiscal year. In addition, it is anticipated that the general operations of the District will remain fairly constant.

Subsequent to fiscal year end, the Board approved the refunding of $26,220,000 outstanding 2006 Bond Anticipation Bonds that are due November 1, 2012. The Series 2012 Capital Improvement Revenue Refunding Bonds were authorized for an amount not to exceed $30,000,000.

CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT

This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with a general overview of the District’s finances and to demonstrate the District’s accountability for the financial resources it manages and the stewardship of the facilities it maintains. If you have questions about this report or need additional financial information, contact the Ave Maria Stewardship Community District’s management services at Special District Services, Inc., 2501A Burns Road, Palm Beach Gardens, Florida 33410.

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AVE MARIA STEWARDSHIP COMMUNITY DISTRICT COLLIER COUNTY, FLORIDA STATEMENT OF NET ASSETS

SEPTEMBER 30, 2011

ASSETSCash 257,691$ Accounts receivable 61,889 Deferred charges 899,465 Due from Developer 1,486,429 Restricted assets: Investments 2,638,947 Capital assets:

Nondepreciable 18,622,245 Depreciable assets, net 39,396,798

Total assets 63,363,464

LIABILITIES Accounts payable 186,216 Accrued interest payable 1,057,933 Non-current liabilities: Due within one year 440,000 Due in more than one year 50,765,000 Total liabilities 52,449,149

NET ASSETSInvested in capital assets, net of related debt 7,713,520 Restricted for debt service 2,841,725 Unrestricted 359,070 Total net assets 10,914,315$

Governmental Activities

See notes to the financial statements

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AVE MARIA STEWARDSHIP COMMUNITY DISTRICT COLLIER COUNTY, FLORIDA STATEMENT OF ACTIVITIES

FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011

Net (Expense) Revenue and

Changes in Net Assets

Charges Operatingfor Grants and Governmental

Functions/Programs Expenses Services Contributions ActivitiesPrimary government: Governmental activities: General government 138,007$ 138,007$ -$ -$

Maintenance and operations 3,276,534 468,811 1,131,237 (1,676,486) Interest on long-term debt 2,587,443 730,176 2,220,407 363,140 Total governmental activities 6,001,984 1,336,994 3,351,644 (1,313,346)

General revenues: Unrestricted investment earnings 5,775 Total general revenues 5,775 Change in net assets (1,307,571) Net assets - beginning 12,221,886 Net assets - ending 10,914,315$

Program revenues


8


BALANCE SHEET GOVERNMENTAL FUNDS

SEPTEMBER 30, 2011

Debt CapitalGeneral Service Projects

ASSETSCash 257,691$ -$ -$ 257,691$Investments - 2,638,935 12 2,638,947Accounts receivable 61,889 - - 61,889 Due from Developer 225,706 1,260,723 - 1,486,429

Total assets 545,286$ 3,899,658$ 12$ 4,444,956$

LIABILITIES AND FUND BALANCESLiabilities:

Accounts payable 186,216$ -$ -$ 186,216$Total liabilities 186,216 - - 186,216

Fund balances:Restricted for:

Debt service - 3,899,658 - 3,899,658Capital projects - - 12 12

Unassigned: 359,070 - - 359,070Total fund balances 359,070 3,899,658 12 4,258,740

Total liabilities and fund balances 545,286$ 3,899,658$ 12$ 4,444,956$

Total Governmental

Funds

Major Fund


9


RECONCILIATION OF BALANCE SHEET – GOVERNMENTAL FUNDSTO THE STATEMENT OF NET ASSETS

GOVERNMENTAL FUNDS SEPTEMBER 30, 2011

Fund balance - governmental funds 4,258,740$

Amounts reported for governmental activities in the statement of net assets are different because:

Capital assets used in governmental activities are not financial resources and, therefore, are not reported as assets in the governmental funds. The statement of net assets includes those capital assets, net of accumulated depreciation, in the assets of the government as a whole.

Cost of capital assets 63,391,332Accumulated depreciation (5,372,289) 58,019,043

Bond issuance costs are not financial resources and, therefore are not reported as assets in the governmental funds. The statements of net assets includes these costs, net of any amortization.

Bond issuance costs 1,072,209Accumulated amortization (172,744) 899,465

Liabilities not due and payable from current available resourcesare not reported as liabilities in the governmental fund statements. All liabilities, both current and long-term, are reported in the government-wide financial statements.

Bonds payable (51,205,000)Accrued interest payable (1,057,933) (52,262,933)

Net assets of governmental activities 10,914,315$


10


STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011

Debt CapitalGeneral Service Projects

REVENUESAssessments 343,121$ 730,176$ -$ 1,073,297$Developer contributions 1,131,237 2,199,065 - 3,330,302Reclaim water revenue 263,697 - - 263,697 Interest and other revenues 5,775 21,342 - 27,117

Total revenues 1,743,830 2,950,583 - 4,694,413

EXPENDITURESCurrent:

General government 138,007 - - 138,007 Maintenance and operations 1,485,771 - - 1,485,771

Debt service:Principal - 445,000 - 445,000 Interest - 2,561,207 - 2,561,207

Total expenditures 1,623,778 3,006,207 - 4,629,985

Excess (deficiency) of revenuesover (under) expenditures 120,052 (55,624) - 64,428

Fund balances - beginning 239,018 3,955,282 12 4,194,312

Fund balances - ending 359,070$ 3,899,658$ 12$ 4,258,740$

Major Fund Total Governmental

Funds


11


RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES


Net change in fund balances - total governmental funds 64,428$

Amounts reported for governmental activities in the statement of activities are different because:

statement but is reported as an expense in the statement of activities. (1,790,763)

Repayments of long-term liabilities are reported as expenditures in the governmental fund statement but such repayments reduce liabilities in the statement of net assets and are eliminated in the statement of activities. 445,000

Amortization of deferred charges is not recognized in the governmental fund statement but is reported as an expense in the statement of activities. (35,740)

prior fiscal year is recorded in the statement of activities but not in the fund financial statements. 9,504

Change in net assets of governmental activities (1,307,571)$

The change in accrued interest on long-term liabilities between the current and

Depreciation on capital assets is not recognized in the governmental fund


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NOTES TO FINANCIAL STATEMENTS

NOTE 1 – NATURE OF ORGANIZATION AND REPORTING ENTITY

Ave Maria Stewardship Community District ("District") was created by the Florida Legislature (Chapter 2004-461) on April 23, 2004 and became effective on June 17, 2004, pursuant to Chapter 189, Florida Statutes.

The District was established for the purposes of providing the public infrastructure and managing the acquisition, construction, maintenance and operation of all or a portion of the infrastructure necessary for community development within the District.

The District is governed by the Board of Supervisors ("Board"), which is composed of five members. The Supervisors are elected on an at large basis by the owners of the property within the District. Ownership of land within the District entitles the owner to one vote per acre. The Board of Supervisors of the District exercise all powers granted to the District pursuant to Chapter 2004-461 and other appropriate Florida Statutes. One of the Board members is affiliated with Ave Maria Development LLLP (“Developer”).

The Board has the final responsibility for: 1. Assessing and levying assessments. 2. Approving budgets. 3. Exercising control over facilities and properties. 4. Controlling the use of funds generated by the District. 5. Approving the hiring and firing of key personnel. 6. Financing improvements.

The financial statements were prepared in accordance with Governmental Accounting Standards Board (“GASB”) Statement 14, and Statement 39, an amendment of GASB Statement 14. Under the provisions of those standards, the financial reporting entity consists of the primary government, organizations for which the District Board of Supervisors is considered to be financially accountable, and other organizations for which the nature and significance of their relationship with the District are such that, if excluded, the financial statements of the District would be considered incomplete or misleading. There are no entities considered to be component units of the District; therefore, the financial statements include only the operations of the District.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Government-Wide and Fund Financial StatementsThe basic financial statements include both government-wide and fund financial statements.

The government-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the non-fiduciary activities of the primary government. For the most part, the effect of interfund activity has been removed from these statements.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment; operating-type special assessments for maintenance and debt service are treated as charges for services and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Other items not included among program revenues are reported instead as general revenues.

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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Measurement Focus, Basis of Accounting and Financial Statement PresentationThe government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Assessments are recognized as revenues in the year for which they are levied. Grants and similar items are to be recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Governmental fund financial statements are reported using the current financial resources measurement focusand the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures are recorded only when payment is due.

AssessmentsAssessments are non-ad valorem assessments on certain land and all platted lots within the District. Assessments are levied each November 1 on property of record as of the previous January. The fiscal year for which annual assessments are levied begins on October 1 with discounts available for payments through February 28 and become delinquent on April 1. For debt service assessments, amounts collected as advance payments are used to prepay a portion of the Bonds outstanding. Otherwise, assessments are collected annually to provide funds for the debt service on the portion of the Bonds which are not paid with prepaid assessments.

Assessments and interest associated with the current fiscal period are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. The portion of assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government.

The District reports the following major governmental funds:

General FundThe general fund is the general operating fund of the District. It is used to account for all financial resources except those required to be accounted for in another fund.

Debt Service FundThe debt service fund is used to account for the accumulation of resources for the annual payment of principal and interest on long-term debt.

Capital Projects FundThis fund accounts for the financial resources to be used for the acquisition or construction of major infrastructure within the District.

As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements.

When both restricted and unrestricted resources are available for use, it is the government’s policy to use restricted resources first for qualifying expenditures, then unrestricted resources as they are needed.

Restricted AssetsThese assets represent cash and investments set aside pursuant to Bond covenants or other contractual restrictions.

14


Assets, Liabilities and Net Assets or Equity

Deposits and InvestmentsThe District’s cash and cash equivalents are considered to be cash on hand and demand deposits (interest and non-interest bearing).

The District has elected to proceed under the Alternative Investment Guidelines as set forth in Section 218.415 (17) Florida Statutes. The District may invest any surplus public funds in the following:

a) The Local Government Surplus Trust Funds, or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperation Act;

b) Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency;

c) Interest bearing time deposits or savings accounts in qualified public depositories; d) Direct obligations of the U.S. Treasury.

Securities listed in paragraph c and d shall be invested to provide sufficient liquidity to pay obligations as they come due. In addition, surplus funds may be deposited into certificates of deposit which are insured and any unspent Bond proceeds are required to be held in investments as specified in the Bond Indenture.

The District records all interest revenue related to investment activities in the respective funds and reports investments at fair value.

Capital AssetsCapital assets, which include property, plant and equipment, and infrastructure assets (e.g., roads, sidewalks and similar items) is reported in the government activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.

Property, plant and equipment of the District are depreciated using the straight-line method over the following estimated useful lives:

Assets YearsRoadway Improvements 25 Master Irrigation System 25 Mitigation and Restoration 25 Stormwater Management 25

In the governmental fund financial statements, amounts incurred for the acquisition of capital assets are reported as fund expenditures. Depreciation expense is not reported in the governmental fund financial statements.

15


Assets, Liabilities and Net Assets or Equity (Continued)

Deferred ChargesIn connection with the issuance of certain debt, the District incurred costs totaling $1,072,209. In the government-wide financial statements that amount has been capitalized and amortized over the estimated life of the Bonds. At September 30, 2011 the District reported accumulated amortization of $172,744.

Deferred Revenue Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned.

Long-Term ObligationsIn the government-wide financial statements long-term debt and other long-term obligations are reported as liabilities in the statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized ratably over the life of the Bonds. Bonds payable are reported net of applicable premiums or discounts.

In the fund financial statements, governmental fund types recognize premiums and discounts, as well as issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

Fund Equity/Net AssetsIn the fund financial statements, governmental funds report non spendable and restricted fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Assignments of fund balance represent tentative management plans that are subject to change. Under GASB 54, Fund Balance Reporting and Governmental Fund Type Definitions, fund balances are required to be reported according to the following classifications:

Non-spendable fund balance – Amounts that are (a) not in spendable form or (b) legally or contractually required to be maintained intact. “Not in spendable form” includes items that are not expected to be converted to cash (such as inventories and prepaid amounts) and items such as long-term amount of loans and notes receivable, as well as property acquired for resale. The corpus (or principal) of a permanent fund is an example of an amount that is legally or contractually required to be maintained intact.

Restricted fund balance – Amounts that can be spent only for specific purposes stipulated by (a) external resource providers such as creditors (by debt covenants), grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation.

Committed fund balance – Amounts that can be used only for the specific purposes determined by a formal action (resolution) of the Board of Supervisors. Commitments may be changed or lifted only by the Board of Supervisors taking the same formal action (resolution) that imposed the constraint originally. Resources accumulated pursuant to stabilization arrangements sometimes are reported in this category.

Assigned fund balance – Includes spendable fund balance amounts established by the Board of Supervisors of the District through the District’s Fund Balance Policy that are intended to be used for specific purposes that are neither considered restricted nor committed.

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Assets, Liabilities and Net Assets or Equity (Continued)

Fund Equity/Net Assets (Continued)

Unassigned fund balance – Unassigned fund balance is the residual classification for the general fund. This classification represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the general fund. Unassigned fund balance may also include negative balances for any governmental fund if expenditures exceed amounts restricted, committed, or assigned for those specific purposes.

The District first uses committed fund balance, followed by assigned fund balance and then unassigned fund balance when expenditures are incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used.

Net assets in the government-wide financial statements are categorized as invested in capital assets, net of related debt, restricted or unrestricted. Invested in capital assets, net of related debt represents net assets related to infrastructure and property, plant and equipment, net of any related debt. Restricted net assets represent the assets restricted by the District’s Bond covenants or other contractual restrictions.

Other Disclosures

Use of EstimatesThe preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates.

NOTE 3 – BUDGETARY INFORMATION

The District is required to establish a budgetary system and an approved Annual Budget. Annual Budgets are adopted on a basis consistent with generally accepted accounting principles for the general fund. All annual appropriations lapse at fiscal year end.

The District follows these procedures in establishing the budgetary data reflected in the financial statements.

a) Each year the District Manager submits to the District Board a proposed operating budget for the fiscal year commencing the following October 1.

b) Public hearings are conducted to obtain public comments. c) Prior to October 1, the budget is legally adopted by the District Board. d) All budget changes must be approved by the District Board. e) The budgets are adopted on a basis consistent with generally accepted accounting principles. f) Unused appropriation for annually budgeted funds lapse at the end of the year.

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NOTE 4 – DEPOSITS AND INVESTMENTS

DepositsThe District’s cash balances were entirely covered by federal depository insurance or by a collateral pool pledged to the State Treasurer. Florida Statutes Chapter 280, "Florida Security for Public Deposits Act", requires all qualified depositories to deposit with the Treasurer or another banking institution eligible collateral equal to various percentages of the average daily balance for each month of all public deposits in excess of any applicable deposit insurance held. The percentage of eligible collateral (generally, U.S. Governmental and agency securities, state or local government debt, or corporate bonds) to public deposits is dependent upon the depository's financial history and its compliance with Chapter 280. In the event of a failure of a qualified public depository, the remaining public depositories would be responsible for covering any resulting losses.

InvestmentsThe District’s investments were held as follows at September 30, 2011:

Investment Fair Value Credit Risk MaturitiesFirst American Government Obligation Funds Class Y 457,664$ S&P AAAm

Average of the fund portfolio: 50 days

Federal National Mortgage Association Strips 521,283 S&P AAA 9/15/2012Federal National Mortgage Association MTN 1,110,000 S&P AA+ 9/28/2016Federal Home Loan Bks 550,000 S&P AA+ 9/16/2016

Total Investments 2,638,947$

Custodial risk – For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the District will not be able to recover the value of the investments or collateral securities that are in the possession of an outside party. The District has no formal policy for custodial risk. The money market funds are not evidenced by securities that exist in physical or book entry form. The remaining investments are held by the trustee or agent but not in the District’s name.

Credit risk – For investments, credit risk is generally the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Investment ratings by investment type are included in the preceding summary of investments.

Concentration risk – The District places no limit on the amount the District may invest in any one issuer.

Interest rate risk – The District does not have a formal policy that limits investment maturities as a means of managing exposure to fair value losses arising from increasing interest rates.

However, the Bond Indenture limits the type of investments held using unspent proceeds.

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NOTE 5 – CAPITAL ASSETS

Capital asset activity for the fiscal year ended September 30, 2011 was as follows:

Beginning Balance

(restated) Increases DecreasesEnding Balance

Governmental activitiesCapital assets, not being depreciated

Land 18,622,245$ -$ -$ 18,622,245$ Total capital assets, not being depreciated 18,622,245 - - 18,622,245

Capital assets, being depreciatedRoadway Improvements 41,652,306 - - 41,652,306 Master Irrigation System Improvements 2,555,755 - - 2,555,755 Mitigation and Restoration 119,108 - - 119,108 Drainage / Stormwater Management System 441,918 - - 441,918

Total capital assets, being depreciated 44,769,087 - - 44,769,087

Less accumulated depreciation for:Roadway Improvements 3,332,184 1,666,092 - 4,998,276 Master Irrigation System Improvements 204,460 102,230 - 306,690 Mitigation and Restoration 9,528 4,764 - 14,292 Drainage / Stormwater Management System 35,354 17,677 - 53,031

Total accumulated depreciation 3,581,526 1,790,763 - 5,372,289

Total capital assets, being depreciated, net 41,187,561 (1,790,763) - 39,396,798

Governmental activities capital assets, net 59,809,806$ (1,790,763)$ -$ 58,019,043$

The total cost to complete the District-wide project is estimated to be approximately $650 million. The total cost of the initial phase of the project has been estimated at approximately $94 million of which $44 million were funded by the Series 2006 Capital Improvement Revenue Bonds. The majority of the improvements were acquired from the Developer. Additional costs related to the initial project will be funded by the Developer or by issuing additional Bonds. The funding for the remaining cost of the project has not been determined at this time. Certain improvements will be conveyed to other entities upon completion of the project.

Depreciation expense was charged to maintenance and operations.

NOTE 6 – LONG TERM LIABILITIES

In December 2006, the District issued $26,245,000 of Capital Improvement Revenue Bonds, Series 2006A. The Bonds are due May 1, 2038 with a fixed interest rate of 5.125%. The Bonds were issued to finance the acquisition and construction of certain improvements for the benefit of the District. Interest is to be paid semiannually on each May 1 and November 1, commencing May 1, 2007. Principal is due annually on May 1, commencing May 1, 2009.

In December 2006, the District issued $26,620,000 of Bond Anticipation Bonds, Series 2006. The Bonds are due in one lump sum payment on November 1, 2012 with a fixed interest rate of 4.80%. The Bonds were issued to finance the acquisition and construction of certain improvements for the benefit of the District. Interest is to be paid semiannually on each May 1 and November 1, commencing May 1, 2007.

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NOTE 6 – LONG TERM LIABILITIES (Continued)

The Bonds are subject to redemption at the option of the District prior to maturity as outlined in the Bond Indenture. The Bonds are also subject to extraordinary mandatory redemption prior to their maturity in the manner determined by the Bond Registrar if certain events occurred as outlined in the Bond Indenture. For the Series 2006A Bonds, this occurred during the current fiscal year as the District had excess reserves and prepaid $25,000 of the Bonds.

The Bond Indenture requires that the District maintain adequate funds in a reserve account to meet the debt service reserve requirement as defined in the Indenture. In addition, the Bond Indenture has certain restrictions and requirements relating principally to the procedures to be followed in the collection of pledged revenues and the application of the revenues to the various restricted accounts. The District is in compliance with the requirements of the Bond Indenture as of September 30, 2011.

Changes in long-term liability activity for the fiscal year ended September 30, 2011 was as follows:Beginning Balance Additions Reductions

Ending Balance

Due Within One Year

Governmental activitiesBonds payable:

Series 2006 and 2006A Bonds 51,650,000$ -$ 445,000$ 51,205,000$ 440,000$ Total 51,650,000$ -$ 445,000$ 51,205,000$ 440,000$

At September 30, 2011, the scheduled debt service requirements on the long-term debt were as follows:

Year ending September 30: Principal Interest Total

2012 440,000$ 2,539,041$ 2,979,041$ 2013 26,685,000 1,887,211 28,572,2112014 485,000 1,234,100 1,719,100 2015 515,000 1,209,244 1,724,244 2016 540,000 1,182,850 1,722,850

2017 - 2021 3,165,000 5,468,119 8,633,119 2022 - 2026 4,090,000 4,567,400 8,657,400 2027 - 2031 5,280,000 3,403,256 8,683,256 2032 - 2036 6,820,000 1,899,838 8,719,838 2037 - 2038 3,185,000 245,231 3,430,231

Total 51,205,000$ 23,636,290$ 74,841,290$

Governmental Activities

NOTE 7 – DEVELOPER TRANSACTIONS

The Developer has agreed to fund the general operations of the District. In connection with that agreement, Developer contributions to the general fund were $1,131,237, which includes a receivable of $225,706. The Developer has also agreed to fund the debt service on the Bonds which is not paid through special or prepaid assessments. During the fiscal year ended September 30, 2011 the Developer provided $2,199,065 to the Debt Service Fund, which includes a receivable of $1,260,723, which was collected subsequent to the year end.

NOTE 8 – CONCENTRATION

A significant portion majority of the District’s activity is dependent upon the continued involvement of the Developer, the loss of which could have a material adverse effect on the District’s operations.

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NOTE 9 – INTERLOCAL AGREEMENT

The District and Collier County have entered into an interlocal agreement related to the future development of the lands within and contiguous to the District that secures the traffic capacity for developing the community of Ave Maria. Collier County and the Developer have also entered into a Developer Agreement related to the development of the Ave Maria community that states the Developer will donate $7.8 million in certain right of way and storm water improvements, provide the design and permitting related to certain road ways required for the project, and pay approximately $60 million in road impact fees for construction of roadways. The Developer Agreement is not an obligation of the District.

NOTE 10 – MANAGEMENT COMPANY

The District has contracted with a management company to perform management advisory services, which include financial and accounting advisory services. Certain employees of the management company also serve as officers of the District. Under the agreement, the District compensates the management company for management, accounting, financial reporting, computer and other administrative costs.

NOTE 11 – RISK MANAGEMENT

The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. The District has obtained commercial insurance from independent third parties to mitigate the costs of these risks; coverage may not extend to all situations. Settled claims from these risks have not exceeded commercial insurance coverage over the past three years.

NOTE 12 – SUBSEQUENT EVENTS

Bond RefundingSubsequent to fiscal year end, the Board approved the refunding of $26,220,000 outstanding 2006 Bond Anticipation Bonds that are due November 1, 2012. The Series 2012 Capital Improvement Revenue Refunding Bonds were authorized for an amount not to exceed $30,000,000.

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SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL – GENERAL FUND


Variancewith Final

Budget -Actual Positive

Original Final Amounts (Negative)REVENUESMaintenance assessments 338,723$ 334,029$ 343,121$ 9,092$ Developer contribution 1,414,232 1,090,674 1,131,237 40,563 Reclaim water revenue 240,000 263,697 263,697 - Interest and other revenues - 5,775 5,775 - Total revenues 1,992,955 1,694,175 1,743,830 49,655

EXPENDITURESCurrent:

General government 187,566 147,678 138,007 9,671 Maintenance and operations 1,805,389 1,678,130 1,485,771 192,359

Total expenditures 1,992,955 1,825,808 1,623,778 202,030

Excess (deficiency) of revenues over (under) expenditures -$ (131,633)$ 120,052 251,685$

Fund balances - beginning 239,018

Fund balances - ending 359,070$

Budgeted Amounts

See notes to required supplementary information

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NOTES TO REQUIRED SUPPLEMENTARY INFORMATION

The District is required to establish a budgetary system and an approved Annual Budget for the general fund. The District’s budgeting process is based on estimates of cash receipts and cash expenditures which are approved by the Board. The budget approximates a basis consistent with accounting principles generally accepted in the United States of America (generally accepted accounting principles).

The legal level of budgetary control, the level at which expenditures may not exceed budget is in the aggregate. Any budget amendments that increase the aggregate budgeted appropriations must be approved by the Board of Supervisors. The general fund budget for the fiscal year ended September 30, 2011 was amended to decrease revenues by $298,780, decrease appropriations by $167,147. The decrease in revenues is primarily the result of lower Developer contributions and the decrease in appropriations is primarily due to lower maintenance and operations and payroll. Actual general fund expenditures did not exceed appropriations for the fiscal year ended September 30, 2011.

The variance between budgeted and actual general fund revenues for the 2011 fiscal year is the result of the additional Developer contribution. The actual general fund expenditures for the 2011 fiscal year were lower than budgeted amounts due primarily to anticipated costs which were not incurred in the current fiscal year.

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REPORT TO MANAGEMENT

I. CURRENT YEAR FINDINGS AND RECOMMENDATIONS

None

II. PRIOR YEAR FINDINGS AND RECOMMENDATIONS

None

III. COMPLIANCE WITH THE PROVISIONS OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA

Unless otherwise required to be reported in the auditor’s report on compliance and internal controls, the management letter shall include, but not be limited to the following:

1. A statement as to whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report.

There were no significant findings and recommendations made in the preceding annual financial audit report for the fiscal year ended September 30, 2010.

2. A statement as to whether or not the local governmental entity complied with Section 218.415, Florida Statutes, regarding the investment of public funds.

The District complied with Section 218.415, Florida Statutes, regarding the investment of public funds.

3. Any recommendations to improve the local governmental entity's financial management.

There were no such matters discovered by, or that came to the attention of, the auditor, to be reported for the fiscal year ended September 30, 2011.

4. Violations of provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but more than inconsequential.

There were no such matters discovered by, or that came to the attention of, the auditor, to be reported, for the fiscal year ended September 30, 2011.

5. For matters that have an inconsequential effect on the financial statements, considering both quantitative and qualitative factors, the following may be reported based on professional judgment:

a. Violations of provisions of contracts or grant agreements, fraud, illegal acts, or abuse.

b. Deficiencies in internal control that are not significant deficiencies.

There were no such matters discovered by, or that came to the attention of, the auditor, that, in our judgment, are required to be reported, for the fiscal year ended September 30, 2011.

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REPORT TO MANAGEMENT (Continued)

6. The name or official title and legal authority of the District are disclosed in the notes to the financial statements.

7. The financial report filed with the Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes agrees with the September 30, 2011 financial audit report.

8. The District has not met one or more of the financial emergency conditions described in Section 218.503(1), Florida Statutes.

9. We applied financial condition assessment procedures pursuant to Rule 10.556(7) and no deteriorating financial conditions were noted. It is management’s responsibility to monitor financial condition, and our financial condition assessment was based in part on representations made by management and the review of financial information provided by same

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