MONTGOMERY COUNT Y MUNICIPAL UTILITY DISTRICT NO. 115 … · 5/7/2020 · Escrow yield 0.101591% Value of Negative Arbitrage 17,064.42 Bond Par Amount 4,580,000.00 True Interest

MONTGOMERY COUNTY MUNICIPAL UTILITY DISTRICT NO. 115 (A political subdivision of the State of Texas located within Montgomery County)

UNLIMITED TAX REFUNDING BONDS

SERIES 2020

_______________ *Preliminary; subject to change

Proposed Pricing DateClosing DatePar AmountUnderwriter

05/21/2006/24/20

$4,580,000Robert W. Baird & Co., Inc.

Gross Savings ($) $333,685Average Annual Savings ($) $18,538

NPV Savings ($) $254,343NPV Savings (%) 5.89%

$4,315,0002010, 2011, 2012 and 2013

Par Amount of Refunded Bonds Series of Bonds Refunded Maturities Refunded (9/1) Maturities Refunded (9/1) Redemption Date (2010 and 2011) Redemption Date (2012 aand 2013)

2021-2027 2023-2037 7/1/2020

9/1/2020

Summary of the Series 2020Refunding Bonds*

000001

May 6, 2020 3:10 pm Prepared by Masterson Advisors LLC (Wolf) (Finance 8.500 Montgomery 115:MC115‐2020REF,2020REF) Page 1

SOURCES AND USES OF FUNDS

Montgomery Co. MUD No. 115U/L Tax Refunding Bonds, Series 2020

***Preliminary ‐ For Discussion Purposes ONLY***'A' Rated Scale as of May 6, 2020

BQ, Insured

Dated Date 06/01/2020Delivery Date 06/24/2020

Sources:

Bond Proceeds:Par Amount 4,580,000.00Accrued Interest 7,284.13Net Original Issue Discount ‐52,045.35

4,535,238.78

Other Sources of Funds:Transfer from Debt Service Funds 70,000.00

4,605,238.78

Uses:

Refunding Escrow Deposits:Cash Deposit 771,243.36SLGS Purchases 3,621,647.00

4,392,890.36

Other Fund Deposits:Accrued Interest 7,284.13

Delivery Date Expenses:Cost of Issuance 34,750.00Underwriter's Discount 45,800.00Bond Counsel 45,800.00Financial Advisor 45,800.00Insurance (50bps) 28,558.08

200,708.08

Other Uses of Funds:Additional Proceeds 4,356.21

4,605,238.78

000002


SUMMARY OF REFUNDING RESULTS



BQ, Insured

Dated Date 06/01/2020Delivery Date 06/24/2020Arbitrage yield 2.656745%Escrow yield 0.101591%Value of Negative Arbitrage 17,064.42

Bond Par Amount 4,580,000.00True Interest Cost 2.776615%Net Interest Cost 2.665787%Average Coupon 2.453633%Average Life 10.006Weighted Average Maturity 9.885

Par amount of refunded bonds 4,315,000.00Average coupon of refunded bonds 3.887056%Average life of refunded bonds 10.375Remaining weighted average maturity of refunded bonds 10.351

PV of prior debt to 06/24/2020 @ 3.116369% 4,651,589.43Net PV Savings 254,342.86Percentage savings of refunded bonds 5.894388%

000003


SAVINGS



BQ, Insured

Present ValuePrior Refunding Annual to 06/24/2020

Date Cash Flow Cash Flow Savings Savings @ 3.1163688%

06/24/2020 ‐70,000.00 ‐7,284.13 ‐62,715.87 ‐62,715.8709/01/2020 84,196.25 28,503.13 55,693.13 55,373.5203/01/2021 84,196.25 57,006.25 27,190.00 26,619.1905/31/2021 20,167.2609/01/2021 159,196.25 167,006.25 ‐7,810.00 ‐7,528.7303/01/2022 82,658.75 55,356.25 27,302.50 25,915.4205/31/2022 19,492.5009/01/2022 272,658.75 280,356.25 ‐7,697.50 ‐7,194.3303/01/2023 78,620.00 51,981.25 26,638.75 24,515.4405/31/2023 18,941.2509/01/2023 348,620.00 356,981.25 ‐8,361.25 ‐7,576.7403/01/2024 73,032.50 47,406.25 25,626.25 22,865.5205/31/2024 17,265.0009/01/2024 228,032.50 237,406.25 ‐9,373.75 ‐8,235.5903/01/2025 69,982.50 44,556.25 25,426.25 21,996.2405/31/2025 16,052.5009/01/2025 329,982.50 334,556.25 ‐4,573.75 ‐3,896.0403/01/2026 65,065.00 40,206.25 24,858.75 20,850.4605/31/2026 20,285.0009/01/2026 330,065.00 335,206.25 ‐5,141.25 ‐4,246.1003/01/2027 60,012.50 37,256.25 22,756.25 18,505.7705/31/2027 17,615.0009/01/2027 330,012.50 332,256.25 ‐2,243.75 ‐1,796.6603/01/2028 54,695.00 34,306.25 20,388.75 16,075.6005/31/2028 18,145.0009/01/2028 254,695.00 254,306.25 388.75 301.8103/01/2029 51,045.00 32,106.25 18,938.75 14,477.6505/31/2029 19,327.5009/01/2029 261,045.00 262,106.25 ‐1,061.25 ‐798.8203/01/2030 47,205.00 29,806.25 17,398.75 12,895.4005/31/2030 16,337.5009/01/2030 262,205.00 259,806.25 2,398.75 1,750.6003/01/2031 43,087.50 27,506.25 15,581.25 11,196.6805/31/2031 17,980.0009/01/2031 263,087.50 257,506.25 5,581.25 3,949.1503/01/2032 38,872.50 24,918.75 13,953.75 9,721.8305/31/2032 19,535.0009/01/2032 268,872.50 259,918.75 8,953.75 6,142.5303/01/2033 34,400.00 22,275.00 12,125.00 8,190.4805/31/2033 21,078.7509/01/2033 274,400.00 267,275.00 7,125.00 4,739.1203/01/2034 29,662.50 19,212.50 10,450.00 6,844.0605/31/2034 17,575.0009/01/2034 294,662.50 284,212.50 10,450.00 6,739.0503/01/2035 24,437.50 15,900.00 8,537.50 5,421.2405/31/2035 18,987.5009/01/2035 674,437.50 660,900.00 13,537.50 8,464.3003/01/2036 11,625.00 7,837.50 3,787.50 2,331.8005/31/2036 17,325.00

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SAVINGS



BQ, Insured

Present ValuePrior Refunding Annual to 06/24/2020

Date Cash Flow Cash Flow Savings Savings @ 3.1163688%

09/01/2036 311,625.00 292,837.50 18,787.50 11,389.1603/01/2037 5,812.50 3,918.75 1,893.75 1,130.4005/31/2037 20,681.2509/01/2037 305,812.50 288,918.75 16,893.75 9,929.3105/31/2038 16,893.75

6,038,016.25 5,704,331.49 333,684.76 333,684.76 254,342.86

Savings Summary

PV of savings from cash flow 254,342.86

Net PV Savings 254,342.86

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BOND PRICING



BQ, Insured

Maturity PremiumBond Component Date Amount Rate Yield Price (‐Discount)

Bond Component:09/01/2021 110,000 3.000% 1.680% 101.542 1,696.2009/01/2022 225,000 3.000% 1.700% 102.776 6,246.0009/01/2023 305,000 3.000% 1.800% 103.698 11,278.9009/01/2024 190,000 3.000% 1.900% 104.404 8,367.6009/01/2025 290,000 3.000% 1.980% 105.002 14,505.8009/01/2026 295,000 2.000% 2.050% 99.709 ‐858.4509/01/2027 295,000 2.000% 2.150% 99.004 ‐2,938.2009/01/2028 220,000 2.000% 2.250% 98.139 ‐4,094.2009/01/2029 230,000 2.000% 2.340% 97.202 ‐6,435.4009/01/2030 230,000 2.000% 2.440% 96.051 ‐9,082.7009/01/2031 230,000 2.250% 2.540% 97.189 ‐6,465.3009/01/2032 235,000 2.250% 2.640% 95.956 ‐9,503.4009/01/2033 245,000 2.500% 2.740% 97.356 ‐6,477.8009/01/2034 265,000 2.500% 2.790% 96.619 ‐8,959.6509/01/2035 645,000 2.500% 2.840% 95.827 ‐26,915.8509/01/2036 285,000 2.750% 2.890% 98.198 ‐5,135.7009/01/2037 285,000 2.750% 2.940% 97.448 ‐7,273.20

4,580,000 ‐52,045.35

Dated Date 06/01/2020Delivery Date 06/24/2020First Coupon 09/01/2020

Par Amount 4,580,000.00Original Issue Discount ‐52,045.35

Production 4,527,954.65 98.863639%Underwriter's Discount ‐45,800.00 ‐1.000000%

Purchase Price 4,482,154.65 97.863639%Accrued Interest 7,284.13

Net Proceeds 4,489,438.78

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SUMMARY OF BONDS REFUNDED



BQ, Insured

Maturity Interest Par Call CallBond Date Rate Amount Date Price

U/L Tax Bonds, Series 2010, 2010, BOND:09/01/2022 4.350% 115,000.00 07/01/2020 100.00009/01/2023 4.500% 120,000.00 07/01/2020 100.000

235,000.00

U/L Tax Bonds, Series 2011, 2011, TERM22:09/01/2021 4.100% 75,000.00 07/01/2020 100.00009/01/2022 4.100% 75,000.00 07/01/2020 100.000

150,000.00


150,000.00

U/L Tax Bonds, Series 2011, 2011, TERM27:09/01/2025 4.700% 75,000.00 07/01/2020 100.00009/01/2026 4.700% 75,000.00 07/01/2020 100.00009/01/2027 4.700% 75,000.00 07/01/2020 100.000

225,000.00

U/L Tax Bonds, Series 2012, 2012, BOND:09/01/2023 3.300% 75,000.00 09/01/2020 100.00009/01/2024 3.500% 80,000.00 09/01/2020 100.00009/01/2025 3.600% 85,000.00 09/01/2020 100.00009/01/2026 3.700% 90,000.00 09/01/2020 100.00009/01/2027 3.800% 95,000.00 09/01/2020 100.000

425,000.00


210,000.00


365,000.00


635,000.00

U/L Tax Bonds, Series 2013, 2013, BOND:09/01/2025 3.250% 100,000.00 09/01/2020 100.00009/01/2026 3.250% 100,000.00 09/01/2020 100.00009/01/2027 3.500% 100,000.00 09/01/2020 100.000

000007


SUMMARY OF BONDS REFUNDED



BQ, Insured

Maturity Interest Par Call CallBond Date Rate Amount Date Price

U/L Tax Bonds, Series 2013, 2013, BOND:09/01/2028 3.500% 100,000.00 09/01/2020 100.00009/01/2029 3.500% 100,000.00 09/01/2020 100.00009/01/2030 3.750% 100,000.00 09/01/2020 100.00009/01/2031 3.750% 100,000.00 09/01/2020 100.000

700,000.00

U/L Tax Bonds, Series 2013, 2013, TERM37:09/01/2032 3.875% 100,000.00 09/01/2020 100.00009/01/2033 3.875% 100,000.00 09/01/2020 100.00009/01/2034 3.875% 120,000.00 09/01/2020 100.00009/01/2035 3.875% 300,000.00 09/01/2020 100.00009/01/2036 3.875% 300,000.00 09/01/2020 100.00009/01/2037 3.875% 300,000.00 09/01/2020 100.000

1,220,000.00

4,315,000.00

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COST OF ISSUANCE



BQ, Insured

Cost of Issuance $/1000 Amount

Moody's Rating Fee 3.49345 16,000.00Printing 0.65502 3,000.00Escrow Agent 0.16376 750.00Paying Agent 0.16376 750.00Redemption Fee 0.26201 1,200.00Verification Agent 0.76419 3,500.005‐Year Lookback 0.22926 1,050.00Consultants 1.09170 5,000.00Miscellaneous 0.76419 3,500.00

7.58734 34,750.00

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PRELIMINARY OFFICIAL STATEMENT DATED: May 7, 2020

$4,545,000* UNLIMITED TAX REFUNDING BONDS

SERIES 2020

TARGET PRICING: May 21, 2020

UNDERWRITER: RAYMOND JAMES

*Preliminary; subject to change.

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. PRELIMINARY OFFICIAL STATEMENT DATED MAY 7, 2020 This Preliminary Official Statement is subject to completion and amendment. Upon sale of the Bonds, the Official Statement will be completed and delivered to the Underwriter. IN THE OPINION OF BOND COUNSEL, UNDER EXISTING LAW, INTEREST ON THE BONDS IS EXCLUDABLE FROM GROSS INCOME FOR FEDERAL INCOME TAX PURPOSES AND INTEREST ON BONDS IS NOT SUBJECT TO THE ALTERNATIVE MINIMUM TAX ON INDIVIDUALS. SEE “TAX MATTERS” FOR A DISCUSSION OF THE OPINION OF BOND COUNSEL.

THE DISTRICT WILL DESIGNATE THE BONDS AS “QUALIFIED TAX-EXEMPT OBLIGATIONS” FOR FINANCIAL INSTITUTIONS. SEE “TAX MATTERS—QUALIFIED TAX-EXEMPT OBLIGATIONS FOR FINANCIAL INSTITUTIONS” HEREIN.

NEW ISSUE-Book-Entry Only

$4,545,000*


UNLIMITED TAX REFUNDING BONDS SERIES 2020

Dated Date: June 1, 2020 Due: September 1, as shown below The bonds described above (the “Bonds”) will be issued in fully registered form only, in denominations of $5,000 or any integral multiple of $5,000 for any one maturity. Principal of the Bonds will be payable at stated maturity or redemption upon presentation of the Bonds at the principal payment office of the paying agent/registrar, initially The Bank of New York Mellon Trust Company, N.A., Dallas, Texas (the “Paying Agent/Registrar”). Interest accrues from June 1, 2020, and is payable September 1, 2020 (three months of interest), and each March 1 and September 1 thereafter until the earlier of maturity or redemption on the basis of a 360 day year of twelve 30 day months. The Bonds are subject to redemption prior to their maturity, as shown below. The Bonds will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York (“DTC”), which will act as securities depository for the Bonds. Beneficial owners of the Bonds will not receive physical certificates representing the Bonds, but will receive a credit balance on the books of the nominees of such beneficial owners. So long as Cede & Co. is the registered owner of the Bonds, the principal of and interest on the Bonds will be paid by the Paying Agent/Registrar directly to DTC, which will, in turn, remit such principal and interest to its participants for subsequent disbursement to the beneficial owners of the Bonds as described herein. See “THE BONDS— Book-Entry-Only System.”

MATURITY SCHEDULE

(a) Initial reoffering yield represents the initial offering yield to the public which has been established by the Underwriter (as herein defined) for offers to the

public and which may be subsequently changed by the Underwriter and is the sole responsibility of the Underwriter. The initial reoffering yields indicated above represent the lower of the yields resulting when priced at maturity or to the first call date. Accrued interest from June 1, 2020, is to be added to the price.

(b) Bonds maturing on or after September 1, 2026 are subject to redemption prior to maturity at the option of the District, in whole or, from time to time in part, on September 1, 2025, or on any date thereafter, at a price equal to the principal amount thereof plus accrued interest thereon to the date fixed for redemption. See “THE BONDS—Redemption Provisions.”

(c) CUSIP Numbers have been assigned to the Bonds by CUSIP Service Bureau and are included solely for the convenience of the purchasers of the Bonds. Neither the District nor the Underwriter shall be responsible for the selection or correctness of the CUSIP Numbers set forth herein.

The Bonds, when issued, will constitute valid and legally binding obligations of Montgomery County Municipal Utility District No. 115 (the “District”) and will be payable from the proceeds of a continuing direct annual ad valorem tax, without legal limitation as to rate or amount, levied against all taxable property located within the District. The Bonds are obligations solely of the District and are not obligations of the State of Texas, Montgomery County, the City of Conroe or any entity other than the District. The Bonds are subject to special investment risks described herein. See “INVESTMENT CONSIDERATIONS.” The Bonds are offered by the Underwriter subject to prior sale, when, as and if issued by the District and accepted by the Underwriter, subject, among other things, to the approval of the Initial Bond by the Attorney General of Texas and the approval of certain legal matters by Smith, Murdaugh, Little & Bonham, L.L.P., Houston, Texas, Bond Counsel to the District. Certain other legal matters will be passed upon, on behalf of the Underwriter, by McCall, Parkhurst & Horton L.L.P., Houston, Texas. Delivery of the Bonds through DTC is expected on or about June 24, 2020.

RAYMOND JAMES

Initial InitialDue Principal Interest Reoffering CUSIP Due Principal Interest Reoffering CUSIP

(September 1) Amount* Rate Yield (a) Number (c) (September 1) Amount* Rate Yield (a) Number (c)

2021 120,000$ % % 2030 225,000$ (b) % %2022 235,000 2031 230,000 (b)2023 310,000 2032 235,000 (b)2024 190,000 2033 240,000 (b)2025 290,000 2034 260,000 (b)2026 290,000 (b) 2035 635,000 (b)2027 295,000 (b) 2036 275,000 (b)2028 220,000 (b) 2037 270,000 (b)2029 225,000 (b)

Underlying Rating: Moody’s “____” See “MUNICIPAL BOND RATING AND MUNICIPAL BOND INSURANCE” herein.


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TABLE OF CONTENTS

MATURITY SCHEDULE ................................................................................................................................................................................. 1 USE OF INFORMATION IN OFFICIAL STATEMENT ................................................................................................................................. 2 OFFICIAL STATEMENT SUMMARY ............................................................................................................................................................ 3 SELECTED FINANCIAL INFORMATION ..................................................................................................................................................... 6 PLAN OF FINANCING ..................................................................................................................................................................................... 7 DEBT SERVICE REQUIREMENTS ................................................................................................................................................................. 9 THE BONDS .................................................................................................................................................................................................... 10 THE DISTRICT ............................................................................................................................................................................................... 15 MANAGEMENT ............................................................................................................................................................................................. 17 THE SYSTEM .................................................................................................................................................................................................. 19 BONDS AUTHORIZED BUT UNISSUED ..................................................................................................................................................... 23 FINANCIAL STATEMENT ............................................................................................................................................................................ 23 ESTIMATED OVERLAPPING DEBT AND TAX RATES STATEMENT ................................................................................................... 25 TAX DATA ...................................................................................................................................................................................................... 26 TAX PROCEDURES ....................................................................................................................................................................................... 28 WATER AND SEWER OPERATIONS .......................................................................................................................................................... 33 INVESTMENT CONSIDERATIONS ............................................................................................................................................................. 34 LEGAL MATTERS ......................................................................................................................................................................................... 40 TAX MATTERS .............................................................................................................................................................................................. 41 MUNICIPAL BOND RATING AND MUNICIPAL BOND INSURANCE .................................................................................................... 43 VERIFICATION OF MATHEMATICAL CALCULATIONS ........................................................................................................................ 44 SALE AND DISTRIBUTION OF THE BONDS ............................................................................................................................................. 44 PREPARATION OF OFFICIAL STATEMENT ............................................................................................................................................. 45 CONTINUING DISCLOSURE OF INFORMATION ..................................................................................................................................... 46 MISCELLANEOUS ......................................................................................................................................................................................... 47 FINANCIAL STATEMENT OF THE DISTRICT FOR THE FISCAL YEAR ENDED MAY 31, 2019 .................................... APPENDIX A

USE OF INFORMATION IN OFFICIAL STATEMENT For purposes of compliance with Rule 15c2-12 of the Securities and Exchange Commission, as amended and in effect on the date hereof, this document constitutes an Official Statement with respect to the Bonds that has been “deemed final” by the District as of its date except for the omission of no more than the information permitted by Rule 15c2-12. No dealer, broker, salesman or other person has been authorized to give any information or to make any representations other than those contained in this Official Statement, and, if given or made, such other information or representation must not be relied upon as having been authorized by the District. This Official Statement is not to be used in an offer to sell or the solicitation of an offer to buy in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation. All of the summaries of the statutes, orders, resolutions, contracts, audited financial statements, engineering and other related reports set forth in this Official Statement are made subject to all of the provisions of such documents. These summaries do not purport to be complete statements of such provisions, and reference is made to such documents, copies of which are available from Smith, Murdaugh, Little & Bonham, L.L.P., 2727 Allen Parkway, Suite 1100, Houston, Texas 77019, upon payment of duplication costs. This Official Statement contains, in part, estimates, assumptions and matters of opinion which are not intended as statements of fact, and no representation is made as to the correctness of such estimates, assumptions or matters of opinion, or as to the likelihood that they will be realized. Any information and expressions of opinion herein contained are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the District or other matters described herein since the date hereof. However, the District has agreed to keep this Official Statement current by amendment or sticker to reflect material changes in the affairs of the District and, to the extent that information actually comes to its attention, the other matters described in this Official Statement until delivery of the Bonds to the Underwriter and thereafter only as specified in “PREPARATION OF OFFICIAL STATEMENT—Updating the Official Statement.”

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OFFICIAL STATEMENT SUMMARY

The following information is qualified in its entirety by the more detailed information and financial statements appearing elsewhere in this Official Statement.

INFECTIOUS DISEASE OUTLOOK (COVID-19)

General... The World Health Organization has declared a pandemic following the outbreak of COVID-19, a respiratory disease caused by a new strain of coronavirus (the “Pandemic”), which is currently affecting many parts of the world, including the United States and Texas. As described herein under “INVESTMENT CONSIDERATIONS—Infectious Disease Outlook (COVID-19)”, federal, state and local governments have all taken actions to respond to the Pandemic, including disaster declarations by both the President of the United States and the Governor of Texas. Such actions are focused on limiting instances where the public can congregate or interact with each other, which affects economic growth within Texas.

Impact… Since the disaster declarations were made, the Pandemic has negatively affected travel,

commerce, and financial markets locally and globally, and is widely expected to continue negatively affecting economic growth and financial markets worldwide and within Texas.

Such adverse economic conditions, if they continue, could result in declines in the demand for

residential and commercial property in the Houston area and could reduce or negatively affect property values or homebuilding activity within the District. The Bonds are secured by an unlimited ad valorem tax, and a reduction in property values may require an increase in the ad valorem tax rate required to pay the Bonds as well as the District’s share of operations and maintenance expenses payable from ad valorem taxes.

The District continues to monitor the spread of COVID-19 and is working with local, state, and

national agencies to address the potential impact of COVID-19 upon the District. While the potential impact of COVID-19 on the District cannot be quantified at this time, the continued outbreak of COVID-19 could have an adverse effect on the District’s operations and financial condition. The financial and operating data contained herein are the latest available, but are as of dates and for periods prior to the economic impact of the Pandemic and measures instituted to slow it. Accordingly, they are not indicative of the economic impact of the Pandemic on the District’s financial condition. See “INVESTMENT CONSIDERATIONS—Infectious Disease Outlook (COVID-19).”

HURRICANE HARVEY

General... The greater Houston area, including the District, is subject to occasional severe weather events, including tropical storms and hurricanes. If the District were to sustain damage to its facilities requiring substantial repair or replacement, or if substantial damage were to occur to taxable property within the District as a result of such a weather event, the investment security of the Bonds could be adversely affected. The greater Houston area has experienced multiple storms exceeding a 0.2% probability (i.e. “500-year flood” events) since 2015, including Hurricane Harvey, which made landfall along the Texas Gulf Coast on August 26, 2017, and brought historic levels of rainfall during the successive four days.

Impact on the District... According to Municipal Operations & Consulting, Inc. (the “Operator”), the District’s water and

sewer system did not sustain any material damage and there was no interruption of water and sewer service as a result of Hurricane Harvey. Further, to the knowledge of the District, no homes within the District experienced structural flooding or other material damage as a result of Hurricane Harvey.

If a future weather event significantly damaged all or part of the improvements within the District, the assessed value of property within the District could be substantially reduced, which could result in a decrease in tax revenues and/or necessitate an increase the District’s tax rate. Further, there can be no assurance that a casualty loss to taxable property within the District will be covered by insurance (or that property owners will even carry flood or other casualty insurance), that any insurance company will fulfill its obligation to provide insurance proceeds, or that insurance

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proceeds will be used to rebuild or repair any damaged improvements within the District. Even if insurance proceeds are available and improvements are rebuilt, there could be a lengthy period in which assessed values within the District could be adversely affected. See “INVESTMENT CONSIDERATIONS—Recent Extreme Weather Events; Hurricane Harvey.”

THE FINANCING

The Issuer... Montgomery County Municipal Utility District No. 115 (the “District”), a political subdivision of the State of Texas, located in Montgomery County, Texas. See “THE DISTRICT.”

The Issue... $4,545,000* Montgomery County Municipal Utility District No. 115 Unlimited Tax Refunding

Bonds, Series 2020 (the “Bonds”), dated June 1, 2020. The Bonds mature serially on September 1 in each of the years 2021 through 2037, both inclusive, in the principal amounts set forth on the cover page of this Official Statement. Interest on the Bonds will accrue from June 1, 2020, with interest payable September 1, 2020 (three months of interest) and each March 1 and September 1 thereafter until maturity. See “THE BONDS.”

Redemption … Bonds maturing on September 1, 2026 and thereafter are subject to redemption, in whole or, from

time to time in part, at the option of the District, prior to their maturity date, on September 1, 2025 or any date thereafter. Upon redemption, the Bonds will be payable at a price of par plus accrued interest to the date of redemption. If less than all of the Bonds of a given maturity are to be redeemed, the particular Bonds to be redeemed shall be selected on behalf of the District by the Paying Agent/Registrar by random method (or while the Bonds are in Book-Entry-Only form, by DTC in accordance with its procedures). See “THE BONDS—Redemption Provisions.”

Book-Entry-Only System … The definitive Bonds will be initially registered and delivered only to Cede & Co., the nominee

of DTC, pursuant to the Book-Entry-Only System described herein. Beneficial ownership of the Bonds may be acquired in denominations of $5,000 or integral multiples thereof. No physical delivery of the Bonds will be made to the beneficial owners thereof. Principal of and interest on the Bonds will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Bonds. See “THE BONDS—Book-Entry-Only System.”

Source of Payment … The Bonds are payable from a continuing direct annual ad valorem tax, unlimited as to rate or

amount, levied against all taxable property within the District. The Bonds are obligations solely of the District and are not obligations of the State of Texas, Montgomery County, the City of Conroe or any entity other than the District. See “THE BONDS—Source of Payment.”

Use of Proceeds... Proceeds from the sale of the Bonds, together with lawfully available funds of the District, if any,

will be used to currently refund and defease $4,315,000* of the District’s Outstanding Bonds in order to achieve annual and net present value savings in the District’s annual debt service expense. The Bonds to be refunded and discharged with Bond proceeds are referred to herein as the “Refunded Bonds.” Bond proceeds will also be used to pay certain costs associated with issuance of the Bonds, including the payment of any insurance premium. See “PLAN OF FINANCING—Refunded Bonds” and “—Sources and Uses of Funds.”

Future Debt… The District has authorized the preparation and filing of a bond application report to the TCEQ

requesting approval to sell $1,390,000 principal amount of unlimited tax bonds for parks and recreational facilities. The District expects approval by the TCEQ and the sale of such bonds in the third or fourth quarter of 2020. See “THE BONDS—Issuance of Additional Debt,” “THE SYSTEM—Future Debt” and “INVESTMENT CONSIDERATIONS—Future Debt.”

Payment Record … The District has previously issued ten series of unlimited tax bonds, two issues of unlimited tax

park bonds, and one series of unlimited tax refunding bonds, $45,760,000 of which remained outstanding as of May 1, 2020 (the “Outstanding Bonds”). The District has never defaulted in the payment of principal of and interest on the Outstanding Bonds.


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Qualified Tax-Exempt Obligations … The Bonds will be designated as “Qualified Tax-Exempt Obligations” for financial institutions.

See “TAX MATTERS—Qualified Tax-Exempt Obligations for Financial Institutions.” Municipal Bond Rating and Municipal Bond Insurance... Moody’s Investors Service (“Moody’s”) has assigned an underlying rating of “____” to the

Bonds. The use of insurance and the payment of an insurance premium is at the option and expense of the District. The rating fee of Moody’s will be paid for by the District; payment of any other rating fee will be the responsibility of the Underwriter. See “MUNICIPAL BOND RATING AND MUNICIPAL BOND INSURANCE.”

Bond Counsel … Smith, Murdaugh, Little & Bonham, L.L.P., Bond Counsel, Houston, Texas. Financial Advisor … Masterson Advisors LLC, Houston, Texas. Underwriter’s Counsel … McCall, Parkhurst & Horton, L.L.P., Houston, Texas. Escrow Agent… The Bank of New York Mellon Trust Company, N.A., Dallas, Texas. Paying Agent/Registrar… The Bank of New York Mellon Trust Company, N.A., Dallas, Texas. Investment Considerations … The purchase and ownership of the Bonds are subject to special investment considerations, and

all prospective purchasers are urged to examine carefully the entire Official Statement for a discussion of investment risks, including particularly the section captioned “INVESTMENT CONSIDERATIONS.”

THE DISTRICT

Description... The District is a political subdivision of the State of Texas, created by Order of the Texas Commission on Environmental Quality (the “Commission”) on March 22, 2006, under the provisions of Article XVI, Section 59, of the Texas Constitution. The District operates in accordance with Chapters 49 and 54 of the Texas Water Code, as amended. The District is located in southeastern Montgomery County approximately 25 miles north of downtown Houston and approximately 15 miles south of the City of Conroe. The District lies approximately three miles east of Interstate Highway 45 (“IH 45”) north of Rayford Road along Northridge Forest Drive and Birnham Woods Drive. The District contains approximately 686 acres and is wholly within the extraterritorial jurisdiction of the City of Conroe and the boundaries of the Conroe Independent School District. See “THE DISTRICT.”

Status of Development … The District has been developed as The Falls at Imperial Oaks, a single family residential

community. Development in the District currently includes 1,527 single-family residential lots on approximately 559 acres. As of March 1, 2020, the District consisted of 1,518 completed homes (1,513 occupied), 8 homes under construction and 1 vacant developed lot. Homes in the District range in price from approximately $350,000 to $1,000,000.

The remainder of the District is comprised of approximately 20 acres owned by Conroe

Independent School District where an elementary school has been built (tax-exempt), approximately 8 acres of park land upon which a recreation center is located, and approximately 99 acres of amenity lakes, easements, detention and drainage facilities, street right-of-way, a water plant site, floodway and flood plain. There is no additional developable acres in the District that have not been provided with water distribution, wastewater collection and storm drainage facilities. See “THE DISTRICT.”

The developer of the land in the District was Imperial Oaks Development Corp., a Texas

Corporation (the “Developer”). Homebuilders... Homebuilders currently building in the District are David Weekley Homes, Partners in Building

and Village Builders. See “THE DISTRICT—Status of Development.”

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SELECTED FINANCIAL INFORMATION 2019 Certified Taxable Assessed Valuation ............................................................................................ $470,343,357 (a) 2020 Preliminary Taxable Assessed Valuation ....................................................................................... $498,659,890 (b) Gross Debt Outstanding (after the issuance of the Bonds) ...................................................................... $45,990,000* (c) Estimated Overlapping Debt .................................................................................................................... 17,501,254 (d) Gross Debt and Estimated Overlapping Debt .......................................................................................... $63,491,254* Ratios of Gross Debt to: 2019 Certified Taxable Assessed Valuation .................................................................................... 9.78%* 2020 Preliminary Taxable Assessed Valuation ................................................................................ 9.22%* Ratios of Gross Debt and Estimated Overlapping Debt to: 2019 Certified Taxable Assessed Valuation ..................................................................................... 13.50%* 2020 Preliminary Taxable Assessed Valuation ................................................................................ 12.73%* 2019 Debt Service Tax Rate .................................................................................................................... $0.88 2019 Maintenance Tax Rate .................................................................................................................... 0.42 2019 Total Tax Rate ......................................................................................................................... $1.30/$100 A.V. Average Annual Debt Service Requirements (2021-2041) of the Bonds (“Average Requirement”) ................................................................................... $2,861,314* (e) Maximum Annual Debt Service Requirement (2021) of the Bonds (“Maximum Requirement”) ................................................................................. $3,649,701* (e) Tax Rates Required to Pay Average Requirement (2021-2041) at a 95% Collection Rate Based upon 2019 Certified Taxable Assessed Valuation ................................................................ $0.65*/$100 A.V. Based upon 2020 Preliminary Taxable Assessed Valuation ............................................................ $0.61*/$100 A.V. Tax Rates Required to Pay Maximum Requirement (2021) at a 95% Collection Rate Based upon 2019 Certified Taxable Assessed Valuation ................................................................ $0.82*/$100 A.V. Based upon 2020 Preliminary Taxable Assessed Valuation ............................................................ $0.78*/$100 A.V. Status of home construction as of March 1, 2020: Single-family residential – completed and occupied ........................................................................ 1,513 Single-family residential – completed and unoccupied .................................................................... 5 Single-family residential – under construction ................................................................................. 8 Total .......................................................................................................................................... 1,526

Estimated 2020 Population – 5,296 (f) (a) As certified by the Montgomery Central Appraisal District (the “Appraisal District”). See “TAX PROCEDURES.” (b) Provided by the Appraisal District as a preliminary indication of the 2020 taxable value (as of January 1, 2020). Such amount is subject

to review and downward adjustment prior to certification. No tax will be levied on such amount until it is certified in the fall of 2020. See “TAX PROCEDURES.”

(c) After the refunding of the Refunded Bonds and the issuance of the Bonds. See “FINANCIAL STATEMENT—Outstanding Bonds.” (d) See “ESTIMATED OVERLAPPING DEBT AND TAX RATES STATEMENT.” (e) See “DEBT SERVICE REQUIREMENTS.” (f) Based upon 3.5 persons per occupied home.


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PRELIMINARY OFFICIAL STATEMENT

$4,545,000*



SERIES 2020

This Official Statement provides certain information in connection with the issuance by Montgomery County Municipal Utility District No. 115 (the “District”) of its $4,545,000* Unlimited Tax Refunding Bonds, Series 2020 (the “Bonds”). The Bonds are issued pursuant to Article XVI, Section 59 of the Texas Constitution, Chapters 49 and 54 of the Texas Water Code, as amended, Chapter 1207 Texas Government Code, as amended, an order authorizing the issuance of the Bonds (the “Bond Order”) adopted by the Board of Directors of the District (the “Board”), and an election held within the District. This Official Statement includes descriptions, among others, of the Bonds and the Bond Order, and certain other information about the District, Imperial Oaks Development Corp. (the “Developer”) and development activity within the District. All descriptions of documents contained herein are only summaries and are qualified in their entirety by reference to each document. Copies of such documents may be obtained from the District upon payment of the costs of duplication therefor from Smith, Murdaugh, Little & Bonham, L.L.P., Bond Counsel, 2727 Allen Parkway, Suite 1100, Houston, Texas 77019.

PLAN OF FINANCING Purpose

The District currently has $45,760,000 principal amount of its bonds outstanding (the “Outstanding Bonds”). The proceeds of the Bonds, together with legally available funds of the District, if any, will be used to currently refund and defease portions of the Unlimited Tax Bonds, Series 2010, Unlimited Tax Bonds, Series 2011, Unlimited Tax Bonds, Series 2012 and the Unlimited Tax Bonds, Series 2013, totaling $4,315,000* principal amount ( the “Refunded Bonds”) in order to achieve a net savings in the District’s debt service expense. The proceeds will also be used to pay the costs of issuance of the Bonds. See “Sources and Uses of Funds.” A total of $41,445,000* principal amount of the District’s Outstanding Bonds will remain outstanding after the issuance of the Bonds (the “Remaining Outstanding Bonds”). See “—Sources and Uses of Funds” herein and “FINANCIAL STATEMENT—Outstanding Bonds.”


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Refunded Bonds

The principal amounts and maturity dates of the Refunded Bonds are set forth below:

(a) Represents sinking fund payments on term bonds. Escrow Agreement and Defeasance of Refunded Bonds

The Refunded Bonds and the interest due thereon, are to be paid on each principal or interest payment date and on the redemption date from funds to be deposited with The Bank of New York Mellon Trust Company, N.A., as escrow agent (the “Escrow Agent”). The Bond Order provides that the District and the Escrow Agent will enter into an escrow agreement (the “Escrow Agreement”) to provide for the discharge and defeasance of the Refunded Bonds. The Bond Order further provides that from the proceeds of the sale of the Bonds and lawfully available funds of the District, if any, the District will deposit with the Escrow Agent the amount necessary to accomplish the discharge and final payment of the Refunded Bonds. Such funds will be held by the Escrow Agent in a segregated escrow account (the “Escrow Fund”) and used to purchase United States Treasury Obligations or other investments authorized by Chapter 1207, Texas Government Code (the “Escrowed Securities”). At the time of delivery of the Bonds, Public Finance Partners LLC will verify to the District, the Escrow Agent and the Underwriter that the cash and Escrowed Securities are sufficient in principal amount and are scheduled to mature at such times and to yield interest in such amounts, together with uninvested funds, if any, in the Escrow Fund, to pay, when due, the principal of and interest on the Refunded Bonds. See “VERIFICATION OF MATHEMATICAL CALCULATIONS.” Under the Escrow Agreement, the Escrow Fund is irrevocably pledged to the payment of principal of and interest on the Refunded Bonds and will not be available to pay principal of and interest on the Bonds. By the deposit of the Escrowed Securities and cash, if any, with the Escrow Agent pursuant to the Escrow Agreement, and the making of irrevocable arrangements for the giving of notice of redemption of the Refunded Bonds, the terms of the prior orders of the District securing payment of the Refunded Bonds shall have been satisfied and such Refunded Bonds will no longer be considered outstanding except for the payment out of amounts so deposited, and the amounts so deposited and invested in the Escrow Fund will constitute firm banking arrangements under Texas law for the discharge and final payment of the Refunded Bonds.

Maturity Date Series Series Series SeriesSeptember 1 2010* 2011* 2012* 2013*

2021 -$ 75,000$ (a) -$ -$ 2022 115,000 75,000 (a) - - 2023 120,000 75,000 (a) 75,000 - 2024 - 75,000 (a) 80,000 - 2025 - 75,000 (a) 85,000 100,000 2026 - 75,000 (a) 90,000 100,000 2027 - 75,000 (a) 95,000 100,000 2028 - - 100,000 (a) 100,000 2029 - - 110,000 (a) 100,000 2030 - - 115,000 (a) 100,000 2031 - - 120,000 (a) 100,000 2032 - - 130,000 (a) 100,000 (a)2033 - - 140,000 (a) 100,000 (a)2034 - - 145,000 (a) 120,000 (a)2035 - - 350,000 (a) 300,000 (a)2036 - - - 300,000 (a)2037 - - - 300,000 (a)

Total 235,000$ 525,000$ 1,635,000$ 1,920,000$

Redemption Date: July 1, 2020 July 1, 2020 September 1, 2020 September 1, 2020


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Sources and Uses of Funds The proceeds derived from the sale of the Bonds, exclusive of accrued interest, and lawfully available funds of the District, if any, will be applied as follows: Sources of Funds: Principal Amount of the Bonds ............................................................. $_______ Plus/Less: Net Premium/Original Discount on the Bonds .................... _______ Plus: Transfer from Debt Service Fund ................................................ _______ Total Sources of Funds ........................................................... $_______ Uses of Funds: Deposit to Escrow Fund $_______ Issuance Expenses and Underwriters’ Discount (a) .............................. _______ Total Uses of Funds ................................................................ $_______ (a) Includes municipal bond insurance premium.

DEBT SERVICE REQUIREMENTS The following table sets forth the actual debt service requirements for the Outstanding Bonds, less the debt service on the Refunded Bonds ($4,315,000* principal amount), plus the estimated debt service on the Bonds.

(a) Excludes the March 1, 2020 debt service payment in the amount of $2,310,341. Maximum Annual Debt Service Requirement (2021)............................................................................................ $3,649,701* Average Annual Debt Service Requirement (2021-2041)...................................................................................... $2,861,314*

OutstandingBonds Less: Debt Total

Debt Service Service on the Debt ServiceYear Requirements Refunded Bonds* Principal Interest Total Requirements*

2020 2,240,791$ (a) 84,196$ 22,725$ 22,725$ 2,179,319$ 2021 3,682,194 243,393 120,000$ 90,900 210,900 3,649,701 2022 3,666,811 355,318 235,000 88,500 323,500 3,634,994 2023 3,655,028 427,240 310,000 83,800 393,800 3,621,588 2024 3,646,678 301,065 190,000 77,600 267,600 3,613,213 2025 2,904,571 399,965 290,000 73,800 363,800 2,868,406 2026 2,897,336 395,130 290,000 68,000 358,000 2,860,206 2027 2,892,169 390,025 295,000 62,200 357,200 2,859,344 2028 2,882,459 309,390 220,000 56,300 276,300 2,849,369 2029 2,885,784 312,090 225,000 51,900 276,900 2,850,594 2030 2,880,729 309,410 225,000 47,400 272,400 2,843,719 2031 2,882,469 306,175 230,000 42,900 272,900 2,849,194 2032 2,876,001 307,745 235,000 38,300 273,300 2,841,556 2033 2,861,244 308,800 240,000 33,600 273,600 2,826,044 2034 2,862,294 324,325 260,000 28,800 288,800 2,826,769 2035 2,883,988 698,875 635,000 23,600 658,600 2,843,713 2036 2,877,500 323,250 275,000 10,900 285,900 2,840,150 2037 2,871,906 311,625 270,000 5,400 275,400 2,835,681 2038 2,727,600 - - - - 2,727,600 2039 2,331,875 - - - - 2,331,875 2040 1,784,250 - - - - 1,784,250 2041 1,729,625 - - - - 1,729,625

Total 62,923,299$ 6,108,016$ 4,545,000$ 906,625$ 5,451,625$ 62,266,908$

Plus: Debt Service on the Bonds*


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THE BONDS

Description

The Bonds are dated June 1, 2020, with interest payable each September 1 and March 1 (each an “Interest Payment Date”), beginning September 1, 2020 (three months of interest), and mature on the dates and in the principal amounts and pay interest at the rates shown on the cover page hereof. The definitive Bonds will be issued only in fully registered form in any integral multiple of $5,000 for any one maturity and will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company (“DTC”) pursuant to the Book-Entry-Only System described herein. No physical delivery of the Bonds will be made to the owners thereof. Initially, principal of and interest on the Bonds will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Bonds. See “Book-Entry-Only System” herein. In the event the Book-Entry-Only System is discontinued, interest on the Bonds shall be payable by check on or before each interest payment date, mailed by the Paying Agent/Registrar to the registered owners (“Registered Owners”) as shown on the bond register (the “Register”) kept by the Paying Agent/Registrar at the close of business on the 15th calendar day of the month immediately preceding each interest payment date to the address of such Registered Owner as shown on the Register, or by such other customary banking arrangements as may be agreed upon by the Paying Agent/Registrar and a Registered Owner at the risk and expense of such Registered Owner. Book-Entry-Only System The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the District believes to be reliable, but the District takes no responsibility for the accuracy or completeness thereof. The District cannot and does not give any assurances that DTC, DTC Direct Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest, principal or premium, if any, with respect to the Bonds, (b) Bonds representing ownership interest in or other confirmation or ownership interest in the Bonds, or (c) prepayment or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the Bonds, or that they will do so on a timely basis or that DTC, DTC Direct Participants or DTC Indirect Participants will act in the manner described in this Official Statement. The current “Rules” applicable to DTC are on file with the Securities and Exchange Commission and the current “Procedure” of DTC to be followed in dealing with DTC Direct Participants are on file with DTC. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Bond certificate will be issued for each maturity of the Bonds, in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world’s largest depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.6 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated 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 corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a rating of “AA+” by S&P Global Ratings. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

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Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the District (or the Trustee on behalf thereof) as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the District or Paying Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Paying Agent, or the District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, premium, if any, interest payments and redemption proceeds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the District or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the District or the Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered. The District may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the District believes to be reliable, but the District takes no responsibility for the accuracy thereof. Use of Certain Terms in Other Sections of this Official Statement

In reading this Official Statement it should be understood that while the Bonds are in the Book-Entry-Only System, references in other sections of this Official Statement to registered owners should be read to include the person for which the Participant acquires an interest in the bonds, but (i) all rights of ownership must be exercised through DTC and the Book-Entry-Only System, and, (ii) except as described above, notices that are to be given to registered owners under the Order will be given only to DTC.

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Registration, Transfer and Exchange

So long as any Bonds remain outstanding, the Paying Agent/Registrar shall keep the Register at its principal payment office and, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for the registration and transfer of Bonds in accordance with the Bond Order. While the Bonds are in the Book-Entry-Only system, Bonds will be registered only in the name of Cede & Co and held by DTC. See “Book-Entry-Only System.”

Paying Agent/Registrar

The initial Paying Agent/Registrar is The Bank of New York Mellon Trust Company, N.A., in Dallas, Texas. In the Bond Order the District retains the right to replace the Paying Agent/Registrar. The District covenants to maintain and provide a Paying Agent/Registrar at all times until the Bonds are duly paid, and any successor Paying Agent/Registrar shall be a commercial bank or trust company organized under the laws of the State of Texas or other entity duly qualified and legally authorized to serve as and perform the duties and services of Paying Agent/Registrar for the Bonds. Upon any change in the Paying Agent/Registrar for the Bonds, the District agrees to promptly cause a written notice thereof to be sent to each Registered Owner of the Bonds by United States mail, first class, postage prepaid, which notice shall also give the address of the new Paying Agent/Registrar. Source of Payment

The Bonds, when issued, will constitute valid and binding obligations of the District and are payable as to principal and interest from and are secured by the proceeds of a continuing direct annual ad valorem tax, without legal limitation as to rate or amount, levied against all taxable property located within the District. Tax proceeds, after deduction for collection costs, will be placed in the Debt Service Fund (as defined in the Bond Order) and used solely to pay principal of and interest on the Bonds, the Remaining Outstanding Bonds, and on any additional bonds issued by the District payable from taxes which may be levied. See “TAX DATA.”

The Bonds are obligations solely of the District and are not obligations of Montgomery County, Texas, the City of Conroe, the State of Texas or any political subdivision or entity other than the District.

Funds

In the Bond Order, the Debt Service Fund is confirmed. The Debt Service Fund is to be kept separate from all other funds of the District and used for payment of debt service on the Remaining Outstanding Bonds, the Bonds and any of the District’s duly authorized additional bonds, together with interest thereon, as such becomes due. Amounts on deposit in the Debt Service Fund may also be used to pay the fees and expenses of the Paying Agent/Registrar, and to defray the expenses of assessing and collecting taxes levied for payment of interest on and principal of the Bonds and any additional bonds. Accrued interest on the Bonds will be deposited into the Debt Service Fund upon receipt. Any monies remaining after the deposit into the Escrow Fund and payment of issuance costs will be deposited into the Debt Service Fund. The Bond Order also confirms the previous establishment of the District’s General Fund. The District deposits, as collected, all revenues derived from operation of the District’s water and wastewater system and from maintenance taxes into the General Fund. From the General Fund, the District pays all administration, operation, and maintenance expenses of the water and wastewater system and the District’s storm drainage system, recreational facilities and street lights in the District. Any funds remaining in the General Fund after payment of maintenance and operating expenses may be used by the District for any lawful purposes. Redemption Provisions

The District reserves the right, at its option, to redeem the Bonds maturing on or after September 1, 2026, prior to their scheduled maturities, in whole or from time to time in part, in integral multiples of $5,000 on September 1, 2025, or any date thereafter, at a price of par value plus accrued interest on the principal amounts called for redemption to the date fixed for redemption. If less than all of the Bonds are redeemed at any time, the maturities of the Bonds to be redeemed will be selected by the District. If less than all the Bonds of a certain maturity are to be redeemed, the particular Bonds to be redeemed shall be selected by the Paying Agent/Registrar by lot or other random method (or by DTC in accordance with its procedures while the Bonds are in book-entry-only form). Notice of any redemption identifying the Bonds to be redeemed in whole or in part shall be given by the Paying Agent/Registrar at least thirty (30) days prior to the date fixed for redemption by sending written notice by first class mail to the Registered Owner of each Bond to be redeemed in whole or in part at the address shown on the Register. Such notices shall state the redemption date, the redemption price, the place at which the Bonds are to be surrendered for payment and, if less than all the Bonds outstanding within any one maturity are to be redeemed, the numbers of the Bonds or the portions thereof to be redeemed. Any notice so given shall be conclusively presumed to have been duly given, whether or not the Registered Owner receives such notice. By the date

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fixed for redemption, due provision shall be made with the Paying Agent/Registrar for payment of the redemption price of the Bonds or portions thereof to be redeemed, plus accrued interest to the date fixed for redemption. When Bonds have been called for redemption in whole or in part and due provision has been made to redeem the same as herein provided, the Bonds or portions thereof so redeemed shall no longer be regarded as outstanding except for the purpose of receiving payment solely from the funds so provided for redemption, and the rights of the registered owners to collect interest which would otherwise accrue after the redemption date on any Bond or portion thereof called for redemption shall terminate on the date fixed for redemption. Authority for Issuance At an election held within the District on November 7, 2006, the voters of the District authorized the issuance of a total of $120,000,000 principal amount of unlimited tax bonds for purposes of acquiring and constructing the District's water, sewer and drainage system and for refunding purposes. After issuance of the Bonds, the District will have $71,010,000* in principal amount of unlimited tax bonds authorized but unissued for acquiring and constructing the District’s water, sewer, and drainage facilities and for refunding purposes. See “Issuance of Additional Debt” below. The Bonds are issued by the District pursuant to the terms and conditions of the above referenced election; the Bond Order; Article XVI, Section 59 of the Texas Constitution; Chapters 49 and 54 of the Texas Water Code, as amended; and Chapter 1207 of the Texas Government Code, as amended. Before the Bonds can be issued, the Attorney General of Texas must pass upon the legality of certain related matters. The Attorney General of Texas does not guarantee or pass upon the safety of the Bonds as an investment or upon the adequacy of the information contained in this Official Statement Issuance of Additional Debt The District's voters have authorized the issuance of $120,000,000 in principal amount of unlimited tax bonds for purposes of acquiring and constructing the water, sewer and drainage facilities to serve land within the District and for refunding such bonds. The District could authorize additional amounts. After the issuance of the Bonds, the District will have $71,010,000* principal amount of unlimited tax bonds authorized but unissued for constructing water, sewer and drainage facilities and for refunding such bonds. The Bond Order imposes no limitation on the amount of additional parity bonds which may be subsequently authorized for issuance by the District's voters or the amount ultimately issued by the District. The District is authorized by statute to develop parks and recreational facilities, including the issuing of bonds payable from taxes for such purpose. On November 6, 2007, the voters authorized the issuance of a total of $10,672,000 in principal amount of unlimited tax bonds for the purpose of developing parks and recreational facilities and for refunding such bonds. Before the District issues recreational facilities bonds payable from taxes, the following actions are required: (a) approval of the park projects and bonds by the Commission; and (b) approval of the bonds by the Attorney General of Texas. Additionally, recreational facilities bonds outstanding principal amount may not exceed an amount equal to one percent of the value of the taxable property in the District. The District currently has $5,147,000 in principal amount of unlimited tax bonds authorized but unissued for developing parks and recreational facilities and for refunding such bonds. The District expects to continue to issue unlimited tax bonds for developing parks and recreational facilities to provide funds with which to reimburse the Developer for recreational facilities constructed for the District. See “THE SYSTEM—Future Debt.” The District has authorized the preparation and filing of a bond application report to the TCEQ requesting approval to sell $1,390,000 principal amount of unlimited tax bonds for parks and recreational facilities. The District expects approval by the TCEQ and the sale of such bonds in the third or fourth quarter of 2020. See “THE SYSTEM—Future Debt” and “INVESTMENT CONSIDERATIONS—Future Debt.” Pursuant to Chapter 54 of the Texas Water Code, a municipal utility district may petition the Commission for the power to issue bonds supported by property taxes to finance roads. Before the District could issue such bonds, the District would be required to receive a grant of such power from the Commission, authorization from the District's voters to issue such bonds, and approval of the bonds by the Attorney General of Texas. The District has not considered filing an application to the Commission for “road powers” nor calling such an election at this time. Issuance of additional bonds or other subsequently authorized bonds could affect the investment quality or security of the Bonds. See “INVESTMENT CONSIDERATIONS—Future Debt.” Defeasance The District may defease the Bonds pursuant to provisions of the Bond Order and discharge its obligations to the Registered Owners of any or all of the Bonds to pay principal of and interest on the Bonds in any manner permitted by law. Under current Texas law, such discharge may be accomplished as follows: (1) by paying or causing to pay principal and interest due on the Bonds (whether at maturity, redemption or otherwise) in accordance with the terms of the Bonds; (2) by depositing with the Comptroller of Public Accounts of the State of Texas a sum of money equal to the principal of, premium, if any and all interest to accrue on the Bonds to


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maturity or redemption; or (3) by depositing with any place of payment (paying agent) of the Bonds or other obligations of the District payable with revenues from ad valorem taxes or both, or with a commercial bank or trust company designated in the proceedings authorizing the discharge moneys or investments which, together with interest earned on or profits to be realized from such investments, will be sufficient to pay principal, interest or redemption price to maturity or to the date fixed for redemption of the Bonds provided that such deposits may be invested and reinvested only in (a) direct obligations of the United States of America, (b) non-callable obligations of an agency or instrumentality of the United States, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date the governing body of the District adopts or approves the proceedings authorizing the issuance of refunding bonds, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent, and (c) non-callable obligations of a state or an agency or a county, municipality or other political subdivision of a state that have been refunded and that on the date the governing body of the District adopts or approves the proceedings authorizing the issuance of refunding bonds, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent, and which mature and /or bear interest payable at such times and in such amounts as will be sufficient to provide for the scheduled payment and /or redemption of the Bonds. Upon such payment or deposit, the Bonds shall no longer be regarded as outstanding and unpaid. However, if the maturity date on the Bonds shall not have then arrived, provision shall be made by the District for payment to the Registered Owners of the Bonds at the date of maturity or at a date fixed for redemption in full amount to which the Registered Owners would be entitled by way of principal, interest and redemption price to the date of such maturity or redemption as provided in the Bond Order, and further provided written notice thereof shall have been given as provided in the Bond Order. Annexation All of the District is located in the extraterritorial jurisdiction (“ETJ”) of the City of Conroe. The District could be annexed by such city without the consent of the District or its residents. If annexation of the District by such city did occur, the District would be abolished within ninety (90) days after annexation. When the District is abolished, such city would be required to assume the assets, functions, and obligations of the District (including the Bonds). Annexation of territory by the City of Conroe is a policy-making matter within the discretion of the Mayor and City Council of the City of Conroe, and therefore, the District makes no representation that the City of Conroe will ever annex the District and assume its debt, nor does the District make any representation concerning the ability of the City of Conroe to pay debt service on the District’s bonds if annexation were to occur. See “THE DISTRICT—Conroe Extraterritorial Jurisdiction.” Consolidation A district (such as the District) has the legal authority to consolidate with other districts and, in connection therewith, to provide for the consolidation of its assets, such as cash and the utility system, with the assets of districts with which it is consolidating as well as its liabilities (which would include the Bonds). No representation is made concerning the likelihood of consolidation. Legal Investment and Eligibility to Secure Public Funds in Texas The following is quoted from Section 49.186 of the Texas Water Code, and is applicable to the District:

“(a) All bonds, notes, and other obligations issued by a district shall be legal and authorized investments for all banks, trust companies, building and loan associations, savings and loan associations, insurance companies of all kinds and types, fiduciaries, and trustees, and for all interest and sinking funds and other public funds of the state, and all agencies, subdivisions, and instrumentalities of the state, including all counties, cities, towns, villages, school districts, and all other kinds and types of districts, public agencies, and bodies politic.”

“(b) A district's bonds, notes, and other obligations are eligible and lawful security for all deposits of public funds of the state, and all agencies, subdivisions, and instrumentalities of the state, including all counties, cities, towns, villages, school districts, and all other kinds and types of districts, public agencies, and bodies politic, to the extent of the market value of the bonds, notes, and other obligations when accompanied by any unmatured interest coupons attached to them.”

The Public Funds Collateral Act (Chapter 2257, Texas Government Code) also provides that bonds of the District (including the Bonds) are eligible as collateral for public funds. No representation is made that the Bonds will be suitable for or acceptable to financial or public entities for investment or collateral purposes. No representation is made concerning other laws, rules, regulations or investment criteria which apply to or which might be utilized by any of such persons or entities to limit the acceptability or suitability of the Bonds for any of the foregoing purposes. Prospective purchasers are urged to carefully evaluate the investment quality of the Bonds as to the suitability or acceptability of the Bonds for investment or collateral purposes. Amendments

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The District has reserved the right to amend the Bond Order without the consent of the Registered Owners as may be required (a) by the provisions of the Bond Order, (b) for the purpose of curing any ambiguity, inconsistency, or formal defect or omission in the Bond Order, or (c) in connection with any other change not to the prejudice of the Registered Owners, but the District may not otherwise amend the terms of the Bonds or of the Bond Order without the consent of the Registered Owners. Registered Owners' Remedies If the District defaults in the payment of principal, interest, or redemption price on the Bonds when due, or if it fails to make payments into any fund or funds created in the Bond Order, or defaults in the observance or performance of any other covenants, conditions, or obligations set forth in the Bond Order, the Registered Owners have the statutory right of a writ of mandamus issued by a court of competent jurisdiction requiring the District and its officials to observe and perform the covenants, obligations, or conditions prescribed in the Bond Order. Except for mandamus, the Bond Order does not specifically provide for remedies to protect and enforce the interests of the Registered Owners. There is no acceleration of maturity of the Bonds in the event of default and, consequently, the remedy of mandamus may have to be relied upon from year to year. Further, there is no trust indenture or trustee, and all legal actions to enforce such remedies would have to be undertaken at the initiative of, and be financed by, the Registered Owners. Statutory language authorizing local governments such as the District to sue and be sued does not waive the local government’s sovereign immunity from suits for money damages, so that in the absence of other waivers of such immunity by the Texas Legislature, a default by the District in its covenants in the Bond Order may not be reduced to a judgment for money damages. If such a judgment against the District were obtained, it could not be enforced by direct levy and execution against the District's property. Further, the Registered Owners cannot themselves foreclose on property within the District or sell property within the District to enforce the tax lien on taxable property to pay the principal of and interest on the Bonds. The enforceability of the rights and remedies of the Registered Owners may further be limited by a State of Texas statute reasonably required to attain an important public purpose or by laws relating to bankruptcy, reorganization or other similar laws of general application affecting the rights of creditors of political subdivisions, such as the District. See “INVESTMENT CONSIDERATIONS—Registered Owners' Remedies and Bankruptcy Limitations.”

THE DISTRICT General Montgomery County Municipal Utility District No. 115 (the “District”) is a municipal utility district created by Order of the Texas Commission on Environmental Quality on March 22, 2006, under the provisions of XVI, Section 59, of the Texas Constitution. The District operates under provisions of Chapters 49 and 54 of the Texas Water Code, as amended, and other general statutes applicable to municipal utility districts. The District is subject to the continuing supervision of the Commission. The District is located wholly within the boundaries of the Conroe Independent School District and within the exclusive extraterritorial jurisdiction of the City of Conroe. The District is empowered, among other things, to purchase, construct, operate and maintain all works, improvements, facilities and plants necessary for the supply and distribution of water, the collection, transportation, and treatment of wastewater and the control and diversion of storm water. The District may issue bonds and other forms of indebtedness to purchase or construct such facilities. The District is also empowered to provide for the collection and disposal of solid waste, to provide street lighting and to establish, operate, and maintain firefighting facilities and/or parks and recreational facilities, independently or with one or more conservation and reclamation districts. Additionally, the District may, subject to certain limitations, develop and finance roads. Conroe Extraterritorial Jurisdiction When the District was created on March 22, 2006, the District was not located within any city’s extraterritorial jurisdiction (“ETJ”). As a result of population growth and pursuant to an ordinance adopted by the City of Conroe in January 2008, Conroe exercised its rights pursuant to state law and expanded its ETJ into unincorporated areas of Montgomery County, including the entire area of the District. The District is now located within the City of Conroe’s ETJ. The City of Conroe has been granted authority by the State of Texas to regulate certain activities within its specified ETJ; however, the City of Conroe has opted not to require any kind of engineering plan or bonding review within the ETJ that is outside of the City Limits and the Conroe Planning Area. The City has also opted not to review plats for areas outside the Conroe Planning Area. Development within the City of Conroe’s ETJ is subject to requirements that may be imposed by Montgomery County, the Commission or other regulatory agencies. The District is not located within the Conroe City Limits or Planning Area, and in reliance on the City of Conroe policy, the District has not submitted plans for construction of facilities, subdivision plats or proceedings for issuance of bonds, including the Bonds, to the City of Conroe.

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Description and Location The District contains approximately 686 acres of land and is located in the southeastern portion of Montgomery County approximately 25 miles north of downtown Houston and approximately 15 miles south of the City of Conroe. The District lies approximately three miles east of Interstate Highway 45 (“IH 45”) north of Rayford Road along Northridge Forest Drive and Birnham Woods Drive and is bounded on the west by Rayford Road Municipal Utility District, on the north by Montgomery County Municipal Utility District No. 99 and on the south by Montgomery County Municipal Utility District No. 88 and Montgomery County Municipal Utility District No. 127.

Land Use The District includes approximately 559 developed acres of single-family residential development (1,527 lots), approximately 20 acres owned by Conroe Independent School District where an elementary school has been constructed, approximately 8 acres of park land upon which a recreation center is located, and approximately 99 acres of amenity lakes, easements, detention and drainage facilities, street right-of-way, a water plant site, floodway and flood plain. There are no developable acres in the District that have not been provided with water distribution, wastewater collection and storm drainage facilities. The table below represents a detailed breakdown of the current acreage and development in the District. Approximate Single-Family Residential Acres Lots

Imperial Oaks Forest:

Section 15 .............................................................................................. 35 125 Section 16 .............................................................................................. 32 118 Section 17 .............................................................................................. 10 48 Section 17A ............................................................................................. 9 43 Section 18 .............................................................................................. 23 75

Imperial Oaks Forest: Section 3 ................................................................................................ 33 93 Section 4 ................................................................................................ 28 59 Section 5 ................................................................................................ 20 46

Falls at Imperial Oaks: Section 1 ................................................................................................ 17 33 Section 2 ................................................................................................ 22 33 Section 3 ................................................................................................ 18 66 Section 4 ................................................................................................ 19 55 Section 5 ................................................................................................ 38 60 Section 6 ................................................................................................ 12 59 Section 7 ................................................................................................ 26 49 Section 8 ................................................................................................ 14 13 Section 9 ................................................................................................ 15 55 Section 10 .............................................................................................. 27 90 Section 11 .............................................................................................. 19 42 Section 12 .............................................................................................. 16 61 Section 14 .............................................................................................. 18 38 Section 15 .............................................................................................. 13 47 Section 18 .............................................................................................. 15 60 Section 19 ............................................................................................. 37 76 Section 20 ............................................................................................. 34 70 Section 26 ............................................................................................. 9 13

Subtotal ............................................................................................ 559 1,527 School Site (a) ........................................................................................... 20 --- Recreation Center (b) .................................................................................. 8 --- Future Development .................................................................................... 0 --- Non-Developable (c) ............................................................................... 99 ---

Totals................................................................................................ 686 1,527 (a) See “Status of Development—School Site” below. (b) See “Status of Development—Recreation Center” below. (c) Includes amenity lakes, easements, detention and drainage facilities, street right-of-way, a water plant site, and

approximately 34 acres either in the 100-year flood plain or the Woodson’s Gully floodway.

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Status of Development Single-Family Residential: As of March 1, 2020, the District consisted of 1,518 completed homes (1,513 occupied), 8 homes under construction, and 1 vacant developed lot. Homes in the District range in price from approximately $350,000 to $1,000,000. As of March 1, 2020, the estimated population in the District based upon 3.5 persons per occupied single-family residence was 5,296. Homebuilders currently building in the District are David Weekley Homes, Partners in Building and Village Builders. School Site: Conroe Independent School District has constructed the Birnham Woods Elementary School located on approximately 20 acres within the District. The school is not subject to ad valorem taxation. Recreation Center: The District contains a 4,200 square foot recreation center known as The Lake Club with clubhouse, fitness center, meeting facilities, a competition-sized swimming pool, a children’s pool with splash pad, a playground, lighted tennis courts and picnic areas. These facilities are owned and operated by The Falls at Imperial Oaks Homeowners Association and are for the exclusive use of residents of the subdivision who pay annual membership fees. Parks and Recreational Facilities: The District also contains parks and recreational facilities that were constructed by the Developer for the District pursuant to a Park Plan adopted and approved by the District on August 16, 2007. Facilities constructed for the District include walks, greenbelts, landscaping, lighting, waterfalls, lakes, walking/jogging trails, a sand volleyball court, picnic areas and a dog park. See “THE SYSTEM—Future Debt.” Community Facilities: A Kroger-anchored strip shopping center is located on Rayford Road approximately one mile south of the District. Several retail centers located at the intersection of IH 45 and Rayford Road and along IH 45 between Rayford Road and The Woodlands Parkway also provide residents of the District with shopping and banking facilities, and The Woodlands Mall, a regional shopping center, is located approximately five miles from the District. Lake Holcomb Recreation Area, a 120 acre recreational area with many amenities, including a 100-acre lake with a 2.5 mile nature trail around the lake, a fishing dock, pedestrian bridges and an additional recreational center “The Retreat” with a resort style pool, splash pad, playground and outdoor clubhouse, is located approximately one mile southeast of the District. Imperial Oaks Park, a 40-acre recreational facility with many amenities, is located one mile west of the District. Medical care for District residents is available from Memorial Hermann Woodlands Hospital, approximately seven miles from the District. Developer: The land within the District was developed by was Imperial Oaks Development Corp., a Texas Corporation (the “Developer”).

MANAGEMENT Board of Directors The District is governed by the Board of Directors, consisting of five (5) directors, which has control over and management supervision of all affairs of the District. Directors are elected to four-year staggered terms, and elections are held in May in even numbered years only. One of the Directors resides within the District and four of the Directors each own a small parcel of land within the District, subject to a deed of trust in favor of the original developer of the District. The Directors and Officers of the District are listed below:

Name Title Term Expires

Hal B. Sharp President May 2024

Catherine Athearn Vice President May 2024

Cynthia A. Giles Secretary May 2024

Leona G. Ohrt Director May 2022

Ben Mitchell Director May 2022

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While the District does not employ any employees, it has contracted for certain services as follows: Tax Appraisal Land and improvements within the District are appraised for ad valorem taxation purposes by the Montgomery Central Appraisal District. Tax Assessor/Collector The District's tax assessor/collector is Equi-Tax, Inc. (the “Tax Assessor/Collector”). Bookkeeper The District contracts with Myrtle Cruz, Inc. for bookkeeping services. Operator The District contracts with Municipal Operations & Consulting, Inc. for operations and maintenance services. Engineer The consulting engineer for the District in connection with the design and construction of certain District facilities is IDS Engineering Group (the “Engineer”). Attorney The District has engaged Smith, Murdaugh, Little & Bonham, L.L.P. as general counsel and as Bond Counsel in connection with the issuance of the Bonds. The legal fees to be paid Bond Counsel for services rendered in connection with the issuance of the Bonds are based on a percentage of the Bonds actually issued, sold and delivered, and, therefore, such fees are contingent on the sale and delivery of the Bonds. Financial Advisor Masterson Advisors LLC (the “Financial Advisor”) serves as financial advisor to the District. The fee to be paid the Financial Advisor is contingent upon sale and delivery of the Bonds. Auditor As required by the Texas Water Code, the District retains an independent auditor to audit the District’s financial statements annually, which audit is filed with the Commission. The District’s audited financial statements for the fiscal year ending May 31, 2019 have been prepared by McCall Gibson Swedlund Barfoot PLLC. See “APPENDIX A” for a copy of the District’s May 31, 2019 audited financial statements. The District has engaged McCall Gibson Swedlund Barfoot PLLC to audit the District’s financial statements for the fiscal year ending May 31, 2020.

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THE SYSTEM Regulation

Construction and operation of the District's water, wastewater and storm drainage systems as they now exist or as they may be expanded from time-to-time is subject to regulatory jurisdiction of federal, state and local authorities. The Commission exercises continuing, supervisory authority over the District. Discharge of treated sewage into Texas waters is also subject to the regulatory authority of the Commission and the United States Environmental Protection Agency (“EPA”). Construction of all water, wastewater and storm drainage facilities is subject to the regulatory authority of Montgomery County, Texas, the Commission and the EPA. Shared Central Plant Facilities In the initial planning of development within the District and Montgomery County Municipal Utility District No. 99 (“MUD 99”), the developers of both the District and MUD 99 agreed that the districts would share the costs of construction and operations and maintenance of central plant facilities to serve both districts, including one or more water plants, a wastewater treatment plant and one or more lift stations in order to achieve efficiency in operations and cost savings for the customers and taxpayers of both districts. The District, MUD 99 and the developers of both districts subsequently entered into a Fourth Amended and Restated Water Supply Agreement dated June 4, 2015 (the “Water Supply Agreement”) and a Second Amended Waste Disposal Agreement dated May 27, 2014 (the “Waste Disposal Agreement”). Pursuant to the current Water Supply Agreement, neighboring Montgomery County Municipal Utility District No. 127 (“MUD 127”) was added as a party. MUD 127 has purchased water capacity and will continue to do so as it is developed. Pursuant to the Water Supply Agreement and the Waste Disposal Agreement, MUD 99 holds legal title to the central plant facilities, and MUD 99 operates the facilities. The District owns an equitable share of the capacity in the central plant facilities, and the District and MUD 99 share the costs of operations and maintenance of the central plant facilities as provided in the Agreements. MUD 127 also owns an equitable share of capacity in the water plant facilities. MUD 127 will operate its own sewage treatment plant and will therefore not participate in the shared sewer facilities. The water distribution systems of all districts are interconnected at multiple locations, and the combined water distribution systems serve as a single integrated system receiving water from the shared water plant. The sanitary sewer collection systems of both the District and MUD 99 are interconnected at multiple locations, and the combined sewer collection systems serve as an integrated collection system delivering wastewater to the shared lift station and wastewater treatment plant. The District, MUD 99 and MUD 127 are responsible for and bear the cost of maintenance and operation of the water distribution systems, and the District and MUD 99 are responsible for the cost of maintenance and operation of the sewer collection systems within their respective boundaries. There is one exception: a segment of water line and a segment of sewer line serve MUD 99 and the District. Construction costs of those shared lines were paid for based upon each party’s pro rata share of the capacity of each line. The districts have a cost-sharing agreement for capital costs and maintenance costs associated with the shared lines. The developers in the District and MUD 99 financed construction of the initial phase of the shared water plant, wastewater treatment plant and lift station. Since the initial phase of construction, both the water supply and wastewater treatment facilities have been expanded, as needed. Water Supply The District owns water supply capacity in the shared water plants operated by MUD 99. The two water plants consists of 2,100 gallons per minute (“gpm”) of well capacity, a guaranteed 410 gpm surface water feed, 954,000 gallon ground storage tanks, 45,000 gallons of pressure tank capacity, booster pump capacity of 5,250 gpm and related appurtenant equipment. According to the District engineer, the water plant has sufficient capacity to serve approximately 3,683 equivalent single-family connections (“ESFCs”). The District’s share of the water plant capacity is 2,783 ESFCs. Pursuant to the Water Supply Agreement, the District has a right to purchase additional capacity or upgrade the facilities, as needed, to serve its development, and MUD 99 and MUD 127 have the right to purchase additional capacity, as needed. Additionally, the District has two emergency interconnects with Rayford Road MUD, which are normally closed.

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Wastewater Treatment The District owns capacity in the shared 399,000 gallon per day (“gpd”) wastewater treatment plant. The current permitted capacity of the treatment plant is 399,000 gpd, and the permit allows for the plant to treat up to 1,500,000 gpd of wastewater. Construction of the treatment plant will be completed in phases. The first three phases are complete, and design of the fourth expansion of the wastewater treatment plant is underway. It is estimated that the wastewater treatment plant will be expanded to 525,000 gpd which will provide capacity to serve 2,058 ESFCs. The current treatment plant has the capacity to serve approximately 1,564 ESFCs, of which the District owns 872 ESFCs. As of March 1, 2020, the shared wastewater treatment plant is serving a total of 1,757 ESFCs for both the District and MUD 99 and is operating at approximately 90% percent of its permitted capacity. Unused capacity in the plant is available until the next expansion is completed and can be utilized by the District, which provides the District with capacity it needs to serve the existing connections. Proceeds from previously issued bonds are being used to pay the cost of the design the next expansion of the wastewater treatment plant. The District and MUD 99 have funds dedicated to constructing the next expansion. 100-Year Flood Plain “Flood Insurance Rate Map” or “FIRM” means an official map of a community on which the Federal Emergency Management Agency (FEMA) has delineated the appropriate areas of flood hazards. The 1% chance of probable inundation, also known as the 100-year flood plain, is depicted on these maps. The "100‐year flood plain" (or 1% chance of probable inundation) as shown on the FIRM is the estimated geographical area that would be flooded by a rain storm of such intensity to statistically have a one percent chance of occurring in any given year. Generally speaking, homes must be built above the 100‐year flood plain in order to meet local regulatory requirements and to be eligible for federal flood insurance. An engineering or regulatory determination that an area is above the 100‐year flood plain is no assurance that homes built in such area will not be flooded. The District’s drainage system has been designed and constructed to all current standards. According to the District’s engineer, approximately 66 acres of land in the District are either within the 100-year flood plain or flood way as designated by the Federal Emergency Management Administration Insurance Rate Map for the area; however, such acreage may be developed if the lots are filled pursuant to a Federal Emergency Management Administration Letter of Map Amendment dated December 19, 2013 (Case No. 14-06-033A) and a Federal Emergency Management Administration Letter of Map Revision based on Fill dated September 19, 2013 (Case No. 13-06-3929A). Out of the 66 acres within the flood plain, approximately 32 acres have been developed within portions of the Falls at Imperial Oaks, Sections 5 and 19 and approximately 34 acres are not developable. The National Weather Service recently completed a rainfall study known as National Oceanic and Atmospheric Administration (“NOAA”) Atlas 14, Volume 11 Participation-Frequency Atlas of the United States (“Atlas 14”). Floodplain boundaries within the District may be redrawn based on the Atlas 14 study based on a higher statistical rainfall amount, resulting in interim floodplain regulations applying to a larger number of properties. Such regulations could result in higher insurance rates, increased development fees, and stricter building codes for any property located within the expanded boundaries of the floodplain. Lone Star Groundwater Conservation District The District is located within the boundaries of the Lone Star Groundwater Conservation District (the “Conservation District”) which was created by the Texas Legislature to conserve, protect and enhance the groundwater resources of Montgomery County. The Conservation District has adopted rules and a regulatory plan for the conservation, preservation, protection, recharge and prevention of waste of groundwater, groundwater reservoirs or their subdivisions and to control subsidence caused by the withdrawal of groundwater from those groundwater resources or their subdivisions. The Conservation District initially required persons and entities, including the District, MUD 99, and MUD 127 that pump groundwater from wells to apply for and obtain permits for the withdrawal of groundwater under terms and conditions provided in the Conservation District’s rules. The Conservation District adopted an initial District Regulatory Plan which called for the reduction of groundwater withdrawal throughout Montgomery County to volumes that do not exceed the recharge capabilities of aquifers in the County to prevent the long term depletion of the aquifers. Large water users, including the District, MUD 99, and MUD 127 were required to prepare and submit a two-part Water Resources Assessment Plan (“WRAP”) that identified methods and plans for reduction of groundwater usage through the development of alternate water resources, including the design and construction of infrastructure facilities to purchase and transport surface water to affected areas within the County. The initial requirement and deadline for reduction of groundwater use by the District, MUD 99, and MUD 127 by 30% was January 1, 2016.

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The District and MUD 99, and later by extension, MUD 127, participated in a joint WRAP prepared by the San Jacinto River Authority as described below. Upon passage of House Bill 1982 by the 85th Texas Legislature in 2017, the Conservation District board of directors was changed from a nine member appointed board to a seven member elected board. The first election was held on November 6, 2018, and the new board assumed office in on November 18, 2018. Since taking office the new board members have indicated that there will be major changes to the Conservation District’s approach to groundwater management. In 2015, dissatisfied with the production limits the Conservation District created through the rulemaking authority delegated to it by the Texas Legislature, a group of large water producers filed suit claiming that the rules the Conservation District created imposing per-producer yearly production limits on their production of groundwater were invalid because they purported to regulate the production limits on their production of groundwater in ways the Texas Legislature never authorized. On October 2, 2018, the 284th District Court of Montgomery County, ruled that, as a matter of law, the core groundwater regulation, which the Conservation District had imposed on large groundwater producers, is outside of the Conservation District’s authority under the Texas Water Code and is not valid. The Conservation District appealed to the Beaumont Court of Appeals for review of the decision. However, at the Conservation District board meeting held on January 23, 2019, the newly elected board announced that they unanimously agreed on a settlement offer with the large water producers, and the appeal was withdrawn. As a result of the settlement, it is expected that the Conservation District board will consider and adopt new groundwater regulations in the future. In August of 2015, in City of Conroe, Texas et. al. vs. Richard J. Tram, et. al., filed in the 284th Judicial District Court, Montgomery County, Texas, the City of Conroe , Texas and various investor owned utilities sued the Conservation District and its Board of Directors claiming that the 2009 groundwater reduction requirements adopted by the Conservation District were beyond its legal authority and constitute an unconstitutional taking of the plaintiffs' water. In September 2018, the 284th Judicial District Court ruled that such groundwater reductions requirements were invalid. While the Conservation District initially appealed the ruling, the Conservation District approved a settlement offer with the plaintiffs on January 22, 2019. The settlement was accepted on January 24, 2019, and included the withdrawal of the Conservation District's appeal. On February 5, 2019, the Conservation District issued its notice of impending regulatory changes to comply with that judgment. In addition, in March of 2019, the Conservation District adopted an amended Groundwater Management Plan and submitted the plan to the Texas Water Development Board for review and approval in accordance with the requirements of Chapter 36 of the Texas Water Code. In May of 2019, the Texas Water Development Board rejected the amended Groundwater Management Plan. The Conservation District filed notice with the Texas Water Development Board of its appeal of the rejection of the amended Groundwater Management Plan. The Conservation District’s appeal was rejected by the Texas Water Development Board on October 3, 2019. The full impact of these matters on the District is not known at this time. Regulatory changes by the Conservation District may impact the District's production of groundwater from its wells. The Conservation District currently bills permit holders $0.085 per 1,000 gallons of water pumped from wells to finance the Conservation District’s operations. This amount is subject to future increases. San Jacinto River Authority GRP Agreement and Supplemental Agreement (Non-Mandatory Conversion to Surface Water) In response to the Conservation District requirements, the SJRA expressed a willingness to assume responsibility to construct and operate a surface water treatment plant at or near Lake Conroe and a water transmission system to major populated areas of Montgomery County, thus enabling the entire county to comply with the Conservation District requirements. SJRA offered to enter into a contract for groundwater reduction planning, alternative water supply, and related goods and services (the “GRP Contract”) with all large water users in the county to achieve the goals for reduction of groundwater pumpage for the entire county. Approximately 147 larger volume water users in Montgomery County, including MUD 99 and, by extension, the District, approved and entered into the GRP Contract (“collectively the “Participants”) and are in compliance with SJRA and Conservation District requirements applicable to groundwater pumpage from the MUD 99 well. MUD 99 exercised its right to expand its service area to include MUD 127. Pursuant to the GRP Contract, SJRA will develop, implement and enforce a groundwater reduction plan (“GRP”) covering all Participants to achieve and maintain compliance with the Conservation District requirements. The initial focus of the GRP will be the design and construction of a surface water treatment and transmission system (the “Project”) to be owned and operated by SJRA for the benefit of all Participants. The SJRA will design, permit, finance, construct, own, operate and maintain the Project, and the Project will be constructed in phases. A group compliance approach will be utilized. Certain large volume Participants may be wholly-converted to treated surface water while other users may continue to use groundwater. This approach is expected to minimize overall Project cost, equalize costs for Participants and avoid geographic advantages and disadvantages.

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All Participants will pay a monthly groundwater pumpage fee for groundwater pumped from wells. The pumpage fee shall be set so that Participants are neither benefitted nor penalized for utilizing groundwater, and allowances will be made for Participant costs of operating and maintaining their wells. The Participants are also required to pay well permit fees assessed by the Conservation District which currently bills permit holders (SJRA) $0.085 per 1,000 of water pumped from wells. Participants that receive treated surface water from the Project will pay the prevailing rate for water, which rate will be set so that Participants are neither benefitted nor penalized for being required to take water from the Project under the GRP, and allowances will be made for Participant costs of operating on-site water facilities, as well as operating and maintaining their wells. The pumpage fees and water service fees received from the Project will be comparable, so that all Participants will be paying equivalent charges without preference for customers within or outside the areas converted to surface water. SJRA has issued $544,555,358 principal amount of special project and water revenue bonds to finance the capital costs of the Project, and groundwater pumpage fees and water service fees will be used to cover costs of debt service on the bonds. Effective September 1, 2019, the SJRA assessed groundwater pumpage fees of $2.73 per 1,000 gallons pumped from the MUD 99 well. MUD 99, MUD 127 and the District pay the pumpage fees based upon the amount of water delivered to each district each month. MUD 99, MUD 127 and the District pass these pumpage fees and Conservation District fees on to customers in the districts. The SJRA pumpage fees will increase as the costs of the Project are incurred, but the District is unable to predict the magnitude of such increases. In 2016, the City of Conroe and the City of Magnolia advised the SJRA that it would not pay the rate increases that became effective September 1, 2016 of $0.07 per thousand gallons for the Pumpage Fee and the Surface Water Fee. The Pumpage Fee and Surface Water Fee were further increased effective September 1, 2017. The City of Conroe and the City of Magnolia have not paid more than the rates set in 2015. On August 31, 2016, the SJRA filed suit in the District Court of Travis County, Texas, pursuant to Chapter 1205 of the Texas Government Code, seeking a declaratory judgment that (i) the SJRA is authorized to set rates for its GRP Participants pursuant to the procedures set forth in the GRP Contracts, (ii) the SJRA adopted its fiscal year 2017 Rate Order, including the setting of its fiscal year 2017 rates, in accordance with the procedures set forth in the GRP Contracts, (iii) the SJRA’s fiscal year 2017 rates, the Rate Order, and the GRP Contract are legal and valid, and (iv) the City of Conroe's refusal to pay the fiscal year 2017 rate is a breach of its GRP Contract. The Cities of Conroe, Magnolia, and Splendora, Texas, along with two privately-owned water utilities, Quadvest, L.P. and Woodlands Oaks Utility, L.P. (collectively, the "Intervenors") have intervened in opposition to the SJRA’s suit. The Third Court of Appeals, Austin ruled in September 2018 that the suit was properly filed by the SJRA and should be sent back to the District Court for further proceedings on the first three declarations sought by the SJRA, as described above. The Third Court of Appeals ruled that the SJRA could not pursue the fourth declaration, as described above, under Chapter 1205 of the Texas Government Code. A separate suit would need to be filed to achieve such declaration. Since such ruling, the lntervenors have filed a petition for review with the Texas Supreme Court, which has been granted. Oral arguments are scheduled for January 9, 2020. The Texas Supreme Court has not yet published a decision. At this time, no evaluation can be made as to the outcome of this matter or its impact on the SJRA and the resultant impact on GRP Participants such as the District. MUD 99 and the District had not initially been scheduled to receive water from the first phase of the Project in 2016. However, MUD 99 and the District requested that the SJRA provide surface water to MUD 99 and the District in 2016 under the terms of the SJRA’s early conversion policy. Pursuant to the terms of such policy, the SJRA would pay for the engineering and half of the line construction costs, while the District and MUD 99, through advances from their developers to be reimbursed by such districts, would pay the other half of the construction costs. The request was approved, and the SJRA entered into a Supplemental Agreement (Non-Mandatory Conversion to Surface Water) with MUD 99, the District, and the respective developers. Pursuant to the terms of this agreement, the SJRA will be obligated to provide up to 590,000 gallons per day of treated surface water to MUD 99’s water plant. MUD 99 will be required to take at least 253,000 gallons per day in this initial phase. MUD 115’s developer committed the necessary funds for water delivery facilities, and construction of such surface water improvements are complete. Effective September 1, 2019, the SJRA assessed surface water fees of $3.15 per 1,000 gallons of surface water delivered. Future Debt

With the consent of the District, and pursuant to the prefinancing contracts, the Developer of land in the District has financed the design and construction of improvements for which the Developer has not yet been reimbursed. As of March 1, 2020, the Developer is owed approximately $2,250,000 for District parks and recreational facilities, which costs are expected to be reimbursed to the Developer from proceeds from future issues of District bonds for parks and recreational facilities. See “THE BONDS—Issuance of Additional Debt.” The District has authorized the preparation and filing of a bond application report to the TCEQ requesting approval to sell $1,390,000 principal amount of unlimited tax bonds for parks and recreational facilities. The District expects approval by the TCEQ and the sale of such bonds in the third or fourth quarter of 2020. See “INVESTMENT CONSIDERATIONS—Future Debt.”

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BONDS AUTHORIZED BUT UNISSUED

Date of Amount Issued Amount

Authorization Purpose Authorized to Date Unissued

11/07/2006 Water, Sewer and Drainage Facilities and Refunding Bonds $120,000,000 $48,990,000* $71,010,000*

11/06/2007 Recreational Facilities and $10,672,000 $5,525,000 $5,147,000

Refunding Bonds * Includes the Bonds.

FINANCIAL STATEMENT 2019 Certified Taxable Assessed Valuation ............................................................................................. $470,343,357 (a) 2020 Preliminary Taxable Assessed Valuation ........................................................................................ $498,659,890 (b) Direct Debt: Outstanding Bonds (as of May 1, 2020) ............................................................................................ $45,760,000 Less: The Refunded Bonds ............................................................................................................... 4,315,000* Plus: The Bonds ................................................................................................................................ 4,545,000* Gross Debt Outstanding ............................................................................................................................ $45,990,000* Ratios of Gross Debt to: 2019 Certified Taxable Assessed Valuation ..................................................................................... 9.78%* 2020 Preliminary Taxable Assessed Valuation ................................................................................. 9.22%*

Area of District – 686 Acres Estimated 2020 Population – 5,296 (d)

(a) As certified by the Montgomery Central Appraisal District (the “Appraisal District”). See “TAX PROCEDURES.” (b) Provided by the Appraisal District as a preliminary indication of the 2020 taxable value (as of January 1, 2020). Such amount is subject

to review and downward adjustment prior to certification. No tax will be levied on such amount until it is certified in the fall of 2020. See “TAX PROCEDURES.”

(c) Based upon 3.5 persons per occupied home.

Cash and Investment Balances (unaudited as of March 5, 2020) Capital Projects Fund Cash and Temporary Investments $2,314,045 Operating Fund Cash and Temporary Investments $6,905,923 Debt Service Fund Cash and Temporary Investments $3,474,222 (a) (a) Approximately $68,000* will be contributed for the purpose of which the Bonds are being issued. Neither Texas law nor the Bond Order

requires the District to maintain any minimum balance in the Debt Service Fund. District Investment Policy The District’s goal is to minimize credit and market risks while maintaining a competitive yield on its portfolio. Funds of the District are invested either in short term U.S. Treasury obligations or certificates of deposit insured by the Federal Deposit Insurance Corporation or secured by collateral held by a third party institution. The District does not own any long term securities or derivative products in the District’s investment portfolio.


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Outstanding Bonds (as of May 1, 2020)

(a) Unlimited tax refunding bonds. (b) Unlimited tax park bonds.

PrincipalOriginal Amount RemainingPrincipal Currently Refunded Outstanding

Series Amount Outstanding Bonds* Bonds*2009 3,460,000$ 250,000$ -$ 250,000$ 2010 2,800,000 440,000 235,000 205,000 2011 2,120,000 600,000 525,000 75,000 2012 2,120,000 1,830,000 1,635,000 195,000 2013 2,920,000 2,420,000 1,920,000 500,000 2014 3,750,000 3,375,000 - 3,375,000 2015 5,500,000 4,870,000 - 4,870,000 2015A 7,000,000 6,250,000 - 6,250,000 2016 9,635,000 9,005,000 - 9,005,000 2016A (a) 5,690,000 5,510,000 - 5,510,000 2017 8,860,000 8,310,000 - 8,310,000 2018 (b) 4,055,000 2,000,000 - 2,000,000 2019 (b) 1,470,000 900,000 - 900,000

Total 59,380,000$ 45,760,000$ 4,315,000$ 41,445,000$ *4,545,000 *

45,990,000$ *


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ESTIMATED OVERLAPPING DEBT AND TAX RATES STATEMENT

Expenditures of the various taxing entities which include the territory in the District are paid out of ad valorem taxes levied by such entities on properties within the District. Such entities are independent of the District and may incur borrowings to finance their expenditures. This statement of direct and estimated overlapping ad valorem tax bonds (“Tax Debt”) was developed from information contained in “Texas Municipal Reports” published by the Municipal Advisory Council of Texas. Except for the amounts relating to the District, the District has not independently verified the accuracy or completeness of such information, and no person should rely upon such information as being accurate or complete. Furthermore, certain of the entities listed may have issued additional bonds since the date of such reports, and such entities may have programs requiring the issuance of substantial amounts of additional bonds, the amount of which cannot be determined. The following table reflects the estimated share of overlapping Tax Debt allocable to the District. Taxing Outstanding Overlapping Jurisdiction Bonds As of Percent Amount Montgomery County .................................................... $522,350,000 2/29/20 0.64% $ 3,343,040 Conroe Independent School District ............................ 1,269,275,000 2/29/20 1.03% 13,073,533 Lone Star College System ............................................ 570,885,000 2/29/20 0.19% 1,084,682 Total Estimated Overlapping Debt ................................................................................................................ $17,501,254 The District’s Total Direct Debt (a) ............................................................................................................... 45,990,000* Total Direct and Estimated Overlapping Debt ............................................................................................... $63,491,254* Direct and Estimated Overlapping Debt as a Percentage of: 2019 Certified Taxable Assessed Valuation of $470,343,357 ................................................................................13.50%* 2020 Preliminary Taxable Assessed Valuation of $498,659,890 ............................................................................12.73%* (a) The Bonds and the Remaining Outstanding Bonds.

Overlapping Tax Rates for 2019

2019 Tax Rateper $100 of Taxable

Assessed Valuation

Montgomery County…………………………………………..………………………… 0 0.44750$ Montgomery County Hospital District…………………………………………..……… 0 0.05890 Montgomery County Emergency Services District No. 8……………………………… 0 0.10000 Conroe Independent School District…………………………………………………… 0 1.23000 Lone Star College System…………………………………………………………….…… 0 0.10780

0Total Overlapping Tax Rate……………………………………….…………………..… 0 1.94420$

0The District………………………………………………………………………………… 0 1.30000

0Total Tax Rate……………………………………………………………………………… 0 3.24420$


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TAX DATA

Tax Collections

The following statement of tax collections sets forth in condensed form the historical tax collection experience of the District. This summary has been prepared for inclusion herein, based upon information from District records. Reference is made to these records for further and more complete information.

(a) Unaudited. Taxes are due October 1 and are delinquent after January 31 of the following year. No split payments are allowed, and no discounts are allowed.

Tax Rate Distribution

Tax Rate Limitations Debt Service: Unlimited (no legal limit as to rate or amount). Maintenance: Unlimited (no legal limit as to rate or amount). Debt Service Tax The Board covenants in the Bond Order to levy and assess, for each year that all or any part of the Bonds remain outstanding and unpaid, a tax adequate to provide funds to pay the principal of and interest on the Bonds. The District levied a debt service tax for 2019 at the rate of $0.88 per $100 assessed valuation. See “Tax Rate Distribution” above. Maintenance Tax The Board of Directors of the District has the statutory authority to levy and collect an annual ad valorem tax for maintenance of the District’s improvements, if such maintenance tax is authorized by the District’s voters. At an election held November 7, 2006, the Board was authorized to levy such a maintenance tax in an unlimited rate in accordance with the constitution and laws of the state of Texas. Such tax is in addition to taxes which the District is authorized to levy for paying principal of and interest on the Bonds and any additional tax bonds which may be issued in the future. The District levied a maintenance tax for 2019 at the rate of $0.42 per $100 assessed valuation. See “Tax Rate Distribution” above. Tax Exemptions As discussed in the section titled “TAX PROCEDURES” herein, certain property in the District may be exempt from taxation by the District. The District does not exempt any percentage of the market value of any residential homesteads from taxation. For 2020, the District has adopted a $10,000 exemption for persons who are 65 or older and/or disabled. The Developer has executed a Waiver of Special Appraisal, waiving its right to claim any agriculture or open space exemptions, or any other type of exemption or valuation, for the property it owns within the District that would reduce the assessed value of such land below its market value for purposes of ad valorem taxation by the District. Such waiver is binding for a period of thirty years.

Tax Taxable Assessed Tax TotalYear Valuation Rate Tax Levy Amount Percent

2015 257,952,489$ 1.35$ 3,482,368$ 3,482,368$ 100.00%2016 336,565,425 1.35 4,543,449 4,543,449 100.00%2017 376,591,700 1.35 5,084,649 5,084,649 100.00%2018 409,975,179 1.32 5,411,672 5,409,771 99.96%2019 470,343,357 1.30 6,114,464 6,040,889 98.80%

Total Collectionsas of March 31, 2020 (a)

2019 2018 2017 2016 2015Debt Service 0.88$ 0.90$ 0.85$ 0.85$ 0.85$ Maintenance and Operations 0.42 0.42 0.50 0.50 0.50 Total 1.30$ 1.32$ 1.35$ 1.35$ 1.35$

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Additional Penalties The District has contracted with Smith, Murdaugh, Little & Bonham, L.L.P. for collection of delinquent taxes. In connection with that contract, the District established an additional penalty of twenty percent (20%) of the tax, penalty and interest to defray the costs of collection. This 20% penalty applies to taxes that either: (1) become delinquent on or after February 1 of a year, but not later than May 1 of that year, and that remain delinquent on April 1 (for personal property) and July 1 (for real property) of the year in which they become delinquent or (2) become delinquent on or after June 1, pursuant to the Texas Tax Code. Principal Taxpayers The following list of principal taxpayers was provided by the District’s Tax Assessor/Collector based upon the 2019 tax roll which reflects ownership at January 1, 2019. A principal taxpayer list related to the 2020 Preliminary Taxable Assessed Valuation, of $498,659,890 which is subject to review and downward adjustment prior to certification, is not available from the Appraisal District.

(a) See “THE DEVELOPER.” Summary of Assessed Valuation The following summary of the 2019, 2018 and 2017 Certified Taxable Assessed Valuation is provided by the District's Tax Assessor/Collector based on information contained in the 2019, 2018 and 2017 tax rolls of the District. A breakdown of the 2020 Preliminary Taxable Assessed Valuation, which is subject to review and downward revision prior to certification, is not available from the Appraisal District.

% of2019 Certified 2019 Certified

Taxable Assessed Taxable AssessedTaxpayer Type of Property Valuation Valuation

Centerpoint Energy Houston Electric Electric Utility 1,112,170$ 0.24%Imperial Oaks Development (a) Acreage and Lots 760,310 0.16%Individual Residence 736,720 0.16%Individual Residence 724,560 0.15%Individual Residence 708,440 0.15%Individual Residence 672,850 0.14%Individual Residence 658,000 0.14%Individual Residence 652,650 0.14%Individual Residence 648,390 0.14%Individual Residence 628,050 0.13%Total 7,302,140$ 1.55%

2019 2018 2017Certified Taxable Certified Taxable Certified Taxable

Assessed Valuation Assessed Valuation Assessed ValuationLand 56,949,310$ 56,373,690$ 56,220,950$ Improvements 433,383,640 370,795,930 335,804,800 Personal Property 5,682,600 4,926,988 4,076,254 Exemptions (25,672,193) (22,121,429) (19,510,304) Total 470,343,357$ 409,975,179$ 376,591,700$

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Tax Adequacy for Debt Service The calculations shown below assume, solely for purposes of illustration, no increase or decrease in assessed valuation over the 2019 Certified Taxable Assessed Valuation of $470,343,357, and the 2020 Preliminary Taxable Assessed Valuation of $498,659,890, and a debt service tax rate necessary to pay the District’s average annual debt service requirements on the District’s Remaining Outstanding Bonds and the Bonds. Average Annual Debt Service Requirement (2021-2041) ............................................................. $2,861,314* $0.65* Tax Rate on the 2019 Certified Taxable Assessed Valuation ..................................... $2,904,370* $0.61* Tax Rate on the 2020 Preliminary Taxable Assessed Valuation ................................ $2,889,734* No representations or suggestions are made that the 2020 Preliminary Taxable Assessed Valuation, which is subject to review and downward revision prior to certification, provided by the Appraisal District for the District will be certified as taxable value by the Appraisal District, and no person should rely upon such amount or its inclusion herein as assurance of its attainment. See “TAX PROCEDURES.”

TAX PROCEDURES Authority to Levy Taxes The Board is authorized to levy an annual ad valorem tax, without legal limitation as to rate or amount, on all taxable property within the District in an amount sufficient to pay the principal of and interest on the Remaining Outstanding Bonds, the Bonds and any additional bonds payable from taxes which the District may hereafter issue (see “INVESTMENT CONSIDERATIONS— Future Debt”) and to pay the expenses of assessing and collecting such taxes. The District agrees in the Bond Order to levy such a tax from year to year as described more fully herein under “THE BONDS—Source of and Security for Payment.” Under Texas law, the Board may also levy and collect an annual ad valorem tax for the operation and maintenance of the District. See “TAX DATA—Maintenance Tax.” Tax Code and County-Wide Appraisal District The Texas Tax Code (the “Tax Code”) specifies the taxing procedures of all political subdivisions of the State of Texas, including the District. Provisions of the Tax Code are complex and are not fully summarized here. The Tax Code requires, among other matters, county-wide appraisal and equalization of taxable property values and establishes in each county of the State of Texas an appraisal district with the responsibility for recording and appraising property for all taxing units within a county and an appraisal review board with responsibility for reviewing and equalizing the values established by the appraisal district. The Montgomery Central Appraisal District has the responsibility for appraising property for all taxing units within Montgomery County, including the District. Such appraisal values are subject to review and change by the Montgomery County Appraisal Review Board (the “Appraisal Review Board”). Property Subject to Taxation by the District Except for certain exemptions provided by Texas law, all real property, tangible personal property held or used for the production of income, mobile homes and certain categories of intangible personal property with a tax situs in the District are subject to taxation by the District. Principal categories of exempt property include, but are not limited to: property owned by the State of Texas or its political subdivisions if the property is used for public purposes; property exempt from ad valorem taxation by federal law; certain household goods, family supplies, and personal effects; certain goods, wares and merchandise in transit; farm products owned by the producer; certain property of charitable organizations, youth development associations, religious organizations, and qualified schools; designated historical sites; and most individually owned automobiles. In addition, the District may by its own action exempt residential homesteads of persons sixty-five (65) years or older and of certain disabled persons to the extent deemed advisable by the Board. The District has adopted a residential homestead exemption in the amount of $10,000 for persons age 65 and older and disabled persons. Additionally, the District must grant exemptions to disabled veterans or certain surviving dependents of disabled veterans, if requested, of between $5,000 and $12,000 depending on the disability rating of the veteran. Subject to certain conditions, the surviving spouse of a disabled veteran who is entitled to an exemption for the full value of the veteran's residence homestead is also entitled to an exemption from taxation of the total appraised value of the same property to which the disabled veteran's exemption applied. See “TAX DATA.”


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Partially disabled veterans or certain surviving spouses of partially disabled veterans are entitled to an exemption from taxation of a percentage of the appraised value of their residence homestead in an amount equal to the partially disabled veteran’s disability rating if the residence homestead was donated by a charitable organization. The surviving spouse of a member of the armed forces who was killed in action is, subject to certain conditions, entitled to an exemption of the total appraised value of the surviving spouse’s residence homestead, and subject to certain conditions, an exemption up to the same amount may be transferred to a subsequent residence homestead of the surviving spouse. The surviving spouse of a first responder who was killed or fatally injured in the line of duty is, subject to certain conditions, also entitled to an exemption of the total appraised value of the surviving spouse’s residence homestead, and, subject to certain conditions, an exemption up to the same amount may be transferred to a subsequent residence homestead of the surviving spouse. Residential Homestead Exemptions: The Tax Code authorizes the governing body of each political subdivision in the State of Texas to exempt up to twenty percent (20%) (not less than $5,000) of the appraised value of residential homesteads from ad valorem taxation. Where ad valorem taxes have previously been pledged for the payment of debt, the governing body of a political subdivision may continue to levy and collect taxes against the exempt value of the homesteads until the debt is discharged, if the cessation of the levy would impair the obligations of the contract by which the debt was created. The District has never granted such a general homestead exemption and has no plans to do so. See “TAX DATA.” Freeport Goods and Goods-in-Transit Exemptions: A “Freeport Exemption” applies to goods, wares, ores, and merchandise other than oil, gas, and petroleum products (defined as liquid and gaseous materials immediately derived from refining petroleum or natural gas), and to aircraft or repair parts used by a certified air carrier acquired in or imported into Texas which are destined to be forwarded outside of Texas and which are detained in Texas for assembling, storing, manufacturing, processing or fabricating for less than 175 days. Although certain taxing units may take official action to tax such property in transit and negate such exemption, the District does not have such an option. A “Goods-in-Transit” Exemption is applicable to the same categories of tangible personal property which are covered by the Freeport Exemption, if, for tax year 2011 and prior applicable years, such property is acquired in or imported into Texas for assembling, storing, manufacturing, processing, or fabricating purposes and is subsequently forwarded to another location inside or outside of Texas not later than 175 days after acquisition or importation, and the location where said property is detained during that period is not directly or indirectly owned or under the control of the property owner. For tax year 2012 and subsequent years, such Goods-in-Transit Exemption includes tangible personal property acquired in or imported into Texas for storage purposes only if such property is stored under a contract of bailment by a public warehouse operator at one or more public warehouse facilities in Texas that are not in any way owned or controlled by the owner of such property for the account of the person who acquired or imported such property. A property owner who receives the Goods-in-Transit Exemption is not eligible to receive the Freeport Exemption for the same property. Local taxing units such as the District may, by official action and after public hearing, tax goods-in- transit personal property. A taxing unit must exercise its option to tax goods-in-transit property before January 1 of the first tax year in which it proposes to tax the property at the time and in the manner prescribed by applicable law. The District has taken official action to allow taxation of all such goods-in-transit personal property for all prior and subsequent years. Tax Abatement Montgomery County or the City of Conroe may designate all or part of the area within the District as a reinvestment zone. Thereafter, Montgomery County, the District, and the City of Conroe (after annexation of the District), under certain circumstances, may enter into tax abatement agreements with owners of property within the zone. Prior to entering into a tax abatement agreement, each entity must adopt guidelines and criteria for establishing tax abatement, which each entity will follow in granting tax abatement to owners of property. The tax abatement agreements may exempt from ad valorem taxation by each of the applicable taxing jurisdictions, including the District, for a period of up to ten (10) years, all or any part of any increase in the assessed valuation of property covered by the agreement over its assessed valuation in the year in which the agreement is executed, on the condition that the property owner make specified improvements or repairs to the property in conformity with the terms of the tax abatement. Each taxing jurisdiction has discretion to determine terms for its tax abatement agreements without regard to the terms approved by the other taxing jurisdictions. Valuation of Property for Taxation Generally, property in the District must be appraised by the Appraisal District at market value as of January 1 of each year. Once an appraisal roll is prepared and finally approved by the Appraisal Review Board, it is used by the District in establishing its tax rolls and tax rate. Generally, assessments under the Tax Code are to be based on one hundred percent (100%) of market value, as such is defined in the Tax Code. In determining market value, either the replacement cost or the income or the market data method of valuation may be used, whichever is appropriate. Nevertheless, certain land may be appraised at less than market value under the Tax Code. Increases in the appraised value of residence homesteads are limited by the Texas Constitution to 10 percent annually regardless of the market value of the property.

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The Tax Code permits land designated for agricultural or timber land use to be appraised at its value based on the land's capacity to produce agricultural products or, with respect to timber land, the value based upon accepted income capitalization methods. The Tax Code permits under certain circumstances that residential real property inventory held by a person in the trade or business be valued at the price all of such property would bring if sold as a unit to a purchaser who would continue the business. Landowners wishing to avail themselves of the agricultural, timber land or residential real property appraisal must apply for such appraisal, and the Appraisal District is required to act on each claimant's application individually. If a claimant receives the agricultural or timber land appraisal on land and later changes the land use or sells the land to an unqualified owner, an additional tax is imposed on the land equal to the difference between the taxes imposed on the land for each of the five years preceding the year in which the change of use occurs that the land was appraised as agricultural or timber land and the tax that would have been imposed had the land been taxed on the basis on market value in each of those years, plus interest at an annual rate of seven percent (7%) calculated from the dates on which the differences would have become due. Provisions of the Tax Code are complex and are not fully summarized here. The Tax Code requires the Appraisal District to implement a plan for periodic reappraisal of property to update appraisal values. The plan must provide for appraisal of all real property in the Appraisal District at least once every three (3) years. It is not known what frequency of reappraisal will be utilized by the Appraisal District or whether reappraisals will be conducted on a zone or county-wide basis. The District, however, at its expense has the right to obtain from the Appraisal District a current estimate of appraised values within the District or an estimate of any new property or improvements within the District. While such current estimate of appraised values may serve to indicate the rate and extent of growth of taxable values within the District, it cannot be used for establishing a tax rate within the District until such time as the Appraisal District chooses formally to include such values on its appraisal roll. The Property Tax Code provides for a temporary exemption from ad valorem taxation of a portion of the appraised value of certain property that is at least 15% damaged by a disaster and located within an area declared to be a disaster area by the governor of the State of Texas. This temporary exemption is automatic if the disaster is declared prior to a taxing unit, such as the District, adopting its tax rate for the tax year. A taxing unit, such as the District, may authorize the exemption at its discretion if the disaster is declared after the taxing unit has adopted its tax rate for the tax year. The amount of the exemption is based on the percentage of damage and is prorated based on the date of the disaster. Upon receipt of an application submitted within the eligible timeframe by a person who qualifies for a temporary exemption under the Property Tax Code, the Appraisal District is required to complete a damage assessment and assign a damage assessment rating to determine the amount of the exemption. The temporary exemption amounts established in the Property Tax Code range from 15% for property less than 30% damaged to 100% for property that is a total loss. Any such temporary exemption granted for disaster-damaged property expires on January 1 of the first year in which the property is reappraised. District and Taxpayer Remedies Under certain circumstances taxpayers and taxing units (such as the District) may appeal the orders of the Appraisal Review Board by filing a timely petition for review in State district court. In such event, the value of the property in question will be determined by the court or by a jury if requested by any party. Additionally, taxing units may bring suit against the Appraisal District to compel compliance with the Tax Code. The Tax Code also establishes a procedure for notice to property owners of reappraisals reflecting increased property value, appraisals which are higher than renditions, and appraisals of property not previously on an appraisal roll. Levy and Collection of Taxes The District is responsible for the levy and collection of its taxes unless it elects to transfer such functions to another governmental entity. The rate of taxation is set by the Board of Directors, after the legally required notice has been given to owners of property within the District, based upon: a) the valuation of property within the District as of the preceding January 1, and b) the amount required to be raised for debt service, maintenance purposes, and authorized contractual obligations. Taxes are due October 1, or when billed, whichever comes later, and become delinquent if not paid before February 1 of the year following the year in which imposed. However, a person who is 65 years of age or older or disabled is entitled by law to pay current taxes on his residential homestead in installments or to receive a deferral or abatement of delinquent taxes without penalty during the time he owns or occupies his property as his residential homestead. A delinquent tax incurs a penalty of six percent (6%) of the amount of the tax for the first calendar month it is delinquent, plus one percent (1%) for each additional month or portion of a month the tax remains unpaid prior to July 1 of the year in which it becomes delinquent. If the tax is not paid by July 1 of the year in which it becomes delinquent, the tax incurs a total penalty of twelve percent (12%) regardless of the number of months the tax has been delinquent and incurs an additional penalty for collection costs of an amount established by the District and a delinquent tax attorney. A delinquent tax on personal property incurs an additional penalty, in an amount established by the District and a delinquent tax attorney, 60 days after the date the taxes become delinquent. The delinquent tax accrues interest at a rate of one percent (1%) for each month or portion of a month it remains unpaid. The Property Tax Code makes provisions for the split payment of taxes, discounts for early payment and the postponement of the delinquency date of taxes under certain circumstances which, at the option of the District, which may be rejected by taxing units. The District’s tax collector is required to enter into an installment payment agreement with any person who is delinquent on the payment of tax on a residence homestead for payment of tax, penalties and interest, if the person requests an installment agreement in writing and has not entered into an installment agreement with the

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collector in the preceding 24 months. The installment agreement must provide for payments to be made in equal monthly installments and must extend for a period of at least 12 months and no more than 36 months. Additionally, the owner of a residential homestead property who is (i) sixty-five (65) years of age or older, (ii) disabled, or (iii) a disabled veteran, is entitled by law to pay current taxes on a residential homestead in installments without penalty or to defer the payment of taxes during the time of ownership. In the instance of tax deferral, a tax lien remains on the property and interest continue to accrue during the period of deferral. Certain qualified taxpayers, including owners of residential homesteads, located within a natural disaster area and whose property has been damaged as a direct result of the disaster, are entitled to enter into a tax payment installment agreement with a taxing jurisdiction such as the District if the tax payer pays at least one-fourth of the tax bill imposed on the property by the delinquency date. The remaining taxes may be paid without penalty or interest in three equal installments within six months of the delinquency date. Rollback of Operation and Maintenance Tax Rate During the 86th Regular Legislative Session, Senate Bill 2 (“SB 2”) was passed and signed by the Governor, with an effective date of January 1, 2020, and the provisions described herein are effective beginning with the 2020 tax year. See “SELECTED FINANCIAL INFORMATION” for a description of the District’s current total tax rate. Debt service and contract tax rates cannot be reduced by a rollback election held within any of the districts described below. SB 2 classifies districts differently based on the current operation and maintenance tax rate or on the percentage of build-out that the District has completed. Districts that have adopted an operation and maintenance tax rate for the current year that is 2.5 cents or less per $100 of taxable value are classified as “Special Taxing Units.” Districts that have financed, completed, and issued bonds to pay for all improvements and facilities necessary to serve at least 95% of the projected build-out of the district are classified as “Developed Districts.” Districts that do not meet either of the classifications previously discussed can be classified herein as “Developing Districts.” The impact each classification has on the ability of a district to increase its maintenance and operations tax rate pursuant to SB 2 is described for each classification below. Special Taxing Units: Special Taxing Units that adopt a total tax rate that would impose more than1.08 times the amount of the total tax imposed by such district in the preceding tax year on a residence homestead appraised at the average appraised value of a residence homestead, subject to certain homestead exemptions, are required to hold an election within the district to determine whether to approve the adopted total tax rate. If the adopted total tax rate is not approved at the election, the total tax rate for a Special Taxing Unit is the current year’s debt service and contract tax rate plus 1.08 times the previous year’s operation and maintenance tax rate. Developed Districts: Developed Districts that adopt a total tax rate that would impose more than1.035 times the amount of the total tax imposed by the district in the preceding tax year on a residence homestead appraised at the average appraised value of a residence homestead, subject to certain homestead exemptions for the preceding tax year, plus any unused increment rates, as calculated and described in Section 26.013 of the Tax Code, are required to hold an election within the district to determine whether to approve the adopted total tax rate. If the adopted total tax rate is not approved at the election, the total tax rate for a Developed District is the current year’s debt service and contract tax rate plus 1.035 times the previous year’s operation and maintenance tax rate plus any unused increment rates. In addition, if any part of a Developed District lies within an area declared for disaster by the Governor of Texas or President of the United States, alternative procedures and rate limitations may apply for a temporary period. If a district qualifies as both a Special Taxing Unit and a Developed District, the district will be subject to the operation and maintenance tax threshold applicable to Special Taxing Units. Developing Districts: Districts that do not meet the classification of a Special Taxing Unit or a Developed District can be classified as Developing Districts. The qualified voters of these districts, upon the Developing District’s adoption of a total tax rate that would impose more than 1.08 times the amount of the total tax rate imposed by such district in the preceding tax year on a residence homestead appraised at the average appraised value of a residence homestead, subject to certain homestead exemptions, are authorized to petition for an election to reduce the operation and maintenance tax rate. If an election is called and passes, the total tax rate for Developing Districts is the current year’s debt service and contract tax rate plus 1.08 times the previous year’s operation and maintenance tax rate. The District: A determination as to a district’s status as a Special Taxing Unit, Developed District or Developing District will be made by the Board of Directors on an annual basis, beginning with the 2020 tax rate. The District cannot give any assurances as to what its classification will be at any point in time or whether the District’s future tax rates will result in a total tax rate that will reclassify the District into a new classification and new election calculation.

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District’s Rights in the Event of Tax Delinquencies Taxes levied by the District are a personal obligation of the owner of the property as of January 1 of the year for which the tax is imposed. On January 1 of each year, a tax lien attaches to property to secure the payment of all state and local taxes, penalties, and interest ultimately imposed for the year on the property. The lien exists in favor of the State of Texas and each local taxing unit, including the District, having power to tax the property. The District's tax lien is on a parity with tax liens of such other taxing units. See “ESTIMATED OVERLAPPING DEBT AND TAX RATES STATEMENT.” A tax lien on real property takes priority over the claim of most creditors and other holders of liens on the property encumbered by the tax lien, whether or not the debt or lien existed before the attachment of the tax lien; however, whether a lien of the United States is on a parity with or takes priority over a tax lien of the District is determined by applicable federal law. Personal property under certain circumstances is subject to seizure and sale for the payment of delinquent taxes, penalty, and interest. At any time after taxes on property become delinquent, among other collection methods available, the District may file suit to foreclose the lien securing payment of the tax, to enforce personal liability for the tax, or both, subject to the restrictions on residential homesteads described above under “Levy and Collection of Taxes”. In filing a suit to foreclose a tax lien on real property, the District must join other taxing units that have claims for delinquent taxes against all or part of the same property. Collection of delinquent taxes may be adversely affected by the cost of suit and sale, by the amount of taxes owed to other taxing units, by the effects of market conditions on the foreclosure sale price, by taxpayer redemption rights (a taxpayer may redeem property within six (6) months for commercial property and two (2) years for residential and all other types of property after the purchaser's deed issued at the foreclosure sale is filed in the county records) or by bankruptcy proceedings which restrict the collection of taxpayer debts. See “INVESTMENT CONSIDERATIONS.” The Effect of FIRREA on Tax Collections of the District The Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”) contains certain provisions which affect the time for protesting property valuations, the fixing of tax liens and the collection of penalties and interest on delinquent taxes on real property owned by the Federal Deposit Insurance Corporation (“FDIC”) when the FDIC is acting as the conservator or receiver of an insolvent financial institution. Under FIRREA, real property held by the FDIC is still subject to ad valorem taxation, but such act states (i) that no real property of the FDIC shall be subject to foreclosure or sale without the consent of the FDIC and no involuntary liens shall attach to such property, (ii) the FDIC shall not be liable for any penalties, interest, or fines, including those arising from the failure to pay any real or personal property tax when due, and (iii) notwithstanding failure of a person to challenge an appraisal in accordance with state law, such value shall be determined as of the period for which such tax is imposed. To the extent that the FDIC attempts to enforce the same, these provisions may affect the timeliness of collection of taxes on property, if any, owned by the FDIC in the District and may prevent the collection of penalties and interest on such taxes or may affect the valuation of such property.

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WATER AND SEWER OPERATIONS General The Bonds and Remaining Outstanding Bonds are payable from the levy of an ad valorem tax, without legal limitation as to rate or amount, upon all taxable property in the District. Net revenues, if any, derived from the operation of the District's water and sewer operations are not pledged to the payment of the Bonds and Remaining Outstanding Bonds but are available for any lawful purpose including payment of debt service on the Bonds, at the discretion and upon action of the Board. It is not anticipated that any significant revenues will be available for the payment of debt service on the Bonds and Remaining Outstanding Bonds. Waterworks and Sewer System Operating Statement The following statement sets forth in condensed form the historical results of operation of the District’s General Operating Fund. Accounting principles customarily employed in the determination of net revenues have been observed and in all instances exclude depreciation. Such summary is based upon information obtained from the District’s audited financial statements for the fiscal years ended 2016 through 2019 and an unaudited summary for the period ended of February 29, 2020 provided by the District’s bookkeeper. Reference is made to such statements for further and complete information.

(a) Unaudited. Prepared by the District’s bookkeeper. (b) Includes $1,327,541 contribution from the Developer for participation in the SJRA surface water line and $309,058 for the District’s share

of the wastewater treatment plant expansion. (c) Advance from the Developer for District’s participation in the construction of the SJRA surface water line.

6/1/2019 to

2/29/2020 (a) 2019 2018 2017 2016

(Unaudited)Revenues

Property Taxes 1,956,410$ 1,714,792$ 1,896,241$ 1,668,696$ 1,294,652$ Water Service 328,282 370,316 350,548 330,740 287,419 Wastewater Service 478,253 602,960 561,549 521,301 446,833 Conservation District/ Water Authority Fees 492,923 545,341 527,171 452,707 357,693 Penalty and Interest 14,920 15,596 16,301 15,922 15,529 Tap Connection and Inspection Fees 17,675 41,640 120,050 112,645 126,890 Sale of Capacity 632,332 629,426 694,560 - - Investment Income 62,767 36,091 4,063 2,221 1,030 Other - 11,410 9,710 30,779 18,661 Total Revenues 3,983,562$ 3,967,572$ 4,180,193$ 3,135,011$ 2,548,707$

ExpendituresProfessional Fees 100,195$ 125,075$ 112,024$ 104,720$ 146,127$ Contracted Services 300,187 359,064 315,976 286,079 232,887 Purchased Water Services 598,439 620,540 722,875 634,049 548,354 Purchased Wastewater Services 170,358 238,746 279,501 318,080 191,565 Utilities 143,893 166,019 183,585 169,588 179,283 Repairs and Maintenance 393,082 623,114 504,075 713,204 476,884 Other 81,562 138,071 164,928 162,044 185,034 Capital Outlay - 466,143 467,999 56,799 1,636,599 (b) Total Expenditures 1,787,716$ 2,736,772$ 2,750,963$ 2,444,563$ 3,596,733$

Net Revenues 2,195,846$ 1,230,800$ 1,429,230$ 690,448$ (1,048,026)$

Other Sources (Interfund Transfer) 30,000$ -$ 259,510$ 1,327,541$ (c)

Fund Balance (Beginning of Year) 4,844,648$ 3,613,848$ 2,184,618$ 1,234,660$ 955,145$

Fund Balance (End of Year) 7,070,494$ 4,844,648$ 3,613,848$ 2,184,618$ 1,234,660$

Fiscal Year Ended May 31

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INVESTMENT CONSIDERATIONS

General The Bonds are obligations solely of the District and are not obligations of the City of Conroe, Montgomery County, the State of Texas, or any entity other than the District. Payment of the principal of and interest on the Bonds depends upon the ability of the District to collect taxes levied on taxable property within the District in an amount sufficient to service the District's bonded debt or in the event of foreclosure, on the value of the taxable property in the District and the taxes levied by the District and other taxing authorities upon the property within the District. See “THE BONDS—Source of Payment.” The collection by the District of delinquent taxes owed to it and the enforcement by Registered Owners of the District's obligation to collect sufficient taxes may be a costly and lengthy process. Furthermore, the District cannot and does not make any representations that continued development of taxable property within the District will accumulate or maintain taxable values sufficient to justify continued payment of taxes by property owners or that there will be a market for the property or that owners of the property will have the ability to pay taxes. See “Registered Owners' Remedies and Bankruptcy Limitations” below. Infectious Disease Outlook (COVID-19) The World Health Organization has declared a pandemic following the outbreak of COVID-19, a respiratory disease caused by a new strain of coronavirus (the “Pandemic”), which is currently affecting many parts of the world, including the United States and Texas. On January 31, 2020, the Secretary of the United States Health and Human Services Department declared a public health emergency for the United States in connection with COVID-19. On March 13, 2020, the President of the United States (the “President”) declared the Pandemic a national emergency and the Texas Governor (the “Governor”) declared COVID-19 an imminent threat of disaster for all counties in Texas (collectively, the “disaster declarations”). On March 25, 2020, in response to a request from the Governor, the President issued a Major Disaster Declaration for the State of Texas. Pursuant to Chapter 418 of the Texas Government Code, the Governor has broad authority to respond to disasters, including suspending any regulatory statute prescribing the procedures for conducting state business or any order or rule of a state agency that would in any way prevent, hinder, or delay necessary action in coping with this disaster and issuing executive orders that have the force and effect of law. The Governor has issued a number of executive orders relating to COVID-19 preparedness and mitigation. These include, for example, the issuance of Executive Order GA-18 on April 27, 2020, which, among other things, permits the reopening of retail establishments, dine-in restaurant services, movie theatres, shopping malls, museums and libraries, with limitations on the levels of occupancy, unless and until such order is otherwise extended, modified, rescinded, or superseded by the Governor. Many of the federal, state and local actions and policies under the aforementioned disaster declarations are focused on limiting instances where the public can congregate or interact with each other, which affects economic growth within Texas. Since the disaster declarations were made, the Pandemic has negatively affected travel, commerce, and financial markets locally and globally, and is widely expected to continue negatively affecting economic growth and financial markets worldwide and within Texas. Stock values and crude oil prices, in the U.S. and globally, have seen significant declines attributed to COVID-19 concerns. Texas may be particularly at risk from any global slowdown, given the prevalence of international trade in the state and the risk of contraction in the oil and gas industry and spillover effects into other industries. Such adverse economic conditions, if they continue, could result in declines in the demand for residential and commercial property in the Houston area and could reduce or negatively affect property values within the District. The Bonds are secured by an unlimited ad valorem tax, and a reduction in property values may require an increase in the ad valorem tax rate required to pay the Bonds as well as the District’s share of operations and maintenance expenses payable from ad valorem taxes. The District continues to monitor the spread of COVID-19 and is working with local, state, and national agencies to address the potential impact of COVID-19 upon the District. While the potential impact of COVID-19 on the District cannot be quantified at this time, the continued outbreak of COVID-19 could have an adverse effect on the District’s operations and financial condition. The financial and operating data contained herein are the latest available, but are as of dates and for periods prior to the economic impact of the Pandemic and measures instituted to slow it. Accordingly, they are not indicative of the economic impact of the Pandemic on the District’s financial condition.

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Potential Effects of Oil Price Declines on the Houston Area The recent declines in oil prices in the U.S. and globally, which at times have led to the lowest prices in three decades, may lead to adverse conditions in the oil and gas industry, including but not limited to reduced revenues, declines in capital and operating expenditures, business failures, and layoffs of workers. The economy of the Houston area has, in the past, been particularly affected by adverse conditions in the oil and gas industry, and such conditions and their spillover effects into other industries could result in declines in the demand for residential and commercial property in the Houston area and could reduce or negatively affect property values or homebuilding activity within the District. As previously stated, the Bonds are secured by an unlimited ad valorem tax, and a reduction in property values may require an increase in the ad valorem tax rate required to pay the Bonds as well as the District’s share of operations and maintenance expenses payable from ad valorem taxes. Recent Extreme Weather Events; Hurricane Harvey The greater Houston area, including the District, is subject to occasional severe weather events, including tropical storms and hurricanes. If the District were to sustain damage to its facilities requiring substantial repair or replacement, or if substantial damage were to occur to taxable property within the District as a result of such a weather event, the investment security of the Bonds could be adversely affected. The greater Houston area has experienced multiple storms exceeding a 0.2% probability (i.e. “500‐year flood” events) since 2015, including Hurricane Harvey, which made landfall along the Texas Gulf Coast on August 26, 2017, and brought historic levels of rainfall during the successive four days. According to Municipal Operations & Consulting, Inc. (the “Operator”), the District’s water and sewer system did not sustain any material damage and there was no interruption of water and sewer service as a result of Hurricane Harvey. Further, to the knowledge of the District, no homes within the District experienced structural flooding or other material damage as a result of Hurricane Harvey. If a future weather event significantly damaged all or part of the improvements within the District, the assessed value of property within the District could be substantially reduced, which could result in a decrease in tax revenues and/or necessitate an increase the District’s tax rate. Further, there can be no assurance that a casualty loss to taxable property within the District will be covered by insurance (or that property owners will even carry flood or other casualty insurance), that any insurance company will fulfill its obligation to provide insurance proceeds, or that insurance proceeds will be used to rebuild or repair any damaged improvements within the District. Even if insurance proceeds are available and improvements are rebuilt, there could be a lengthy period in which assessed values within the District could be adversely affected. Specific Flood Type Risks Ponding (or Pluvial) Flood: Ponding or pluvial flooding occurs when heavy rainfall creates a flood event independent of an overflowing water body, typically in relatively flat areas. Intense rainfall can exceed the drainage capacity of a drainage system, which may result in water within the drainage system becoming trapped and diverted onto streets and nearby property until it is able to reach a natural outlet. Ponding can also occur in a flood pool upstream or behind a dam, levee or reservoir. Riverine (or Fluvial) Flood: Riverine or fluvial flooding occurs when water levels rise over the top of river, bayou or channel banks due to excessive rain from tropical systems making landfall and/or persistent thunderstorms over the same area for extended periods of time. The damage from a riverine flood can be widespread. The overflow can affect smaller rivers and streams downstream or may sheet-flow over land. Flash flooding is a type of riverine flood that is characterized by an intense, high velocity torrent of water that occurs in an existing river channel with little to no notice. Flash flooding can also occur even if no rain has fallen, for instance, after a levee, dam or reservoir has failed or experienced an uncontrolled release, or after a sudden release of water by a debris or ice jam. In addition, planned or unplanned controlled releases from a dam, levee or reservoir also may result in flooding in areas adjacent to rivers, bayous or drainage systems downstream.

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Future Debt The District reserves in the Bond Order the right to issue the remaining $71,010,000* principal amount of authorized and unissued unlimited tax bonds for the purpose of acquiring and constructing water, sewer and drainage facilities and refunding purposes. The District also has $5,147,000 principal amount of authorized but unissued unlimited tax bonds for the purpose of developing parks and recreational facilities and refunding purposes. The District has authorized the preparation and filing of a bond application report to the TCEQ requesting approval to sell $1,390,000 principal amount of unlimited tax bonds for parks and recreational facilities. The District expects approval by the TCEQ and the sale of such bonds in the third or fourth quarter of 2020. The District may issue additional bonds approved by District voters in future elections. See “THE BONDS—Issuance of Additional Debt” and “THE SYSTEM.” The issuance of such obligations may adversely affect the investment security of the Bonds. The District does not employ any formula with regard to assessed valuations or tax collections or otherwise to limit the amount of bonds which may be issued; however, the principal amount of bonds issued to develop parks and recreational facilities may not exceed 1% of the District’s taxable value. Any bonds issued by the District, however, must be approved by the Attorney General of Texas and the Board of the District and any bonds issued to acquire or construct water, sanitary sewer and drainage facilities and recreational facilities must be approved by the Commission. Tax Collections Limitations The District's ability to make debt service payments may be adversely affected by its inability to collect ad valorem taxes. Under Texas law, the levy of ad valorem taxes by the District constitutes a lien in favor of the District on a parity with the liens of all other state and local taxing authorities on the property against which taxes are levied, and such lien may be enforced by foreclosure. The District's ability to collect ad valorem taxes through such foreclosure may be impaired by market conditions limiting the proceeds from a foreclosure sale of taxable property and collection procedures. While the District has a lien on taxable property within the District for taxes levied against such property, such lien can be foreclosed only in a judicial proceeding. The costs of collecting any such taxpayer's delinquencies could substantially reduce the net proceeds to the District from a tax foreclosure sale. Finally, a bankruptcy court with jurisdiction over bankruptcy proceedings initiated by or against a taxpayer within the District pursuant to the Federal Bankruptcy Code could stay any attempt by the District to collect delinquent ad valorem taxes against such taxpayer. In addition to the automatic stay against collection of delinquent taxes afforded a taxpayer during the pendency of a bankruptcy, a bankruptcy could affect payment of taxes in two other ways: first, a debtor’s confirmation plan may allow a debtor to make installment payments on delinquent taxes for up to six years; and, second, a debtor may challenge, and a bankruptcy court may reduce, the amount of any taxes assessed against the debtor, including taxes that have already been paid. See “TAX PROCEDURES—District's Rights in the Event of Tax Delinquencies.” Registered Owners’ Remedies and Bankruptcy Limitations If the District defaults in the payment of principal, interest, or redemption price on the Bonds when due, or if it fails to make payments into any fund or funds created in the Bond Order, or defaults in the observation or performance of any other covenants, conditions, or obligations set forth in the Bond Order, the Registered Owners have the statutory right of a writ of mandamus issued by a court of competent jurisdiction requiring the District and its officials to observe and perform the covenants, obligations, or conditions prescribed in the Bond Order. Except for mandamus, the Bond Order does not specifically provide for remedies to protect and enforce the interests of the Registered Owners. There is no acceleration of maturity of the Bonds in the event of default and, consequently, the remedy of mandamus may have to be relied upon from year to year. Further, there is no trust indenture or trustee, and all legal actions to enforce such remedies would have to be undertaken at the initiative of, and be financed by, the Registered Owners. Statutory language authorizing local governments such as the District to sue and be sued does not waive the local government’s sovereign immunity from suits for money damages, so that in the absence of other waivers of such immunity by the Texas Legislature, a default by the District in its covenants in the Bond Order may not be reduced to a judgment for money damages. If such a judgment against the District were obtained, it could not be enforced by direct levy and execution against the District's property. Further, the Registered Owners cannot themselves foreclose on property within the District or sell property within the District to enforce the tax lien on taxable property to pay the principal of and interest on the Bonds. The enforceability of the rights and remedies of the Registered Owners may further be limited by a State of Texas statute reasonably required to attain an important public purpose or by laws relating to bankruptcy, reorganization or other similar laws of general application affecting the rights of creditors of political subdivisions, such as the District.


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Subject to the requirements of Texas law discussed below, a political subdivision such as the District may voluntarily file a petition for relief from creditors under Chapter 9 of the Federal Bankruptcy Code, 11 U.S.C. Sections 901-946. The filing of such petition would automatically stay the enforcement of Registered Owner's remedies, including mandamus. The automatic stay would remain in effect until the federal bankruptcy judge hearing the case dismisses the petition, enters an order granting relief from the stay or otherwise allows creditors to proceed against the petitioning political subdivision. A political subdivision such as the District may qualify as a debtor eligible to proceed in a Chapter 9 case only if it is (1) authorized to file for federal bankruptcy protection by applicable state law, (2) is insolvent or unable to meet its debts as they mature, (3) desires to effect a plan to adjust such debts, and (4) has either obtained the agreement of or negotiated in good faith with its creditors or is unable to negotiate with its creditors because negotiation is impracticable. Special districts such as the District must obtain the approval of the Commission as a condition to seeking relief under the Federal Bankruptcy Code. The Commission is required to investigate the financial condition of a financially troubled district and authorize such district to proceed under federal bankruptcy law only if such district has fully exercised its rights and powers under Texas law and remains unable to meet its debts and other obligations as they mature. Notwithstanding noncompliance by a district with Texas law requirements, the District could file a voluntary bankruptcy petition under Chapter 9, thereby invoking the protection of the automatic stay until the bankruptcy court, after a hearing, dismisses the petition. A federal bankruptcy court is a court of equity and federal bankruptcy judges have considerable discretion in the conduct of bankruptcy proceedings and in making the decision of whether to grant the petitioning District relief from its creditors. While such a decision might be appealable, the concomitant delay and loss of remedies to the Registered Owner could potentially and adversely impair the value of the Registered Owner's claim. If a petitioning district were allowed to proceed voluntarily under Chapter 9 of the Federal Bankruptcy Code, it could file a plan for an adjustment of its debts. If such a plan were confirmed by the bankruptcy court, it could, among other things, affect Registered Owners by reducing or eliminating the amount of indebtedness, deferring or rearranging the debt service schedule, reducing or eliminating the interest rate, modifying or abrogating the collateral or security arrangements, substituting (in whole or in part) other securities, and otherwise compromising and modifying the rights and remedies of the Registered Owners’ claims against a district. A district may not be forced into bankruptcy involuntarily. Continuing Compliance with Certain Covenants The Bond Order contains covenants by the District intended to preserve the exclusion from gross income of interest on the Bonds. Failure by the District to comply with such covenants in the Bond Order on a continuous basis prior to maturity of the Bonds could result in interest on the Bonds becoming taxable retroactively to the date of original issuance. See “TAX MATTERS.” Marketability The District has no agreement with the Underwriter regarding the reoffering yields or prices of the Bonds and has no control over trading of the Bonds in the secondary market. Moreover, there is no assurance that a secondary market will be made in the Bonds. If there is a secondary market, the difference between the bid and asked price of the Bonds may be greater than the difference between the bid and asked price of bonds of comparable maturity and quality issued by more traditional issuers as such bonds are generally bought, sold or traded in the secondary market. Environmental Regulation and Air Quality Wastewater treatment, water supply, storm sewer facilities and construction activities within the District are subject to complex environmental laws and regulations at the federal, state and local levels that may require or prohibit certain activities that affect the environment, such as:

Requiring permits for construction and operation of water wells, wastewater treatment and other facilities; Restricting the manner in which wastes are treated and released into the air, water and soils; Restricting or regulating the use of wetlands or other properties; or Requiring remedial action to prevent or mitigate pollution.

Sanctions against a municipal utility district or other type of special purpose district for failure to comply with environmental laws and regulations may include a variety of civil and criminal enforcement measures, including assessment of monetary penalties, imposition of remedial requirements and issuance of injunctions to ensure future compliance. Environmental laws and compliance with environmental laws and regulations can increase the cost of planning, designing, constructing and operating water production and wastewater treatment facilities. Environmental laws can also inhibit growth and development within the District. Further, changes in regulations occur frequently, and any changes that result in more stringent and costly requirements could materially impact the District.

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Air Quality Issues: Air quality control measures required by the United States Environmental Protection Agency (the “EPA”) and the Texas Commission on Environmental Quality (the “TCEQ”) may impact new industrial, commercial and residential development in the Houston area. Under the Clean Air Act (“CAA”) Amendments of 1990, the eight-county Houston Galveston area (“HGB area”)—Harris, Galveston, Brazoria, Chambers, Fort Bend, Waller, Montgomery and Liberty counties—has been designated a nonattainment area under three separate federal ozone standards: the one-hour (124 parts per billion (“ppb”)) and eight-hour (84 ppb) standards promulgated by the EPA in 1997 (“the 1997 Ozone Standards”); the tighter, eight-hour ozone standard of 75 ppb promulgated by the EPA in 2008 (“the 2008 Ozone Standard”), and the EPA’s most-recent promulgation of an even lower, 70 ppb eight-hour ozone standard in 2015 (“the 2015 Ozone Standard). While the State of Texas has been able to demonstrate steady progress and improvements in air quality in the HGB area, the HGB area remains subject to CAA nonattainment requirements. The HGB area is currently designated as a severe ozone nonattainment area under the the 1997 Ozone Standards. While the EPA has revoked the 1997 Ozone Standards, EPA historically has not formally redesignated nonattainment areas for a revoked standard. As a result, the HGB area remained subject to continuing severe nonattainment area “anti-backsliding” requirements, despite the fact that HGB area air quality has been attaining the 1997 Ozone Standards since 2014. In late 2015, EPA approved the TCEQ’s “redesignation substitute” for the HGB area under the revoked 1997 Ozone Standards, leaving the HGB area subject only to the nonattainment area requirements under the 2008 Ozone Standard (and later, the 2015 Ozone Standard). In February 2018, the U.S. Court of Appeals for the District of Columbia Circuit issued an opinion in South Coast Air Quality Management District v. EPA, 882 F.3d 1138 (D.C. Cir. 2018) vacating the EPA redesignation substitute rule that provided the basis for EPA’s decision to eliminate the anti-backsliding requirements that had applied in the HGB area under the 1997 Ozone Standard. The court has not responded to EPA’s April 2018 request for rehearing of the case. To address the uncertainty created by the South Coast court’s ruling, the TCEQ has developed a formal request that the HGB area be redesignated to attainment under the 1997 Ozone Standards. The TCEQ Commissioners approved publication of a proposed HGB area redesignation request under the 1997 Ozone Standards on September 5, 2018. The HGB area is currently designated as a “moderate” nonattainment area under the 2008 Ozone Standard, with an attainment deadline of July 20, 2018. If the EPA ultimately determines that the HGB area has failed to meet the attainment deadline based on the relevant data, the area is subject to reclassification to a nonattainment classification that provides for more-stringent controls on emissions from the industrial sector. In addition, the EPA may impose a moratorium on the awarding of federal highway construction grants and other federal grants for certain public works construction projects if it finds that an area fails to demonstrate progress in reducing ozone levels. The HGB area is currently designated as a “marginal” nonattainment area under the 2015 Ozone Standard. For purposes of the 2015 Ozone Standard, the HGB area consists of only six counties: Brazoria, Chambers, Fort Bend, Galveston, Harris, and Montgomery Counties. In order to demonstrate progress toward attainment of the EPA’s ozone standards, the TCEQ has established a state implementation plan (“SIP”) for the HGB area setting emission control requirements, some of which regulate the inspection and use of automobiles. These types of measures could impact how people travel, what distances people are willing to travel, where people choose to live and work, and what jobs are available in the HGB area. These SIP requirements can negatively impact business due to the additional permitting/regulatory constraints that accompany this designation and because of the community stigma associated with a nonattainment designation. It is possible that additional controls will be necessary to allow the HGB area to reach attainment with the ozone standards by the EPA’s attainment deadlines. These additional controls could have a negative impact on the HGB area’s economic growth and development. Water Supply & Discharge Issues: Water supply and discharge regulations that municipal utility districts, including the District, may be required to comply with involve: (1) public water supply systems, (2) waste water discharges from treatment facilities, (3) storm water discharges, and (4) wetlands dredge and fill activities. Each of these is addressed below: Pursuant to the federal Safe Drinking Water Act (“SDWA”) and Environmental Protection Agency’s National Primary Drinking Water Regulations (“NPDWRs”), which are implemented by the TCEQ’s Water Supply Division, a municipal utility district’s provision of water for human consumption is subject to extensive regulation as a public water system. Municipal utility districts must generally provide treated water that meets the primary and secondary drinking water quality standards adopted by the TCEQ, the applicable disinfectant residual and inactivation standards, and the other regulatory action levels established under the agency’s rules. The EPA has established NPDWRs for more than ninety (90) contaminants and has identified and listed other contaminants which may require national drinking water regulation in the future.

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Texas Pollutant Discharge Elimination System (“TPDES”) permits set limits on the type and quantity of discharge, in accordance with state and federal laws and regulations. The TCEQ reissued the TPDES Construction General Permit (TXR150000), with an effective date of March 5, 2018, which is a general permit authorizing the discharge of stormwater runoff associated with small and large construction sites and certain nonstormwater discharges into surface water in the state. It has a 5-year permit term, and is then subject to renewal. Moreover, the Clean Water Act (“CWA”) and Texas Water Code require municipal wastewater treatment plants to meet secondary treatment effluent limitations and more stringent water quality-based limitations and requirements to comply with the Texas water quality standards. Any water quality-based limitations and requirements with which a municipal utility district must comply may have an impact on the municipal utility district’s ability to obtain and maintain compliance with TPDES permits. Operations of utility districts, including the District, are also potentially subject to requirements and restrictions under the CWA regarding the use and alteration of wetland areas that are within the “waters of the United States.” The District must obtain a permit from the United States Army Corps of Engineers (“USACE”) if operations of the District require that wetlands be filled, dredged, or otherwise altered. In 2015, the EPA and USACE promulgated a rule known as the Clean Water Rule (“CWR”) aimed at redefining “waters of the United States” over which the EPA and USACE have jurisdiction under the CWA. The CWR significantly expanded the scope of the federal government’s CWA jurisdiction over intrastate water bodies and wetlands. The CWR was challenged in numerous jurisdictions, including the Southern District of Texas, causing significant uncertainty regarding the ultimate scope of “waters of the United States” and the extent of EPA and USACE jurisdiction. On September 12, 2019, the EPA and USACE finalized a rule repealing the CWR, thus reinstating the regulatory text that existed prior to the adoption of the CWR. This repeal officially became final on December 23, 2019, but the repeal has itself become the subject of litigation in multiple jurisdictions. On January 23, 2020, the EPA and USACE released the Navigable Waters Protection Rule (“NWPR”), which contains a new definition of “waters of the United States.” The stated purpose of the NWPR is to restore and maintain the integrity of the nation’s waters by maintaining federal authority over the waters Congress has determined should be regulated by the federal government, while preserving the states’ primary authority over land and water resources. The new definition outlines four categories of waters that are considered “waters of the United States,” and thus federally regulated under the CWA: (i) territorial seas and traditional navigable waters; (ii) perennial and intermittent tributaries to territorial seas and traditional navigable waters; (iii) certain lakes, ponds, and impoundments of jurisdictional waters; and (iv) wetlands adjacent to jurisdictional waters. The new rule also identifies certain specific categories that are not “waters of the United States,” and therefore not federally regulated under the CWA: (a) groundwater; (b) ephemeral features that flow only in direct response to precipitation; (c) diffuse stormwater runoff and directional sheet flow over upland; (d) certain ditches; (e) prior converted cropland; (f) certain artificially irrigated areas; (g) certain artificial lakes and ponds; (h) certain water-filled depressions and certain pits; (i) certain stormwater control features; (j) certain groundwater recharge, water reuse, and wastewater recycling structures; and (k) waste treatment systems. The EPA published the NWPR in the Federal Register on April 21, 2020. The NWPR will go into effect on June 22, 2020 and will likely become the subject of further litigation. Due to ongoing rulemaking activity, as well as existing and possible future litigation, there remains uncertainty regarding the ultimate scope of “waters of the United States” and the extent of EPA and USACE jurisdiction. Depending on the final outcome of such proceedings, operations of municipal utility districts, including the District, could potentially be subject to additional restrictions and requirements, including additional permitting requirements. Operations of Utility Districts are also potentially subject to stormwater discharge permitting requirements under the Clean Water Act and EPA and TCEQ regulations. The TCEQ issued a general permit for stormwater discharges associated with industrial activities (which was amended and reissued on July 13, 2016, effective August 14, 2016) and a general permit for stormwater discharges associated with small municipal separate storm sewer systems (which was issued on August 13, 2007 and was amended and reissued on December 11, 2013). Utility Districts in certain urbanized areas are also required to develop and implement stormwater pollution prevention plans and stormwater management plans. The District could incur substantial costs to develop and implement such plans as well as to install or implement best management practices to minimize or eliminate unauthorized pollutants that may otherwise be found in stormwater runoff. Failure to comply with these requirements may result in the imposition of administrative, civil, and criminal penalties as well as injunctive relief under the Clean Water Act or the Texas Water Code. A small portion of the District is located in the Woodlands Urbanized Area, but the portion of the District in that area does not service any residents. The District is therefore entitled to a waiver, and on April 4, 2019, such waiver was submitted to the TCEQ pending approval.

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Risk Factors Related to the Purchase of Municipal Bond Insurance The District has applied for a bond insurance policy (the “Policy”) to guarantee the scheduled payment of principal and interest on the Bonds. If the Policy is issued, investors should be aware of the following investment considerations: The long-term ratings on the Bonds are dependent in part on the financial strength of the insurer (the “Insurer”) and its claims paying ability. The Insurer’s financial strength and claims paying ability are predicated upon a number of factors which could change over time. No assurance is given that the long-term ratings of the Insurer and of the ratings on the Bonds insured by the Insurer will not be subject to downgrade and such event could adversely affect the market price of the Bonds or the marketability (liquidity) for the Bonds. The obligations of the Insurer are contractual obligations and in an event of default by the Insurer, the remedies available may be limited by applicable bankruptcy law or state law related to insolvency of insurance companies. Neither the District nor the Underwriter have made independent investigation into the claims paying ability of the Insurer and no assurance or representation regarding the financial strength or projected financial strength of the Insurer is given. Thus, when making an investment decision, potential investors should carefully consider the ability of the District to pay principal and interest on the Bonds and the claims paying ability of the Insurer, particularly over the life of the investment.

LEGAL MATTERS Legal Opinion The District will furnish the Underwriter a transcript of certain certified proceedings incident to the authorization and issuance of the Bonds. Such transcript will include a certified copy of the approving opinion of the Attorney General of Texas, as recorded in the Bond Register of the Comptroller of Public Accounts of the State of Texas, to the effect that the Bonds are valid and binding obligations of the District, payable from the proceeds of an annual ad valorem tax levied without limitation as to rate or amount upon all taxable property within the District. The District also will furnish the approving legal opinion of Smith, Murdaugh, Little & Bonham, L.L.P., Houston, Texas, Bond Counsel to the District (“Bond Counsel”), to the effect that, based upon an examination of such transcript, the Bonds are valid and binding obligations of the District under the Constitution and laws of the State of Texas, except to the extent that the enforceability thereof may be affected by bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application affecting rights of creditors of political subdivisions such as the District. The legal opinion of Bond Counsel will further state that the Bonds, including principal of and interest thereon, are payable from ad valorem taxes, without legal limitation as to rate or amount, upon all taxable property located within the District and that interest on the Bonds is excludable from gross income for federal income tax purposes under existing laws subject to the matters described under the caption which follows entitled “TAX MATTERS.” Legal Review In its capacity as Bond Counsel, Smith, Murdaugh, Little & Bonham, L.L.P. has reviewed the information appearing in this Official Statement under the captions “PLAN OF FINANCING—Refunded Bonds”, “—Escrow Agreement and Defeasance of Refunded Bonds (but only insofar as such section relates to the legal opinion of Bond Counsel), “THE BONDS,” (except for “Book-Entry-Only System”) “TAX PROCEDURES,” “THE DISTRICT—General,” “LEGAL MATTERS,” “TAX MATTERS,” and “CONTINUING DISCLOSURE OF INFORMATION” to determine whether such information fairly summarizes the procedures, law and documents referred to therein. Bond Counsel has not, however, independently verified any of the other factual information contained in this Official Statement nor has it conducted an investigation of the affairs of the District for the purpose of passing upon the accuracy or completeness of this Official Statement. No person is entitled to rely upon Bond Counsel's limited participation as an assumption of responsibility for or an expression of opinion of any kind with regard to the accuracy or completeness of any of the information contained herein. The legal fees to be paid Bond Counsel for services rendered in connection with the issuance of the Bonds are based on a percentage of the Bonds actually issued, sold and delivered, and therefore, such fees are contingent on the sale and delivery of the Bonds. Bond Counsel acts as general counsel for the District on matters other than the issuance of bonds. No-Litigation Certificate The District will furnish to the Underwriter a certificate, dated as of the date of delivery of the Bonds, to the effect that no litigation of any nature has been filed or is then pending or threatened, either in state or federal courts, contesting or attacking the Bonds; restraining or enjoining the issuance, execution or delivery of the Bonds; affecting the provisions made for the payment of or security for the Bonds; in any manner questioning the authority or proceedings for the issuance, execution, or delivery of the Bonds; or affecting the validity of the Bonds.

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No Material Adverse Change The obligations of the Underwriter to take and pay for the Bonds, and of the District to deliver the Bonds, are subject to the condition that, up to the time of delivery of and receipt of payment for the Bonds, there shall have been no material adverse change in the condition (financial or otherwise) of the District from that set forth or contemplated in the Official Statement, as it may have been supplemented or amended, through the date of sale.

TAX MATTERS Opinion On the date of initial delivery of the Bonds, Bond Counsel will render its opinion that, in accordance with statutes, regulations, published rulings and court decisions existing on the date thereof (“Existing Law”), (1) interest on the Bonds for federal income tax purposes will be excludable from the “gross income” of the holders thereof, and (2) the Bonds will not be treated as “specified private activity bonds” the interest on which would be included as an alternative minimum tax preference item under section 57(a)(5) of the Internal Revenue Code of 1986 (the “Code”). Except as stated above, Bond Counsel will express no opinion as to any other federal, state or local tax consequences of the purchase, ownership or disposition of the Bonds. In rendering its opinion, Bond Counsel will rely upon (a) certain information and representations of the District, including information and representations contained in the District's federal tax certificate, and (b) covenants of the District contained in the Bond documents relating to certain matters, including arbitrage and the use of the proceeds of the Bonds and the property financed or refinanced therewith. Failure by the District to observe the aforementioned representations or covenants could cause the interest on the Bonds to become taxable retroactively to the date of issuance. The Code and the regulations promulgated thereunder contain a number of requirements that must be satisfied subsequent to the issuance of the Bonds in order for interest on the Bonds to be, and to remain, excludable from gross income for federal income tax purposes. Failure to comply with such requirements may cause interest on the Bonds to be included in gross income retroactively to the date of issuance of the Bonds. The opinion of Bond Counsel is conditioned on compliance by the District with such requirements, and Bond Counsel has not been retained to monitor compliance with these requirements subsequent to the issuance of the Bonds. Bond Counsel's opinion represents its legal judgment based upon its review of Existing Law and the reliance on the aforementioned information, representations and covenants. Bond Counsel's opinion is not a guarantee of a result. Existing Law is subject to change by the Congress and to subsequent judicial and administrative interpretation by the courts and the Department of the Treasury. There can be no assurance that Existing Law or the interpretation thereof will not be changed in a manner which would adversely affect the tax treatment of the purchase, ownership or disposition of the Bonds. A ruling was not sought from the Internal Revenue Service by the District with respect to the Bonds or the property financed or refinanced with proceeds of the Bonds. No assurances can be given as to whether the Internal Revenue Service will commence an audit of the Bonds, or as to whether the Internal Revenue Service would agree with the opinion of Bond Counsel. If an Internal Revenue Service audit is commenced, under current procedures the Internal Revenue Service is likely to treat the District as the taxpayer and the Bondholders may have no right to participate in such procedure. No additional interest will be paid upon any determination of taxability. Federal Income Tax Accounting Treatment of Original Discount Bonds The initial public offering price to be paid for one or more maturities of the Bonds may be less than the principal amount thereof, or one or more periods for the payment of interest on the bonds may not be equal to the accrual period or be in excess of one year (the “Original Issue Discount Bonds”). In such event, the difference between (i) the “stated redemption price at maturity” of each Original Issue Discount Bond, and (ii) the initial offering price to the public of such Original Issue Discount Bond would constitute original issue discount. The “stated redemption price at maturity” means the sum of all payments to be made on the bonds less the amount of all periodic interest payments. Periodic interest payments are payments which are made during equal accrual periods (or during any unequal period if it is the initial or final period) and which are made during accrual periods which do not exceed one year.

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Under existing law, any owner who has purchased such Original Issue Discount Bond in the initial public offering is entitled to exclude from gross income (as defined in section 61 of the Code) an amount of income with respect to such Original Issue Discount Bond equal to that portion of the amount of such original issue discount allocable to the accrual period. For a discussion of certain collateral federal tax consequences, see discussion set forth below. In the event of the redemption, sale or other taxable disposition of such Original Issue Discount Bond prior to stated maturity, however, the amount realized by such owner in excess of the basis of such Original Issue Discount Bond in the hands of such owner (adjusted upward by the portion of the original issue discount allocable to the period for which such Original Issue Discount Bond was held by such initial owner) is includable in gross income. Under existing law, the original issue discount on each Original Issue Discount Bond is accrued daily to the stated maturity thereof (in amounts calculated as described below for each six-month period ending on the date before the semiannual anniversary dates of the date of the Bonds and ratably within each such six-month period) and the accrued amount is added to an initial owner's basis for such Original Issue Discount Bond for purposes of determining the amount of gain or loss recognized by such owner upon the redemption, sale or other disposition thereof. The amount to be added to basis for each accrual period is equal to (a) the sum of the issue price and the amount of original issue discount accrued in prior periods multiplied by the yield to stated maturity (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period) less (b) the amounts payable as current interest during such accrual period on such Original Issue Discount Bond. The federal income tax consequences of the purchase, ownership, redemption, sale or other disposition of Original Issue Discount Bonds which are not purchased in the initial offering at the initial offering price may be determined according to rules which differ from those described above. All owners of Original Issue Discount Bonds should consult their own tax advisors with respect to the determination for federal, state and local income tax purposes of the treatment of interest accrued upon redemption, sale or other disposition of such Original Issue Discount Bonds and with respect to the federal, state, local and foreign tax consequences of the purchase, ownership, redemption, sale or other disposition of such Original Issue Discount Bonds. Federal Income Tax Accounting Treatment of Premium Bonds The initial public offering price of certain Bonds (the “Premium Bonds”) may be greater than the amount payable on such Bonds at maturity. An amount equal to the difference between the initial public offering price of a Premium Bond (assuming that a substantial amount of the Premium Bonds of that maturity are sold to the public at such price) and the amount payable at maturity constitutes premium to the initial purchaser of such Premium Bonds. The basis for federal income tax purposes of a Premium Bond in the hands of such initial purchaser must be reduced each year by the amortizable bond premium. Such reduction in basis will increase the amount of any gain (or decrease the amount of any loss) to be recognized for federal income tax purposes upon the sale or other taxable disposition of a Premium Bond. The amount of premium which is amortizable each year by an initial purchaser is determined by using such purchaser’s yield to maturity. Purchasers of the Premium Bonds should consult with their own tax advisors with respect to the determination of amortizable bond premium with respect to the Premium Bonds for federal income tax purposes and with respect to the state and local tax consequences of owning Premium Bonds. Collateral Federal Income Tax Consequences The following discussion is a summary of certain collateral federal income tax consequences resulting from the purchase, ownership or disposition of the Bonds. This discussion is based on existing statutes, regulations, published rulings and court decisions, all of which are subject to change or modification, retroactively. The following discussion is applicable to investors, other than those who are subject to special provisions of the Code, such as financial institutions, property and casualty insurance companies, life insurance companies, individual recipients of Social Security or Railroad Retirement benefits, individuals allowed an earned income credit, certain S corporations with accumulated earnings and profits and excess passive investment income, taxpayers qualifying for the health-insurance premium assistance credit, foreign corporations subject to the branch profits tax and taxpayers who may be deemed to have incurred or continued indebtedness to purchase tax-exempt obligations. THE DISCUSSION CONTAINED HEREIN MAY NOT BE EXHAUSTIVE. INVESTORS, INCLUDING THOSE WHO ARE SUBJECT TO SPECIAL PROVISIONS OF THE CODE, SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX TREATMENT WHICH MAY BE ANTICIPATED TO RESULT FROM THE PURCHASE, OWNERSHIP AND DISPOSITION OF TAX-EXEMPT OBLIGATIONS BEFORE DETERMINING WHETHER TO PURCHASE THE BONDS. Under Section 6012 of the Code, holders of tax-exempt obligations, such as the Bonds, may be required to disclose interest received or accrued during each taxable year on their returns of federal income taxation.

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Section 1276 of the Code provides for ordinary income tax treatment of gain recognized upon the disposition of a tax-exempt obligation, such as the Bonds, if such obligation was acquired at a “market discount” and if the fixed maturity of such obligation is equal to, or exceeds, one year from the date of issue. Such treatment applies to “market discount bonds” to the extent such gain does not exceed the accrued market discount of such bonds; although for this purpose, a de minimis amount of market discount is ignored. A “market discount bond” is one which is acquired by the holder at a purchase price which is less than the stated redemption price at maturity or, in the case of a bond issued at an original issue discount, the “revised issue price” (i.e., the issue price plus accrued original issue discount). The “accrued market discount” is the amount which bears the same ratio to the market discount as the number of days during which the holder holds the obligation bears to the number of days between the acquisition date and the final maturity date. Future and Proposed Legislation Tax legislation, administrative actions taken by tax authorities, or court decisions, whether at the Federal or state level, may adversely affect the tax-exempt status of interest on the Bonds under Federal or state law and could affect the market price or marketability of the Bonds. Any such proposal could limit the value of certain deductions and exclusions, including the exclusion for tax-exempt interest. The likelihood of any such proposal being enacted cannot be predicted. Prospective purchasers of the Bonds should consult their own tax advisors regarding the foregoing matters. State, Local and Foreign Taxes Investors should consult their own tax advisors concerning the tax implications of the purchase, ownership or disposition of the Bonds under applicable state or local laws. Foreign investors should also consult their own tax advisors regarding the tax consequences unique to investors who are not United States persons. Qualified Tax-Exempt Obligations for Financial Institutions Section 265(a) of the Code provides, in pertinent part, that interest paid or incurred by a taxpayer, including a “financial institution,” on indebtedness incurred or continued to purchase or carry tax-exempt obligations is not deductible in determining the taxpayer's taxable income. Section 265(b) of the Code provides an exception to the disallowance of such deduction for any interest expense paid or incurred on indebtedness of a taxpayer that is a “financial institution” allocable to tax-exempt obligations, other than “private activity bonds,” that are designated by a “qualified small issuer” as “qualified tax- exempt obligations.” A “qualified small issuer” is any governmental issuer (together with any “on-behalf of” and “subordinate” issuers) who issues no more than $10,000,000 of tax-exempt obligations during the calendar year. Section 265(b)(5) of the Code defines the term “financial institution” as any “bank” described in Section 585(a)(2) of the Code, or any person accepting deposits from the public in the ordinary course of such person's trade or business that is subject to federal or state supervision as a financial institution. Notwithstanding the exception to the disallowance of the deduction of interest on indebtedness related to “qualified tax-exempt obligations” provided by Section 265(b) of the Code, Section 291 of the Code provides that the allowable deduction to a “bank,” as defined in Section 585(a)(2) of the Code, for interest on indebtedness incurred or continued to purchase “qualified tax-exempt obligations” shall be reduced by twenty-percent (20%) as a “financial institution preference item.” The District expects to designate the Bonds as “qualified tax-exempt obligations” within the meaning of Section 265(b) of the Code. In furtherance of that designation, the District will covenant to take such action that would assure, or to refrain from such action that would adversely affect the treatment of the Bonds as “qualified tax-exempt obligations.”

MUNICIPAL BOND RATING AND MUNICIPAL BOND INSURANCE Moody’s Investors Service (“Moody’s”) has assigned an underlying rating of “____” to the Bonds. An explanation of the rating may be obtained from Moody’s. The rating fees of Moody’s will be paid by the District; however, the fees associated with any other rating will be the responsibility of the Underwriter. The use of insurance and the payment of an insurance premium is at the option and expense of the District. The rating fees of Moody’s will be paid by the District; any other rating fees associated with the insurance will be the responsibility of the Underwriter. See “INVESTMENT CONSIDERATIONS—Risk Factors Related to the Purchase of Municipal Bond Insurance.” There is no assurance that such rating will continue for any given period of time or that it will not be revised or withdrawn entirely by Moody’s, if in its judgment, circumstances so warrant. Any such revisions or withdrawal of the rating may have an adverse effect on the market price of the Bonds.

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VERIFICATION OF MATHEMATICAL CALCULATIONS

Public Finance Partners LLC will deliver to the District, on or before the settlement date of the Bonds, its verification report indicating that it has verified the mathematical accuracy of (a) the adequacy of funds and maturing principal of and interest on the Escrowed Securities held by the Escrow Agent to provide for the payment of the Refunded Bonds and (b) the mathematical computations of yield used by Bond Counsel to support its opinion that interest on the Bonds will be excluded from gross income for federal income tax purposes. Public Finance Partners LLC relied on the accuracy, completeness and reliability of all information provided to it by, and on all decisions and approvals of, the District. In addition, Public Finance Partners LLC has relied on all information provided to it by the District’s retained advisors, consultants or legal counsel.

SALE AND DISTRIBUTION OF THE BONDS The Underwriter The Bonds are being purchased by Raymond James & Associates, Inc. (the “Underwriter”) pursuant to a bond purchase agreement with the District (the “Bond Purchase Agreement”) at a price of $____________ (representing the par amount of the Bonds of $_______________, plus a net premium on the Bonds of $___________, less an Underwriter’s discount of $____________) plus accrued interest. The Underwriter’s obligation is to purchase all of the Bonds, if any are purchased. See “PLAN OF FINANCING—Sources and Uses of Funds.” The Underwriter has reviewed the information in this official statement pursuant to its responsibilities to investors under the federal securities laws, but the Underwriter does not guarantee the accuracy or completeness of such information. Prices and Marketability The prices and other terms with respect to the offering and sale of the Bonds may be changed at any time by the Underwriter after the Bonds are released for sale, and the Bonds may be offered and sold at prices other than the initial offering prices, including sales to dealers who may sell the Bonds into investment accounts. In connection with the offering of the Bonds, the Underwriter may over-allot or effect transactions that stabilize or maintain the market prices of the Bonds at levels above those that might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. The District has no control over trading of the Bonds in the secondary market. Moreover, there is no guarantee that a secondary market will be made in the Bonds. In such a secondary market, the difference between the bid and asked price of utility district bonds may be greater than the difference between the bid and asked price of bonds of comparable maturity and quality issued by more traditional municipal entities, as bonds of such entities are more generally bought, sold, or traded in the secondary market. Securities Laws No registration statement relating to the offer and sale of the Bonds has been filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended, in reliance upon the exemptions provided thereunder. The Bonds have not been registered or qualified under the Securities Act of Texas in reliance upon various exemptions contained therein; nor have the Bonds been registered or qualified under the securities laws of any other jurisdiction. The District assumes no responsibility for registration or qualification of the Bonds under the securities laws of any other jurisdiction in which the Bonds may be offered, sold or otherwise transferred. This disclaimer of responsibility for registration or qualification for sale or other disposition of the Bonds shall not be construed as an interpretation of any kind with regard to the availability of any exemption from securities registration or qualification provisions in such other jurisdiction.

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PREPARATION OF OFFICIAL STATEMENT

Sources and Compilation of Information The financial data and other information contained in this Official Statement has been obtained primarily from the District's records, the Developer, the Engineer, the Tax Assessor/Collector, the Appraisal District and information from certain other sources. All of these sources are believed to be reliable, but no guarantee is made by the District as to the accuracy or completeness of the information derived from such sources, and its inclusion herein is not to be construed as a representation on the part of the District except as described below under “Certification of Official Statement.” Furthermore, there is no guarantee that any of the assumptions or estimates contained herein will be realized. The summaries of the agreements, reports, statutes, resolutions, engineering and other related information set forth in this Official Statement are included herein subject to all of the provisions of such documents. These summaries do not purport to be complete statements of such provisions, and reference is made to such documents for further information. Financial Advisor Masterson Advisors LLC is employed as the Financial Advisor to the District to render certain professional services, including advising the District on a plan of financing and preparing the Official Statement. In its capacity as Financial Advisor, Masterson Advisors LLC has compiled and edited this Official Statement. The Financial Advisor has reviewed the information in this Official Statement in accordance with, and as a part of, its responsibilities to the District and, as applicable, to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Financial Advisor does not guarantee the accuracy or completeness of such information. Consultants In approving this Official Statement the District has relied upon the following consultants. Auditor: The District's audited financial statements for the year ended May 31, 2019, were prepared by McCall Gibson Swedlund Barfoot PLLC, Certified Public Accountant. See “APPENDIX A” for a copy of the District's May 31, 2019, audited financial statements. Engineer: The information contained in this Official Statement relating to engineering matters and to the description of the System and, in particular that information included in the sections entitled “THE DISTRICT” and “THE SYSTEM,” has been provided by IDS Engineering Group, and has been included herein in reliance upon the authority of said firm as experts in the field of civil engineering. Appraisal District: The information contained in this Official Statement relating to the assessed valuations has been provided by the Montgomery Central Appraisal District and has been included herein in reliance upon the authority of such entity to establish the taxable value of property in Montgomery County, including the District. Tax Assessor/Collector: The information contained in this Official Statement relating to the historical breakdown of the Certified Taxable Assessed Valuations, principal taxpayers, and certain other historical data concerning tax rates and tax collections has been provided by Equi-Tax, Inc., and is included herein in reliance upon the authority of such person as an expert in assessing and collecting taxes. Bookkeeper: The information related to the “unaudited” summary of the District's General Operating Fund as it appears in “WATER AND SEWER OPERATIONS” has been provided by Myrtle Cruz, Inc. and is included herein in reliance upon the authority of such firm as experts in the tracking and managing the various funds of municipal utility districts. Updating the Official Statement If, subsequent to the date of the Official Statement, the District learns, through the ordinary course of business and without undertaking any investigation or examination for such purposes, or is notified by the Underwriter, of any adverse event which causes the Official Statement to be materially misleading, and unless the Underwriter elects to terminate its obligation to purchase the Bonds, the District will promptly prepare and supply to the Underwriter an appropriate amendment or supplement to the Official Statement satisfactory to the Underwriter; provided, however, that the obligation of the District to so amend or supplement the Official Statement will terminate when the District delivers the Bonds to the Underwriter, unless the Underwriter notifies the District on or before such date that less than all of the Bonds have been sold to ultimate customers, in which case the District's obligations hereunder will extend for an additional period of time as required by law (but not more than 90 days after the date the District delivers the Bonds).

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Certification of Official Statement The District, acting through its Board of Directors in its official capacity, hereby certifies, as of the date hereof, that the information, statements, and descriptions or any addenda, supplement and amendment thereto pertaining to the District and its affairs contained herein, to the best of its knowledge and belief, contain no untrue statement of a material fact and do not omit to state any material fact necessary to make the statements herein, in light of the circumstances under which they are made, not misleading. With respect to information included in this Official Statement other than that relating to the District, the District has no reason to believe that such information contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements herein, in the light of the circumstances under which they are made, not misleading; however, the Board has made no independent investigation as to the accuracy or completeness of the information derived from sources other than the District.

CONTINUING DISCLOSURE OF INFORMATION In the Bond Order, the District has made the following agreement for the benefit of the registered and beneficial owners of the Bonds. The District is required to observe the agreement for so long as it remains obligated to advance funds to pay the Bonds. Under the agreement, the District will be obligated to provide certain updated financial information and operating data annually, and timely notice of specified events, to the Municipal Securities Rulemaking Board (the “MSRB”). This information will be available to the public without charge through its Electronic Municipal Market Access (“EMMA”) internet portal at www.emma.msrb.org. Annual Reports The District will provide annually to the MSRB certain updated financial information and operating data. The information to be updated includes the quantitative financial information and operating data with respect to the District of the general type included in this Official Statement under the headings “DEBT SERVICE REQUIREMENTS,” “FINANCIAL STATEMENT,” “THE SYSTEM,” “TAX DATA,” and “WATER AND SEWER OPERATIONS” (most of which information is contained in the District's annual audit report and supplemental schedules) and in APPENDIX A. The District will update and provide this information to the MSRB within six (6) months after the end of each fiscal year ending in or after 2020. The District may provide updated information in full text or may incorporate by reference certain other publicly available documents, as permitted by SEC Rule 15c2-12 (the “Rule”). The updated information will include audited financial statements, if the District commissions an audit and the audit is completed by the required time. If the audit of such financial statements is not complete within such period, then the District will provide unaudited financial statements by the required time, and audited financial statements when and if such audited financial statements become available. Any such financial statements will be prepared in accordance with the accounting principles described in the Bond Order or such other accounting principles as the District may be required to employ from time to time pursuant to state law or regulation. The District's current fiscal year end is May 31. Accordingly, it must provide updated information by November 30 in each year, unless the District changes its fiscal year. If the District changes its fiscal year, it will notify the MSRB via EMMA of the change. Specified Event Notices The District will provide timely notices of certain events to the MSRB via EMMA, but in no event will such notices be provided to the MSRB in excess of ten business days after the occurrence of an event. The District will provide notice of any of the following events with respect to the Bonds: (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; (7) modifications to rights of beneficial owners 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, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the District; (13) consummation of a merger, consolidation, or acquisition involving the District or the sale of all or substantially all of the assets of the District, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of an definitive agreement relating to any such actions, other than pursuant to its terms, if material; (14) appointment of a successor or additional trustee or the change of name of a trustee, if material (15) incurrence of a financial obligation of the District or an obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the District

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47

or an obligated person, any of which affect security holders, if material; and (16) default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the District or an obligated person, any of which reflect financial difficulties. The terms “financial obligation” and “material” when used in this paragraph shall have the meanings ascribed to them under federal securities laws. In addition, the District will provide timely notice of any failure by the District to provide financial information, operating data, or financial statements in accordance with its agreement described above under “Annual Reports.” Availability of Information from the MSRB The District has agreed to provide the foregoing information only to the MSRB. Investors will be able to access, without charge from the MSRB, continuing disclosure information filed with the MSRB at www.emma.msrb.org. Limitations and Amendments The District has agreed to update information and to provide notices of specified events only as described above. The District has not agreed to provide other information that may be relevant or material to a complete presentation of its financial results of operations, condition, or prospects or agreed to update any information that is provided, except as described above. The District makes no representation or warranty concerning such information or concerning its usefulness to a decision to invest in or sell Bonds at any future date. The District disclaims any contractual or tort liability for damages resulting in whole or in part from any breach of its continuing disclosure agreement or from any statement made pursuant to its agreement, although holders or Beneficial Owners of Bonds may seek a writ of mandamus to compel the District to comply with its agreement. The District may amend its continuing disclosure agreement from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the District, if but only if (1) the agreement, as amended, would have permitted an underwriter to purchase or sell Bonds in the offering made hereby in compliance with SEC Rule 15c2-12, taking into account any amendments or interpretations of SEC Rule 15c2-12 to the date of such amendment, as well as such changed circumstances, and (2) either (a) the holders of a majority in aggregate principal amount of the outstanding Bonds consent to the amendment or (b) any person unaffiliated with the District (such as nationally recognized bond counsel) determines that the amendment will not materially impair the interests of the Registered Owners and Beneficial Owners of the Bonds. If the District so amends the agreement, it has agreed to include with any financial information or operating data next provided in accordance with its agreement described above under “Annual Reports” an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information and operating so provided.

Compliance With Prior Undertakings During the last five years, the District has complied in all material respects with its previous continuing disclosure agreements.

MISCELLANEOUS All estimates, statements and assumptions in this Official Statement and the APPENDICES hereto have been made on the basis of the best information available and are believed to be reliable and accurate. Any statements in this Official Statement involving matters of opinion or estimates, whether or not expressly so stated, are intended as such and not as representations of fact, and no representation is made that any such statements will be realized. This Official Statement was approved by the Board of Directors of Montgomery County Municipal Utility District No. 115, as of the date shown on the cover page. /s/ President, Board of Directors ATTEST: /s/ Secretary, Board of Directors

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APPENDIX A

District Audited Financial Statements for the fiscal year ended May 31, 2019

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3 Greenway Plaza, Suite 1100, Houston, TX 77046 [email protected]

713‐814‐0552

Anthea W. Moran May 7, 2020 Managing Director

Montgomery County Municipal Utility District No. 115 c/o Smith, Murdaugh, Little & Bonham, L.L.P 2727 Allen Parkway, Suite 1100 Houston, Texas, 77019 Attn: Ms. Lori Aylett

Re: Montgomery County Municipal Utility District No. 115 Unlimited Tax Refunding Bonds, Series 2020 (“2020 Refunding Bonds”) Dear Board Members: In connection with the sale and delivery of the 2020 Refunding Bonds, we are notifying Montgomery County Municipal Utility District No. 115 (the “District”) that our Financial Advisory fee for services rendered will be based on one percent (1.00%) of the par amount of the bonds issued which is a modification of the fee schedule in Section 4 of the Financial Advisory Contract between Masterson Advisors LLC and the District dated May 3, 2018. This fee shall be for the Financial Advisory services related only to the sale of the 2020 Refunding Bonds. Sincerely yours, /s/ Anthea W. Moran Anthea W. Moran Managing Director

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DEBORAH S. JONES, MANAGING DIRECTOR

5847 San Felipe, Suite 4125 // Houston, TX 77057 // T 713.840.3602 // [email protected]

Raymond James & Associates, Inc., member New York Stock Exchange/SIPC

March 9, 2020 Montgomery County Municipal Utility District No. 115 c/o Smith, Murdaugh, Little & Bonham, L.L.P. 2727 Allen Parkway, Suite 1100 Houston, Texas 77019 Attn: Mr. Hal B. Sharp, President, Board of Directors Re: Disclosures by Underwriter Pursuant to SEC Municipal Advisor Rule and MSRB Rule G‐17 Unlimited Tax Refunding Bonds, Series 2020 Dear Mr. Sharp:

We are writing to provide you, as President of the Board of Directors of Montgomery County Municipal Utility District No. 115 (the “Issuer”), and an official of the Issuer with the authority to bind the Issuer by contract, with certain disclosures relating to the captioned bond issue (the “Bonds”) to:

(i) Confirm and engage Raymond James & Associates, Inc. (“RJA”), to serve as underwriter, and not as a

financial advisor or municipal advisor, pursuant to the Securities and Exchange Commission’s

Municipal Advisor Rule in connection with the issuance of the Bonds, and;

(ii) Provide certain underwriting disclosures as required by Municipal Securities Rulemaking Board

(MSRB) Rule G‐17 as set forth in MSRB Notice 2012‐25 (May 7, 2012)1.

As part of our services as underwriter, RJA may provide advice concerning the structure, timing, terms, and other similar matters concerning the issuance of the Bonds.

I. Disclosures Concerning the Underwriters’ Role:

(i) MSRB Rule G‐17 requires an underwriter to deal fairly at all times with both municipal issuers and investors.

(ii) The primary role of the underwriters is to purchase the Bonds with a view to distribution in an arm’s‐length commercial transaction with the Issuer. The underwriters have financial and other interests that differ from those of the Issuer.

(iii) Unlike a municipal advisor, the underwriters do not have a fiduciary duty to the Issuer under the federal securities laws and are, therefore, not required by federal law to act in the best interests of the Issuer without regard to their own financial or other interests.

(iv) The underwriters have a duty to purchase the Bonds from the Issuer at a fair and reasonable price, but must balance that duty with their duty to sell the Bonds to investors at prices that are fair and reasonable.

1 Interpretive Notice Concerning the Application of MSRB Rule G‐17 to Underwriters of Municipal Securities (effective

August 2, 2012).

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(v) The underwriters will review the official statement for the Bonds in accordance with, and as part of, their respective responsibilities to investors under the federal securities laws, as applied to the facts and circumstances of this transaction2.

II. Disclosures Concerning the Underwriters’ Compensation:

The underwriters will be compensated by a fee and/or an underwriting discount that will be set forth in the bond purchase agreement to be negotiated and entered into in connection with the issuance of the Bonds. Payment or receipt of the underwriting fee or discount will be contingent on the closing of the transaction and the amount of the fee or discount may be based, in whole or in part, on a percentage of the principal amount of the Bonds. While this form of compensation is customary in the municipal securities market, it presents a conflict of interest since the underwriters may have an incentive to recommend to the Issuer a transaction that is unnecessary or to recommend that the size of the transaction be larger than is necessary.

III. Additional Conflicts and Business Relationships Disclosures:

RJA has identified the following additional potential or actual material conflicts or business relationships we wish to call to your attention: In the ordinary course of its various business activities, RJA and its affiliates, officers, directors, and employees may purchase, sell or hold a broad array of investments and may actively trade securities, derivatives, loans, commodities, currencies, credit default swaps, and other financial instruments for their own account and for the accounts of customers. Such investment and trading activities may involve or relate to assets, securities and/or instruments of the Issuer (whether directly, as collateral securing other obligations or otherwise) and/or persons and entities with relationships with the Issuer. RJA and its affiliates also may communicate independent investment recommendations, market advice or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments and at any time may hold, or recommend to clients that they should acquire, long and/or short positions in such assets, securities and instruments.

Conflicts of Interest/Payments to or from Third Parties o We understand that the Issuer may use a portion of the proceeds from the issuance of the

Bonds to refund certain of the Issuer’s outstanding securities (“Refunded Bonds”). To the extent that RJA or an affiliate thereof owns Refunded Bonds, RJA or its affiliate, as the case may be, would receive a portion of the proceeds from the issuance of the Bonds.

IV. Disclosures Concerning Structure of Municipal Securities Financing:

Since RJA has recommended to the Issuer a financing structure that may be considered a “complex municipal securities financing” for purposes of MSRB Rule G‐17, attached is a description of the material financial characteristics of that financing structure as well as the material financial risks of the financing that are known to the underwriter and reasonably foreseeable at this time.

2 Under federal securities law, an issuer of securities has the primary responsibility for disclosure to investors. The

review of the official statement by the underwriters is solely for purposes of satisfying the underwriters’ obligations under the federal securities laws and such review should not be construed by an issuer as a guarantee of the accuracy or completeness of the information in the official statement.

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In accordance with the requirements of MSRB Rule G‐17, if RJA recommends a “complex municipal securities financing” to the Issuer that is not otherwise described herein, this letter will be supplemented to provide disclosure of the material financial characteristics of that financing structure as well as the material financial risks of the financing that are known to the underwriter and reasonably foreseeable at that time.

If you or any other Issuer official has any questions or concerns about these disclosures, then please make those questions or concerns known immediately to the undersigned. In addition, the Issuer should consult with its own financial and/or municipal, legal, accounting, tax and other advisors, as applicable, to the extent it deems appropriate.

It is our understanding that you have the authority to bind the Issuer by contract with us, and that you are not a party to any conflict of interest relating to the subject transaction. If our understanding is incorrect, please notify the undersigned immediately.

Under SEC and MSRB Rules, we are required to confirm our role as underwriter, and also seek your acknowledgement that you have received this letter. Accordingly, please send me an email to that effect or sign and return a copy of this letter to me via email as a PDF attachment. Depending on the structure of the transaction that the Issuer decides to pursue, or if additional potential or actual material conflicts are identified, we may be required to send you additional disclosures regarding the material financial characteristics and risks of such transaction and/or describing those conflicts. At that time, we also will seek your acknowledgement of receipt of any such additional disclosures.

We look forward to working with you and the Issuer in connection with the issuance of the Bonds. We appreciate your business.

Sincerely,

RAYMOND JAMES & ASSOCIATES, INC. By:_________________________________ Confirmation and acknowledgement: _________________

Name:

Title:

Date: ___________________

CC: Smith, Murdaugh, Little & Bonham, L.L.P. Masterson Advisors LLC

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Fixed Rate Structure Disclosure The following is a general description of the financial characteristics and security structures of fixed rate municipal bonds (“Fixed Rate Bonds”), as well as a general description of certain financial risks that you should consider before deciding whether to issue Fixed Rate Bonds. If you decide that you would like to pursue this financing alternative, we may provide you with additional information more specific to your particular issue. Financial Characteristics Maturity and Interest Fixed Rate Bonds are interest‐bearing debt securities issued by state and local governments, political subdivisions and agencies and authorities. Maturity dates for Fixed Rate Bonds are fixed at the time of issuance and may include serial maturities (specified principal amounts are payable on the same date in each year until final maturity) or one or more term maturities (specified principal amounts are payable on each term maturity date) or a combination of serial and term maturities. The final maturity date typically will range between 10 and 30 years from the date of issuance. Interest on the Fixed Rate Bonds typically is paid semiannually at a stated fixed rate or rates for each maturity date. Redemption Fixed Rate Bonds may be subject to optional redemption, which allows you, at your option, to redeem some or all of the bonds on a date prior to scheduled maturity, such as in connection with the issuance of refunding bonds to take advantage of lower interest rates. Fixed Rate Bonds will be subject to optional redemption only after the passage of a specified period of time, often approximately ten years from the date of issuance, and upon payment of the redemption price set forth in the bonds, which may include a redemption premium. You will be required to send out a notice of optional redemption to the holders of the bonds, usually not less than 30 days prior to the redemption date. Fixed Rate Bonds with term maturity dates also may be subject to mandatory sinking fund redemption, which requires you to redeem specified principal amounts of the bonds annually in advance of the term maturity date. The mandatory sinking fund redemption price is 100% of the principal amount of the bonds to be redeemed. Security Payment of principal of and interest on a municipal security, including Fixed Rate Bonds, may be backed by various types of pledges and forms of security, some of which are described below. General Obligation Bonds “General obligation bonds” are debt securities to which your full faith and credit is pledged to pay principal and interest. If you have taxing power, generally you will pledge to use your ad valorem (property) taxing power to pay principal and interest. Ad valorem taxes necessary to pay debt service on general obligation bonds may not be subject to state constitutional property tax millage limits (an unlimited tax general obligation bond). The term “limited” tax is used when such limits exist. General obligation bonds constitute a debt and, depending on applicable state law, may require that you obtain approval by voters prior to issuance. In the event of default in required payments of interest or principal, the holders of general obligation bonds have certain rights under state law to compel you to impose a tax levy.

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Revenue Bonds “Revenue bonds” are debt securities that are payable only from a specific source or sources of revenues. Revenue bonds are not a pledge of your full faith and credit and you are obligated to pay principal and interest on your revenue bonds only from the revenue source(s) specifically pledged to the bonds. Revenue bonds do not permit the bondholders to compel you to impose a tax levy for payment of debt service. Pledged revenues may be derived from operation of the financed project or system, grants or excise or other specified taxes. Generally, subject to state law or local charter requirements, you are not required to obtain voter approval prior to issuance of revenue bonds. If the specified source(s) of revenue become inadequate, a default in payment of principal or interest may occur. Various types of pledges of revenue may be used to secure interest and principal payments on revenue bonds. The nature of these pledges may differ widely based on state law, the type of issuer, the type of revenue stream and other factors. The description above regarding “Security” is only a brief summary of certain possible security provisions for the bonds and is not intended as legal advice. You should consult with your bond counsel for further information regarding the security for the bonds. Financial Risk Considerations Certain risks may arise in connection with your issuance of Fixed Rate Bonds, including some or all of the following: Issuer Default Risk You may be in default if the funds pledged to secure your bonds are not sufficient to pay debt service on the bonds when due. The consequences of a default may be serious for you and, depending on applicable state law and the terms of the authorizing documents, the holders of the bonds, the trustee and any credit support provider may be able to exercise a range of available remedies against you. For example, if the bonds are secured by a general obligation pledge, you may be ordered by a court to raise taxes. Other budgetary adjustments also may be necessary to enable you to provide sufficient funds to pay debt service on the bonds. If the bonds are revenue bonds, you may be required to take steps to increase the available revenues that are pledged as security for the bonds. A default may negatively impact your credit ratings and may effectively limit your ability to publicly offer bonds or other securities at market interest rate levels. Further, if you are unable to provide sufficient funds to remedy the default, subject to applicable state law and the terms of the authorizing documents, you may find it necessary to consider available alternatives under state law, including (for some issuers) state‐mandated receivership or bankruptcy. A default also may occur if you are unable to comply with covenants or other provisions agreed to in connection with the issuance of the bonds. This description is only a brief summary of issues relating to defaults and is not intended as legal advice. You should consult with your bond counsel for further information regarding defaults and remedies. Redemption Risk Your ability to redeem the bonds prior to maturity may be limited, depending on the terms of any optional redemption provisions. In the event that interest rates decline, you may be unable to take advantage of the lower interest rates to reduce debt service. Refinancing Risk If your financing plan contemplates refinancing some or all of the bonds at maturity (for example, if you have term maturities or if you choose a shorter final maturity than might otherwise be permitted under the

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applicable federal tax rules), market conditions or changes in law may limit or prevent you from refinancing those bonds when required. Further, limitations in the federal tax rules on advance refunding of bonds (an advance refunding of bonds occurs when tax‐exempt bonds are refunded more than 90 days prior to the date on which those bonds may be retired) may restrict your ability to refund the bonds to take advantage of lower interest rates. Reinvestment Risk You may have proceeds of the bonds to invest prior to the time that you are able to spend those proceeds for the authorized purpose. Depending on market conditions, you may not be able to invest those proceeds at or near the rate of interest that you are paying on the bonds, which is referred to as “negative arbitrage”. Tax Compliance Risk The issuance of tax‐exempt bonds is subject to a number of requirements under the United States Internal Revenue Code, as enforced by the Internal Revenue Service (IRS). You must take certain steps and make certain representations prior to the issuance of tax‐exempt bonds. You also must covenant to take certain additional actions after issuance of the tax‐exempt bonds. A breach of your representations or your failure to comply with certain tax‐related covenants may cause the interest on the bonds to become taxable retroactively to the date of issuance of the bonds, which may result in an increase in the interest rate that you pay on the bonds or the mandatory redemption of the bonds. The IRS also may audit you or your bonds, in some cases on a random basis and in other cases targeted to specific types of bond issues or tax concerns. If the bonds are declared taxable, or if you are subject to audit, the market price of your bonds may be adversely affected. Further, your ability to issue other tax‐exempt bonds also may be limited. This description of tax compliance risks is not intended as legal advice and you should consult with your bond counsel regarding tax implications of issuing the bonds.

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MONTGOMERY COUNTY MUNICIPAL UTILITY DISTRICT NO. 115

Resolution Authorizing Issuance and Distribution

of Preliminary Official Statement and Provisions

of Notice of Refunding and Redemption

The Board of Directors (“Board”) of Montgomery County Municipal Utility

District No. 115 (“District”) met on May 7, 2020, with the following directors present:

Hal B. Sharp, President

Catherine Athearn, Vice President

Cynthia A. Giles, Secretary

Leona G. Ohrt, Director

Ben Mitchell, Director

and the following directors were absent:

None

when the following business was transacted:

The resolution set out below was introduced for consideration by the Board. It

was duly moved and seconded that said resolution be adopted; and after due discussion said

motion was carried by the following vote:

Ayes: Hal B. Sharp, Catherine Athearn, Leona G. Ohrt and Ben

Mitchell

Noes: None

Abstentions: Cynthia A. Giles

The resolution adopted is as follows:

WHEREAS, the District intends to issue bonds for the purpose of refunding

$235,000 of the District’s $2,800,0000 Unlimited Tax Bonds, Series 2010 (the “Series 2010

Bonds”);


$525,000 of the District’s $2,120,0000 Unlimited Tax Bonds, Series 2011 (the “Series 2011

Bonds”);

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$1,635,000 of the District’s $2,120,0000 Unlimited Tax Bonds, Series 2012 (the “Series 2012

Bonds”);


$1,920,000 of the District’s $2,920,0000 Unlimited Tax Bonds, Series 2013 (the “Series 2013

Bonds”);

WHEREAS, for purposes of allowing and enabling Raymond James &

Associates, Inc. (the “Underwriter”), to purchase bonds of the District, the Board desires to

approve the distribution and use by the Underwriter of the Preliminary Official Statement dated

May 7, 2020 (the “Preliminary Official Statement”) relating to the issuance of bonds to refund a

portion of the Series 2010 Bonds, Series 2011 Bonds, Series 2012 Bonds and Series 2013 Bonds;

WHEREAS, the District has “deemed final” within the meaning of Securities and

Exchange Commission Rule 15c2-12 (“Rule 15c2-12”) the Preliminary Official Statement, dated

May 7, 2020, except for the permitted omissions described in paragraph (b)(1) of Rule 15c2-12;

WHEREAS, the Bond Order authorizing the issuance of the $2,800,000 Series

2010 Bonds, dated September 14, 2010, requires that the District to notify the Paying

Agent/Registrar its intention to redeem the bonds and at least 45 calendar days prior to the

redemption date (unless a shorter notice shall be satisfactory to the Paying Agent/Registrar)

notify the paying agent for the Series 2010 Bonds of such redemption date and of the principal

amount of bonds to be redeemed and that provision be made for notice to be sent to the

bondholders of the redemption of the Series 2010 Bonds not less than 30 calendar days prior to

the redemption date of the bonds to be redeemed. Such notice shall be sent to each Registered

Owner of a Bond to be redeemed at the address appearing on the Register of the Paying

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Agent/Registrar at the close of business on the business day next preceding the date of mailing

such notice.


2011 Bonds, dated October 25, 2011, requires that the District to notify the Paying









such notice.


2012 Bonds, dated August 29, 2012, requires that the District to notify the Paying









such notice.

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2013 Bonds, dated May 21, 2013, requires that the District to notify the Paying Agent/Registrar

its intention to redeem the bonds and at least 45 calendar days prior to the redemption date

(unless a shorter notice shall be satisfactory to the Paying Agent/Registrar) notify the paying

agent for the Series 2013 Bonds of such redemption date and of the principal amount of bonds to

be redeemed and that provision be made for notice to be sent to the bondholders of the

redemption of the Series 2013 Bonds not less than 30 calendar days prior to the redemption date

of the bonds to be redeemed. Such notice shall be sent to each Registered Owner of a Bond to be

redeemed at the address appearing on the Register of the Paying Agent/Registrar at the close of

business on the business day next preceding the date of mailing such notice.

NOW THEREFORE, BE IT ORDERED by the Board of Directors of

Montgomery County Municipal Utility District No. 115 that:

1. The Board hereby approves the distribution and use by the Underwriter of

the Preliminary Official Statement, being the “deemed final” Official Statement under

Rule 15c2-12.

2. The Board hereby authorizes notification be sent to the Paying

Agent/Registrars of the District’s Series 2010 Bonds, Series 2011 Bonds, Series 2012 Bonds, and

Series 2013 Bonds of its intention to redeem the bonds, authorizes the President to send written

notice to the paying agent for the Series 2010 Bonds, Series 2011 Bonds, Series 2012 Bonds, and

Series 2013 Bonds of redemption of the Series 2010 Bonds, Series 2011 Bonds, Series 2012

Bonds, and Series 2013 Bonds at least 45 calendar days prior to the redemption date (unless a

shorter notice shall be satisfactory to the Paying Agent/Registrar) and directs that provision be

made for notice to be sent to bondholders of the redemption of the Series 2010 Bonds, Series

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2011 Bonds, Series 2012 Bonds, and Series 2013 Bonds not less than 30 calendar days prior to

the redemption date of the bonds to be redeemed.

3. The Board hereby finds and declares that written notice of the date, hour,

place and subject of the meeting at which this resolution was adopted was posted according to

and in compliance with the Open Meetings Act, Tex. Gov’t. Code Ann. §551.001 et seq., as

amended, as suspended in part by the Governor of Texas on March 16, 2020, and that such

meeting was open to the public as required by law at all times during which this resolution and

the subject matter thereof were discussed, considered and formally acted upon, all as required by

the Open Meetings Act.

4. This resolution shall take effect and be in full force and effect upon and

after its passage.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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PASSED AND APPROVED this May 7, 2020.

MONTGOMERY COUNTY MUNICIPAL

UTILITY DISTRICT NO. 115

HAL B. SHARP

President

ATTEST:

CYNTHIA A. GILES

Secretary

[SEAL]

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92115-003 474714v1

I, the undersigned Secretary of the Board of Directors of Montgomery County

Municipal Utility District No. 115, hereby certify that the foregoing is a true and correct copy of

the Resolution Authorizing Issuance and Distribution of Preliminary Official Statement and

Provisions of Notice of Refunding and Redemption adopted by said Board at its regular meeting

of May 7, 2020, together with excerpts from the minutes of said Board’s meeting on that date

showing the adoption of said resolution, as same appear of record in the official minutes of the

Board, on file in the District’s office.

I further certify that said meeting was open to the public, and that notice was

given in compliance with the provisions of Tex. Gov’t. Code Ann. § 551.001 et seq. as adopted,

and as suspended in part by the Governor of Texas on March 16, 2020.

Witness my hand and the official seal of the said District, this ______________.

Secretary

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$_________MONTGOMERY COUNTY MUNICIPAL UTILITY DISTRICT NO. 115

UNLIMITED TAX REFUNDING BONDS,SERIES 2020

BOND PURCHASE AGREEMENT

__________, 2020

Board of DirectorsMontgomery County Municipal Utility District No. 115c/o Smith, Murdaugh, Little & Bonham, L.L.P. 2727 Allen Parkway, Suite 1100Houston, Texas 77019

Dear President and Members of the Board of Directors:

The undersigned, Raymond James & Associates, Inc. (the "Underwriters"), acting on its ownbehalf, offers to enter into this Bond Purchase Agreement (the "Agreement") with MontgomeryCounty Municipal Utility District No. 115 (the "District"). This offer is made subject to theDistrict's acceptance of this Bond Purchase Agreement on or before 10:00 p.m., Houston, TexasTime on the date hereof.

1. Purchase and Sale of the Bonds. Upon the terms and conditions and upon the basisof the representations set forth herein, the Underwriters hereby agree to purchase from the District,and the District hereby agrees to sell and deliver to the Underwriters, an aggregate of $_________principal amount of Montgomery County Municipal Utility District No. 115 Unlimited TaxRefunding Bonds, Series 2020 (the "Bonds"). Inasmuch as this purchase and sale represents anegotiated transaction, the District understands, and hereby confirms that the Underwriters are notacting as fiduciaries or agents of the District, but rather are acting solely in their capacity asunderwriters for their own account. The District acknowledges and agrees that (i) the primary roleof the Underwriters, as underwriters is to purchase securities for resale to investors in an arm'slength transaction between the District and the Underwriters; (ii) the Underwriters, as underwriters,have financial and other interests that differ from those of the District; (iii) the Underwriters are notacting as a municipal advisor, financial advisor or fiduciary to the District and have not assumed anyadvisory or fiduciary responsibility to the District with respect to the transaction contemplatedhereby and the discussions, undertakings and procedures leading thereto (irrespective of whetherthe Underwriters have provided or are currently providing other services to the District on othermatters); (iv) the only obligations the Underwriters have to the District with respect to thetransaction contemplated hereby expressly are set forth in this Bond Purchase Agreement; (v) theDistrict has consulted its own financial, municipal, legal, accounting, tax and/or other advisors, asapplicable, to the extent it deems appropriate; and (vi) the Underwriters have provided to the Districtprior disclosures under Rule G-17 of the Municipal Securities Rulemaking Board ("MSRB"), which havebeen received by the District. The District has engaged a municipal advisor to advise it on this transaction.

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The Bonds shall be dated June 1, 2020, and shall have the maturities and bear interest at therate or rates per annum as shown on Exhibit A attached hereto. Interest on the Bonds shall accruefrom June 1, 2020, and be payable on September 1, 2020, and semiannually thereafter on March 1and September 1 in each year until maturity or prior redemption. The purchase price for the Bondsshall be $____________ (representing the principal amount of the Bonds of $____________, plusa net premium on the Bonds of $_________, and less an Underwriters' discount of $_________),plus interest accrued on the Bonds from their dated date until the date of Closing (hereinafterdefined).

In accordance with Texas Government Code, 2252.908, the Underwriters represent andwarrant that at the time of this Bond Purchase agreement they are a publically traded business entity,or a wholly owned subsidiary of a publicly traded business entity.

2. Bond Order. The Bonds shall be issued and secured under the provisions of an orderadopted by the District on April 2, 2020, and the Officer's Approval Certificate of even dateherewith executed pursuant thereto (collectively, the "Bond Order") which Bond Order shall approveand contain the pricing information set forth in this Bond Purchase Agreement and Exhibit A hereto. The Bonds shall be secured and payable as provided in the Bond Order.

3. Public Offering. It shall be a condition of the obligations of the District to sell anddeliver the Bonds to the Underwriters, and of the obligations of the Underwriters to purchase andaccept delivery of the Bonds, that the entire principal amount of the Bonds authorized by the BondOrder shall be sold and delivered by the District and accepted and paid for by the Underwriters atthe Closing. The Underwriters agree to make a bona fide public offering of all of the Bonds, atprices not in excess of the initial public offering prices, as set forth on the cover page of the OfficialStatement, plus interest accrued on the Bonds.

(a) The Underwriters, on behalf of the Underwriters, agree to assist the District inestablishing the issue price of the Bonds and shall execute and deliver to the District at Closing an"issue price" or similar certificate, together with the supporting pricing wires or equivalentcommunications, with such modifications as may be appropriate or necessary, in the reasonablejudgment of the Underwriters, the District and Bond Counsel, to accurately reflect, as applicable,the sales price or prices or the initial offering price or prices to the public of the Bonds. Asapplicable, all actions to be taken by the District under this section to establish the issue price of theBonds may be taken on behalf of the District by the District's municipal advisor and any notice orreport to be provided to the District may be provided to the District's municipal advisor.

(b) Except as otherwise set forth in Exhibit B attached hereto, the District will treat thefirst price at which 10% of each maturity of the Bonds (the "10% test") is sold to the public as theissue price of that maturity (if different interest rates apply within a maturity, each separate CUSIPnumber within that maturity will be subject to the 10% test). At or promptly after the execution ofthis Agreement, the Underwriters shall report to the District the price or prices at which it has soldto the public each maturity of Bonds.

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(c) The Underwriters confirm that the Underwriters have offered the Bonds to the publicon or before the date of this Agreement at the offering price or prices (the "initial offering price"),or at the corresponding yield or yields, set forth in Exhibit A attached hereto, except as otherwiseset forth therein. Exhibit B sets forth, as of the date of this Agreement, the maturities, if any, of theBonds for which the 10% test has not been satisfied (the "Hold-The-Offering-Price Maturities"). The District and the Underwriters, on behalf of the Underwriters, agree that the restrictions set forthin the next sentence shall apply to the Hold-The-Offering-Price Maturities, which will allow theDistrict to treat the initial offering price to the public of each such maturity as of the sale date as theissue price of that maturity (the "hold-the-offering-price rule"). So long as thehold-the-offering-price rule remains applicable to any maturity of the Bonds, the Underwriters willneither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than theinitial offering price to the public during the period starting on the sale date and ending on the earlierof the following:

(i) the close of the fifth (5th) business day after the sale date; or

(ii) the date on which the Underwriters have sold at least 10% of that maturityof the Bonds to the public at a price that is no higher than the initial offering price to thepublic.

The Underwriters shall promptly advise the District when the Underwriters have sold 10%of that maturity of the Bonds to the public at a price that is no higher than the initial offering priceto the public, if that occurs prior to the close of the fifth (5th) business day after the sale date.

(d) The Underwriters confirm that:

(i) any agreement among underwriters, any selling group agreement and eachretail distribution agreement (to which the Underwriters are a party) relating to the initialsale of the Bonds to the public, together with the related pricing wires, contains or willcontain language obligating each Underwriter, each dealer who is a member of the sellinggroup, and each broker-dealer that is a party to such retail or other third-party distributionagreement, as applicable, to (A) report the prices at which it sells to the public the unsoldBonds of each maturity allotted to it until it is notified by the Underwriters that either the10% test has been satisfied as to the Bonds of that maturity or all Bonds of that maturityhave been sold to the public and (B) comply with the hold-the-offering-price rule, ifapplicable, in each case if and for so long as directed by the Underwriters and as set forthin the related pricing wires, and

(ii) any agreement among underwriters relating to the initial sale of the Bonds tothe public, together with the related pricing wires, contains or will contain languageobligating each Underwriter that is a party to a retail or other third-party distributionagreement to be employed in connection with the initial sale of the Bonds to the public torequire each broker-dealer that is a party to such retail or other third-party distributionagreement to (A) report the prices at which it sells to the public the unsold Bonds of eachmaturity allotted to it until it is notified by the Underwriters or the Underwriter that eitherthe 10% test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity

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have been sold to the public and (B) comply with the hold-the-offering-price rule, ifapplicable, in each case if and for so long as directed by the Underwriters or the Underwriterand as set forth in the related pricing wires.

(e) The Underwriters acknowledge that sales of any Bonds to any person that is a relatedparty to an Underwriter shall not constitute sales to the public for purposes of this section. Further,for purposes of this section:

(i) "public" means any person other than an underwriter or a related party,

(ii) "underwriters" means (A) any person that agrees pursuant to a writtencontract with the District (or with the lead underwriter to form an underwriting syndicate)to participate in the initial sale of the Bonds to the public and (B) any person that agreespursuant to a written contract directly or indirectly with a person described in clause (A) toparticipate in the initial sale of the Bonds to the public (including a member of a sellinggroup or a party to a retail or other third-party distribution agreement participating in theinitial sale of the Bonds to the public),

(iii) a purchaser of any of the Bonds is a "related party" to the Underwriters if theunderwriter and the purchaser are subject, directly or indirectly, to (A) more than 50%common ownership of the voting power or the total value of their stock, if both entities arecorporations (including direct ownership by one corporation of another), (B) more than 50%common ownership of their capital interests or profits interests, if both entities arepartnerships (including direct ownership by one partnership of another), or (C) more than50% common ownership of the value of the outstanding stock of the corporation or thecapital interests or profit interests of the partnership, as applicable, if one entity is acorporation and the other entity is a partnership (including direct ownership of the applicablestock or interests by one entity of the other), and

(iv) "sale date" means the date of execution of this Bond Purchase Agreement byall parties.

4. Official Statement. Exhibit A hereto is the cover page of the Official Statement ofthe District with respect to the Bonds. The Official Statement of the District, dated __________,2020, including the cover page and Appendices thereto, as further amended or supplemented onlyin the manner hereinafter provided, is hereinafter called the "Official Statement." The PreliminaryOfficial Statement, dated April 2, 2020 (as amended or supplemented through the date hereof, the"Preliminary Official Statement") has been prepared by the District for the use by the Underwritersin connection with the public offering, sale and distribution of the Bonds. The District confirms itsconsent to the use by the Underwriters prior to the date hereof of the Preliminary Official Statement. The District hereby represents and warrants that the Preliminary Official Statement was deemedfinal by the District as of its date, except for the omission of such information which is dependentupon the final pricing of the Bonds for completion, all as permitted to be excluded by Section (b)(1)of Rule 15c2-12 of the United States Securities and Exchange Commission (the "SEC") under theSecurities Exchange Act of 1934 ("Rule 15c2-12"). The District hereby authorizes the OfficialStatement and the information therein contained to be used by the Underwriters in connection with

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the public offering and sale of the Bonds. The District agrees to cooperate with the Underwritersto provide a supply of final Official Statements within seven business days of the date hereof insufficient quantities (not to exceed 250), and in such printed or electronic form as is sufficient, tocomply, and the Underwriters agree to comply, with the Underwriters' obligations under applicableMSRB Rules and Rule 15c2-12 of the SEC. The District further specifically agrees to cooperatewith the Underwriters to provide such information as is reasonably necessary for the Underwritersto comply with the filing requirements of MSRB Rule G-32. Unless otherwise notified in writingby the Underwriters, the "end of the underwriting period" for the purposes of Rule 15c2-12 is thedate of Closing.

5. Representations, Warranties and Agreements of District. On the date hereof, theDistrict represents, warrants and agrees as follows:

(a) The District is a municipal utility district created on March 22, 2006, by anorder of the Texas Commission of Environmental Quality and operates pursuant to ArticleXVI, Section 59 of the Texas Constitution and Chapters 49 and 54, Texas Water Code, asamended, and has full legal right, power and authority (i) to issue the Bonds and to enter intothe escrow agreement (the "Escrow Agreement") described in the Bond Order, (ii) to authorize andapprove the Preliminary Official Statement and the Official Statement and to authorize andapprove their distribution by the Underwriters, (iii) to enter into this Bond PurchaseAgreement, (iv) to adopt the Bond Order and to carry out and consummate the actionscontemplated thereby, and (v) to carry out and consummate all other transactionscontemplated by each of the aforesaid documents

(b) The District has complied, and will be at the date of Closing in compliance,in all material respects, with the Constitution and laws of the State of Texas in connectionwith the authorization, issuance and sale of the Bonds;

(c) By official action of the District prior to or concurrently with the acceptancehereof, the District has duly adopted the Bond Order, has duly authorized and approved theexecution and delivery of the Bonds, the Escrow Agreement, and this Bond PurchaseAgreement, and has duly authorized and approved the performance by the District of itsobligations contained in the Bond Order, the Escrow Agreement, and this Bond PurchaseAgreement and such documents constitute legal, valid and binding obligations of theDistrict, enforceable in accordance with their respective terms, subject to bankruptcy,insolvency, reorganization, moratorium and other similar laws and principles of equityrelating to or affecting the enforcement of creditors' rights;

(d) To the knowledge of the District, the District is not, in any material respect,in breach of or default under any applicable law or administrative regulation of the State ofTexas or the United States or any applicable judgment or decree or any loan agreement, note,resolution, agreement or other instrument, except as may be disclosed in the OfficialStatement, to which the District is a party or is otherwise subject, which would have amaterial and adverse effect upon the business or financial condition of the District; and theexecution and delivery of this Bond Purchase Agreement by the District and the executionand delivery of the Bonds and the Escrow Agreement and the adoption of the Bond Order

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by the District and compliance with the provisions of each thereof will not violate orconstitute a material breach of or default under any existing law, administrative regulation,judgment, decree or any agreement or other instrument to which the District is a party or, tothe knowledge of the District, is otherwise subject;

(e) All approvals, consents and orders of any governmental authority or agencyhaving jurisdiction which approval, consent or order would constitute a condition precedentto the performance by the District of its obligation to issue the Bonds hereunder will havebeen obtained prior to the Closing;

(f) The Preliminary Official Statement did not, and at the time of the District'sacceptance hereof, the Official Statement does not, and at the time of the Closing, theOfficial Statement will not, contain any untrue statement of a material fact or omit to statea material fact required to be stated therein or necessary to make the statements therein, inlight of the circumstances under which they were made, not misleading insofar asinformation within the knowledge of the District is concerned;

(g) The audited financial statements of the District as of May 31, 2019, containedin the Official Statement present fairly the financial position as of such date, and the resultsof its operations for the year then ended, in conformity with generally accepted accountingprinciples, and there has been no material adverse change in the financial condition of theDistrict since May 31, 2019;

(h) Between the date of this Bond Purchase Agreement and Closing, the Districtwill not, without the prior written consent of the Underwriters, issue any additional bonds,notes or other obligations for borrowed money payable in whole or in part from ad valoremtaxes;

(i) Except as described in the Official Statement, no litigation is pending or, tothe knowledge of the District, threatened in any court affecting the existence of the District,the title of its officers to their respective offices, or seeking to restrain or enjoin the issuanceor delivery of the Bonds, the levy or the collection of taxes pledged or to be pledged to paythe principal of and interest on the Bonds, or in any way contesting or affecting the issuance,execution, delivery, payment, security or validity of the Bonds, or in any way contesting oraffecting the validity or enforceability of the Bond Order, the Escrow Agreement, or thisBond Purchase Agreement, or contesting the powers of the District, or any authority for theBonds, the Bond Order, the Escrow Agreement, or this Bond Purchase Agreement orcontesting in any way the completeness, accuracy or fairness of the Preliminary OfficialStatement or the Official Statement;

(j) Although the District assumes no responsibility for the registration orqualification of the Bonds under the securities law of any jurisdiction, the District willcooperate with the Underwriters, at the Underwriters' request and expense, in arranging forthe qualification of the Bonds for sale and the determination of their eligibility forinvestment under the securities laws of such jurisdictions as the Underwriters designate, and

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will, at the Underwriters' request and expense, use its best efforts to continue suchqualifications in effect so long as required for the initial distribution of the Bonds; provided,however, that the District will not be required to execute a general consent to service ofprocess or to qualify to do business in connection with any such qualification in anyjurisdiction;

(k) The descriptions contained in the Official Statement of the Bonds, the EscrowAgreement, and the Bond Order accurately reflect the provisions of such instrument, and theBonds, when validly executed, authenticated and delivered in accordance with the BondOrder and sold to the Underwriters as provided herein, will be validly issued and outstandingdirect obligations of the District, entitled to the benefits of, and subject to the limitationscontained in, the Bond Order; and

(l) If after the date of this Bond Purchase Agreement to and including the datethe Underwriters are no longer required to provide an Official Statement to customers whorequest the same pursuant to Rule 15c2-12, an event occurs of which the District hasknowledge and which would cause the Official Statement to contain any untrue statementof a material fact or to omit to state a material fact required to be stated therein or necessaryto make the statements therein, in light of the circumstances under which they were made,not misleading, the District shall notify the Underwriters, and if in the opinion of the Districtor the Underwriters such event requires a supplement or amendment to the OfficialStatement, or if it is necessary to amend or supplement the Official Statement to comply withlaws, the District will supplement or amend the Official Statement in a form and in a mannerjointly approved by the District and the Underwriters, such that the Official Statement as sosupplemented or amended will not contain any untrue statement of a material fact or omitto state any material fact required to be stated therein or necessary to make the statementstherein, in light of the circumstances under which made, not misleading. If such supplementor amendment shall be subsequent to the Closing, the District shall furnish such certificates,instruments and other documents as the Underwriters may deem necessary to evidence thetruth and accuracy of such supplement or amendment to the Official Statement.

6. Closing. At 10:00 A.M., Central Time, on June 4, 2020, or such later time as shallbe agreeable to the Underwriters and the District (the "Closing"), the District will deliver the initialbond or bonds (as defined in the Bond Order) to the Underwriters or its designee, together with theother documents hereinafter mentioned, and the Underwriters will accept such delivery and pay thepurchase price of the Bonds as set forth in Paragraph 1 hereof in immediately available funds. Delivery and payment as aforesaid shall be made at the offices of The Bank of New York MellonTrust Company, N.A., in Dallas, Texas (the "Registrar"), or such other place as shall have beenmutually agreed upon by the District and the Underwriters. The Bonds shall be delivered in fullyregistered form, bearing CUSIP numbers without coupons, with one Bond for each maturity of theBonds, registered in the name of Cede & Co., as nominee of The Depository Trust Company, NewYork, New York, all as provided in the Bond Order, and shall be made available to the Underwritersor its designee at least one business day before the Closing for purposes of inspection at such placeas shall be mutually satisfactory to the District and the Underwriters.

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7. Conditions. The Underwriters have entered into this Bond Purchase Agreement inreliance upon the representations and warranties of the District contained herein and to be containedin the documents and instruments to be delivered at the Closing, and upon the performance by theDistrict of its obligations hereunder, both as of the date hereof and as of the date of Closing. Accordingly, the Underwriters' obligations under this Bond Purchase Agreement to purchase andpay for the Bonds shall be subject to the performance by the District of its obligations to beperformed hereunder and under such documents and instruments executed at or prior to the Closing,and shall also be subject to the following conditions:

(a) The representations and warranties of the District contained herein shall betrue, complete and correct in all material respects on the date hereof and on and as of the dateof Closing, as if made on the date of Closing;

(b) At the time of the Closing, the Bond Order and the Escrow Agreement shallbe in full force and effect, the Bond Order and the Escrow Agreement shall not have beenamended, modified or supplemented and the Official Statement shall not have beenamended, modified or supplemented, except as may have been agreed to by theUnderwriters;

(c) At the time of the Closing, all official actions of the District related to theBond Order shall be in full force and effect and shall not have been amended, modified orsupplemented, except as may have been agreed to by the Underwriters;

(d) The District shall not have failed to pay principal or interest when due on anyof its outstanding obligations for borrowed money;

(e) At or prior to the Closing, either (i) the Underwriters shall have purchased orsubscribed for the purchase of the open market Treasury Obligations, if any, described in theVerification Report (hereinafter defined) at prices not exceeding the market prices thereofor (ii) the District shall have subscribed to the United States Treasury for the purchase ofState and Local Government Treasury Obligations, if any, required to be deposited with theEscrow Agent pursuant to and as defined in the Escrow Agreement; and

(f) At or prior to the Closing, the Underwriters shall have received each of thefollowing documents:

(1) The Official Statement of the District executed on behalf of theDistrict by the President or Vice President and Secretary or Secretary Pro Temporeof the Board of Directors of the District;

(2) The Bond Order certified by the Secretary or Secretary Pro Temporeof the Board of Directors under its seal as having been duly adopted by the Districtand an executed Approval Certificate, both as in effect, with such changes oramendments as may have been agreed to by the Underwriters;

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(3) The opinion, dated the date of Closing, of Smith, Murdaugh, Little &Bonham, L.L.P., Bond Counsel, to the effect described in the Official Statement andin form and substance acceptable to the Underwriters concerning the validity of theBonds under Texas law and the excludability of interest on the Bonds from grossincome for federal income tax purposes;

(4) An opinion certified by a Certificate of the Comptroller of PublicAccounts of the State of Texas, dated on or prior to the date of Closing, of theAttorney General of Texas, approving the Bonds as required by law;

(5) The supplemental opinion, dated the date of Closing, of Smith,Murdaugh, Little & Bonham, L.L.P., addressed to the District and the Underwritersto the effect that, in its capacity as Bond Counsel, such firm has reviewed theinformation contained under the captions "PLAN OF FINANCING -"- EscrowAgreement and Defeasance of Refunded Bonds," THE BONDS" (except for "Book-Entry-Only System"),"THE DISTRICT - General," "MANAGEMENT - Attorney,""TAX PROCEDURES," "LEGAL MATTERS - Legal Opinion," "TAX MATTERS,"and "CONTINUING DISCLOSURE OF INFORMATION" contained in the OfficialStatement, and such firm is of the opinion that such information, insofar as it relatesto matters of law, is true and correct and fairly summarizes matters of law andprovisions of the documents referred to therein;

(6) An opinion from McCall, Parkhurst & Horton L.L.P., Underwriters'Counsel, dated the date of the Closing, addressed to the Underwriters to the effectthat the Bonds are exempted securities as described in Section 3(a)(2) of theSecurities Act of 1933, as amended, and Section 304(a)(4) of the Trust Indenture Actof 1939, as amended, to the extent provided in such Acts, and it is not necessary inconnection with the sale of the Bonds to the public to register the Bonds under theSecurities Act of 1933, as amended, or to qualify the Bond Order under the TrustIndenture Act of 1939, as amended. The opinion of such firm shall also state that,based upon its participation in the preparation of the Official Statement, suchCounsel has no reason to believe that the Official Statement (except for the financialstatements and other financial and statistical data contained therein, as to which noview need be expressed), as of the date thereof, contained any untrue statement ofa material fact or omitted to state any material fact necessary to make the statementstherein, in the light of the circumstances under which they were made, notmisleading;

(7) A certificate, dated the date of Closing, signed by the President orVice President of the Board of Directors of the District in his or her official capacity,to the effect that to the best of his or her knowledge or belief (i) the representationsand warranties of the District contained herein are true and correct in all materialrespects on and as of the date of Closing, as if made on the date of Closing; (ii)except to the extent disclosed in the Official Statement, no litigation is pending or,to the knowledge of the District, threatened in any court to restrain or enjoin theissuance or delivery of the Bonds, or the levy or collection of the taxes pledged orto be pledged to pay the principal of and interest on the Bonds, or the pledge thereof,

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or in any way contesting or affecting the validity of the Bonds, the Bond Order, theEscrow Agreement, or this Bond Purchase Agreement, or contesting the powers ofthe District or contesting the authorization of the Bonds or the Bond Order, orcontesting in any way the accuracy, completeness or fairness of the PreliminaryOfficial Statement or the Official Statement (but in lieu of or in conjunction withsuch certificate, the Underwriters may, in their sole discretion, accept certificates oropinions of counsel of the District that, in his or her opinion, the issues raised in anysuch pending or threatened litigation are without substance or that the contentionsof all plaintiffs therein are without merit); (iii) to the best of his or her knowledge,no event affecting the District has occurred since the date of the Official Statementwhich should be disclosed in the Official Statement for the purpose for which it isto be used or which it is necessary to disclose therein in order to make the statementsand information therein not misleading in any material respect; and (iv) there has notbeen any material and adverse change in the financial condition of the District sinceMay 31, 2019, the latest date as to which audited financial information is available;

(8) A certificate, dated the date of Closing, of an appropriate official ofthe District to the effect that, on the basis of the facts, estimates and circumstancesin effect on the date of delivery of the Bonds, it is not expected that the proceeds ofthe Bonds will be used in a manner that would cause the Bonds to be arbitrage bondswithin the meaning of Section 148 of the Internal Revenue Code of 1986, asamended (the "Code");

(9) A copy of a special report (the "Verification Report") prepared by averifier (as defined in the City of Houston Ordinance No. 97-416, as amended),addressed to the District, Bond Counsel, and the Underwriters verifying (i) themathematical computations of the adequacy of the cash and the maturing principalamounts of and interest on the State and Local Government Treasury Obligations oropen market Treasury Obligations, if any, to be held by the Escrow Agent to pay,when due, the principal of and interest on of the Refunded Bonds, (ii) themathematical computations of yield used by Bond Counsel to support its opinion thatinterest on the Bonds will be excluded from gross income for federal income taxpurposes, and (iii) compliance with City of Houston Ordinance 97-416;

(10) Evidence of the [underlying rating of Moody's Investors Service][insured rating of S&P Global Ratings, a business unit of Standard & Poor'sFinancial Services LLC,] of no less than "__" (stable outlook) on the Bonds;

[(11) Evidence of the municipal bond insurance policy issued by _______________________________ (the "Insurer") delivered in a form acceptable to theUnderwriters;] and

(12) Such additional legal opinions, certificates, instruments and otherdocuments as Bond Counsel or Underwriters' Counsel may reasonably request toevidence the truth, accuracy and completeness, as of the date hereof and as of thedate of Closing, of the District's representations and warranties contained herein and

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of the statements and information contained in the Official Statement and the dueperformance and satisfaction by the District at or prior to the date of Closing of allagreements then to be performed and all conditions then to be satisfied by theDistrict.

All of the opinions, letters, certificates, instruments and other documents mentioned aboveor elsewhere in this Bond Purchase Agreement shall be in form and substance satisfactory to BondCounsel and Counsel to the Underwriters.

If the District shall be unable to satisfy the conditions to the obligations of the Underwritersto purchase, accept delivery of and pay for the Bonds, as set forth in this Bond Purchase Agreement,or if the obligations of the Underwriters to purchase, accept delivery of and pay for the Bonds shallbe terminated for any reason permitted by this Bond Purchase Agreement, this Bond PurchaseAgreement shall terminate, and neither the Underwriters nor the District shall be under furtherobligation hereunder, except that the respective obligations of the District and the Underwriters setforth in Paragraph 9 hereof shall continue in full force and effect.

8. Termination. The Underwriters may terminate their obligation to purchase theBonds, if at any time after the date hereof, but before Closing, any of the following should occur:

(a) (i) Legislation shall have been enacted by the Congress of the United States,or recommended to the Congress for passage by the President of the United States, (by pressrelease or other form of written notice, but expressly not including posting on a social mediaplatform), or Treasury Department of the United States or the Internal Revenue Service, orfavorably reported for passage to either House of the Congress by any Committee of suchHouse, or (ii) a decision shall have been rendered by a court established under Article III ofthe Constitution of the United States or by the United States Tax Court, or (iii) an order,ruling or regulation (final, temporary, or proposed), press release, statement, or other formof notice shall have been issued or proposed by or on behalf of the Treasury Department ofthe United States or the Internal Revenue Service or any other agency of the United States,the effect of which, in any such case described in clause (i), (ii), or (iii), would be to impose,directly or indirectly, federal income taxation upon interest received on obligations of thegeneral character of the Bonds or upon income of the general character to be derived by theDistrict, other than any imposition of federal income taxes upon interest received onobligations of the general character as the Bonds on the date hereof, or other action or eventsshall have transpired which may have the purpose or effect, directly or indirectly, ofchanging the federal income tax consequences of any of the transactions contemplatedherein, in such a manner as in the reasonable judgment of the Underwriters would materiallyimpair the marketability or materially adversely affect the market price of the Bonds.

(b) Any action shall have been taken by the SEC or by a court of competentjurisdiction which would require registration of any security under the Securities Act of1933, as amended, or qualification of any indenture under the Trust Indenture Act of 1939,as amended, in connection with the public offering of the Bonds, or any action shall havebeen taken by any court or by any governmental authority of competent jurisdictionsuspending the use of the Preliminary Official Statement or the Official Statement or any

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amendment or supplement thereto, or any proceeding for that purpose shall have beeninitiated or threatened in any such court or by any such authority.

(c) (i) The Constitution of the State of Texas shall be amended or an amendmentshall be proposed, or (ii) legislation shall be enacted, or (iii) a decision shall have beenrendered by a court of competent jurisdiction as to matters of Texas law, or (iv) any order,ruling or regulation shall have been issued or proposed by or on behalf of the State of Texasby an official, agency or department thereof, affecting the tax status of the District, itsproperty or income, its bonds (including the Bonds) or the interest thereon, which in thejudgment of the Underwriters would materially affect the market price of the Bonds.

(d) (i) A general suspension of trading in securities shall have occurred on theNew York Stock Exchange, (ii) the United States shall have become engaged in hostilities,which have resulted in the declaration, on or after the date of this Bond Purchase Agreement,of a national emergency or war, except for current hostilities in Iraq, Afghanistan, and Syria,unless such current hostilities are escalated beyond that in existence on the date of thisAgreement, or (iii) there shall have occurred any national or international calamity or crisisin the financial markets or otherwise of the United States, the effect of which, in any casedescribed in clauses (i), (ii), or (iii), is, in the reasonable judgment of the Underwriters, somaterial and adverse as to make it impracticable or inadvisable to proceed with the publicoffering or the delivery of the Bonds on the terms and in the manner contemplated in thisBond Purchase Agreement and the Official Statement.

(e) An event described in Paragraph 5(l) hereof occurs which requires asupplement or amendment to the Official Statement, and such supplement or amendmenthas, or would have, a material adverse effect upon the marketability or market price of theBonds.

(f) A general banking moratorium shall have been declared by authorities of theUnited States, the State of New York or the State of Texas.

(g) The debt ceiling of the United States is such that the State and LocalGovernment Treasury Obligations, if any, required to be deposited with the Escrow Agentpursuant to the Escrow Agreement, are not available for delivery on the date of the Closingand the District is otherwise unable on the date of Closing to fund the Escrow Fund createdpursuant to the terms of the Escrow Agreement.

(h) Failure to provide, within seven business days of the date hereof, an OfficialStatement in form and substance satisfactory to the Underwriters.

(i) There shall have occurred any materially adverse change in the financialcondition of the District, except for changes which the Official Statement discloses areexpected to occur.

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(j) There shall have occurred or any notice shall have been given of any intendedreview, downgrading, suspension, withdrawal, or negative change in credit watch status byany national rating service to any of the District's obligations [or any rating of the Insurer].

9. Expenses. At or promptly following the Closing: (a) The District shall pay (and theUnderwriters shall be under no obligation to pay) any expenses incident to the performance of theDistrict's obligations hereunder, including but not limited to: (i) the cost of the preparation, printingand distribution of the Preliminary Official Statement and the Official Statement (includingamendments or supplements thereto); (ii) the cost, if any, of the preparation and printing of theBonds; (iii) the fees and expenses of Bond Counsel; (iv) the fees and disbursements of the AttorneyGeneral of the State of Texas and the District's accountants, financial advisors, engineers, and anyother experts or consultants or advisors retained by the District, including the fee of the independentcertified accountants named in the Official Statement for the preparation of the Verification Report;(v) bond insurance premiums, if any; (vi) rating agencies' fees, if any; and (vii) redemption fees, ifany.

(b) The Underwriters hereby advise the District, and the District acknowledges, that theUnderwriters will pay from the Underwriters' expense allocation of the Underwriters' discount (i)any expenses incurred by the Underwriters which are incidental to implementing this Bond PurchaseAgreement and the issuance of the Bonds, including but not limited to, meals, transportation, andlodging, if any, and any other miscellaneous closing costs, and (ii) the applicable per bondassessment charged by the Municipal Advisory Council of Texas, a non-profit corporation whosepurpose is to collect, maintain and distribute information relating to issuing entities of municipalsecurities. The District acknowledges that it has had an opportunity, in consultation with suchadvisors as it may deem appropriate, if any, to evaluate and consider the fees and expenses beingincurred as part of the issuance of the Bonds.

(c) The Underwriters shall pay (and the District shall be under no obligation to pay): (i)all advertising expenses in connection with the offering of the Bonds; (ii) the cost of the preparationand printing of all the underwriting documents (other than the Preliminary Official Statement andthe Official Statement); (iii) fees and expenses of Underwriters' Counsel; and (iv) all other expensesincurred by them in connection with the offering and distribution of the Bonds.

(d) In the event that the Bonds are not purchased by the Underwriters, except asotherwise permitted in Paragraphs 7 and 8 hereof, the Underwriters shall be responsible for thepayment of all costs and expenses of the District incident to the authorization, issuance and deliveryof the Bonds.

10. Notices. Any notice or other communication to be given to the District under thisBond Purchase Agreement may be given by delivering the same in writing at the address for theDistrict set forth above, and any notice or other communication to be given to the Underwritersunder this Bond Purchase Agreement may be given by delivering the same in writing to RaymondJames & Associates, Inc., 5847 San Felipe, Suite 4125, Houston, Texas 77057, Attention: DebiJones. The approval of the Underwriters when required hereunder or the determination of theirsatisfaction as to any document referred to herein shall be in writing, signed by the Underwriters anddelivered to the District.

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11. Parties in Interest. This Bond Purchase Agreement is made solely for the benefitof the District and the Underwriters (including the successors or assigns of the Underwriters) andno other person shall acquire or have any right hereunder or by virtue hereof. The representations,warranties and agreements contained in this Bond Purchase Agreement shall remain operative andin full force and effect, regardless of (i) any investigations made by or on behalf of the Underwriters,and (ii) delivery of any payment for the Bonds hereunder.

12. Compliance With Laws Prohibiting Contracts With Companies BoycottingIsrael and Certain Companies Engaged in Business With Iran, Sudan or Foreign TerroristOrganizations. (a) The Underwriters hereby verifies that it and its parent company, wholly-ormajority-owned subsidiaries, and other affiliates, if any, do not boycott Israel and, to the extent thisAgreement is a contract for goods or services, will not boycott Israel during the term of thisAgreement. The foregoing verification is made solely to comply with Section 2271.002, TexasGovernment Code, and to the extent such Section does not contravene applicable Texas or Federallaw. As used in the foregoing verification, "boycott Israel" means refusing to deal with, terminatingbusiness activities with, or otherwise taking any action that is intended to penalize, inflict economicharm on, or limit commercial relations specifically with Israel, or with a person or entity doingbusiness in Israel or in an Israeli-controlled territory, but does not include an action made forordinary business purposes. The Underwriters understands "affiliate" to mean an entity thatcontrols, is controlled by, or is under common control with the Underwriters and exists to make aprofit. For purposes of this subsection (a), the term "company" has the meaning given to it in theTexas Government Code, Sections 808.001(2) and 2271.001(2).

(b) Each of the Underwriters represents that neither it nor any of its parent company,wholly- or majority-owned subsidiaries, and other affiliates is a company identified on a listprepared and maintained by the Texas Comptroller of Public Accounts under Section 2252.153 orsection 2270.0201, Texas Government Code, and posted on any of the following pages of suchofficer's internet website: https://comptroller.texas.gov/purchasing/docs/sudan-list.pdf,h t t p s : / / c o m p t r o l l e r . t e x a s . g o v / p u r c h a s i n g / d o c s / i r a n - l i s t . p d f , o r https://comptroller.texas.gov/purchasing/docs/fto-list.pdf. The foregoing representation is madesolely to comply with Section 2252.152, Texas Government Code, and to the extent such Sectiondoes not contravene applicable Federal law and excludes the Underwriters and each of its parentcompany, wholly- or majority-owned subsidiaries, and other affiliates, if any, that the United Statesgovernment has affirmatively declared to be excluded from its federal sanctions regime relating toSudan or Iran or any federal sanctions regime relating to a foreign terrorist organization. Forpurposes of this subsection (b), the term "company" has the meaning given to it in the TexasGovernment Code, Section 2270.0001(2). Each of the Underwriters understands "affiliate" to meanany entity that controls, is controlled by, or is under common control with the Underwriters andexists to make a profit.

13. Severability. If any provision of this Bond Purchase Agreement is held to be illegal,invalid or unenforceable under present or future laws effective during the term hereof, suchprovision shall be fully severable, and this Bond Purchase Agreement shall be construed andenforced as if such illegal, invalid or unenforceable provision never comprised a part hereof andshall not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom.Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added

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automatically as part of this Bond Purchase Agreement a provision as similar in its terms and effectto such illegal, invalid or unenforceable provision as may be possible and be legal, valid andenforceable.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

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14. Effective Date. This Bond Purchase Agreement shall become effective upon the executionof the acceptance hereof by the Authorized Representative of the District and shall be valid and enforceableas of the time of such acceptance.

Very truly yours,

RAYMOND JAMES & ASSOCIATES, INC.

By: _____________________________________Title: _____________________________________

Montgomery County Municipal Utility District No. 115Unlimited Tax Refunding Bonds, Series 2020

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Accepted at ____ a.m./p.m. CDST this ____ day of ________, 2020.


By: ___________________________________ Authorized Representative

Montgomery County Municipal Utility District No. 115Unlimited Tax Refunding Bonds, Series 2020

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EXHIBIT A

COVER PAGE OF OFFICIAL STATEMENT

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EXHIBIT B

HOLD-THE-OFFERING-PRICE MATURITIES

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BOND ORDER

The Board of Directors (the “Board”) of Montgomery County Municipal Utility District

No. 115 (the “District” or “Issuer”) met on May 7, 2020, with the following directors present:







None


The order set out below (the “Bond Order”) was introduced for consideration by the

Board. It was then moved and seconded that said order be adopted; and, after due discussion,

said motion was carried by the following vote:


Mitchell.

Noes: None.

Abstentions: Cynthia A. Giles.

The Bond Order thus adopted is as follows:

Whereas, the District has presently outstanding and unpaid the following bonds:

$250,000 bonds of the District’s $3,460,000 Unlimited Tax Bonds, Series 2009,

dated October 1, 2009 (the “Series 2009 Bonds”) ($3,210,000 of such bonds

having heretofore matured or been paid);





dated November 1, 2011 (the “Series 2011 Bonds”) ($1,520,000 of such bonds


$1,830,000 bonds of the District’s $2,120,000 Unlimited Tax Bonds, Series 2012,

dated September 1, 2012 (the “Series 2012 Bonds”) ($290,000 of such bonds


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92115-003 474628v1 2


dated June 1, 2013 (the “Series 2013 Bonds”) ($500,000 of such bonds having

heretofore matured or been paid);


dated April 1, 2014 (the “Series 2014 Bonds”) ($375,000 of such bonds having



dated February 1, 2015 (the “Series 2015 Bonds”) ($630,000 of such bonds


$6,250,000 bonds of the District’s $7,000,000 Unlimited Tax Bonds, Series

2015A, dated October 1, 2015 (the “Series 2015A Bonds”) ($750,000 of such

bonds having heretofore matured and been paid);




$5,510,000 bonds of the District’s $5,690,000 Unlimited Tax Refunding Bonds,

Series 2016A, dated November 1, 2016 (the “Series 2016A Bonds”) ($180,000 of

such bonds having heretofore matured or been paid);


dated May 1, 2017 (the “Series 2017 Bonds”) ($550,000 of such bonds having


$2,000,000 bonds of the District’s $4,055,000 Unlimited Tax Park Bonds, Series

2018, dated August 1, 2018 (the “Series 2018 Bonds”) ($2,055,000 of such bonds

having heretofore matured or been paid); and

$900,000 bonds of the District’s $1,470,000 Unlimited Tax Park Bonds, Series

2019, dated August 1, 2019 (the “Series 2019 Bonds”) ($570,000 of such bonds

having heretofore matured or been paid).

Whereas, (1) the bond order issuing the Series 2010 Bonds (the “Series 2010 Bond

Order”) provides in part that the District expressly reserves and shall thereafter have the right to

redeem any of the bonds of the Series 2010 Bonds which mature, in whole or in part, on

September 1, 2020 and thereafter on September 1, 2019 or any day thereafter, to which bond

order reference is hereby made for all purposes; (2) the bond order issuing the Series 2011 Bonds

(the “Series 2011 Bond Order”) provides in part that the District expressly reserves and shall

thereafter have the right to redeem any of the bonds of the Series 2011 Bonds which mature, in

whole or in part, on September 1, 2020 and thereafter on September 1, 2019 or any day

thereafter, to which bond order reference is hereby made for all purposes; (3) the bond order

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92115-003 474628v1 3

issuing the Series 2012 Bonds (the “Series 2012 Bond Order”) provides in part that the District

expressly reserves and shall thereafter have the right to redeem any of the bonds of the Series

2012 Bonds which mature, in whole or in part, on September 1, 2021 and thereafter on

September 1, 2020 or any day thereafter, to which bond order reference is hereby made for all

purposes; and (4) the bond order issuing the Series 2013 Bonds (the “Series 2013 Bond Order”)

provides in part that the District expressly reserves and shall thereafter have the right to redeem

any of the bonds of the Series 2013 Bonds which mature, in whole or in part, on September 1,

2021 and thereafter on September 1, 2020 or any day thereafter, to which bond order reference is

hereby made for all purposes;

Whereas, the Series 2010 Bond Order, Series 2011 Bond Order, the Series 2012 Bond

Order, the Series 2013 Bond Order, Section 54.514 of the Texas Water Code, as amended and

Tex. Gov’t. Code Ann. Chapter 1207 authorize the District to issue refunding bonds to refund all

or any part of the District’s bonds;

Whereas, in order for the District to achieve a reduction in debt service requirements and

to achieve a present value savings, the Board has determined that refunding bonds should be

issued and the proceeds thereof applied to refund and redeem the Refunded Bonds as defined

herein;

Whereas, the Board has determined that it is proper and necessary at this time to order to

be issued its Series 2020 Unlimited Tax Refunding Bonds in an original aggregate amount not to

exceed $5,000,000 (the “Bonds”);

Whereas, $205,000 of the Series 2010 Bonds will remain outstanding after the issuance

of the Bonds;

Whereas, $75,000 of the Series 2011 Bonds will remain outstanding after the issuance of

the Bonds;


of the Bonds;


of the Bonds; and

It is, therefore, ordered by the Board of the District, as follows:

ARTICLE I

FINDINGS AND DETERMINATIONS

It is hereby officially found and determined that:

1. All matters and facts contained in the recitals above are declared to be true and

correct.

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92115-003 474628v1 4

2. The District, acting through its Board, is authorized pursuant to and in accordance

with the provisions of the Constitution and the laws of the State of Texas, specifically, Chapters

49 and 54, Texas Water Code, as amended, and Tex. Gov’t. Code Ann. Chapter 1207, and by an

election held on November 7, 2006, to issue its 2020 series of refunding bonds in the original

aggregate amount not to exceed $5,000,000 for the purpose of refunding and redeeming a portion

of the District’s outstanding debt, and to pay all of the related legal and fiscal fees in connection

therewith, and to pay costs of issuance of the Bonds.

ARTICLE II

DEFINITIONS AND INTERPRETATIONS

A. For all purposes of this Bond Order, except as otherwise expressly provided or

unless the context otherwise requires, and in addition to the definitions provided for herein, the

following definitions will apply:

“Approval Certificate” shall mean the approval certificate of the Authorized

Representaive to be executed and delivered pursuant to Article III of this Order.

“Attorney General” shall mean the Attorney General of the State of Texas.

“BAM” or “Insurer” shall mean Build America Mutual Assurance Company, or any

successor thereto.

“Blanket Issuer Letter of Representations” shall mean the Blanket Issuer Letter of

Representations between the District, the Paying Agent/Registrar and DTC.

“Bond Order” or “Order” as used herein and in the Bonds shall mean this Order

authorizing the issuance of the Bonds.

“Bond Register” shall mean the registration books for the Bonds kept by the Paying

Agent/Registrar in which are maintained the names and addresses of and the principal amounts

registered to each Registered Holder.

“Bond” or “Bonds” shall mean any or all of the Montgomery County Municipal Utility

District No. 115 Unlimited Tax Refunding Bonds, Series 2020 Bonds in the original aggregate

amount not to exceed $5,000,000.

“Comptroller” shall mean the Comptroller of Public Accounts of the State of Texas.

“Definitive Bonds” shall mean the Bonds, other than the Initial Bond, in the form of

Exhibit A-1.

“District” or “Issuer” when referred to herein, shall mean Montgomery County

Municipal Utility District No. 115.

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92115-003 474628v1 5

“DTC” shall mean the Depository Trust Company of New York, New York, or any

successor securities depository.

“DTC Participant” shall mean securities brokers and dealers, banks, trust companies,

clearing corporations and certain other organizations on whose behalf DTC was created to hold

securities to facilitate the clearance and settlement of securities transactions among DTC

Participants.

“Escrow Agreement” shall mean the Escrow Agreement that the District shall enter into

with The Bank of New York Mellon Trust Company, N.A., a national banking association and

its successors in that capacity.

“Holder” or “Holders” or “Registered Holder” or “Registered Holders” or “Owner” or

“Registered Owner” when used with respect to any Bond or the Bonds means the person in

whose name such Bond is registered in the Bond Register.

“Initial Bond” shall mean the initially issued Bond representing the entire principal

amount of the Bonds in the form of Exhibit A-1-A and used in accordance with the provisions of

this Bond Order.

“Interest Payment Date” shall mean, when used in connection with the Bonds, September

1, 2020 and each March 1 and September 1 thereafter until maturity or earlier redemption of the

Bonds.

“Issue Date” or “Delivery Date” shall mean the date on which the Bonds are delivered to

and paid for by the Purchaser, which is currently anticipated to be June 24, 2020.

“Outstanding” when used with reference to the Bonds, shall mean, as of a particular date,

all Bonds theretofore and thereupon delivered pursuant to this Order except: (a) any Bond

canceled by or on behalf of the District at or before such date; (b) any Bond defeased pursuant

to the defeasance provisions of this Order or otherwise defeased as permitted by applicable law;

and (c) any Bond in lieu of or in substitution for which a replacement Bond shall have been

delivered pursuant to this Order.

“Outstanding Bonds” shall mean the following:










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92115-003 474628v1 6















bonds having heretofore matured or been paid);
















“Paying Agent/Registrar” shall mean The Bank of New York Mellon Trust Company,

N.A., Dallas, Texas, a national banking association, and its successors in that capacity.

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92115-003 474628v1 7

“Person” shall mean any individual, corporation, partnership, joint venture, association,

trust, joint stock company, unincorporated organization, government or governmental agency or

other legal entity.

“Policy” shall mean the Municipal Bond Insurance policy issued by BAM that guarantees

the scheduled payment of principal of and interest on the Bonds when due.

“Predecessor Bonds” of any particular Bond means every previous Bond evidencing all

or a portion of the same debt as that evidenced by such particular Bond, and, for the purposes of

this definition, any Bond registered and delivered pursuant to Article VI hereof in lieu of a

mutilated, lost, destroyed, or stolen Bond shall be deemed to evidence the same debt as the

mutilated, lost, destroyed, or stolen Bond.

“Record Date” shall mean with respect to the Bonds the fifteenth (15th) calendar day of

the calendar month next preceding each Interest Payment Date.

“Refunded Bonds” shall mean the bonds designated by the Authorized Officer to be

refunded as set forth in the Approval Certificate.

“Registrar” shall mean the registration books for the Bonds kept by the Paying

Agent/Registrar in which are maintained the names and addresses of and the principal amounts

registered to each Registered Owner.

“Registered Owner” or “Registered Holder” shall mean the Person or entity in whose

name any Bond is registered in the Registrar.

“Report” shall have the same meaning as defined in the Series 2020 Escrow Agreement.

“Serial Bond” or “Serial Bonds,” if any, shall mean any one or more, as the case may be,

of the Bonds maturing serially at terms as set out in the Approval Certificate (defined

hereinbelow).

“System” shall mean the District’s waterworks and sanitary sewer system owned and/or

operated by the District, together with any additions and extensions thereto and improvements

and replacements thereof whensoever so constructed or acquired.

“Term Bonds” or “Term Bond,” if any, shall mean any one or more, as the case may be,

of the Term Bonds maturing at terms as set out in the Approval Certificate (defined

hereinbelow).

B. All terms defined herein and all pronouns used in this Bond Order shall be

deemed to apply equally to singular and plural and to all genders. The titles and headings of the

articles of this Bond Order have been inserted for convenience of reference only and are not to

be considered a part hereof and shall not in any way modify or restrict any of the terms or

provisions hereof. This Bond Order and all the terms and provisions hereof shall be liberally

construed to effectuate the purposes set forth herein and to sustain the validity of the Bonds and

the validity of the levy of ad valorem taxes to pay the principal of and interest on the Bonds.

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92115-003 474628v1 8

ARTICLE III

SALE AND ISSUANCE OF BONDS

A. Bonds of the District, to be called “Montgomery County Municipal Utility

District No. 115 Unlimited Tax Refunding Bonds, Series 2020” (the “Bonds”), are hereby

ordered to be issued in an aggregate amount not to exceed $5,000,000, for the purpose of

refunding and redeeming a portion of the District’s outstanding debt, as authorized by the

election held for that purpose on November 7, 2006 and by the Constitution and laws of the State

of Texas, particularly Article XVI, Section 59, Constitution of the State of Texas, including but

not limited to Chapters 49 and 54, Texas Water Code, as amended, and Tex. Gov’t. Code Ann.

Chapter 1207, as amended (“Chapter 1207”).

B. As authorized by Section 1207, Texas Government Code, as amended, the

directors holding the office of President (primary) or Vice President (secondary, if needed) of the

Issuer at the time of execution of the Approval Certificate, as herein defined, are each hereby

designated as the "Authorized Representative" of the Issuer, and is hereby authorized, appointed,

and designated as the officer or employee of the Issuer authorized to act on behalf of the Issuer,

which actions shall be evidenced by a certificate executed by such Authorized Representative

(the "Approval Certificate") for a period not to extend beyond 90 days, determining which of the

Outstanding Bonds shall be refunded and constitute Refunded Bonds, and carrying out the other

procedures specified in this Order, including the use of a book-entry only system with respect to

the Bonds, the determining and fixing of the date of the Bonds, any additional or different

designation or title by which the Bonds shall be known, the price at which the Bonds will be

sold, the amount of each maturity of principal thereof, the due date of each such maturity, the

rate of interest to be borne by each such maturity, the interest payment dates and periods, the

dates, price and terms upon and at which the Bonds shall be subject to redemption prior to due

date or maturity at the option of the Issuer, any mandatory sinking fund redemption provisions,

approving modifications to this Order and to any of the instruments authorized and approved by

this Order and executing such instruments, documents and agreements as may be necessary with

respect thereto, and all other matters relating to the issuance, sale and delivery of the Bonds, and

the refunding of the Refunded Bonds. It is further provided, however, that, notwithstanding the

foregoing provisions, the Bonds shall not be sold and delivered unless the issuance of the Bonds

and the refunding of the Refunded Bonds will result in a net present value savings of 3.0% or

more and as set forth in a verification report of independent certified public accountants, in the

amount which would otherwise be payable from the pledge of ad valorem taxes.

C. The Authorized Representative, acting for and on behalf of the Issuer, is

authorized to arrange for the Bonds to be sold at negotiated sale to Raymond James &

Associates, Inc. (the “Purchaser”), and to enter into and carry out a bond purchase agreement

(the “Bond Purchase Agreement”) with such Purchaser of the Bonds, at such price and terms as

shall be set forth therein. The price to be paid for the Bonds shall be not less than 95% of the

initial aggregate principal amount thereof plus accrued interest thereon from their date to their

delivery. Upon its execution and delivery, such Bond Purchase Agreement shall constitute a

binding and enforceable agreement of the Issuer in accordance with its terms.

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92115-003 474628v1 9

D. The Authorized Representative is further authorized, for and on behalf of the

Issuer, to approve any preliminary official statement, official statement, and any supplements

thereto relating to the Bonds and referred to in the Bond Purchase Agreement.

E. The President or Vice President, and Secretary, Assistant Secretary or Secretary

Pro Tempore are hereby further authorized to have control and custody of the Bonds and all

necessary records and proceedings pertaining thereto pending their delivery, and the President or

Vice President and Secretary, Assistant Secretary or Secretary Pro Tempore and other officers

and employees of the District are hereby authorized and directed to make such certifications and

to execute such instruments as may be necessary to accomplish the delivery of the Bonds and the

District’s obligations under this Order, and to assure the investigation, examination, and approval

thereof by the Attorney General and the registration of the Initial Bond by the Comptroller.

Upon registration of the Initial Bond, the Comptroller (or a deputy in the office of the

Comptroller lawfully designated in writing to act for the Comptroller) shall manually sign the

Comptroller’s Registration Certificate prescribed herein to be attached or affixed to the Initial

Bond, and the seal of the Comptroller shall be impressed or printed or lithographed thereon.

F. In addition, prior to the initial delivery of the Bonds, the President or Vice

President and Secretary, Assistant Secretary or Secretary Pro Tempore of the Board of Directors

of the District, the District’s General Counsel and Bond Counsel are hereby authorized and

directed to approve any technical changes or corrections to this Order or to any of the

instruments authorized and approved by this Order necessary in order to (i) correct any

ambiguity or mistake or to properly or more completely document the transactions contemplated

and approved by this Order and as described in the Official Statement, (ii) obtain a rating from

any of the national bond rating agencies or satisfy requirements of the Insurer, or (iii) obtain

approval of the Bonds by the Texas Attorney General’s office.

ARTICLE IV

TERMS OF THE BONDS

A. The Bonds shall be issued in fully registered form in the total authorized

aggregate amount as set forth in the Approval Certificate. The Bonds are issued for the purpose

of refunding and redeeming the Refunded Bonds, in advance of their maturities, and for payment

of the costs of issuance of the Bonds. The issuance of the Bonds will, among other benefits,

allow the District to achieve debt service savings.

B. Each of the Bonds shall be designated “Montgomery County Municipal Utility

District No. 115 Unlimited Tax Refunding Bonds, Series 2020.” The Bonds shall be numbered

separately from R-1 upward, except that the Initial Bond shall be numbered IB-1, and shall be

submitted substantially in the form of the attached Exhibit A-1-A to the Attorney General for

approval and to the Comptroller for registration until cancellation in accordance with Article IV

(J) hereof.

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92115-003 474628v1 10

C. The Bonds shall be dated as set forth in the Approval Certificate (“Dated Date”)

and shall bear interest at the rates set forth in the Approval Certificate from the later of the Dated

Date, or the most recent Interest Payment Date on which interest has been paid or duly provided

for, calculated on the basis of a 360-day year of twelve (12) thirty (30)-day months, payable on

September 1, 2020 and semiannually thereafter on March 1 and September 1 of each year until

maturity or earlier redemption.

D. The Bonds shall be issued in the principal amounts and bear interest at the rates

set forth in the Approval Certificate and may be transferred and exchanged as set forth in this

Bond Order. The Bonds shall mature, in accordance with this Bond Order, on September 1 of

each of the years and in the amounts set out in the Approval Certificate. Bonds delivered in

transfer of or in exchange for other Bonds as set out in this Bond Order shall be numbered in

order of their authentication by the Paying Agent/Registrar. All Bonds other than the Initial

Bond shall be in the denomination of $5,000 or integral multiples thereof and shall mature on the

same date and bear interest at the same rate as the Bond or Bonds in lieu of which they are

delivered. The Bonds are subject to optional redemption as further described in Article V herein.

E. Principal of the Bonds at maturity or on a redemption date, including accrued

interest at maturity, shall be payable in lawful money of the United States of America, without

deduction for paying agent services, at the payment office of the Paying Agent/Registrar,

currently The Bank of New York Mellon Trust Company, N.A., a national banking association,

Dallas, Texas, and its successors in that capacity. Interest on the Bonds shall be payable as

provided in this Bond Order.

F. The Bonds (other than the Initial Bond in the form of Exhibit A-1-A), shall be

substantially in the form set forth in Exhibit A-1 to this Bond Order, with such appropriate

variations, omissions and insertions as are customary or as are permitted or required by this Bond

Order, and the Bonds may have letters, numbers or other marks of identification as may be

consistent herewith and determined by the officers executing the Bonds, as evidenced by their

signing of the Initial Bond. Any portion of the text of the Bonds may be printed on the back of

such Bond with an appropriate reference placed on the front of the Bond. There may be printed

thereon any approving legal opinions and any CUSIP or other identifying number.

G. The Definitive Bonds shall be printed, lithographed or steel engraved or

reproduced in any other similar manner, as determined by the officers of the District executing

the Bonds as evidenced by their execution thereof. The Initial Bond submitted to the Attorney

General may each be typewritten, photocopied or otherwise reproduced.

H. Notwithstanding anything to the contrary contained in this Bond Order, the Initial

Bond in the form of Exhibit A-1-A to this Bond Order shall be registered to CEDE & CO., as

registered owner and nominee for the Depository Trust Corporation (“DTC”), or such person or

entity as the Purchaser designates, and shall be manually signed by the President or Vice

President and attested and manually sealed by the Secretary, Assistant Secretary or Secretary Pro

Tempore of the Board, submitted to the Attorney General for approval, and thereafter registered

by the Comptroller by manual signature on the Comptroller’s Certificate. The Initial Bond may

thereafter be canceled and exchanged for registered Definitive Bonds in accordance with the

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provisions of Article IV (I) of this Bond Order and the Public Security Procedures Act, Tex.

Gov’t. Code Ann. Chapter 1201, et seq.

I. In the event the Purchaser instructs the Paying Agent/Registrar in writing five (5)

business days prior to the Issue Date to exchange, authenticate, deliver and register Definitive

Bonds to those persons named by the Purchaser, including their addresses, the maturities, interest

rates and denominations, that are to be so registered, then the Initial Bond will be canceled, and

Definitive Bonds will be issued, registered and delivered in accordance with the instructions of

the Purchaser on the Issue Date. The Paying Agent/Registrar need not accept instructions

regarding exchange of the Initial Bond less than five (5) business days before the Issue Date. If

such instructions are not timely received, then cancellation of the Initial Bond and delivery of

Definitive Bonds may be delayed until the fifth (5th) business day following receipt by the

Paying Agent/Registrar of such instructions.

J. No Bond shall be entitled to any right or benefit under this Bond Order, or be

valid or obligatory for any purpose, unless there appears on such Bond (1) with respect to the

Initial Bond only, a certificate of registration substantially in the form of Exhibit A-1-A,

executed by the Comptroller of Public Accounts of the State of Texas or duly authorized deputy

by manual signature, and (2) with respect to the Definitive Bonds, a certificate of authentication

substantially in the form thereof set forth in Exhibit A-1, executed by the manual signature of the

Paying Agent/Registrar. Such certificate of registration and/or authentication, as the case may

be, upon any Bond shall be conclusive evidence, and the only evidence, that such Bond has been

duly certified and/or authenticated, registered and delivered.

K. The District shall have control and custody of the Initial Bond and all necessary

records and proceedings pertaining thereto pending their delivery to the Purchaser, and the

President or Vice President and other officers of the District are hereby authorized and instructed

to make such certifications and to execute such instruments as may be necessary to accomplish

the delivery of the Initial Bond and to assure the investigation, examination and approval thereof

by the Attorney General and the registration thereof by the Comptroller.

ARTICLE V

REDEMPTION OF THE BONDS BEFORE MATURITY

A. Certain Bonds of this issue shall be callable for redemption prior to maturity at the

option of the District, in whole or in part, on the interest payment date as set out in the Approval

Certificate, or on any date thereafter, for the purpose of retirement or refunding, or both, at a

price equal to the principal amount of the Bonds called for redemption plus accrued interest, if

any, from the most recent Interest Payment Date on which interest has been paid or duly

provided for to the date fixed for redemption. At least forty-five (45) calendar days before the

date fixed for redemption (unless a shorter notice shall be satisfactory to the Paying

Agent/Registrar), the District shall notify the Paying Agent/Registrar by first class mail of its

choice of Bonds to be redeemed and prior to redemption shall place the appropriate amount of

money in trust with the Paying Agent/Registrar for the purpose of said redemption. While the

Bonds are in book-entry form pursuant to Article XIV of this Order, if less than all the Bonds of

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a particular maturity are to be redeemed, the Bonds will be selected for redemption by DTC in

accordance with its procedures. If the book-entry only system is discontinued, if less than all the

Bonds of a particular maturity are to be redeemed, the Paying Agent/Registrar, on behalf of the

District, shall select the Bonds of such maturity to be redeemed by lot or such other customary

random method as the District deems fair and appropriate.

B. Any redemption of the Bonds shall be at par plus accrued interest to the date of

redemption. If the date of redemption is on a date other than an Interest Payment Date, interest

on the Bonds shall be calculated in accordance with Article IV of this Bond Order.

C. Notice of the redemption of the Bonds shall be mailed by United States mail, first

class, postage prepaid, by the Paying Agent/Registrar in the name of and at the expense of the

District not less than thirty (30) calendar days prior to the redemption date for the Bonds to each

Registered Holder of the Bonds to be redeemed notifying such Registered Holder of the

redemption date and the termination of the payment or accrual of interest on that date. Such

notice shall be sent to each Registered Holder of a Bond to be redeemed at the address appearing

on the Register of the Paying Agent/Registrar at the close of business on the date which is thirty

(30) calendar days prior to redemption date.

D. All notices of redemption shall include a statement (1) as to the redemption date,

(2) as to the redemption price, (3) as to the principal amount of the Bonds to be redeemed and, if

less than all Bonds which are then Outstanding are to be redeemed, an identification (and, in the

case of partial redemption, the respective principal amounts) of the Bonds to be redeemed, (4) to

the effect that on the redemption date the redemption price of each of the Bonds to be redeemed

will become due and payable and that interest thereon shall cease to accrue from and after such

date, and (5) further, to the effect that such Bonds are to be surrendered for payment of the

redemption price at the payment office of the Paying Agent/Registrar and the address of such

office.

E. Notice of redemption having been given as aforesaid, the Bonds to be redeemed

shall, on the redemption date, become due and payable at the redemption price, and from and

after such date (unless the District shall default in the payment of the redemption price) such

Bonds shall cease to bear interest. Upon the surrender of such Bonds for redemption in

accordance with such notice, such Bonds shall be paid by the Paying Agent/Registrar at the

redemption price out of money supplied by the District. Installments of interest with a stated

maturity on or prior to the redemption date shall be payable to the Registered Holders of such

Bonds registered as such on the relevant Record Dates according to their terms.

F. If any Bond called for redemption shall not be so paid on the date set for

redemption by reason of the failure of the District to provide collected funds, the same shall

continue to bear interest from the redemption date at the rate borne by such Bond until same is

paid by the District.

G. Any Bond which is to be redeemed only in part shall be surrendered at the

payment office of the Paying Agent/Registrar (if payment is to be made to other than the

Registered Holder with due endorsement by, or a written instrument of transfer in form

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satisfactory to the Paying Agent/Registrar duly executed by the Registered Holder or attorney

duly authorized in writing), and the District shall execute and the Paying Agent/Registrar shall

register and deliver to the Registered Holder of such Bond, without service charge to the

Registered Holder, new Bond or Bonds of same stated maturity and any authorized denomination

or denominations as requested by such Registered Holder in aggregate principal amount equal to

and in exchange for the unredeemed portion of the principal of the Bond so surrendered.

H. Term Bonds, if any, are subject to mandatory redemption (“Mandatory

Redemption”) at a price equal to 100% of the principal amount thereof plus accrued interest to

the redemption dates from amounts which are required to be deposited in the District’s Debt

Service Fund as defined in this Order in amounts sufficient to redeem the Term Bond on

September 1 in the years and principal amounts shown in the Approval Certificate.

While the Bonds are in book-entry form pursuant to Article XIV of this Order, the

Term Bonds will be selected for Mandatory Redemption by the DTC in accordance with its

procedures. If the book-entry only system is discontinued, the Term Bonds will be selected for

Mandatory Redemption by DTC in accordance with its procedures. If the book-entry only

system is discontinued, the Terms Bonds will be selected for mandatory redemption by lot or

other customary random method. The principal amount of the Term Bonds of a given maturity

required to be redeemed pursuant to the operation of such Mandatory Redemption provisions

shall be reduced, at the option of the District or other customary random method. The principal

amount of the Term Bond of a given maturity required to be redeemed pursuant to the operation

of such Mandatory Redemption provisions shall be reduced, at the option of the District, by the

principal amount of the Term Bond of such maturity which, at least fifty (50) days prior to the

date of such Mandatory Redemption, (1) shall have been acquired by the District at a price not

exceeding the principal amount of such Term Bond plus accrued interest to the date of purchase

thereof, and delivered to the Registrar for cancellation, (2) shall have been purchased and

canceled by the Registrar at the request of the District at a price not exceeding the principal

amount of such Term Bond plus accrued interest to the date of purchase, or (3) shall have been

redeemed pursuant to the optional redemption provisions and not thereto credited against a

Mandatory Redemption requirement.

ARTICLE VI

PAYING AGENT/REGISTRAR

A. The District will enter into an agreement and will maintain such agreement with

The Bank of New York Mellon Trust Company, N.A., a national banking association, Dallas,

Texas, to act as Paying Agent/Registrar for the Bonds. The District will maintain at least one

paying agent/registrar for the purpose of maintaining the Bond Register on behalf of the District.

The District will retain the right to select a successor paying agent/registrar under the same or

similar agreements. The original Paying Agent/Registrar is and any successor paying

agent/registrar, if any, shall be either a national or state banking institution and shall be a

corporation organized and doing business under the laws of the United States of America or of

any state, authorized under such laws to exercise trust powers, subject to supervision or

examination by federal or State of Texas authority, registered with the Securities and Exchange

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Commission, with a combined capital and surplus of at least $25,000,000. In the event a

successor paying agent/registrar is appointed, the Bond Insurer, if any, and each Registered

Holder of the Bonds will be notified of same by first class mail. The Paying Agent/Registrar

shall be responsible for the payment of the principal of and interest on the Bonds upon timely

receipt of sufficient moneys from the District to pay the principal of and interest on the Bonds,

for maintaining the Bond Register, and for the replacement, transfer and exchange of the Bonds

under the terms and conditions hereinafter set forth in this Bond Order.

B. The principal or redemption price of the Bonds shall be deposited in trust by the

District at least one (1) business day prior to a maturity or redemption date in immediately

available funds with the Paying Agent/Registrar who shall pay out same to the Registered

Holders of such Bonds at the maturity or redemption thereof upon surrender of such Bonds to the

Paying Agent/Registrar for cancellation.

C. Interest on the Bonds shall be timely deposited in trust with the Paying

Agent/Registrar by the District at least one (1) business day prior to an Interest Payment Date in

immediately available funds, and such interest shall be paid by check, dated as of the Interest

Payment Date, and mailed on the Interest Payment Date by United States mail, first class,

postage prepaid, or if agreed to by the Paying Agent/Registrar and the Registered Holders, paid

by other customary means of transfer of funds, including wire transfer, to the Registered Holders

of the Bonds shown on the records of the Paying Agent/Registrar on the Record Date.

D. The Paying Agent/Registrar shall cause to be kept at its corporate trust office the

Bond Register in which, subject to such reasonable regulations as it may prescribe, registration

of the Bonds and transfers or assignments of the Bonds shall be made as provided herein.

E. Upon surrender for transfer of any Bond at the corporate trust office of the Paying

Agent/Registrar, the Paying Agent/Registrar shall within three (3) business days after request

and presentation, register and deliver, in the name of the designated transferee or transferees, one

or more new Bonds of the same stated maturity, of any authorized denominations, and of a like

aggregate principal amount.

F. The Paying Agent/Registrar for the District shall adopt and implement reasonable

rules and regulations providing for the replacement of Bonds which are reported by the

Registered Holder thereof to have been mutilated, lost, destroyed or stolen. Upon receipt of

satisfactory evidence of such mutilation, destruction, loss or theft, and receipt by the District and

Paying Agent/Registrar of security or indemnity as may be required by either of them to hold

them harmless, the District will replace such mutilated, destroyed, lost or stolen Bond. The

District may require payment of taxes, governmental charges, cost of printing of the replacement

bond, and other expenses incurred in connection with any such replacement.

G. All Bonds issued upon any transfer or exchange of Bonds shall be the valid

obligations of the District, evidencing the same debt and entitled to the same benefits under this

Bond Order as the Bonds surrendered upon such transfer or exchange.

H. Every Bond presented or surrendered for transfer or exchange shall be duly

endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the

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Paying Agent/Registrar, duly executed by the Registered Holder thereof or the Registered

Holder’s attorney duly authorized in writing.

I. No service charge shall be made to the Registered Holder for any registration,

transfer, or exchange of Bonds, but the District or the Paying Agent/Registrar may require

payment of a sum sufficient to cover any tax or other governmental charge that may be imposed

in connection with any transfer or exchange of Bonds.

J. Neither the District nor the Paying Agent/Registrar shall be required to issue,

transfer or exchange any Bond during a period beginning at the opening of business on a Record

Date and ending at the close of business on the next succeeding Interest Payment Date. Neither

the District nor the Paying Agent/Registrar shall be required to (1) issue, transfer or exchange

any Bond selected for redemption, in whole or in part, during a period beginning on the opening

of business fifteen (15) calendar days before the date of the first mailing of a notice of

redemption of Bonds and ending at the close of business on the date of such mailing or (2)

thereafter to transfer or exchange any Bond so selected for redemption when such redemption is

scheduled to occur within thirty (30) calendar days.

K. Funds held by the Paying Agent/Registrar that represent principal of or interest on

the Bonds remaining unclaimed by the Registered Holder after the expiration of three (3) years

from the date such funds have become due and payable (1) shall be reported and disposed of by

the Paying Agent/Registrar in accordance with the provisions of Title 6 of the Texas Property

Code, as amended, to the extent such provisions are applicable to such funds, or (2) to the extent

such provisions do not apply to the funds, such funds shall be paid by the Paying Agent/Registrar

to the District upon receipt by the Paying Agent/Registrar of a written request therefor from the

District.

ARTICLE VII

SECURITY FOR THE BONDS: TAX LEVY

For the current year and during each year thereafter while any of the Bonds or interest

thereon are Outstanding, the District shall compute and ascertain a rate and amount of ad

valorem taxes which, after taking into account other funds available to the District for such

purpose, will be sufficient to raise and produce the moneys required to provide for the payment

of the interest on the Bonds as such interest comes due and to provide and maintain a sinking

fund adequate to pay the principal of the Bonds as such principal matures, and such tax shall be

based on the certified tax rolls of the District at the time of the levy, with full allowance being

made for tax delinquencies and the cost of tax collection. For the current year there shall hereby

be levied and for each year thereafter while the Bonds or any part of the principal of and interest

thereon are outstanding and unpaid, there shall be levied, assessed and collected in due time,

form and manner, a continuing, direct annual ad valorem tax upon all taxable property in the

District in the rate and amount as aforesaid, and the proceeds of such tax shall be appropriated

and applied to the payment of principal of and interest on the Bonds. Said taxes are hereby

irrevocably pledged to the payment of the principal and interest of the Bonds.

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There is hereby appropriated from the Debt Service Fund, which is certified to be on

hand and available for such purpose from taxes levied and collected for payment of the Refunded

Bonds, an amount sufficient to pay principal of and interest coming due on the Bonds on

September 1, 2020, and such amount shall be used for no other purposes.

ARTICLE VIII

FUNDS AND ACCOUNTS

A. There is hereby confirmed the prior establishment of the Montgomery County

Municipal Utility District No. 115 General Fund (the “General Fund”). The District shall deposit

as collected all revenues derived from the operation of the System into the District’s General

Fund, which fund shall be kept separate and apart from all other funds and accounts of the

District.

B. There is hereby confirmed the prior establishment of the Montgomery County

Municipal Utility District No. 115 Debt Service Fund (the “Debt Service Fund”). The Debt

Service Fund shall be used to pay the principal of and interest on the Bonds. An amount

representing the interest accrued on the Bonds calculated from the Dated Date as set forth in the

Approval Certificate to the Issue Date, plus the proceeds from the levy of taxes, shall be

deposited into the Debt Service Fund. The accrued interest on the Bonds and investment

earnings thereon shall be used to pay a portion of the principal of and interest on the Bonds due

on September 1, 2020, prior to the use of taxes in the Debt Service Fund therefor. Moneys in the

Debt Service Fund shall be transferred to the Paying Agent/Registrar prior to any interest and/or

principal payment date in an amount sufficient to pay the interest on and principal of the Bonds

and Paying Agent/Registrar fees, if due.

C. There is hereby established the Montgomery County Municipal Utility District

No. 115 Series 2020 Cost of Issuance Account (the “Cost of Issuance Account”) of the District's

General Fund, and into the Cost of Issuance Account there shall be deposited a portion of the net

proceeds of the Bonds which shall be used to pay all fees and expenses associated with the

preparation and issuance of the Bonds.

ARTICLE IX

ISSUANCE OF ADDITIONAL BONDS

The District expressly reserves and shall hereafter have the right to issue in one or more

installments, the $71,010,000 principal amount of unlimited tax bonds which remains authorized

out of the District’s bond election held on November 7, 2006 and the $5,147,000 principal

amount of unlimited tax bonds for recreational facilities which remains authorized out of the

District’s bond election held on November 6, 2007, and any unlimited tax bonds, refunding

bonds or combination unlimited tax and revenue bonds as may hereafter be authorized at

subsequent elections. Furthermore, the District expressly reserves and shall hereafter have the

right to issue in one or more installments the following:

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(a) Revenue Bonds. The District expressly reserves the right to issue bonds payable

solely from net revenues of the District’s facilities for the purpose of completing, repairing,

improving, extending, enlarging or replacing the District’s facilities, and such bonds may be

payable from and equally secured by a lien on and pledge of said net revenues on a parity with

the pledge on any previously issued bonds secured by net revenues to the extent net revenues are

used to pay the principal of and interest on such bonds.

(b) Inferior Lien Bonds. The District also reserves the right to issue inferior lien

bonds and to pledge the net revenues of the District’s facilities to the payment thereof, such

pledge to be subordinate in all respects to the lien of the Bonds and any previously issued or

subsequently issued bonds which are on a parity with the Bonds.

(c) Special Project Bonds. The District further reserves the right to issue special

project bonds for the purchase, construction, improvement, extension, replacement, enlargement

or repair of water, sewer and/or drainage facilities necessary under a contract or contracts with

persons, corporations, municipal corporations, political subdivisions or other entities, such

special project bonds to be payable from and secured by the proceeds of such contract or

contracts. The District further reserves the right to refund such bonds.

(d) Refunding Bonds. The District further reserves the right to issue unlimited tax

refunding bonds to refund any of the Bonds or Outstanding Bonds or any additional bonds

subject to prior redemption, or any bonds the holders of which have consented to have refunded.

The refunding bonds so issued shall enjoy complete equality of lien with the remaining bonds

not refunded, if any such bonds remain, and the refunding bonds so issued shall enjoy the

priority of lien enjoyed by the bonds being refunded.

ARTICLE X

REMEDIES UPON DEFAULT

In addition to all of the rights and remedies provided by the laws of the State of Texas,

the District further covenants and agrees that in the event of default in the payment of the

principal of or any interest on any of the Bonds when due, or in the event it fails to make the

payments required to be made into the Debt Service Fund or defaults in the observance or

performance of any other covenants, conditions or obligations set forth in this Bond Order, the

following remedies shall be available:

A. The Registered Holders of the Bonds shall be entitled to a writ of mandamus

issued by a court of competent jurisdiction compelling and requiring the District and the officials

thereof to observe and perform the covenants, obligations or conditions prescribed in this Bond

Order, notwithstanding the foregoing, the Registered Holders shall not be entitled to acceleration

of debt service payments.

B. Any delay or omission to exercise any right or power accruing upon any default

shall not impair any such right or power and shall not be construed to be a waiver of any such

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default or acquiescence therein, and every such right and power may be exercised from time to

time and as often as may be deemed expedient.

ARTICLE XI

ANNEXATION, STRATEGIC PARTNERSHIP AGREEMENT

AND CONSOLIDATION

A. The District is located wholly within the extraterritorial jurisdiction of the City of

Conroe, Texas (the “City”). If the District is annexed by the City, the City must assume all of

the debts, liabilities and obligations of the District, including the Bonds and the Outstanding

Bonds and must perform all of the functions of the District, including the provision of services.

If the District is annexed and the obligations thereof payable in whole or in part from ad valorem

taxes become obligations of the City, the City is thereafter required to levy and collect taxes on

all taxable property in the City sufficient to pay the principal of and interest on the Bonds and the

Outstanding Bonds as it becomes due and payable.

B. The laws of the State of Texas permit the District to be consolidated with one or

more other conservation and reclamation districts. In that event, the District reserves the right to

consolidate its System with a similar system of one or more such districts with which the District

is consolidating. The District further reserves the right to:

(a) assume such other district’s bonds, notes or other obligations and voted but

unissued bonds payable in whole or in part from taxation, and to provide for the joint levy of

taxes to pay for the bonds so assumed;

(b) apply the net revenues from the operation of such consolidated system to the

payment of principal, interest, redemption price and bond charges on any revenue bonds or

combination unlimited tax and revenue bonds of the District and/or of the district or districts

with which the District is consolidating, if any, without preference to any series of bonds with

the same parity provided that any subordinate lien revenue bonds shall continue to be

subordinate to first lien revenue bonds of the consolidating districts; and

(c) pledge the net revenues of the consolidated system to the payment of principal,

interest, redemption price and bond charges on revenue bonds which may be issued by the

consolidating districts on a parity with the outstanding first lien revenue bonds of the

consolidating districts.

ARTICLE XII

DEFEASANCE OF THE BONDS

The District may defease the Bonds and discharge its obligation to the Registered

Owners of any or all of the Bonds to pay the principal of and interest thereon in any manner

permitted by law. Upon such deposit, the Bonds shall no longer be outstanding or unpaid. Any

surplus amounts not required to accomplish such defeasance shall be returned to the District.

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ARTICLE XIII

CONTINUING DISCLOSURE UNDERTAKING

A. Definitions. As used in this Article, the following terms have the meanings

ascribed below:

“EMMA” means the Electronic Municipal Market Access system of the Municipal

Securities Rule Making Board.

“MSRB” means the Municipal Securities Rulemaking Board.

“Rule” means SEC Rule 15c2-12, as amended from time to time.

“SEC” means the United States Securities and Exchange Commission.

B. Annual Reports. The District shall provide at least annually to the MSRB through

EMMA or such other SEC method approved by the SEC, within six months after the end of each

fiscal year ending in or after 2020, financial information and operating data with respect to the

District of the general type included in the final Official Statement authorized by this Bond

Order,, being the information described in this Article XIII. Any financial statements so to be

provided shall be (1) prepared in accordance with the accounting principles described in this

Article XIII and (2) audited, if the District commissions an audit of such statements and the audit

is complete within the period during which they must be provided. If audited financial

statements are not so provided, then the District shall provide audited financial statements for the

applicable fiscal year to the MSRB, when and if audited financial statements become available.

If the District changes its fiscal year, it will notify the MSRB of the change (and of the

date of the new fiscal year end) prior to the next date by which the District otherwise would be

required to provide financial information and operating data pursuant to this Section.

The financial information and operating data to be provided pursuant to this Section may

be set forth in full in one or more documents or may be included by specific reference to any

publicly available document available on the MSRB website or filed with the SEC as permitted

by SEC Rule 15c2-12. Any filing made hereunder may be made solely by transmitting such

filing to the MSRB in electronic format as prescribed by MSRB currently to

www.emma.msrb.org and shall be accompanied by identifying information as prescribed by the

MSRB.

C. Event Notices. The District shall notify the MSRB, within 10 business days of

occurrence of the event, of any of the following events with respect to the Bonds:

1. Principal and interest payment delinquencies;

2. Unscheduled draws on debt service reserves reflecting financial difficulties;

3. Unscheduled draws on credit enhancements reflecting financial difficulties;

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4. Substitution of credit or liquidity providers, or their failure to perform;

5. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed

or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-

TEB) or other material notices or determinations with respect to the tax status of

the Bonds, or other material events affecting the tax status of the Bonds;

6. Defeasances;

7. Rating changes;

8. Tender offers;

9. Bankruptcy, insolvency, receivership or similar proceeding of the District.

10. Default, event of acceleration, termination event, modification of terms, or other

similar events under the terms of the financial obligation of the District, any of

which reflect financial difficulties.

The District shall notify the MSRB, within 10 business days of occurrence of the event, of any of

the following events with respect to the Bonds, if such event is material within the meaning of

federal securities laws:

1. Non-payment related defaults;

2. Modification to rights of holders of the Bonds;

3. Bond calls;

4. Release, substitution or sale of property securing repayment of the Bonds;

5. The consummation of a merger, consolidation, or acquisition involving the

District or the sale of all or substantially all of the assets of the District, other than

in the ordinary course of business, the entry into a definitive agreement to

undertake such an action or the termination of a definitive agreement relating to

any such actions, other than pursuant to its terms;

6. Appointment of a successor or additional trustee or the change of the name of a

trustee.

7. Incurrence of a financial obligation of the District or agreement to covenants,

events of default, remedies, priority rights, or other similar terms of financial

obligation of the District any of which affect security holders.

The District shall notify the MSRB, in a timely manner, of any failure by the District to

provide financial information or operating data in accordance with Section B. of this Article by

the time required by such Section. Any filing under this Section/Article may be made solely by

transmitting such filing to the MSRB in electronic format as prescribed by MSRB currently to

www.emma.msrb.org and shall be accompanied by identifying information as prescribed by the

MSRB.

D. Limitations, Disclaimers and Amendments. The District shall be obligated to

observe and perform the covenants specified in this Article for so long as, but only for so long as,

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the District remains an “obligated person” with respect to the Bonds within the meaning of the

Rule, except that the District in any event will give the notice required by this Article of any

Bond calls and defeasances that cause the District to be no longer such an “obligated person.”

The provisions of this Article are for the sole benefit of the Registered Owners and

beneficial owners of the Bonds, and nothing in this Article, express or implied, shall give any

benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The

District undertakes to provide only the financial information, operating data, financial

statements, and notices which it has expressly agreed to provide pursuant to this Article and does

not hereby undertake to provide any other information that may be relevant or material to a

complete presentation of the District’s financial results, condition, or prospects and does not

hereby undertake to update any information provided in accordance with this Article or

otherwise, except as expressly provided herein. The District does not make any representation or

warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at

any future date.

UNDER NO CIRCUMSTANCES SHALL THE DISTRICT BE LIABLE TO THE

REGISTERED OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER

PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN

PART FROM ANY BREACH BY THE DISTRICT, WHETHER NEGLIGENT OR WITHOUT

FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS ARTICLE, BUT EVERY

RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON

ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR

MANDAMUS OR SPECIFIC PERFORMANCE.

No default by the District in observing or performing its obligations under this Article

shall constitute a breach of or default under the Bond Order for purposes of any other provision

of this Bond Order.

Nothing in this Article is intended or shall act to disclaim, waive, or otherwise limit the

duties of the District under federal and state securities laws.

The provisions of this Article may be amended by the District from time to time to adapt

to changed circumstances that arise from a change in legal requirements, a change in law, or a

change in the identity, nature, status, or type of operations of the District, but only if (1) the

provisions of this Article, as so amended, would have permitted an underwriter to purchase or

sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account

any amendments or interpretations of the Rule to the date of such amendment, as well as such

changed circumstances, and (2) either (a) the Registered Owners of a majority in aggregate

principal amount of the Bonds Outstanding consent to such amendment or (b) a Person that is

unaffiliated with the District (such as nationally recognized bond counsel) determines that such

amendment will not materially impair the interests of the Registered Owners and beneficial

owners of the Bonds. If the District so amends the provisions of this Article, it shall include with

any amended financial information or operating data next provided in accordance with this

Article an explanation, in narrative form, of the reasons for the amendment and of the impact of

any change in the type of financial information or operating data so provided.

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E. Description of Annual Financial Information. The following information is

referred to in Section B. of this Article:

(a) Annual Financial Statements and Operating Data. The financial information and

operating data of the general type included in the Official Statement with respect to the District

to be provided annually are under the headings in the Official Statement:

“DEBT SERVICE REQUIREMENTS,” “FINANCIAL

STATEMENT,” “THE SYSTEM,” “TAX DATA,” and “WATER

AND SEWER OPERATIONS” (most of which is contained in the

District’s annual audit report and supplemental schedules) and in

“APPENDIX A” to the Official Statement – the Audit.

(b) Accounting Principles. The accounting principles referred to herein are generally

accepted accounting principles for governmental units as prescribed by the Governmental

Accounting Standards Board from time to time, as such principles may be changed from time to

time to comply with state law or regulation, or as otherwise stated in the financial statements.

ARTICLE XIV

BOOK ENTRY PROCEDURES

A. Registration of Nominee of DTC. Notwithstanding the procedures set forth in

this Order relating to registration and exchange of the Bonds, the Initial Bond shall be delivered

against payment to the Purchaser. The Purchaser shall be required to promptly surrender the

Initial Bond to the Paying Agent/Registrar for exchange. Bonds issued in exchange shall be

registered in the name of CEDE & CO., as nominee of the Depository Trust Co. (“DTC”), as

Registered Owner of the Bonds, and held in the custody of DTC. Unless otherwise requested by

DTC, a single certificate will be issued and delivered to DTC for each maturity of the Bonds.

Beneficial owners of Bonds will not receive physical delivery of Bond certificates except as

provided hereinafter. For so long as DTC shall continue to serve as securities depository for the

Bonds as provided herein, all transfers of beneficial ownership interests will be made by book-

entry only, and no investor or other party purchasing, selling or otherwise transferring beneficial

ownership of Bonds is to receive, hold or deliver any Bond certificate.

B. Obligation of Paying Agent/Registrar and District to DTC Participants. With

respect to Bonds registered in the name of CEDE & CO, as nominee of DTC, the District and the

Paying Agent/Registrar shall have no responsibility or obligation to any DTC Participant or to

any Person on whose behalf a DTC Participant holds an interest in the Bonds except as provided

in this Order. Without limiting the immediately preceding sentence, the District and the Paying

Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the

records of DTC, CEDE & CO., or any DTC Participant with respect to any ownership interest in

the Bonds, (ii) the delivery to any DTC Participant or any other Person, other than a Registered

Owner of the Bonds, as shown on the Register, of any notice with respect to the Bonds, including

any notice of redemption, and (iii) the payment to any DTC Participant or any other Person,

other than a Registered Owner of the Bonds, as shown in the Register, of any amount with

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respect to principal of or premium, if any, or interest on the Bonds. Notwithstanding any other

provision of this Order to the contrary, the District and the Paying Agent/Registrar shall be

entitled to treat and consider the person in whose name each Bond is registered in the Register as

the absolute Registered Owner of such Bond for the purpose of payment of principal of and

interest on the Bonds, for the purpose of giving notices of redemption and other matters with

respect to such Bond, for the purpose of registering transfer with respect to such Bond, and for

all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of, premium,

if any, and interest on the Bonds only to or upon the Order of the respective Registered Owners,

as shown in the Register as provided in this Order, or their respective attorneys duly authorized

in writing, and all such payments shall be valid and effective to fully satisfy and discharge the

District’s obligations with respect to payments of principal, premium, if any, and interest on the

Bonds to the extent of the sum or sums so paid. No person other than a Registered Owner, as

shown in the Register, shall receive a Bond certificate evidencing the obligation of the District to

make payments of amounts due pursuant to this Order. Upon delivery by DTC to the Paying

Agent/Registrar of written notice to the effect that DTC has determined to substitute a new

nominee in place of CEDE & CO., and subject to the provisions of this Order with respect to

interest checks being mailed to the Registered Owner of record as of the Record Date, the phrase

“CEDE & CO.” in this Order shall refer to such new nominee of DTC.

C. Blanket Issuer Letter of Representations. The execution and delivery of the

Blanket Issuer Letter of Representations is hereby approved with such changes as may be

approved by the President or Vice President of the Board, and the President or Vice President of

the Board is hereby authorized and directed to execute such Blanket Issuer Letter of

Representations.

D. Replacement of DTC or Issuance of Replacement Bonds. Replacement Bonds

may be issued directly to beneficial owners of Bonds other than DTC, or its nominee, but only in

the event that (i) DTC determines not to continue to act as securities depository for the Bonds

(which determination shall become effective no less than 90 days after written notice to such

effect to the District and the Paying Agent/Registrar); or (ii) the District has advised DTC of its

determination (which determination is conclusive as to DTC and the beneficial owners of the

Bonds) that the interests of the beneficial owners of the Bonds might be adversely affected if

such book-entry only system of transfer is continued. Upon occurrence of any of the foregoing

events, the District shall use its best efforts to attempt to locate another qualified securities

depository. If the District fails to locate another qualified securities depository to replace DTC,

the District shall cause to be authenticated and delivered replacement Bonds, in certificate form,

to the beneficial owners of the Bonds. In the event that the District makes the determination

noted in (ii) above (provided that the District undertakes no obligation to make any investigation

to determine the occurrence of any events that would permit the District to make any such

determination), and has made provisions to notify the beneficial owners of Bonds of such

determination by mailing an appropriate notice to DTC, it shall cause to be issued replacement

Bonds in certificate form to beneficial owners of the Bonds as shown on the records of DTC

provided to the District.

E. DTC Requirements to be Met. Whenever, during the term of the Bonds, the

beneficial ownership thereof is determined by a book entry at DTC, the requirements in this

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92115-003 474628v1 24

Order of holding, delivering or transferring Bonds shall be deemed modified to require the

appropriate Person or entity to meet the requirements of DTC as to registering or transferring the

book entry to produce the same effect.

F. Payments to CEDE & CO. Notwithstanding any other provision of this Order to

the contrary, so long as any Bonds are registered in the name of CEDE & CO., as nominee of

DTC, all payments with respect to principal of, premium, if any, and interest on such Bonds, and

all notices with respect to such Bonds, shall be made and given, respectively, in the manner

provided in the Blanket Issuer Letter of Representations.

G. Cessation of DTC as Securities Depository. If at any time, DTC ceases to hold

the Bonds as securities depository, all references herein to DTC shall be of no further force or

effect.

ARTICLE XV

AMENDMENT OF BOND ORDER

The District may, without the consent of or notice to any Registered Holders of the

Bonds, amend, change or modify this Bond Order as may be required (1) by the provisions

hereof, (2) in connection with the issuance of any additional bonds, (3) for the purpose of curing

any ambiguity, inconsistency, error or formal defect or omission herein, or (4) in connection with

any other change which is not to the prejudice of any Registered Holder of the Bonds. Except

for such amendments, changes, and modifications, the District shall not amend, change or

modify this Bond Order in any manner without the written consent of each Registered Holder of

the Bonds, including particularly any amendment, change or modification which would

(1) extend the time or times of payment of the principal of and interest (or accrual of interest) on

the Bonds, or reduce the principal amount thereof or the rate of interest thereon or in any other

way modify the terms of payment of the principal of or interest on the Bonds, (2) create any lien

ranking prior to or on a parity with the lien of the Bonds except for additional bonds as set forth

in Article IX hereof, (3) give preference of any Bond over any other Bond, or (4) extend any

waiver of default to subsequent defaults.

ARTICLE XVI

TAX EXEMPTION

A. Tax Exemption. The District covenants that it will make such use of the proceeds

of the Bonds, regulate investments of proceeds thereof, and take such other and further actions as

may be required by Sections 103 and 141-150 of the Internal Revenue Code of 1986, as amended

(the “Code”), and all applicable temporary, proposed, and final regulations and procedures

promulgated thereunder or promulgated under the Internal Revenue Code of 1954, to the extent

applicable to the Code (the “Regulations”), necessary to assure that the interest on the Bonds is

excludable from gross income for federal income tax purposes. Without limiting the generality

of the foregoing covenant, the District hereby covenants as follows:

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92115-003 474628v1 25

(a) to take any action to insure that no more than ten percent (10%) of the net

proceeds of the Bonds are used for any “private business use,” as defined in Section 141(b)(6) of

the Code or, if more than ten percent (10%) of the proceeds are so used, that amount, whether or

not received by the District, with respect to such private business use, do not, under the terms of

this Bond Order, directly or indirectly, secure or provide for the payment of more than ten

percent (10%) of the debt service on the Bonds, in contravention of Section 141(b)(2) of the

Code;

(b) to take any action to insure that in the event that the “private business use”

described in subsection (a) hereof exceeds five percent (5%) of the net proceeds of the Bonds,

then the amount in excess of five percent (5%) is used for a “private business use” which is

related and not “disproportionate,” within the meaning of Section 141(b)(3) of the Code, to the

governmental use;

(c) to take any action to insure that no amount which is greater than the lesser of (i)

$5,000,000 or (ii) five percent (5%) of the net proceeds of the Bonds is directly or indirectly used

to finance loans to persons other than governmental units, in contravention of Section 141(c) of

the Code;

(d) to refrain from taking any action which would otherwise result in the Bonds being

treated as “private activity bonds” within the meaning of Section 141(b) of the Code;

(e) to otherwise restrict the use of the proceeds of the Bonds so that the Bonds do not

contravene the requirements of Section 148 of the Code relating to arbitrage;

(f) to refrain from taking any action that would result in the Bonds being “federally

guaranteed” obligations for purposes of Section 149(b) of the Code;

(g) to take all necessary steps to comply with the requirement that excess arbitrage

profits earned on the investment of the “gross proceeds” of the Bonds (within the meaning of

Section 148(f)(6)(B) of the Code), if any, be rebated to the federal government, and to maintain

such records as will enable the District to fulfill its responsibilities under this section and

Section 148 of the Code;

(h) to timely file with the Secretary of the Treasury of the United States the

information required by Section 149(e) of the Code with respect to the Bonds on such form and

in such place as such Secretary may prescribe;

(i) to use the proceeds of the Bonds to pay principal and interest on the Refunded

Bonds;

(j) to refrain from using any portion of the proceeds of the Bonds, directly or

indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire

investment property (as defined in section 148(b)(2) of the Code) which produces a materially

higher yield over the term of the Bonds, other than investment property acquired with

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92115-003 474628v1 26

(1) proceeds of the Bonds invested for a reasonable temporary period until

such proceeds are needed for the purpose for which the Bonds are issued,

(2) amounts invested in a bona fide debt service fund, within the meaning of

section 1.148-1(b) of the Treasury Regulations, and

(3) amounts deposited in any reasonably required reserve or replacement fund

to the extent such amounts do not exceed 10 percent of the stated principal amount (or, in

the case of a discount, the issue price) of the Bonds; and

(k) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as

proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise contravene the

requirements of section 148 of the Code (relating to arbitrage), section 149(g) of the Code

(relating to hedge bonds), and, to the extent applicable, section 149(d) of the Code (relating to

advance refundings).

All officers, employees, and agents of the District are authorized and directed to

provide certifications of facts and estimates that are material to the reasonable expectations of the

District regarding the foregoing as of the date the Bonds are delivered. In complying with the

foregoing covenants, the District may rely from time to time upon an opinion issued by

nationally recognized bond counsel to the effect that any action by the District in reliance upon

any interpretation of the Code or Regulations contained in such opinion will not cause interest on

the Bonds to be includable in gross income for federal income tax purposes under existing law.

B. Qualified Tax Exempt Obligations. The District either deems the bonds, or

hereby designates the Bonds as “qualified tax-exempt obligations” as defined in

section 265(b)(3) of the Internal Revenue Code of 1986 (the “Code”), conditioned upon the

purchaser identified in Article III.C. hereof certifying that the aggregate initial offering price of

the Bonds to the public (excluding any accrued interest) is no greater than $10,000,000 (or such

amount permitted by such section 265 of the Code). Assuming such condition is met, in

furtherance of such designation, the District represents, covenants, and warrants the following:

(a) that during the calendar year in which the Bonds are issued, the District (including any

subordinate entities) has not designated nor will designate obligations, which when aggregated

with the Bonds, will result in more than $10,000,000 (or such amount permitted by such section

265 of the Code) of “qualified tax- exempt obligations” being issued; (b) that the District

reasonably anticipates that the amount of tax-exempt obligations issued during the calendar year

in which the Bonds are issued, by the District (or any subordinate entities) will not exceed

$10,000,000 (or such amount permitted by such section 265 of the Code; and (c) that the Issuer

will take such action or refrain from such action as necessary, and as more particularly set forth

in this Article, in order that the Bonds will not be considered “private activity bonds” within the

meaning of section 141 of the Code.

C. District Certifications. All officers, employees, and agents of the District are

authorized and directed to provide certifications of facts and estimates that are material to the

reasonable expectations of the District regarding the foregoing as of the date the Bonds are

delivered. In complying with the foregoing covenants, the District may rely from time to time

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92115-003 474628v1 27

upon an opinion issued by nationally recognized bond counsel to the effect that any action by the

District in reliance upon any interpretation of the Code or Regulations contained in such opinion

will not cause interest on the Bonds to be includable in gross income for federal income tax

purposes under existing law.

D. Disposition of Bonds. The District covenants that the property financed with

proceeds of the bonds to be refinanced with the proceeds of the Bonds will not be sold or

otherwise disposed in a transaction resulting in the receipt by the District of cash or other

compensation, unless the District obtains an opinion of nationally-recognized bond counsel that

such sale or other disposition will not adversely affect the tax-exempt status of the Bonds. For

purposes of the foregoing, the portion of the property comprising personal property and disposed

in the ordinary course shall not be treated as a transaction resulting in the receipt of cash or other

compensation. For purposes hereof, the District shall not be obligated to comply with this

covenant if it obtains an opinion that such failure to comply will not adversely affect the

excludability for federal income tax purposes from gross income of the interest.

E. Continuing Compliance. The District understands that the term “proceeds”

includes “disposition proceeds” as defined in the Treasury Regulations and, in the case of

refunding bonds, transferred proceeds (if any) and proceeds of the refunded bonds expended

prior to the date of issuance of the Bonds. It is the understanding of the District that the

covenants contained herein are intended to assure compliance with the Code and any regulations

or rulings promulgated by the U.S. Department of the Treasury pursuant thereto. In the event

that regulations or rulings are hereafter promulgated which modify, or expand provisions of the

Code, as applicable to the Bonds, the District will not be required to comply with any covenant

contained herein to the extent that such failure to comply, in the opinion of nationally recognized

bond counsel, will not adversely affect the exemption from federal income taxation of interest on

the Bonds under Section 103 of the Code. In the event that regulations or rulings are hereafter

promulgated which impose additional requirements which are applicable to the Bonds, the

District agrees to comply with the additional requirements to the extent necessary, in the opinion

of nationally recognized bond counsel, to preserve the exemption from federal income taxation

of interest on the Bonds under Section 103 of the Code.

F. Written Procedures. Unless superseded by another action of the District, to

ensure compliance with the covenants contained herein regarding private business use, remedial

actions, arbitrage and rebate, the District hereby adopts and establishes the instructions attached

hereto and incorporated by reference herein as Exhibit “B” as the District’s written procedures.

ARTICLE XVII

APPLICATION OF PROCEEDS

The District covenants and agrees with the Registered Holders of the Bonds that the net

proceeds from the sale of the Bonds will be disbursed as follows:

(a) to The Bank of New York Mellon Trust Company, N.A., Dallas, Texas, for

deposit into the fund created pursuant to the Escrow Agreement, which deposit shall be in such

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amount so as to provide funds sufficient for the timely transfer to the paying agent for the

Refunded Bonds for payment of principal of and interest on the Refunded Bonds to the date of

redemption, as more fully set forth in the Report;

(b) to the Debt Service Fund, for the accrued interest on the Bonds;

(c) to the Cost of Issuance Account of the General Fund, an amount sufficient to pay

fees and expenses incurred in the issuance of the Bonds; and

(d) the balance, if any, to the Debt Service Fund, to be used to pay principal of and

interest on the Bonds.

ARTICLE XVIII

REDEMPTION OF REFUNDED BONDS

A. The District hereby directs that there be called in whole on the dates set forth in

the Approval Certificate for the redemption at par in addition to unpaid accrued interest the

Refunded Bonds with the maturities and principal amounts set forth in the Approval Certificate.

B. The remaining outstanding bonds not specifically redeemed by this Bond Order

shall continue to be outstanding and subject to all terms, covenants and conditions governing the

remaining outstanding bonds pursuant to the bond orders issuing the remaining outstanding

bonds.

C. The President or Vice President and Secretary, Assistant Secretary or Secretary

Pro Tempore of the Board of the District are authorized and directed to give written notice of

said payment and redemption to the paying agent for the Refunded Bonds in accordance with the

bond orders issuing the Refunded Bonds.

ARTICLE XIX

APPROVAL AND REGISTRATION OF INITIAL BOND

A. The President or Secretary of the Board shall submit the transcript of certified

proceedings of the Bonds and the Initial Bond to the Attorney General for approval. After

obtaining such approval, the President or Secretary shall have the Initial Bond registered by the

Comptroller. After the Initial Bond has been registered by the Comptroller, the President or

Secretary shall direct delivery of same to the proper party or parties at the appropriate time and

place.

B. As and when the Initial Bond is delivered and paid for by the Purchaser, the

proceeds therefrom are to be used in accordance with this Bond Order. All moneys to be

deposited into the Debt Service Fund of the District shall be deposited in the depository bank of

the District.

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92115-003 474628v1 29

ARTICLE XX

INSURANCE POLICY

BUILD AMERICA MUTUAL ASSURANCE COMPANY

The following Statement of Insurance shall be printed on the Initial Bond and Definitive

Bonds:

Statement of Insurance

Build America Mutual Assurance Company (“BAM”), New York, New York, has

delivered its municipal bond insurance policy (the “Policy”) with respect to the

scheduled payments due of principal of and interest on this Bond to The Bank of

New York Mellon Trust Company, N.A., Dallas, Texas, or its successor, as

paying agent/registrar for the Bonds (the “Paying Agent/Registrar”). Said Policy

is on file and available for inspection at the principal office of the Paying

Agent/Registrar and a copy thereof may be obtained from BAM or the Paying

Agent/Registrar. All payments required to be made under the Policy shall be

made in accordance with the provisions thereof. By purchase of these Bonds, the

owner acknowledges and consents to the subrogation and all other rights of BAM

as more fully set forth in the Policy.

ARTICLE XXI

MISCELLANEOUS

A. If any date on which interest is payable on the Bonds or principal of the Bonds

matures shall be a legal holiday for the District or a day on which the Paying Agent/Registrar is

authorized by law to close, then payment of interest or principal need not be made on such date

but may be made on the next succeeding day which is neither a legal holiday for the District nor

a day on which the Paying Agent/Registrar is authorized by law to close, and such payment on

such succeeding day shall be treated with the same force and effect as if made on the Interest

Payment Date or the date of maturity, and no interest shall accrue for the period from the Interest

Payment Date or maturity date to the date of actual payment.

B. No recourse shall be had for the payment of principal of or interest on any of the

Bonds or for any claim based thereon or on this Order against any official of the District or any

person executing any Bonds.

C. The President or Vice President and the Secretary, Assistant Secretary or

Secretary Pro Tempore of the Board of Directors of the District, and all other officers,

employees, and agents of the District, and each of them, shall be and they are hereby expressly

authorized, empowered, and directed from time to time and at any time to do and perform all

such acts and things and to execute, acknowledge, and deliver in the name and on behalf of the

Issuer all such instruments, whether or not herein mentioned, as may be necessary or desirable in

order to carry out the terms and provisions of this Order, the Bond Purchase Agreement, the

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92115-003 474628v1 30

Escrow Agreement (including the execution of any forward purchase or similar agreement

relating to and/or implementing or supplementing the same), the Bonds, the redemption prior to

maturity of the Refunded Bonds, the sale and delivery of the Initial Bond and the Bonds, and all

details in connection therewith. In case any officer whose signature shall appear on any Bond

shall cease to be such officer before the delivery of such Bond, such signature shall nevertheless

be valid and sufficient for all purposes the same as if such officer had remained in office until

such delivery. The President or Vice President, the Secretary, Assistant Secretary or Secretary

Pro Tempore and other appropriate officials of the District are hereby authorized and directed to

do any and all things necessary and/or convenient to carry out the terms or effectuate the intent

of this Order in strict conformity and compliance with Tex. Gov’t. Code Ann. Chapter 1201, et

seq.

D. If any section, paragraph, clause or provision of this Order shall for any reason be

held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph,

clause or provision shall not affect any of the remaining provisions of this Order.

E. It is hereby found, determined, and declared that a sufficient written notice of the

date, hour, access instructions, and subject of the meeting of the Board of Directors at which this

Order was adopted was posted at a place convenient and readily accessible at all times to the

general public for the time required by law preceding this meeting, as required by the Open

Meetings Act, Tex. Gov’t. Code Ann. § 551.001 et seq., as amended, as suspended in part by the

Governor of Texas on March 16, 2020, and that this meeting has been accessible to the public as

required by law at all times during which this Order and the subject matter thereof has been

discussed, considered, and formally acted upon. The Board of Directors further ratifies,

approves, and confirms such written notice and the contents and posting thereof.

F. All District orders, resolutions, and ordinances, or parts thereof, inconsistent

herewith are hereby repealed to the extent of such inconsistency.


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Passed, ordered and approved, this May 7, 2020.

HAL B. SHARP

President

ATTEST:

CYNTHIA A. GILES

Secretary

(SEAL)

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I, the undersigned Secretary of the Board of Directors of Montgomery County Municipal

Utility District No. 115 hereby certify that the foregoing is a true and correct copy of the Bond

Order and excerpts of minutes, which Bond Order was adopted by said Board of Directors at its

regular meeting on May 7, 2020, as same appear of record in the official minutes of said Board

of Directors on file in said District’s office.

I further certify that said meeting was open to the public, and that notice was given in

compliance with the provisions of Tex. Gov’t. Code Ann. § 551.001 et seq. as adopted, and as

suspended in part by the Governor of Texas on March 16, 2020.

Witness my hand and the official seal of said District, this ________________________.

Secretary

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92115-003 474628v1 A-1

EXHIBIT A-1

FORM OF DEFINITIVE BOND


Build America Mutual Assurance Company (“BAM”), New York, New York, has delivered its municipal bond insurance policy

(the “Policy”) with respect to the scheduled payments due of principal of and interest on this Bond to The Bank of New York

Mellon Trust Company, N.A., Dallas, Texas, or its successor, as paying agent/registrar for the Bonds (the “Paying

Agent/Registrar”). Said Policy is on file and available for inspection at the principal office of the Paying Agent/Registrar and a

copy thereof may be obtained from BAM or the Paying Agent/Registrar. All payments required to be made under the Policy

shall be made in accordance with the provisions thereof. By purchase of these Bonds, the owner acknowledges and consents to

the subrogation and all other rights of BAM as more fully set forth in the Policy.

UNITED STATES OF AMERICA

STATE OF TEXAS


No. R- ________ Registered

$__________


SERIES 2020

INTEREST RATE: CUSIP: MATURITY DATE: DATED DATE:

_____________% ______ September 1, _______ {See Approval Certificate}

PRINCIPAL AMOUNT:________________________________________________DOLLARS

REGISTERED HOLDER: ____________________________________________________

MONTGOMERY COUNTY MUNICIPAL UTILITY DISTRICT NO. 115 of Montgomery County, Texas

(the “District”), a body politic and corporate, a governmental agency, and a political subdivision of the State of

Texas, for value received, hereby promises to pay to the registered holder named above, or registered assigns, but

solely from the source and in the manner hereinafter provided, on the Maturity Date specified above, unless this

Bond shall have been duly called for prior redemption and payment of the redemption price shall have been made or

provided for in accordance with the Bond Order (as hereinafter defined), upon presentation and surrender of this

Bond, the principal amount identified above and interest on such sum from the later of the Dated Date, or the most

recent interest payment date on which interest has been paid or duly provided for, at the per annum rate set forth

above calculated on the basis of a 360-day year, semiannually on March 1 and September 1 of each year,

commencing September 1, 2020, until the payment of such principal sum shall have been made or provided for.

Principal of this Bond is payable on presentation and surrender of this Bond in lawful money of the United States of

America, without deduction for paying agent services, at the payment office of the Paying Agent/Registrar, currently

The Bank of New York Mellon Trust Company, N.A., Dallas, Texas (the “Paying Agent/Registrar”). All interest on

this Bond payable prior to the maturity hereof shall be paid by check mailed to the registered holder hereof at its

address as it appears on the registration books of the Paying Agent/Registrar. The registered holder of this Bond

shall be determined in each case as of the close of business on the fifteenth (15th) day of the calendar month next

preceding the interest payment date.

This Bond is one of the duly authorized Bonds of the District’s Unlimited Tax Refunding Bonds, Series

2020 (the “Bonds”), aggregating in principal amount of {see Approval Certificate}, authorized by a Bond Order (the

“Bond Order”) adopted by the Board of Directors of the District on May 7, 2020 pursuant to and in full conformity

with the Constitution and the laws of the State of Texas. The Bonds are issued to provide funds to refund and

redeem {see Approval Certificate} and to pay certain costs of issuance, under and in strict conformity with the

Constitution and laws of the State of Texas, particularly Chapters 49 and 54, Texas Water Code, as amended, and

Tex. Gov’t. Code Ann. Chapter 1207.

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92115-003 474628v1 A-2

This Bond and the other Bonds of the series of which it is a part, are payable from the proceeds of a direct

annual ad valorem tax levied upon all taxable property subject to taxation within the District, without limitation as to

rate or amount, in the manner provided by Section 54.503(1), Texas Water Code, as amended.

Bonds of this issue scheduled to mature on {see Approval Certificate} and thereafter shall be callable for

redemption prior to maturity at the option of the District, in whole or in part, on {See Approval Certificate}, or on

any date thereafter for the purpose of retirement or refunding, or both, at par in addition to unpaid accrued interest to

the date of redemption. If less than all of the Bonds of a particular maturity are to be redeemed at any time, the

Bonds to be redeemed shall be selected by the District in accordance with the Bond Order.

Language for Term Bonds, if any:

The Term Bonds that mature on the following schedule (“Term Bonds”) are subject to

mandatory redemption (“Mandatory Redemption”) at a price equal to 100% of the principal amount thereof

plus accrued interest to the redemption dates from amounts which are required to be deposited in the

District's Debt Service Fund as defined in the Bond Order in amounts sufficient to redeem the Bonds on

September 1 in the years and principal amounts shown on the following schedule:

Redemption Date Principal Amount

INSERT INFORMATION FROM APPROVAL CERTIFICATE

While the Bonds are in book entry only form pursuant to Article XIV of the Bond Order, the Term

Bonds will be selected for Mandatory Redemption by DTC in accordance with its procedures. If the book

entry only system is discontinued, the Term Bonds will be selected for Mandatory Redemption by lot or other

customary random method.

The principal amount of the Term Bond of a given maturity required to be redeemed pursuant to the

operation of such Mandatory Redemption provisions shall be reduced, at the option of the District, by the

principal amount of Term Bond of such maturity which, at least fifty (50) days prior to the date of such

Mandatory Redemption, (1) shall have been acquired by the District at a price not exceeding the principal

amount of such Term Bond plus accrued interest to the date of purchase thereof, and delivered to the

Registrar for cancellation, (2) shall have been purchased and canceled by the Registrar at the request of the

District at a price not exceeding the principal amount of such Term Bond plus accrued interest to the date of

purchase, or (3) shall have been redeemed pursuant to the optional redemption provisions and not thereto

credited against a Mandatory Redemption requirement.

In the event all or any part of the Bonds then outstanding shall be called for redemption prior to maturity,

notice thereof in writing shall be mailed, properly stamped and addressed, to each registered owner of the Bonds to

be redeemed, at least thirty (30) calendar days before the date fixed for redemption. Payment of interest shall cease

upon the date set for redemption, and the Paying Agent/Registrar shall notify the registered owner hereof, in writing,

of both the redemption date and the termination of payment or accrual of interest.

This Bond and the other Bonds of the series of which it is a part have been designated a Qualified Tax

Exempt Obligation for purposes of Section 265(b) (3) of the Internal Revenue Code of 1986, as amended.

As provided in the Bond Order and subject to certain limitations therein set forth, this Bond is transferable

on the Bond Register of the District, upon surrender of this Bond for transfer at the corporate trust office of the

Paying Agent/Registrar, currently, The Bank of New York Mellon Trust Company, N.A., Dallas, Texas, duly

endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Paying Agent/Registrar,

duly executed by the registered holder hereof, or the holder’s attorney duly authorized in writing, and thereupon one

or more new fully registered Bonds of the same stated maturity, of authorized denominations of $5,000 or integral

multiples thereof, bearing the same rate of interest and for the same aggregate principal amount will be issued to the

designated transferee or transferees.

000125

92115-003 474628v1 A-3

Neither the District nor the Paying Agent/Registrar shall be required to issue, transfer or exchange any

Bond during a period beginning at the opening of business on the Record Date and ending at the close of business on

the next succeeding Interest Payment Date. Neither the District nor the Paying Agent/Registrar shall be required to

(i) issue, transfer or exchange any Bond selected for redemption, in whole or in part, during a period beginning on

the opening of business fifteen (15) calendar days before the date of the first mailing of a notice of redemption of

Bonds and ending at the close of business on the date of such mailing, or (ii) thereafter to transfer or exchange any

Bond so selected for redemption when such redemption is scheduled to occur within thirty (30) calendar days.

The District, the Paying Agent/Registrar, and any agent of either of them may treat the person in whose

name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided and for all

other purposes, whether or not this Bond be overdue, and neither the District, the Paying Agent/Registrar, nor any

agent of them shall be affected by notice to the contrary.

The District reserves the right to issue additional bonds and other evidences of indebtedness in the manner

provided by Chapters 49 and 54, Texas Water Code, as amended, including without limitation, inferior lien bonds,

refunding bonds, revenue bonds and special project bonds. Reference is made to the Bond Order for a complete

description of the right to issue such additional bonds.

The District is located wholly within the extraterritorial jurisdiction of the City of Conroe, Texas (the

“City”). The laws of the State of Texas contain provisions which require a municipality of the State of Texas,

including a home rule city, that annexes all of the area in a municipal utility district to take over all property and

other assets of the district and assume all the debts, liabilities and obligations of such district, and perform all the

functions of the district, including the provision of services and dissolve the district. If a district is annexed entirely

and dissolved and the obligations thereof payable in whole or in part from ad valorem taxes become obligations of

the annexing municipality, the governing body of such municipality is thereafter required to levy and collect taxes

on all taxable property in the municipality sufficient to pay the principal of and interest on the bonds, warrants or

other obligations of the district as they become due and payable. There are also provisions of state law which permit

the consolidation of a district with one or more other districts. Reference is hereby made to the Bond Order for a

more complete description of the terms, conditions and circumstances under and by virtue of which the District may

be annexed or consolidated, and to the provisions of which the registered holder of this Bond by acceptance hereof

expressly consents.

No Bond shall be valid or obligatory for any purpose or be entitled to any benefit under the Bond Order

until the Certificate of Authentication hereon shall have been signed by the Paying Agent/Registrar.

IT IS HEREBY CERTIFIED, RECITED AND REPRESENTED that the issuance of this Bond and the

Bonds is duly authorized by law; that all acts, conditions and things required to exist and necessary to be done or

performed precedent to and in the issuance of this Bond and the Bonds to render the same lawful, valid and binding

have been properly done and performed and have happened in regular and due time, form and manner as required by

law; that all acts, conditions and things necessary to be done or performed by the District or to have happened

precedent to and in the execution and delivery of the Bond Order have been done and performed and have happened

in regular and due form as required by law; that due provision has been made in the Bond Order for the payment of

the principal of and interest on this Bond and the Bonds by the levy of a direct annual ad valorem tax levied upon all

taxable property subject to taxation within the District, without limitation as to rate or amount sufficient to pay the

principal of and interest on this Bond in the manner provided by Section 54.503(1), Texas Water Code, as amended;

and that the issuance of the Bonds does not contravene or violate any constitutional or statutory limitation.

IN WITNESS WHEREOF, the District has caused this Bond to be executed in its name by the President or

Vice President of its Board of Directors and to be attested to by the Secretary, Assistant Secretary or Secretary Pro

Tempore of its Board of Directors both by their respective manual signatures, and the official seal of the District to

be placed manually hereon.

000126

92115-003 474628v1 A-4

MONTGOMERY COUNTY MUNICIPAL UTILITY

DISTRICT NO. 115

By:

President, Board of Directors

ATTEST:

Secretary, Board of Directors

(SEAL)

Certificate of Authentication

This is one of the Bonds referred to in the within-mentioned Bond Order. The undersigned Paying

Agent/Registrar hereby certifies that on file in its office is an opinion of the Attorney General of the State of Texas

approving the originally issued Bonds and the proceedings relating thereto and that such Bonds contain a Certificate

of Registration by the Comptroller of Public Accounts of the State of Texas.

THE BANK OF NEW YORK MELLON TRUST

COMPANY, N.A., as Paying Agent/Registrar

By:

Authorized Signature

DATED: ______________________________

000127

92115-003 474628v1 A-5

Assignment

FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto

__________________________________________________________________________________ (Transferee),

_______________________________________ (Social Security or other identifying number) the within Bond and

all rights thereunder, and hereby irrevocably constitutes and appoints ____________________________________

attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the

premises.

Dated: _____________________________ _____________________________________

Registered Holder

The signature of the Registered NOTICE: The signature on this Assignment

Holder appearing on this Assignment must correspond with the name of the

is hereby verified as true and Registered Holder as it appears on the

genuine and is guaranteed by: face of the within Bond in every particular

____________________________________

(Bank, Trust Company, or Brokerage

Firm)

____________________________________

(Authorized Representative)

The following abbreviations, when used in the inscription on the face of this Bond, shall be

construed as though they were written out in full.

TEN COM - as tenants in common

TEN ENT - as tenants by the entirety

JT TEN - as joint tenants with right of survivorship and not as tenants in common

UNIF GIFT MIN ACT - ___________ - Custodian for ________________________

(Cust) (minor)

under Uniform Gifts to Minors Act __________

(State)

Additional abbreviations may also be used though not in list above.

000128

92115-003 474628v1 A-1-A (1)

EXHIBIT A-1-A

FORM OF INITIAL BOND


Build America Mutual Assurance Company (“BAM”), New York, New York, has delivered its municipal bond insurance policy

(the “Policy”) with respect to the scheduled payments due of principal of and interest on this Bond to The Bank of New York

Mellon Trust Company, N.A., Dallas, Texas, or its successor, as paying agent/registrar for the Bonds (the “Paying

Agent/Registrar”). Said Policy is on file and available for inspection at the principal office of the Paying Agent/Registrar and a

copy thereof may be obtained from BAM or the Paying Agent/Registrar. All payments required to be made under the Policy

shall be made in accordance with the provisions thereof. By purchase of these Bonds, the owner acknowledges and consents to

the subrogation and all other rights of BAM as more fully set forth in the Policy.

UNITED STATES OF AMERICA

STATE OF TEXAS



SERIES 2020

No. IB-1 Registered {see Approval Certificate}

Dated: {see Approval Certificate}

Maturity Principal Amount Interest Rate

INSERT INFORMATION FROM APPROVAL CERTIFICATE – See Approval Certificate

REGISTERED HOLDER: CEDE & CO., as registered owner and nominee of the Depository Trust Company, New

York, New York (“DTC”).

MONTGOMERY COUNTY MUNICIPAL UTILITY DISTRICT NO. 115 of Montgomery County, Texas

(the “District”), a body politic and corporate, a governmental agency, and a political subdivision of the State of

Texas, for value received, hereby promises to pay to the registered holder named above, or registered assigns, but

solely from the source and in the manner hereinafter provided, on the Maturity Date specified above, unless this

Bond shall have been duly called for prior redemption and payment of the redemption price shall have been made or

provided for in accordance with the Bond Order (as hereinafter defined), upon presentation and surrender of this

Bond, the principal amount identified above and interest on such sum from the later of the Dated Date, or the most

recent interest payment date on which interest has been paid or duly provided for, at the per annum rate set forth

above calculated on the basis of a 360-day year, semiannually on March 1 and September 1 of each year,

commencing September 1, 2020, until the payment of such principal sum shall have been made or provided for.

Principal of this Bond is payable on presentation and surrender of this Bond in lawful money of the United States of

America, without deduction for paying agent services, at the corporate trust office of the Paying Agent/Registrar,

currently The Bank of New York Mellon Trust Company, N.A., Dallas, Texas (the “Paying Agent/Registrar”). All

interest on this Bond payable prior to the maturity hereof shall be paid by check mailed to the registered holder

hereof at its address as it appears on the registration books of the Paying Agent/Registrar. The registered holder of

this Bond shall be determined in each case as of the close of business on the fifteenth (15th) day of the calendar

month next preceding the interest payment date.

This Bond is the duly authorized Initial Bond representing the initial issuance of the Bonds of the District’s

Unlimited Tax Refunding Bonds, Series 2020 (the “Bonds”), aggregating in principal amount of {see Approval

Certificate}, authorized by a Bond Order (the “Bond Order”) adopted by the Board of Directors of the District on

May 7, 2020 pursuant to and in full conformity with the Constitution and the laws of the State of Texas. The Bonds

are issued to provide funds to refund and redeem {see Approval Certificate} and to pay certain costs of issuance,

under and in strict conformity with the Constitution and laws of the State of Texas, particularly Chapters 49 and 54,

Texas Water Code, as amended, and Tex. Gov’t. Code Ann. Chapter 1207.

This Bond and the other Bonds of the series of which it is a part, are payable from the proceeds of a direct

annual ad valorem tax levied upon all taxable property subject to taxation within the District, without limitation as to

rate or amount, in the manner provided by Section 54.503(1), Texas Water Code, as amended.

000129

92115-003 474628v1 A-1-A (2)

Bonds of this issue scheduled to mature on {see Approval Certificate} and thereafter shall be callable for

redemption prior to maturity at the option of the District, in whole or in part, on {see Approval Certificate}, or on

any date thereafter for the purpose of retirement or refunding, or both, at par in addition to unpaid accrued interest to

the date of redemption. If less than an all of the Bonds of a particular maturity are to be redeemed at any time, the

Bonds to be redeemed shall be selected by the District in accordance with the Bond Order.

Language for Term Bonds, if any:

The Term Bonds that mature on the following schedule (“Term Bonds”) are subject to

mandatory redemption (“Mandatory Redemption”) at a price equal to 100% of the principal amount thereof

plus accrued interest to the redemption dates from amounts which are required to be deposited in the

District's Debt Service Fund as defined in the Bond Order in amounts sufficient to redeem the Bonds on

September 1 in the years and principal amounts shown on the following schedule:


INSERT INFORMATION FROM APPROVAL CERTIFICATE – See Approval Certificate

While the Bonds are in book entry only form pursuant to Article XIV of the Bond Order, the Term

Bonds will be selected for Mandatory Redemption by DTC in accordance with its procedures. If the book

entry only system is discontinued, the Term Bonds will be selected for Mandatory Redemption by lot or other

customary random method.

The principal amount of the Term Bond of a given maturity required to be redeemed pursuant to the

operation of such Mandatory Redemption provisions shall be reduced, at the option of the District, by the

principal amount of Term Bond of such maturity which, at least fifty (50) days prior to the date of such

Mandatory Redemption, (1) shall have been acquired by the District at a price not exceeding the principal

amount of such Term Bond plus accrued interest to the date of purchase thereof, and delivered to the

Registrar for cancellation, (2) shall have been purchased and canceled by the Registrar at the request of the

District at a price not exceeding the principal amount of such Term Bond plus accrued interest to the date of

purchase, or (3) shall have been redeemed pursuant to the optional redemption provisions and not thereto

credited against a Mandatory Redemption requirement.

In the event all or any part of the Bonds then outstanding shall be called for redemption prior to maturity,

notice thereof in writing shall be mailed, properly stamped and addressed, to each registered holder of the Bonds to

be redeemed, at least thirty (30) calendar days before the date fixed for redemption. Payment of interest shall cease

upon the date set for redemption, and the Paying Agent/Registrar shall notify the registered holder hereof, in writing,

of both the redemption date and the termination of payment or accrual of interest.

This Bond and the other Bonds of the series of which it is a part have been designated a Qualified Tax

Exempt Obligation for purposes of Section 265(b) (3) of the Internal Revenue Code of 1986, as amended.

As provided in the Bond Order and subject to certain limitations therein set forth, this Bond is transferable

on the Bond Register of the District, upon surrender of this Bond for transfer at the corporate trust office of the

Paying Agent/Registrar, currently, The Bank of New York Mellon Trust Company, N.A., Dallas, Texas, duly

endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Paying Agent/Registrar,

duly executed by the registered holder hereof, or the holder’s attorney duly authorized in writing, and thereupon one

or more new fully registered Bonds of the same stated maturity, of authorized denominations of $5,000 or integral

multiples thereof, bearing the same rate of interest and for the same aggregate principal amount will be issued to the

designated transferee or transferees.

Neither the District nor the Paying Agent/Registrar shall be required to issue, transfer or exchange any

Bond during a period beginning at the opening of business on the Record Date and ending at the close of business on

the next succeeding Interest Payment Date. Neither the District nor the Paying Agent/Registrar shall be required to

(i) issue, transfer or exchange any Bond selected for redemption, in whole or in part, during a period beginning at

the opening of business fifteen (15) calendar days before the date of the first mailing of a notice of redemption of

Bonds and ending at the close of business on the date of such mailing, or (ii) thereafter to transfer or exchange any

Bond so selected for redemption when such redemption is scheduled to occur within thirty (30) calendar days.

000130

92115-003 474628v1 A-1-A (3)

The District, the Paying Agent/Registrar, and any agent of either of them may treat the person in whose

name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided and for all

other purposes, whether or not this Bond be overdue, and neither the District, the Paying Agent/Registrar, nor any

agent of them shall be affected by notice to the contrary.

The District reserves the right to issue additional bonds and other evidences of indebtedness in the manner

provided by Chapters 49 and 54, Texas Water Code, as amended, including without limitation, inferior lien bonds,

refunding bonds, revenue bonds and special project bonds. Reference is made to the Bond Order for a complete

description of the right to issue such additional bonds.

The District is located wholly within the extraterritorial jurisdiction of the City of Conroe, Texas (the

“City”). The laws of the State of Texas contain provisions which require a municipality of the State of Texas,

including a home rule city, that annexes all of the area in a municipal utility district to take over all property and

other assets of the district and assume all the debts, liabilities and obligations of such district, and perform all the

functions of the district, including the provision of services and dissolve the district. If a district is annexed entirely

and dissolved and the obligations thereof payable in whole or in part from ad valorem taxes become obligations of

the annexing municipality, the governing body of such municipality is thereafter required to levy and collect taxes

on all taxable property in the municipality sufficient to pay the principal of and interest on the bonds, warrants or

other obligations of the district as they become due and payable. There are also provisions of state law which permit

the consolidation of a district with one or more other districts. Reference is hereby made to the Bond Order for a

more complete description of the terms, conditions and circumstances under and by virtue of which the District may

be annexed or consolidated, and to the provisions of which the registered holder of this Bond by acceptance hereof

expressly consents.

No Bond shall be valid or obligatory for any purpose or be entitled to any benefit under the Bond Order

until this Bond is registered by the Comptroller of Public Accounts of the State of Texas by due execution of the

Comptroller’s registration certificate affixed hereto.

IT IS HEREBY CERTIFIED, RECITED AND REPRESENTED that the issuance of this Bond and the

Bonds is duly authorized by law; that all acts, conditions and things required to exist and necessary to be done or

performed precedent to and in the issuance of this Bond and the Bonds to render the same lawful, valid and binding

have been properly done and performed and have happened in regular and due time, form and manner as required by

law; that all acts, conditions and things necessary to be done or performed by the District or to have happened

precedent to and in the execution and delivery of the Bond Order have been done and performed and have happened

in regular and due form as required by law; that due provision has been made in the Bond Order for the payment of

the principal of and interest on this Bond and the Bonds by the levy of a direct annual ad valorem tax levied upon all

taxable property subject to taxation within the District, without limitation as to rate or amount, sufficient to pay the

principal of and interest on this Bond in the manner provided by Section 54.503(1), Texas Water Code, as amended;

that payment in full for the Bonds has been received; and that the issuance of the Bonds does not contravene or

violate any constitutional or statutory limitation.

IN WITNESS WHEREOF, the District has caused this Bond to be executed in its name by the President or

Vice President of its Board of Directors and to be attested to by the Secretary, Assistant Secretary or Secretary Pro

Tempore of its Board of Directors both by their respective manual signatures, and the official seal of the District to

be placed manually hereon.

000131

92115-003 474628v1 A-1-A (4)

MONTGOMERY COUNTY MUNICIPAL UTILITY

DISTRICT NO. 115

By: ________________________________________


ATTEST:


(SEAL)

OFFICE OF THE COMPTROLLER §

§ REGISTER NO.

STATE OF TEXAS §

I hereby certify that there is on file and of record in my office an opinion of the Attorney General

of the State of Texas to the effect that this Bond has been examined by him as required by law, and that he finds that

it has been issued in conformity with the Constitution and laws of the State of Texas, and that it is a valid and

binding obligation of Montgomery County Municipal Utility District No. 115, and said Bond has this day been

registered by me.

Witness my hand and seal of office, at Austin, Texas, this ______________________________.

Comptroller of Public Accounts of the State of Texas

000132

92115-003 474628v1 Exhibit B

Assignment

FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto

__________________________________________________________________________________ (Transferee),

_______________________________________ (Social Security or other identifying number) the within Bond and

all rights thereunder, and hereby irrevocably constitutes and appoints ____________________________________

attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the

premises.

Dated: _____________________________ _____________________________________

Registered Holder

The signature of the Registered NOTICE: The signature on this Assignment

Holder appearing on this Assignment must correspond with the name of the

is hereby verified as true and Registered Holder as it appears on the

genuine and is guaranteed by: face of the within Bond in every particular

____________________________________

(Bank, Trust Company, or Brokerage

Firm)

____________________________________

(Authorized Representative)

The following abbreviations, when used in the inscription on the face of this Bond, shall be

construed as though they were written out in full.

TEN COM - as tenants in common

TEN ENT - as tenants by the entirety

JT TEN - as joint tenants with right of survivorship and not as tenants in common

UNIF GIFT MIN ACT - ___________ - Custodian for ________________________

(Cust) (minor)

under Uniform Gifts to Minors Act __________

(State)

Additional abbreviations may also be used though not in list above.

000133

92115-003 474628v1 Exhibit B

EXHIBIT “B”

WRITTEN PROCEDURES RELATING TO CONTINUING

COMPLIANCE WITH FEDERAL TAX COVENANTS

A. Arbitrage. With respect to the investment and expenditure of the proceeds of the

Montgomery County Municipal Utility District No. 115 Unlimited Tax Refunding Bonds, Series

2020 (the “Bonds”) the District’s Board of Directors (the “Responsible Persons”) will:

monitor the actions of the escrow agent (to the extent an escrow is funded with

proceeds) to ensure compliance with the applicable provisions of the escrow

agreement, including with respect to reinvestment of cash balances;

maintain any official action of the District (such as a reimbursement resolution)

stating its intent to reimburse with the proceeds of the Bonds any amount

expended prior to the Issue Date for the acquisition, renovation or construction of

the facilities;

ensure that the applicable information return (e.g., IRS Form 8038-G, 8038-GC,

or any successor forms) is timely filed with the IRS;

assure that, unless excepted from rebate and yield restriction under section 148(f)

of the Code, excess investment earnings are computed and paid to the U.S.

government at such time and in such manner as directed by the IRS (i) at least

every 5 years after the Issue Date and (ii) within 30 days after the date the Bonds

are retired.

B. Private Business Use. With respect to the use of the facilities financed or

refinanced with the proceeds of the Bonds the District’s Board of Directors will:

monitor the date on which the facilities are substantially complete and available to

be used for the purpose intended;

monitor whether, at any time the Bonds are outstanding, any person, other than

the District, the employees of the District, the agents of the District or members of

the general public has any contractual right (such as a lease, purchase,

management or other service agreement) with respect to any portion of the

facilities;



the general public has a right to use the output of the facilities (e.g., water, gas,

electricity);



the general public has a right to use the facilities to conduct or to direct the

conduct of research;

000134

92115-003 474628v1 Exhibit B

determine whether, at any time the Bonds are outstanding, any person, other than

the District, has a naming right for the facilities or any other contractual right

granting an intangible benefit;

determine whether, at any time the Bonds are outstanding, the facilities are sold or

otherwise disposed of; and

take such action as is necessary to remediate any failure to maintain compliance

with the covenants contained in this Order related to the public use of the

facilities.

C. Record Retention. The Responsible Persons will maintain or cause to be

maintained all records relating to the investment and expenditure of the proceeds of the Bonds

and the use of the facilities financed or refinanced thereby for a period ending three (3) years

after the complete extinguishment of the Bonds. If any portion of the Bonds is refunded with the

proceeds of another series of tax-exempt bonds or obligations, such records shall be maintained

until the three (3) years after the refunding bonds or obligations are completely extinguished.

Such records can be maintained in paper or electronic format.

D. Responsible Persons. Each Responsible Person shall receive appropriate training

regarding the District’s accounting system, contract intake system, facilities management and

other systems necessary to track the investment and expenditure of the proceeds and the use of

the facilities financed with the proceeds of the Bonds. The foregoing notwithstanding, the

Responsible Persons are authorized and instructed to retain such experienced advisors and agents

as may be necessary to carry out the purposes of these instructions.

000135

000136

000137

000138

000139

000140

000141

92115-003 474723v1


APPROVAL CERTIFICATE

I, the undersigned, President of the Montgomery County Municipal Utility District No. 115

(the "Issuer") and the "Authorized Officer" as defined in Article III, Section B of the Bond Order of

the Issuer, adopted on May 7, 2020 (the "Bond Order") authorizing the issuance of the Issuer's

Unlimited Tax Refunding Bonds, Series 2020 (the "Bonds"), do hereby approve the following terms

of the Bonds:

1. a principal amount of the Bonds of $4,545,000;

2. a purchase price for the Bonds of $__________ (the principal amount of the Bonds of

$4,545,000, less an Underwriter’s discount of $__________, and plus a net premium of

$___________), plus accrued interest from the Dated Date (June 1, 2020) to the date of

delivery to the initial purchaser, and the Board has determined that the terms of the sale

are the most in the best interest of the District;

3. annual installments of principal payable on September 1 in the years and amounts and

interest rates on the Bonds, as follows:

Serial Bonds:

Year Amount Rate

2021 $120,000 2.000%

2022 $235,000 2.000%

2023 $310,000 2.000%

2024 $190,000 2.000%

2025 $290,000 2.000%

2026 $290,000 2.000%

2027 $295,000 2.000%

2028 $220,000 3.500%

2029 $225,000 4.000%

2030 $225,000 4.000%

2031 $230,000 4.000%

2032 $235,000 4.000%

2033 $240,000 2.000%

2034 $260,000 2.000%

2035 $635,000 3.500%

2036 $275,000 4.000%

2037 $270,000 4.000%

Term Bonds:

Year Amount Rate

2028 $845,000 4.000%

2032 $1,080,000 3.000%

2034 $1,085,000 3.250%

4. a net present value savings of ______% , which is greater than 3% calculated on a

present value basis of the amount which would otherwise be payable on the bonds being

000142

92115-003 474723v1

refunded;

5. interest payable on September 1, 2020, and on each March 1 and September 1 thereafter;

6. (a) mandatory redemption on the Term Bond(s) at a price equal to 100% of the principal

amount thereof plus accrued interest to the redemption dates in amounts sufficient to redeem

the Bonds on September 1 in the years and principal amounts shown on the following

schedule: (table is provided by way of example; actual term bonds will be determined on the

date of sale)

TERM BOND: September 1, 2028 ($845,000)


2027 $375,000

2028 (Maturity Date) $470,000

TERM BOND: September 1, 2032 ($1,080,000)


2031 $530,000


TERM BOND: September 1, 2034 ($1,085,000)


2033 $560,000


6. (b) The District reserves the right, at its option, to redeem the Bonds maturing on or after

September 1, 2026 prior to maturity, in whole or in part, on September 1, 2025, or on any

date thereafter, at a price equal to the principal amount of the Bonds called for redemption

plus accrued interest from the later of the Dated Date or the most recent Interest Payment

Date on which interest has been paid or duly provided for to the date fixed for redemption;

7. a dated date of the Bonds of June 1, 2020;

8. the following bonds of the District shall be refunded through the issuance of the Bonds:

a. on July 1, 2020 for redemption at par in addition to unpaid accrued interest, $235,000

of the District’s issue of $2,800,000 Unlimited Tax Bonds, Series 2010 being those

certain serial bonds with original maturities (or mandatory redemption dates, as

applicable) of September 1, 2022 and September 1, 2023, as shown in the below

chart (Item e. below).

b. on July 1, 2020 for redemption at par in addition to unpaid accrued interest, $525,000

of the District’s issue of $2,120,000 Unlimited Tax Bonds, Series 2011 being those

certain term bonds with original maturities (or mandatory redemption dates, as

applicable) on September 1, 2022, September 1, 2024, and September 1, 2027

(specifically September 1, 2021 through September 1, 2027, inclusive), as shown in

the below chart (Item e. below).

000143

92115-003 474723v1

c. on September 1, 2020 for redemption at par in addition to unpaid accrued interest,

$1,635,000 of the District’s issue of $2,120,000 Unlimited Tax Bonds, Series 2012

being those certain serial bonds with original maturities (or mandatory redemption

dates, as applicable) from September 1, 2023 through September 1, 2027, inclusive,

and term bonds with original maturities on September 1, 2029, September 1, 2032,

and September 1, 2035 (specifically September 1, 2028 through September 1, 2035,

inclusive), as shown in the below chart (Item e. below).

d. on September 1, 2020 for redemption at par in addition to unpaid accrued interest,

$1,920,000 of the District’s issue of $2,920,000 Unlimited Tax Bonds, Series 2013

being those certain serial bonds with original maturities (or mandatory redemption

dates, as applicable) from September 1, 2025 through September 1, 2031, inclusive,

and a term bond with original maturity on September 1, 2037 (specifically September

1, 2032 through September 1, 2037, inclusive), as shown in the below chart (Item e.

below).

e. Chart:

Insert Chart showing Type of Bond (Serial or Term),

Maturity Date, Interest Rate, PAR Amount, Call Date and

Call Price

9. redemption of (i) the Series 2010 Refunded Bonds on July 1, 2020; (ii) the Series 2011

Refunded Bonds on July 1, 2020; (iii) the Series 2012 Refunded Bonds on September 1,

2020; and (iv) the Series 2013 Refunded Bonds on September 1, 2020; and

10. Use of $230,000.00 of voted authority from the November 7, 2006 bond election for the

Series 2020 Bonds. Following the issuance of the Series 2020 Bonds, the District will

have $71,010,000 of remaining voted authority authorized at the November 7, 2006 Bond

election.


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EXECUTED AND DELIVERED ________________________________.



By:

President

[SEAL]

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ORDER APPROVING BOND PURCHASE AGREEMENT,

PAYING AGENT/REGISTRAR AGREEMENT, ESCROW AGREEMENT

AND THE OFFICIAL STATEMENT, AND AUTHORIZING PREPARATION,

ISSUANCE OF NOTICES, CERTIFICATES,

AFFIDAVITS AND SUCH OTHER DOCUMENTS RELATING THERETO

The Board of Directors (“Board”) of Montgomery County Municipal Utility District No.

115 (the “District”) met on May 7, 2020, with a quorum of directors present, as follows:







None


The order set out below was introduced for consideration of the Board. It was

then duly moved and seconded that said order be adopted; and, after due discussion, said motion

carried by the following vote:


Mitchell.

Noes: None.

Abstentions: Cynthia A. Giles.

The order thus adopted is as follows:

WHEREAS, the District is a conservation and reclamation district created pursuant to

Article XVI, Section 59 of the Texas Constitution, and operates pursuant to Chapters 49 and 54

of the Texas Water Code, as amended; and

WHEREAS, the District has presently outstanding and unpaid the following bonds:




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WHEREAS, the Bond Orders issuing the Series 2010 Bonds, Series 2011 Bonds, Series

2012 Bonds, and Series 2013 Bonds (hereinafter from time to time referred to as the

“Outstanding Bonds”) provide in part that if the District shall have made due provision with the

paying agent for the Outstanding Bonds for the payment of a portion of the principal amount of

the Outstanding Bonds to be refunded and redeemed and interest thereon to the date fixed for

redemption (the “Refunded Bonds”), the Refunded Bonds so called for redemption are no longer

regarded as outstanding and unpaid, and the interest on such Refunded Bonds, or portions

thereof, shall cease to accrue at the date specified for redemption; and

WHEREAS, the District has made due provision with the paying agent for the Refunded

Bonds for the payment of the principal amount of the Refunded Bonds to be refunded and

redeemed and interest thereon to the date fixed for redemption, and has directed the paying agent

to give notice of redemption of the Refunded Bonds to be refunded and redeemed. The paying

agent has included or will include within such notice that the Refunded Bonds shall be no longer

regarded as outstanding and unpaid following redemption, and the interest on such Refunded

Bonds shall cease to accrue at the dates specified for redemption; and

WHEREAS, the District is authorized by the laws of the State, including particularly

Chapters 49 and 54, Texas Water Code, as amended, and Tex. Gov’t Code Ann. §1201 et seq, to

issue bonds to refund bonds of the District, including, without limitation, the Series 2010 Bonds,

Series 2011 Bonds, Series 2012 Bonds, and Series 2013 Bonds; and

WHEREAS, the Board of Directors of the District has determined that it is in the best

interests of the District and the inhabitants thereof to issue its Unlimited Tax Refunding Bonds,

Series 2020 (the “Series 2020 Refunding Bonds”) for the purpose of refunding and redeeming

the Refunded Bonds as specified in the Approval Certificate, in order, among other reasons, to

achieve a reduction in annual debt service requirements and achieve a net present value debt

service savings; and

WHEREAS, all things necessary to make the Series 2020 Refunding Bonds, when issued

pursuant to and secured as provided in the Bond Order for the Series 2020 Refunding Bonds and

authenticated by the Paying Agent/Registrar (as defined herein), legal, valid and binding

obligations of the District according to the import thereof and the execution, issuance and

delivery of the Series 2020 Refunding Bonds, subject to the terms and provisions of such Bond

Order, have in all respects been fully authorized; and

WHEREAS, for purposes of refunding and redeeming a portion of the Outstanding

Bonds, the District now desires (i) to approve and authorize the issuance of the Series 2020

Refunding Bonds in the aggregate principal amount not to exceed $5,000,000 pursuant to the

terms and provisions of the Bond Order for the Series 2020 Refunding Bonds, (ii) to approve the

sale of the Bonds to Raymond James & Associates, Inc. (the “Underwriter”), pursuant to the

terms of a Bond Purchase Agreement dated as of the date accepted by the Authorized Officer

(the “BPA”), between the District and the Underwriter, (iii) to approve deposit of a portion of the

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proceeds of the Series 2020 Refunding Bonds with The Bank of New York Mellon Trust

Company, N.A., Dallas, Texas, as Escrow Agent (the “Escrow Agent’) pursuant to the terms of

the Escrow Agreement (the Escrow Agreement”) between the District and the Escrow Agent;

(iv) to ratify the distribution and use of the Preliminary Official Statement dated May 7, 2020

(the “Preliminary Official Statement”), being the previously “deemed final” Official Statement

within the meaning of Securities Exchange Commission Rule 15c2-12, (v) to approve the

distribution and use of the Official Statement (the “Official Statement”), (vi) to enter into a

Paying Agent/Registrar Agreement, dated as of the date of the acceptance by the Authorized

Officer, by and between the District and The Bank of New York Mellon Trust Company, N.A.,

Dallas, Texas, as paying agent and registrar for the Series 2020 Refunding Bonds (the “Paying

Agent/Registrar Agreement”), and (vii) to take and authorize certain other actions in connection

with the foregoing; and

WHEREAS, the Board has been presented with and has examined proposed forms of the

BPA, the Escrow Agreement, the Official Statement and the Paying Agent/Registrar Agreement,

all of which are incorporated herein by reference and comprise a part of this Order, and the

Board finds that the form and substance of such documents are satisfactory, and the recitals and

findings contained therein are true, correct and complete and finds that it is in the best interests

of the public and the District and assists in carrying out the public purpose of the District and of

the Constitution and laws of the State of Texas to authorize the execution and delivery of such

documents in substantially the form presented to the Board, and the taking of any other actions

as may be necessary or convenient in connection therewith.

NOW THEREFORE, BE IT ORDERED BY THE BOARD OF DIRECTORS OF

MONTGOMERY COUNTY MUNICIPAL UTILITY DISTRICT NO. 115 THAT:

1. The proceeds of the Series 2020 Refunding Bonds will be disbursed for the

purpose of and in the manner described in the Bond Order, the Bond Purchase Agreement and

the Escrow Agreement.

2. The sale and delivery of the Series 2020 Refunding Bonds by the District to the

Underwriter, at a purchase price as described in the Approval Certificate and as defined in

accordance with the BPA, is hereby approved, the form, terms and provisions of the BPA and

Bond Order being hereby authorized and approved together with such additions, deletions and

modifications as shall be necessary and desirable or consistent therewith, and the President or

Vice President of the Board are hereby authorized to execute and deliver the BPA and Bond

Order on behalf of the District with such changes therein as the officer executing the same may

approve, such approval to be conclusively evidenced by such execution thereof.

3. The Board hereby ratifies the distribution and use of the Preliminary Official

Statement and authorizes the execution, delivery and distribution and use of the Official

Statement, and the President or Vice President and Secretary, Assistant Secretary or Secretary

Pro Tempore of the District are hereby severally authorized and directed to execute the Official

Statement, with such approval to be conclusively evidenced by such execution thereof.

4. The actions and obligations authorized in Paragraphs 1 through 3 of this Order

shall be subject to and conditioned upon the receipt of the District, at the date of delivery and

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payment for the Series 2020 Refunding Bonds, of (i) an opinion from the Attorney General of

the State of Texas approving the Series 2020 Refunding Bonds and the proceedings relating

thereto and evidence of registration of the Series 2020 Refunding Bonds by the Comptroller of

Public Accounts of the State of Texas; (ii) the purchase price for the Series 2020 Refunding

Bonds; and (iii) such opinions, evidences, certificates, instruments or other documents as shall be

requested by the District’s Bond Counsel.

5. The Board hereby approves the Escrow Agreement, BPA and the Paying

Agent/Registrar Agreement in substantially the form presented to the Board and authorizes the

President or Vice President of the Board of Directors to execute and the Secretary, Assistant

Secretary or Secretary Pro Tempore of the Board of Directors to attest, as appropriate, the

Escrow Agreement, the BPA and the Paying Agent/Registrar Agreement.

6. The Paying Agent/Registrar for the Outstanding Bonds is hereby irrevocably

instructed to pay the principal of and interest on the Refunded Bonds in the amount and on dates

set for redemption as outlined in the Approval Certificate and in accordance with and pursuant to

the provisions of the Bond Order, the BPA and the Escrow Agreement, and from funds made

available therefor pursuant to the Bond Order, this Order, the BPA and the Escrow Agreement.

7. The officers, employees and agents of the District and each of them shall be and

each is expressly authorized, empowered and directed from time to time and at any time to do

and perform all acts and things and to execute, acknowledge and deliver in the name and under

the seal and on behalf of the District all certificates, whether or not herein mentioned, as they

may determine to be necessary or desirable in order to carry out the terms and provisions of this

Order and of the Bond Order for the Series 2020 Refunding Bonds, as well as the terms and

provisions of the Escrow Agreement, the BPA, the Paying Agent/Registrar Agreement, and the

Official Statement, such determination to be conclusively evidenced by the performance of such

acts and things and the execution of any such certificate, instrument or other paper.

8. The Board hereby finds and declares that written notice of the date, hour, access

instructions, and subject of the meeting at which this Order was adopted was posted and that

such meeting was accessible to the public as required by law at all times during which this Order

and the subject matter thereof were discussed considered and formally acted upon, all as required

by the Open Meetings Act, Tex. Gov’t. Code Ann. §551.001 et seq., as suspended in part by the

Governor of Texas on March 16, 2020.

9. This Order shall take effect and be in full force and effect upon and after its

passage.


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PASSED AND APPROVED this May 7, 2020.



HAL B. SHARP ATTEST: President

CYNTHIA A. GILES Secretary

(SEAL)

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Municipal Utility District No. 115, hereby certify that the foregoing is a true and correct copy of

the Order Approving Bond Purchase Agreement, Paying Agent/Registrar Agreement, Escrow

Agreement and the Official Statement, and Authorizing Preparation, Issuance of Notices,

Certificates, Affidavits and such Other Documents Relating Thereto, and minute entry showing

its adoption at the Board’s regular meeting held on May 7, 2020, the originals of which order

and minutes are on file in the official minute book of the Board, in the District’s office.

I further certify that said meeting was open to the public, and that notice was

given in compliance with the provisions of Tex. Gov’t. Code Ann. § 551.001 et seq. as adopted,

and as suspended in part by the Governor of Texas on March 16, 2020.

Witness my hand and the seal of said District, this ________________________.

________________________________________

Secretary

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BOND REGISTER, PAYING AGENCY

AND TRANSFER AGENCY AGREEMENT

THIS BOND REGISTER, PAYING AGENCY AND TRANSFER AGENCY

AGREEMENT (hereinafter designated as the “Agreement”), effective May 7, 2020, by and

between Montgomery County Municipal Utility District No. 115 (hereinafter referred to as the

“Issuer”), and The Bank of New York Mellon Trust Company, N.A., a national banking

association organized and existing under the laws of the United States of America (hereinafter

together with any successor designated as the “Bank”) with a corporate trust office in Dallas,

Texas.

W I T N E S S E T H:

WHEREAS, the Issuer is authorized to issue its Montgomery County Municipal Utility

District No. 115 Unlimited Tax Refunding Bonds, Series 2020 (the “Bonds”) in an aggregate

principal amount of $4,545,000 in accordance with the Bond Order dated May 7, 2020 (the

“Bond Order”) and corresponding Approval Certificate dated _______________, 2020;

WHEREAS, the District has selected Bank to serve as Paying Agent and Registrar in

connection with the payment of the principal of, premium, if any, and interest on said Bonds and

with respect to the registration, transfer and exchange thereof by the registered owners thereof;

and

WHEREAS, Bank has agreed to serve in such capacities for and on behalf of the District

and has full power and authority to perform and serve as Paying Agent/Registrar for the Bonds;

NOW, THEREFORE, it is mutually agreed as follows:

ARTICLE ONE

APPOINTMENT OF PAYING AGENT/REGISTRAR

Section 1.01. Appointment. The District hereby appoints Bank to serve as Paying Agent

with respect to the Bonds, to pay to the registered owners of the Bonds the principal of, premium

(if any) and interest on the Bonds as the same becomes due and payable, all in accordance with

this Agreement and the Bond Order (hereinafter defined).

The District hereby appoints Bank as Registrar with respect to the Bonds, and as

Registrar for the Bonds, Bank shall keep and maintain for and on behalf of the District, books

and records as to the ownership of said Bonds and with respect to the transfer and exchange of

said Bonds as provided herein and in the Bond Order.

Bank hereby accepts its appointment and agrees to serve as the Paying Agent and

Registrar for the Bonds.

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Section 1.02. Compensation. As compensation for Bank’s services as Paying

Agent/Registrar, the District hereby agrees to pay Bank the fees and amounts set forth in Exhibit

“A” attached hereto for the remainder of the Fiscal Year during which this Agreement is

executed and thereafter the fees and amounts set forth in Bank’s current fee schedule then in

effect for services as Paying Agent/Registrar for municipalities, which shall be supplied to the

District on or before 90 days prior to the close of the Fiscal Year of the District, and shall be

effective on the first day of the following Fiscal Year.

In addition, the District agrees to reimburse Bank upon its request for all reasonable

expenses, disbursements and advances (including the reasonable compensation and expenses and

disbursements of its agents and counsel) incurred or made by Bank pursuant to, or as a result of,

any of the provisions hereof.

ARTICLE TWO

DEFINITIONS

Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise

expressly provided or unless the context requires:

“Bank” means the corporate trust office of Bank as indicated by the Bank Delivery

Address, as noted on the Bank’s signature page to this Agreement.

“Bond Order” means the order of the Board of Directors of the District, dated May 7,

2020, pursuant to which the Bonds are issued and certified by the Secretary of the Board of

Directors of the District or any other officer of the District and delivered to Bank.

“Bond Documents” means the Bond Order and all other documents relating to the

offering, execution, delivery and sale of the Bonds.

“Financial Advisor” means Masterson Advisors LLC and its successors.

“Fiscal Year” means the fiscal year of the District ending May 31 in each year.

“Holder” and “Bondholder” each means a Person in whose name the Bonds are registered

in the Bond Register.

“Issuer Request” and “Issuer Order” means a written request or order signed in the name

of the District by an officer of the Board of Directors of the District or such other person named,

or appointed by virtue of holding a particular position with the District, in the Bond Order as

authorized to sign, and delivered to Bank.

“Person” means any individual, corporation, partnership, joint venture, association, joint

stock company, trust, unincorporated organization or government or any agency or political

subdivision of a government.

“Predecessor Bonds” of any particular Bond or Bonds means every previous Bond or

Bonds evidencing all or a portion of the same obligation as that evidenced by such particular

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Bond or Bonds (and, for the purposes of this definition, any Bond or Bonds registered and

delivered under Section 4.06 in lieu of a mutilated, lost, destroyed or stolen Bond or Bonds shall

be deemed to evidence the same obligation as the mutilated, lost, destroyed or stolen Bond or

Bonds).

“Record Date” shall mean the close of business on the fifteenth (15th

) calendar day of the

calendar month immediately preceding the applicable Interest Payment Date.

“Redemption Date” when used with respect to the Bonds to be redeemed means the date

fixed for such redemption pursuant to the terms of the Bond Order.

“Responsible Officer” when used with respect to Bank means the Chairman or

Vice-Chairman of the Board of Directors, the Chairman or Vice-Chairman of the Executive

Committee of the Board of Directors, the President, any Vice President, the Secretary, any

Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier,

any Trust Officer or Assistant Trust Officer, or any other officer of Bank customarily performing

functions similar to those performed by any of the above designated officers and also means,

with respect to a particular corporate trust matter, any other officer to whom such matter is

referred because of his knowledge of and familiarity with the particular subject.

“Bond Register” means the books and records to be maintained by Bank on behalf of the

District relating to the registration, transfer, exchange, and payment of the Bonds.

“Stated Maturity” means the date specified in the Bond Order as the fixed date on which

the principal of the Bonds are scheduled to be due and payable.

Section 2.02. Other Definitions. The terms “Bank,” “Bonds” and “District” have the

meanings assigned to them in the recital paragraphs of this Agreement.

The term “Paying Agent/Registrar” refers to Bank when it is performing the functions

associated with such terms in this Agreement.

Section 2.03. Construction of Terms. If appropriate in the context of this Agreement,

words of the singular number shall be considered to include the plural, words of the plural shall

be considered to include the singular, and words of the masculine, feminine, or neutral gender

shall be considered to include the other genders.

ARTICLE THREE

PAYING AGENT

Section 3.01. Duties of Paying Agent. As Paying Agent, Bank shall, provided adequate

collected funds have been provided to it for such purpose by or on behalf of the District, pay on

behalf of the District the principal of the Bonds at their Stated Maturity or Redemption Date to

the Holder upon surrender of the bond certificate to Bank at the Bank Office.

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As Paying Agent, Bank shall, provided adequate collected funds have been provided to it

for such purpose by or on behalf of the District, pay on behalf of the District the interest on the

Bonds when due. Bank shall compute the amount of interest to be paid each Holder, and shall

prepare and send a check in such amount by United States mail (first class postage prepaid) on or

prior to each interest payment date, to the Holder of the Bonds (or Predecessor Bonds) whose

name appears in the Bond Register on the Record Date. Such checks shall be mailed in such

manner to such Holder at the address for such Holder appearing on the Bond Register, or shall be

transmitted to such Holder on each interest payment date by such other method acceptable to

Bank, requested in writing by, and at the risk and expense of, the Holder.

Section 3.02. Closing Memorandum. The Bank is authorized to receive the purchase

price of and, if applicable, accrued interest on the Bonds from the underwriter of the Bonds and

to transfer said funds relating to the closing and initial delivery of the Bonds in the manner

disclosed in the closing memorandum as prepared by the Issuer's Financial Advisor or other

agent. The Bank may act on a facsimile or electronic mail transmission of the closing

memorandum acknowledged by the Issuer or the Issuer's Financial Advisor as the final closing

memorandum. The Bank shall not be liable for any losses, costs or expenses arising directly or

indirectly from the Bank's reliance upon and compliance with such instructions.

Section 3.03. Payment Dates. The District hereby instructs Bank to pay the principal of

and interest on the Bonds at the dates specified in the Bond Order.

ARTICLE FOUR

REGISTRAR

Section 4.01. Transfer and Exchange. Bank agrees to keep and maintain for and on

behalf of the District at the Bank Office, books and records (herein sometimes referred to as the

“Bond Register”) for recording the names and addresses of the Holders of the Bonds, the

transfer, exchange and replacement of the Bonds and the payment of the principal of and interest

on the Bonds to the Holders and containing such other information as may be reasonably

required by the District and subject to such reasonable regulations as the District and Bank may

prescribe. All transfers, exchanges and replacement of the Bonds shall be noted in the Bond

Register.

Every bond certificate surrendered for transfer or exchange shall be duly endorsed or be

accompanied by a written instrument of transfer, the signature on which has been guaranteed by

an officer of a federal or state bank or a member of the National Association of Securities

Dealers, in form satisfactory to Bank, duly executed by the Holder or his attorney duly

authorized in writing.

As a condition to effecting a re-registration, transfer or exchange of the Bonds, the

Registrar may request any supporting documentation it feels necessary to effect a registration,

transfer or exchange of the Bonds. To the extent possible and under reasonable circumstances,

Bank agrees that, in relation to an exchange or transfer of the Bonds, the exchange or transfer by

the Holders thereof will be completed and new bonds delivered to the Holder or the assignee of

the Holder in not more than three (3) business days after the receipt of the Bonds to be cancelled

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in an exchange or transfer and the written instrument of transfer or request for exchange duly

executed by the Holder, or his duly authorized agent, in form and manner satisfactory to the

Paying Agent/Registrar.

Section 4.02. Certificates. The District shall provide the Registrar with an adequate

inventory of bond certificates to facilitate transfers. Bank covenants that it will maintain the

bond certificates in safekeeping, and will use reasonable care in maintaining such bond

certificates in safekeeping which shall be not less than the level of care it maintains for debt

securities of other governments or corporations for which it serves as registrar, or which it

maintains for its own securities.

Section 4.03. Form of Bond Register. Bank as Registrar will maintain the records of the

Bond Register in accordance with Bank’s general practices and procedures in effect from time to

time. Bank shall not be obligated to maintain such Register in any form other than those which

Bank has currently available and currently utilizes at the time.

The Bond Register may be maintained in written form or in any other form capable of

being converted into written form within a reasonable time.

Section 4.04. List of Bondholders. Bank will provide the District at any time requested

by the District, upon payment of the required fee, a copy of the information contained in the

Bond Register. The District may also inspect the information in the Bond Register at any time

Bank is customarily open for business, provided that reasonable time is allowed Bank to provide

an up-to-date listing or to convert the information into written form.

Bank will not release or disclose the content of the Bond Register to any Person other

than to, or at the written request of, an authorized officer or employee of the District as specified

in an order or resolution of the District’s board of directors, except upon receipt of a subpoena or

court order or as required by law. Upon receipt of a subpoena or court order or other legal

proceedings, Bank will notify the District so that the District may contest the same.

Section 4.05. Return of Cancelled Certificates. Bank will, at such reasonable intervals

as it determines, surrender to the District those Bond certificates in lieu of which or in exchange

for which other Bond certificates have been issued, or which have been paid.

Section 4.06. Mutilated, Destroyed, Lost or Stolen Bond Certificates. The District

hereby instructs Bank to deliver and issue Bond certificates in exchange for or in lieu of

mutilated, destroyed, lost or stolen Bond certificates as long as the same does not result in an

over-issuance.

Bank will issue and deliver a new Bond certificate in exchange for a mutilated Bond

certificate surrendered to it. Bank will issue a new Bond certificate in lieu of a Bond certificate

for which it received written representation from the Holder that the certificate representing such

Bond is destroyed, lost or stolen, without the surrender or production of the original certificate.

Bank will pay on behalf of the District the unpaid principal and premium, if any, of a Bond at the

Stated Maturity or on the Redemption Date, for which it receives written representation that the

certificate representing such Bond is destroyed, lost or stolen without the surrender or production

of the original certificate.

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Bank will not issue a replacement Bond certificate or pay such replacement Bond

certificate unless there is delivered to Bank such security or indemnity as it may require (which

may be by Bank’s blanket Lost Original Instruments bond) to save both Bank and the District

harmless.

On satisfaction of Bank and the District that a Bond certificate has been mutilated,

destroyed, lost or stolen, the certificate number on the mutilated, destroyed, lost or stolen Bond

certificate will be cancelled with a notation that it has been mutilated, destroyed, lost or stolen

and a new Bond certificate will be issued of the same series and of like tenor and principal

amount bearing a number (according to the Bond Register) not contemporaneously outstanding.

Bank may charge the Holder Bank’s fees and expenses in connection with issuing a new

Bond certificate in lieu of or in exchange for a mutilated, destroyed, lost or stolen Bond

certificate.

The District hereby accepts Bank’s current blanket Lost Original Instruments bond for

lost, stolen, or destroyed certificates and any future substitute blanket bond for lost, stolen or

destroyed certificates that Bank may arrange, and agrees that the coverage under any such

blanket bond is acceptable to it and meets the Issuer’s requirements as to security or indemnity.

Bank need not notify the District of any changes in the security or other security or company

giving such bond or the terms of any such bond. At any time Bank is customarily open for

business, the blanket Lost Original Instruments bond then utilized for the purpose of lost, stolen

or destroyed certificates by Bank shall be available for inspection by the District on request. The

District hereby accepts Bank’s indemnity to replace Bond certificates destroyed or lost while in

the possession or under the control of Bank.

Section 4.07. Transaction Information to District. Bank will, within a reasonable time

after receipt of an Issuer Request, furnish the District information as to the Bonds it has paid

pursuant to Section 3.01, Bond certificates it has delivered upon the transfer or exchange of any

Bond certificates pursuant to Section 4.01, and Bond certificates it has delivered in exchange for

or in lieu of mutilated, destroyed, lost or stolen Bond certificates pursuant to Section 4.06.

ARTICLE FIVE

BANK’S DUTIES

Section 5.01. Duties of Bank. Bank undertakes to perform the duties set forth herein

and agrees to use reasonable care in the performance thereof.

Section 5.02. Reliance on Documents, Etc.

(a) Bank may conclusively rely, as to the truth of the statements and correctness of

the opinions expressed therein, on certificates or opinions furnished to Bank by the District.

(b) Bank shall not be liable for any error of judgment made in good faith by a

Responsible Officer, unless it shall be proved in a court of competent jurisdiction that Bank was

negligent in ascertaining the pertinent facts.

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92115-003 474696v1

(c) No provision of this Agreement shall require Bank to expend or risk its own funds

or otherwise incur any financial liability for performance of any of its duties hereunder, or in the

exercise of any of its rights or powers, if it shall have reasonable grounds for believing that

repayment of such funds or adequate indemnity satisfactory to it against such risk or liability is

not assured to it.

(d) Bank may rely and shall be protected by the District against any claim by the

District or any other Person in acting or refraining from acting upon any resolution, certificate,

statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note,

security, or other paper or document believed by it to be genuine and to have been signed or

presented by the proper party or parties. Without limiting the generality of the foregoing

statement, Bank need not examine the ownership of any Bonds, but is protected in acting upon

receipt of a Bond certificate containing an endorsement or instruction of transfer or power of

transfer which appears on its face to be signed by the Holder or an agent of the Holder. Bank

shall not be bound to make any investigation into the facts or matters stated in a resolution,

certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond,

note, security or other paper or document supplied by District.

(e) Bank may consult with legal counsel, and the written advice of such counsel or

any opinion shall be full and complete authorization and protection with respect to any action

taken, suffered or omitted by it hereunder in good faith and in reliance thereon; provided that any

such written advice or opinion is supplied to the District by Bank.

(f) Bank may exercise any of the powers hereunder and perform any duties hereunder

either directly or by or through agents or attorneys of Bank.

Section 5.03. Recitals of District. The recitals contained herein other than any recital

relating to the power and authority of Bank under this Agreement and in the Bonds shall be taken

as the statements of the District, and Bank assumes no responsibility for their correctness.

Bank shall in no event be liable to the District, any Holder or Holders of any Bond or any

other Person for any amount due on any Bond from its own funds.

Section 5.04. May Hold Bonds. Bank, in its individual or any other capacity, may

become the owner or pledgee of the Bonds and may otherwise deal with the District with the

same rights it would have if it were not the Paying Agent/Registrar, or any other agent; provided

that such dealings do not result in a breach of any duties or agreements imposed by this

Agreement.

Section 5.05. Moneys Held by Bank. Money deposited by the Issuer with the Bank for

payment of the principal (or Redemption Price, if applicable) of or interest on any Bonds shall be

segregated from other funds of the Bank and the Issuer and shall be held in trust for the benefit

of the Owners of such Bonds.

All funds at any time and from time to time provided to or held by Bank that exceed the

deposit insurance provided by the Federal Deposit Insurance Corporation will be fully

collateralized with obligations that are eligible under the laws of the State of Texas.

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Funds which represent principal of and interest on the Bonds remaining unclaimed for

three years from the date such amounts have become due and payable shall be reported and

disposed of by the Bank in accordance with the provisions of Texas law, including, to the extent

applicable, Title 6 of the Texas Property Code, as amended.

The Bank shall be under no liability for interest on any money received by it hereunder.

This Agreement relates solely to money deposited for the purposes described herein, and

the parties agree that the Bank may serve as depository for other funds of the Issuer, act as

Trustee under indentures authorizing other bond transactions, or act in any other capacity not in

conflict with its duties hereunder.

Section 5.06. Indemnification. To the extent permitted by law, the District agrees to

indemnify Bank for and hold it harmless against any loss, liability or expense incurred by Bank

without negligence or bad faith on Bank’s part, arising out of or in connection with its

acceptance or administration of Bank’s duties hereunder, including the cost and expense

(including Bank’s counsel fees) of defending against any claim or liability in connection with the

exercise or performance of any of Bank’s powers or duties under this Agreement.

Section 5.07. Interpleader. The District and Bank agree that Bank may seek

adjudication of any adverse claim, demand or controversy over its person as well as funds on

deposits, in any court of competent jurisdiction in the State of Texas where either the Bank

Office or the Administrative Office of the District is located, and agree that service of process by

certified or registered mail, return receipt requested, to the address referred to in Section 6.03 of

this Agreement shall constitute adequate service. The District and Bank further agree that Bank

has the right to file a Bill of Interpleader in any court of competent jurisdiction in the State of

Texas to determine the rights of any Person claiming any interest herein.

Section 5.08. Depository Services. It is hereby represented and warranted that, in the

event the Bonds are otherwise qualified and accepted for Depository Trust Company or

equivalent depository trust service by other organizations, Bank has the capability and, to the

extent within its control, will comply with the operational arrangements, which establishes

requirements for securities to be eligible for such type depository trust services, including but not

limited to, requirements for the timeliness of payments and funds availability, bond certificate

transfer turnaround time, and notification of redemptions and calls.

ARTICLE SIX

MISCELLANEOUS PROVISIONS

Section 6.01. Amendment. This Agreement may be amended only by an agreement in

writing signed by both of the parties hereto.

Section 6.02. Assignment. This Agreement may not be assigned by either party without

the prior written consent of the other.

Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent,

waiver or other document provided or permitted hereby to be given or furnished to the District or

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92115-003 474696v1

Bank shall be mailed or delivered to the District or Bank, respectively, at the address shown on

the signature pages.

Section 6.04. Effect of Headings. The Article and Section headings herein are for

convenience only and shall not affect the construction hereof.

Section 6.05. Successors and Assigns. All covenants and agreements herein by the

District and Bank shall bind their respective successors and assigns, whether so expressed or not.

Section 6.06. Merger, Conversion, Consolidation or Succession. Any corporation into

which the Bank may be merged or converted or with which it may be consolidated, or any

corporation resulting from any merger, conversion, or consolidation to which the Bank shall be a

party, or any corporation succeeding to all or substantially all of the corporate trust business of

the Bank shall be the successor of the Bank hereunder without the execution or filing of any

paper or any further act on the part of either of the parties hereto. In case any Bond shall have

been registered, but not delivered, by the Bank then in office, any successor by merger,

conversion, or consolidation to such authenticating Bank may adopt such registration and deliver

the Bond so registered with the same effect as if such successor Bank had itself registered such

Bond.

Section 6.07. Severability. In case any provision herein shall be invalid, illegal or

unenforceable, the validity, legality and enforceability of the remaining provisions shall not in

any way be affected or impaired thereby.

Section 6.08. Benefits of Agreement. Nothing herein, expressed or implied, shall give

to any Person, other than the parties hereto and their successors hereunder, any benefit or any

legal or equitable right, remedy or claim hereunder.

Section 6.09. Entire Agreement. This Agreement and the Bond Order constitute the

entire agreement between the parties hereto relative to Bank acting as Paying Agent/Registrar

and if any conflict exists between this Agreement and the Bond Order, the Bond Order shall

govern.

Section 6.10. Counterparts. This Agreement may be executed in any number of

counterparts, each or which shall be deemed an original and all of which shall constitute one and

the same Agreement.

Section 6.11. Termination. This Agreement will terminate (i) on the date of final

payment of the principal of and interest on the Bonds to the Holders thereof or (ii) may be earlier

terminated by either party upon sixty (60) days written notice; provided, however, an early

termination of this Agreement by either party shall not be effective until (a) a successor Paying

Agent/Registrar has been appointed by the District and such appointment accepted and (b) notice

given to the Holders of the Bonds of the appointment of a successor Paying Agent/Registrar.

Furthermore, Bank and the District mutually agree that the effective date of an early termination

of this Agreement shall not occur at any time which would disrupt, delay or otherwise adversely

affect the payment of the Bonds.

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92115-003 474696v1

Upon an early termination of this Agreement, Bank agrees to promptly transfer and

deliver the Bond Register (or a copy thereof), together with other pertinent books and records

relating to the Bonds, to the successor Paying Agent/Registrar designated and appointed by the

District.

The provisions of Section 1.02 and of Article Five shall survive, and remain in full force

and effect following the termination of this Agreement.

Section 6.12. Governing Law. This Agreement shall be construed in accordance with

and governed by the laws of the State of Texas.

Section 6.13. Compliance with Texas Government Code Section 2271.002. Bank is a

“Company” as defined by Section 808.001(2) and Section 2271.001(2) of the Texas Government

Code and as required by Section 2271.002 of the Texas Government Code, Bank hereby verifies

that it does not boycott Israel and will not boycott Israel during the term of this Agreement. For

purposes of this Agreement, the phrase “boycott Israel” means refusing to deal with, terminating

business activities with, or otherwise taking any action that is intended to penalize, inflict

economic harm on, or limit commercial relations specifically with Israel or in an Israeli-

controlled territory, but does not include an action made for ordinary business purposes.

Section 6.14. Compliance with Texas Government Code Section 2252.152. Pursuant to

Section 2252.152 of the Texas Government Code, Bank hereby verifies that it is not engaged in

active business operations with Sudan, Iran, or a foreign terrorist organization. For purposes of

this Agreement, the phrase “foreign terrorist organization” means an organization designated as a

foreign terrorist organization by the United States secretary of state as authorized by 8 U.S.C.

Section 1189.


Section 2252.908(c)(4), Texas Government Code, the Form 1295 filing requirement does not

apply to a contract with a publicly traded business entity, including a wholly owned subsidiary of

the business entity. Bank hereby represents to Issuer that the Bank is a wholly owned subsidiary

of The Bank of New York Mellon Corporation, a publicly traded business entity. As such, Bank

is not required to deliver a Form 1295.

Section 6.16. Insurance. The Bonds have been insured by Assured Guaranty Municipal

Corp.(“AGM”) subject to the terms included in the District’s Bond Order. The Paying/Agent

Registrar will comply with the requirements of the Bond Order with respect to the notification

and payment procedures required for payment by AGM under the Policy.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly

executed, and their respective seals to be hereunto affixed and attested, all as of the day and year

first above written.



By:


ATTEST:


(SEAL)

District Address:

2727 Allen Parkway, Suite 1100

Houston, Texas 77019

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92115-003 474696v1


COMPANY, N.A. “Bank”

By:_______________________________________

Name: ____________________________________

Title:_____________________________________

ATTEST:

By: _______________________________

Name: ______________________________

Title: ______________________________

(SEAL)

Bank Address and Bank Delivery Address:

2001 Bryan Street – 10th

Floor

Dallas, Texas 75201

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92115-003 474696v1

EXHIBIT “A”

Compensation Schedule

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92115-003 474696v1

AUTHENTICATION AND SIGNATURE IDENTIFICATION

CERTIFICATE OF PAYING AGENT/REGISTRAR

The undersigned officer(s) of The Bank of New York Mellon Trust Company, N. A. a

banking association with trust powers, serving as Paying Agent/Registrar (the “Paying

Agent/Registrar”) under the Bond Register, Paying Agency and Transfer Agency Agreement

effective May 7, 2020 (the “Paying Agent Agreement”), between Montgomery County

Municipal Utility District No. 115 (the “District”) and the Paying Agent/Registrar, for the

District’s $4,545,000 Unlimited Tax Refunding Bonds, Series 2020, hereby certifies as follows:

A. The Paying Agent Agreement was executed on behalf of the Paying

Agent/Registrar by the persons named below whose office appears set opposite

their name, and said persons were at the time of executing the Paying Agent

Agreement and is now duly elected, qualified and acting incumbent of their

offices, and the signatures appearing after said persons’ names are the true and

correct specimens of such persons’ genuine signatures:

NAME OFFICE SIGNATURE

B. The foregoing officers of the Paying Agent/Registrar named in paragraph A, by

virtue of the authority delegated to them by the Board of Directors of the Paying

Agent/Registrar pursuant to a resolution, a true and correct copy form of which is

attached hereto as Exhibit “A”, are authorized to execute and deliver the Paying

Agent Agreement, and the officers of the Paying Agent/Registrar named in

paragraph A, by virtue of the authority delegated to them by the Board of

Directors pursuant to the aforementioned resolution, are authorized to execute, on

behalf of the Paying Agent/Registrar, such other and further documents as may be

necessary or incidental to the acceptance and performance of the duties set forth

in the Bond Register, Paying Agency and Transfer Agency Agreement, to attest to

any of the foregoing, and to apply the seal of the Paying Agent/Registrar thereto.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the

Paying Agent/Registrar this ___________________________.


COMPANY, N.A.

By:

(SEAL) Name:

Title:

Exhibit A - Resolution of Board of Directors of Paying Agent/Registrar

000166

ESCROW AGREEMENT

THIS ESCROW AGREEMENT, dated May 7, 2020 and effective as of _______, 2020

(the “Agreement”), by and between Montgomery County Municipal Utility District No. 115, a

body politic and corporate and a political subdivision of the State of Texas (the “District”), and

The Bank of New York Mellon Trust Company, N.A., a national banking association organized

and existing under the laws of the United States of America, as escrow agent under the Series

2020 Bond Order, hereinafter defined (the “Escrow Agent”).

WITNESSETH:

WHEREAS, the District has previously issued its $2,800,0000 Unlimited Tax Bonds,

Series 2010 (the “Series 2010 Bonds”); $2,120,000 Unlimited Tax Bonds, Series 2011 (the

“Series 2011 Bonds”); $2,120,000 Unlimited Tax Bonds, Series 2012 (the “Series 2012

Bonds”); and $2,920,000 Unlimited Tax Bonds, Series 2013 (the “Series 2013 Bonds”) pursuant

to the Bond Orders adopted on September 14, 2010, October 25, 2011, August 29, 2012 and May

21, 2013; and

WHEREAS, the District shall provide pursuant to this Agreement for payment to the

holders of those Series 2010 Bonds, Series 2011 Bonds, Series 2012 Bonds, and Series 2013

Bonds presently outstanding, being (i) pursuant to the Bond Order dated September 14, 2010

those certain serial bonds with original maturities of September 1, 2022 and September 1, 2023

in the principal amount of $235,000, (ii) pursuant to the Bond Order dated October 25, 2011, to

the holders of those certain term bonds with original maturities on September 1, 2022, September

1, 2024, and September 1, 2027 (specifically September 1, 2021 through September 1, 2027,

inclusive), in the principal amount of $525,000, (iii) pursuant to the Bond Order dated August

29, 2012, to the holders of those certain serial bonds with original maturities from September 1,

2023 through September 1, 2027, inclusive, and term bonds with original maturities on

September 1, 2029, September 1, 2032, and September 1, 2035 (specifically September 1, 2028

through September 1, 2035, inclusive) in the principal amount of $1,635,000; and (iv) pursuant

to the Bond Order dated May 21, 2013, to the holders of those certain serial bonds with original

maturities from September 1, 2025 through September 1, 2031, inclusive, and a term bond with

original maturity on September 1, 2037 (specifically September 1, 2032 through September 1,

2037, inclusive) in the principal amount of $1,920,000, so called for redemption at the date fixed

for redemption of the full amount to which the holders of the Refunded Bonds would be entitled

by way of principal and interest to the date of maturity or such redemption (collectively the

“Refunded Bonds”); and

WHEREAS, the District has given written notice of the refunding and redemption of the

Refunded Bonds to The Bank of New York Mellon Trust Company, N.A., as paying agent for

the Refunded Bonds; and

WHEREAS, the District is issuing its $4,545,000 aggregate principal amount of

Unlimited Tax Refunding Bonds, Series 2020 (the “Series 2020 Refunding Bonds”), pursuant to

the terms and provisions of the Bond Order of the District adopted on May 7, 2020 and the

Approval Certificate dated ___________, 2020 (collectively referred to herein as the “Series

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2 92115-003 474695v1

2020 Refunding Bond Order”), to provide moneys to be used with respect to refunding and

redeeming the Refunded Bonds as permitted by Section 54.514, Texas Water Code, as amended,

and Tex. Gov’t Code Ann. Chapter 1201 and 1207, et. seq., and by the Bond Orders for the

Refunded Bonds; and

WHEREAS, the Series 2020 Refunding Bond Order authorizes the issuance of the Series

2020 Refunding Bonds, the proceeds of which will be used to provide amounts of money

sufficient to provide for the payment of principal of the Series 2010 and Series 2011 Refunded

Bonds on July 1, 2020 and for the Series 2012 and Series 2013 Refunded Bonds on September 1,

2020 (the “Redemption Dates”), and interest thereon to the applicable Redemption Date; and

WHEREAS, the Bond Orders provide that if moneys or investments are deposited with

the Escrow Agent for the Series 2020 Refunding Bonds, which together with interest earned on

or profits to be made from such investments will be sufficient to pay the principal and interest to

the dates fixed for redemption of the Refunded Bonds, then upon such deposit, the Refunded

Bonds and any interest thereon shall no longer be regarded as outstanding and unpaid, provided

that moneys held for payment shall be invested in direct obligations of the United States of

America and mature in sufficient time to make available moneys needed for the purposes

intended; and

WHEREAS, the District has made advance commitments to purchase, concurrently with

the delivery of the Series 2020 Refunding Bonds to the purchasers thereof, from the proceeds of

the Series 2020 Refunding Bonds, certain direct obligations of the United States of America; and

WHEREAS, the District wishes to deposit or cause to be deposited the Escrowed

Securities, as hereinafter defined, to the credit of the Escrow Fund created pursuant to this

Agreement and wishes to establish any necessary beginning cash balance in such Escrow Fund in

order to cause the Refunded Bonds to cease to be outstanding; and

WHEREAS, the Escrowed Securities will mature, and the interest thereon will be payable

at such times and in such amounts so as to provide moneys which, together with cash balances

from time to time on deposit in the Escrow Fund, will be sufficient to pay interest which accrues

and becomes payable on the Refunded Bonds, which are to be refunded, defeased and redeemed,

and the principal of the Refunded Bonds on the Redemption Dates; and

WHEREAS, in order to facilitate the receipt and transfer of proceeds of the Escrowed

Securities, particularly any in book entry form, the District desires to establish the Escrow Fund

with the Escrow Agent.

NOW, THEREFORE, in consideration of the mutual undertakings, promises and

agreements herein contained, the sufficiency of which are hereby acknowledged, and in order to

secure the full and timely payment of the principal of and interest on the Refunded Bonds, the

District and the Escrow Agent mutually undertake, promise, and agree for each of themselves,

their representatives and successors, as follows:

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ARTICLE I

DEFINITIONS AND INTERPRETATIONS

Section 1.01. Definitions. In addition to terms defined elsewhere in this Agreement,

unless the context clearly indicates otherwise, the following terms shall have the meanings

assigned to them below when they are used in this Agreement.

“Board” or “Board of Directors” means, with respect to the District, the governing body

of the District.

“Code” means the Internal Revenue Code of 1986, as amended, or the corresponding

provisions of any successor internal revenue laws of the United States of America, except in

those cases in which reference is made to the Internal Revenue Code of 1954 in effect prior to

the enactment of the Tax Reform Act of 1986, and the applicable regulations promulgated under

either such codification.

“District Representative” means any person designated as such pursuant to an Officer’s

Certificate of the District delivered to the Escrow Agent by the District.

“District Request” means writing, signed by a District Representative, requesting that the

Escrow Agent take a specified action hereunder and stating that, in the opinion of the signer, the

conditions precedent to such action set forth in this Agreement have been satisfied.

“Escrow Deposit” means the initial deposit into the Escrow Fund, as more particularly

described in Section 2.01 hereof.

“Escrow Fund” means the special escrow fund created by this Agreement to be

administered by the Escrow Agent pursuant to the provisions of this Agreement.

“Escrow Funding Certificate” means the certificate attached hereto as Exhibit “B,” which

shall be executed by the Escrow Agent upon receipt of the funds and other items provided in

Section 2.02 of this Agreement.

“Escrowed Securities” means any cash or security permitted by law described in the

Report.

“Officer’s Certificate” means, in the case of the District, a certificate signed by the

President or Vice President thereof or any person designated by such President or Vice President,

or by a District Representative.

“Opinion of Counsel” means an opinion in writing signed by an attorney or firm of

attorneys who may be an employee of or counsel to the District. As to any factual matters

involved in an opinion of counsel, such counsel may rely, to the extent that it deems such

reliance proper, upon an Officer’s Certificate or a certificate setting forth such matters which

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have been signed by an official, officer, general partner or authorized representative of a

particular person.

“Paying Agent” means with reference to the Refunded Bonds, The Bank of New York

Mellon Trust Company, N.A., with its operations office in Dallas, Texas, and its successors and

assigns.

“Refunded Bonds” mean the (i) $235,000 of the District’s $2,800,000 Unlimited Tax

Bonds, Series 2010, being those certain serial bonds with original maturities of September 1,

2022 and September 1, 2023; (ii) $525,000 of the District’s $2,120,000 Unlimited Tax Bonds,

Series 2011, being those certain term bonds with original maturities on September 1, 2022,

September 1, 2024, and September 1, 2027 (specifically September 1, 2021 through September

1, 2027, inclusive); (iii) $1,635,000 of the District’s $2,120,000 Unlimited Tax Bonds, Series

2012, being those certain serial bonds with original maturities from September 1, 2023 through

September 1, 2027, inclusive, and term bonds with original maturities on September 1, 2029,

September 1, 2032, and September 1, 2035 (specifically September 1, 2028 through September

1, 2035, inclusive); and (iv) $1,920,000 of the District’s $2,920,000 Unlimited Tax Bonds, Series

2013, being those certain serial bonds with original maturities from September 1, 2025 through

September 1, 2031, inclusive, and a term bond with original maturity on September 1, 2037

(specifically September 1, 2032 through September 1, 2037, inclusive), which will be refunded

and redeemed as more fully described in the Report.

“Refunding Bonds” or “Series 2020 Refunding Bonds” means the District’s $4,545,000

Unlimited Tax Refunding Bonds, Series 2020.

“Report” means the report prepared by Public Finance Partners LLC, Certified Public

Accountants, relating to the Refunding Bonds, a copy of which has been or will be delivered to

the Escrow Agent and which is incorporated herein for all purposes, and any subsequent report

prepared by a nationally recognized firm of independent certified public accountants in

connection with the provisions of Section 4.03(b) of this Agreement, which in the event of its

delivery shall be incorporated herein for all purposes.

Section 1.02. Interpretations. The titles and headings of the articles and sections of this

Agreement have been inserted for convenience of reference only and are not to be considered a

part hereof and shall not in any way modify or restrict the terms hereof. This Agreement and all

of the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth

herein and to achieve the intended purpose of providing for the defeasance of the Refunded

Bonds in accordance with applicable law. Except where the context otherwise requires, words

imparting the singular number shall include the plural number and vice versa. Reference to any

instrument or document shall include such instrument or document as the same may be amended

or supplemented from time to time. Reference to any party to any instrument or document shall

include any successor or assign of such party.

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5 92115-003 474695v1

ARTICLE II

INITIAL TRANSFER TO ESCROW FUND

Section 2.01. Transfer to the Escrow Fund. Upon closing of the Series 2020 Refunding

Bonds, the District shall transfer, or cause to be transferred, to the Escrow Agent for the benefit

of the holders from time to time of the Refunded Bonds the Escrow Deposit consisting solely of

the following:

(a) any beginning cash balance for the Escrow Fund and certain funds of the District,

as shown in the Report; and

(b) the Escrowed Securities as shown in the Report which have been purchased on

behalf of the District with a portion of the proceeds of the Series 2020 Refunding

Bonds and certain other funds of the District.

Section 2.02. Execution of Funding Certificate. Upon the receipt by the Escrow Agent

of (i) the Escrow Deposit, (ii) the payment of fees described in Section 6.02 hereof and (iii) the

Report, the Escrow Agent shall attach to this Agreement the Escrow Funding Certificate fully

executed by the Escrow Agent, in substantially the form attached hereto as Exhibit “B”.

Section 2.03. Sufficiency of Escrow Fund. The District represents that the successive

receipts of the principal of and interest on the invested portion of the Escrowed Securities will

assure that the cash balance on deposit from time to time in the Escrow Fund will be at all times

sufficient to provide moneys for transfer by the Escrow Agent to the Paying Agent at the times

and in the amounts required to pay the interest on the Refunded Bonds as such interest comes

due and the principal of the Refunded Bonds, as the Refunded Bonds mature or are redeemed, all

as more fully set forth in the Report. If, at any time and for any reason, the cash balances on

deposit or scheduled to be on deposit in the Escrow Fund shall be insufficient to transfer the

amounts required by the Paying Agent to make the payments set forth in Section 3.02 hereof, the

District shall timely deposit into the Escrow Fund, from lawfully available funds, additional

funds in the amounts required to make such payments. Notice of any such insufficiency shall be

given promptly as hereinafter provided, but the Escrow Agent shall not in any manner be

responsible for any insufficiency of funds in the Escrow Fund or the District’s failure to make

additional deposits thereto.

ARTICLE III

CREATION AND OPERATION OF ESCROW FUND

Section 3.01. Escrow Fund. The Escrow Agent shall create on its books a special

escrow fund to be known as the “Montgomery County Municipal Utility District No. 115 Series

2020 Escrow Fund” (the “Escrow Fund”) into which shall be deposited the beginning cash

balance and the Escrowed Securities described in Section 2.01 hereof. The Escrowed Securities,

all proceeds therefrom and all cash balances from time to time on deposit in the Escrow Fund

shall be the property of the Escrow Fund.

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Section 3.02. Payment of Principal and Interest: Redemption of Certain Refunded

Bonds.

(a) The Escrow Agent is hereby irrevocably instructed to transfer to the Paying Agent

on the Redemption Dates the amounts required to pay the principal of and interest on the

Refunded Bonds in the amounts and at the times shown in the Report.

(b) The Escrow Agent agrees to apply all funds transferred to it pursuant to Section

3.02(a) above solely for the purpose of depositing with the Paying Agent all moneys in the

Escrow Fund required to pay the principal of and interest on the Refunded Bonds in the manner

provided in this Agreement. Except for amounts transferred to the Paying Agent pursuant to

Sections 3.02(a) hereof, and except as permitted in Article IV hereof, the Escrow Agent agrees

that it shall never make any withdrawals from the Escrow Fund, other than as permitted in

Section 3.04, for transfer to the District, or assert any claims, liens or charges against the Escrow

Fund.

Section 3.03. Escrow Deposit in Trust. The Escrow Deposit and all proceeds therefrom

shall be the property of the Escrow Fund, and shall be applied only in strict conformity with the

terms and conditions of the Series 2020 Refunding Bond Order and this Agreement. All of the

Escrowed Securities, all proceeds therefrom and all cash balances from time to time on deposit in

the Escrow Fund are hereby irrevocably transferred to the Escrow Agent for the benefit of the

holders from time to time of the Refunded Bonds to provide for the payment of the principal of

and interest on the Refunded Bonds, which payment shall be made by timely transfers to the

Paying Agent of such amounts at such times as are provided for in Section 3.02 hereof, but

solely from the sources specified in this Agreement and the Series 2020 Refunding Bond Order.

The Escrow Agent shall hold at all times the Escrow Fund, the Escrowed Securities, and all other

assets of the Escrow Fund, for the benefit of the holders from time to time of the Refunded

Bonds, wholly segregated from all other funds and securities on deposit with the Escrow Agent;

it shall never allow the Escrowed Securities or any other assets of the Escrow Fund to be

commingled with any other funds or securities of the Escrow Agent, and it shall hold and dispose

of the assets of the Escrow Fund only as set forth herein and in the Series 2020 Refunding Bond

Order.

Section 3.04. Return of Moneys.

(a) In the event that any funds which have been transferred by the Escrow Agent to

the Paying Agent remain unclaimed by the owner of any Refunded Bond and have not been

presented for payment for a period of three (3) years after the date on which such Refunded

Bond shall have become payable, then such funds shall, subject to any applicable escheat and

forfeiture laws, including Title 6 of the Texas Property Code, as amended, upon request in

writing by the Board, be paid to the District, and thereafter the owner of such Refunded Bond, if

the District receives such moneys, shall look only to the District for payment, without any

interest thereon, and neither the Escrow Agent nor any Paying Agent shall have responsibility

with respect to such moneys.

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(b) The Escrow Agent shall maintain the Escrow Fund until the date upon which the

Refunded Bonds are paid, whereupon the Escrow Agent shall sell or redeem any Escrowed

Securities remaining in the Escrow Fund, and shall remit to the District the proceeds thereof,

subject to this Section 3.04 hereof, together with all other money, if any, then remaining in the

Escrow Fund subject to the provisions of Section 4.04 hereof.

ARTICLE IV

INVESTMENTS

Section 4.01. General. Except as herein otherwise expressly provided, the Escrow

Agent shall not invest any money held hereunder, or make substitutions of the Escrowed

Securities, or sell, transfer or otherwise dispose of the Escrowed Securities. In particular, cash

balances on deposit in the Escrow Fund shall not be reinvested except as otherwise provided in

Section 4.02 hereof.

Section 4.02. Reinvestment of Certain Cash Balances in Escrow by Escrow Agent. The

Escrow Agent shall reinvest cash balances in zero (0) interest rate United States Treasury

Obligations - State and Local Government Series to the extent such Obligations are available

from the Department of the Treasury as shown in the Report. All such re-investments shall be

made only from the portion of cash balances derived from the maturing principal of and interest

on Escrowed Securities that are United States Treasury Certificates of Indebtedness, Notes, or

Bonds - State and Local Government Series. All such re-investments shall be acquired on and

shall mature on the dates shown in the Report.

Section 4.03. Substitution of Escrowed Securities.

(a) Concurrently with the initial deposit by the District with the Escrow Agent, but

not thereafter, the District, at its option, may substitute cash or direct non-callable and not pre-

payable obligations of the United States Treasury (the "Substitute Obligations"), but only if such

Substitute Obligations

(i) are in an amount, and/or mature in an amount, which is equal to or greater

than the amount payable on the maturity date of the obligation listed in the

Report for which such Substitute Obligations are substituted,

(ii) mature on or before the maturity date of the obligation listed in the Report

for which such Substitute Obligations are substituted, and

(iii) produce the amount necessary to pay the interest on and principal of the

Refunded Obligations, as set forth in the Report, as verified by a certified

public accountant or a firm of certified public accountants.

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If, concurrently with the initial deposit by the District with the Escrow Agent, any such

Substitute Obligations are so substituted for any Escrowed Securities, the District may, at any

time thereafter, substitute for such Substitute Obligations the same Escrowed Securities for

which such Substitute Obligations originally were substituted.

Section 4.04. Arbitrage. The District hereby covenants and agrees that it shall never

request the Escrow Agent to exercise any power hereunder or permit any part of the money in

the Escrow Fund or proceeds from the sale of Escrowed Securities to be used directly or

indirectly to acquire any securities or obligations if the exercise of such power or the acquisition

of such securities or obligations would cause any Refunding Bonds or the Refunded Bonds to be

an “arbitrage bond” within the meaning of Section 148 of the Code or Section 103(c) of the

Internal Revenue Code of 1954.

Section 4.05. Security for Cash Balances. Cash balances from time to time, to the

extent not insured by the Bank Insurance Fund maintained and administered by the Federal

Deposit Insurance Corporation or successor insurance fund, shall be continuously secured in the

manner provided by law for deposits of trust funds by a pledge of direct obligations of, or

obligations unconditionally guaranteed by, the United States of America, having a market value

at least equal to such cash balances. The holders of the Refunded Bonds shall be entitled to a

preferred lien and claim upon such obligations in the event of any insolvency, receivership,

conservatorship or liquidation of the Escrow Agent.

ARTICLE V

RECORDS AND REPORTS

Section 5.01. Records. The Escrow Agent shall keep books of records and accounts in

which complete and correct entries shall be made of all transactions relating to the receipts,

disbursements, allocations and applications of the money and Escrowed Securities deposited to

the Escrow Fund and all proceeds thereof, and such books shall be available for inspection at

reasonable hours and under reasonable conditions by the District and the holders of the Refunded

Bonds.

Section 5.02. Reports. For the period beginning on the date hereof and ending on May

31, 2020, and for each yearly period thereafter while this Agreement remains in effect, the

Escrow Agent shall prepare and send to the District within 30 days following the end of such

period a written report summarizing all transactions relating to the Escrow Fund during such

period, including without limitation, credits to the Escrow Fund as a result of interest payments

on or maturities of the Escrowed Securities and transfers from the Escrow Fund to the Paying

Agent for payments on the Refunded Bonds or otherwise, together with a detailed statement of

all Escrowed Securities and the cash balance on deposit in the Escrow Fund as of the end of such

period.

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ARTICLE VI

CONCERNING THE ESCROW AGENT

Section 6.01. Moneys to Be Held in Trust. All moneys received by the Escrow Agent

shall, until used or applied as herein provided (including payment of moneys to the District under

Section 3.04 hereof), be held in trust for the purposes for which they were received and shall be

segregated from other funds. The Escrow Agent shall be under no liability for interest on any

moneys received by it hereunder other than such interest as it expressly agrees to pay.

Section 6.02. Compensation and Expenses of Escrow Agent.

(a) In consideration of the agreement of the District contained in the Series 2020

Refunding Bond Order with respect to the compensation of the Escrow Agent and in

consideration of the payment to be received by the Escrow Agent out of the proceeds of the

Refunding Bonds, the Escrow Agent hereby agrees that it will not make any claim to any amount

on deposit in the Escrow Fund and hereby waives any lien or claim on such fund. Additionally,

the Escrow Agent expressly agrees that in its capacity as Paying Agent for any of the District’s

outstanding bonds, the Escrow Agent, as Paying Agent or otherwise, will not make any claim to

any amount on deposit in the Escrow Fund for any compensation owed by the District to the

Escrow Agent in its capacity as Paying Agent for any bonds of the District. To the extent that

this Section 6.02 conflicts with any other provisions contained herein or in the Series 2020

Refunding Bond Order, this Section 6.02 shall control.

(b) Upon delivery of the Series 2020 Refunding Bonds, the District shall pay to the

Escrow Agent, as a fee for performing the services as Escrow Agent hereunder, in accordance

with the schedule attached as Exhibit “A”, which is made a part hereof for all purposes, which

amount does not include fees for services as paying agent for the Refunding Bonds, if any. This

sum does not include the costs of publication, printing costs or reasonable legal fees and

expenses and other out-of-pocket costs of the Escrow Agent incurred in the performance of its

duties and responsibilities as Escrow Agent hereunder, which expenses shall be paid by the

District. In the event that the Escrow Agent is requested to perform any extraordinary services

hereunder, the District hereby agrees to pay reasonable fees to the Escrow Agent for such

extraordinary services.

(c) The Escrow Agent, in its capacity as Paying Agent on the Refunded Bonds,

agrees to continue providing services as Paying Agent for the life of the Refunded Bonds. The

District agrees to pay for such services as such amounts become due. The Bank of New York

Mellon Trust Company, N.A. agrees that its exclusive remedy for nonpayment for its services as

a paying agent shall be an action for an amount owing under the Paying Agent/Registrar

Agreements for the Refunded Bonds.

Section 6.03. Responsibility of the Escrow Agent. The Escrow Agent shall not be liable

or responsible for any act performed or step taken or omitted by it or any mistake of fact or law

or for anything which it may do or refrain from doing, except for its own negligence or its

default or failure in the performance of any obligation imposed upon it hereunder. The Escrow

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Agent shall not be responsible in any manner whatsoever for the recitals made herein or

statements contained in the Series 2010 Bonds, Series 2011 Bonds, Series 2012 Bonds, Series

2013 Bonds or the Series 2020 Refunding Bonds or any proceedings taken in connection

therewith. The Escrow Agent makes no representation as to the value, conditions or sufficiency

of the Escrow Fund or as to the title of the District thereto, and the Escrow Agent shall not incur

any liability or responsibility with respect to such matters other than as set forth herein. The

Escrow Agent shall not have any liability whatsoever for the insufficiency of moneys from time

to time available in the Escrow Fund or any failure of the obligor of the Escrowed Securities to

make timely payment thereon, except for the obligation to notify the parties hereto promptly of

any such occurrence. It is the intention of the parties hereto that the Escrow Agent shall never be

required to use or advance its own funds or otherwise incur personal financial liability in the

performance of any of its duties or the exercise of any rights and powers hereunder.

The Escrow Agent is not a principal, participant, or beneficiary of the underlying

transaction to which this Escrow Agreement relates. The Escrow Agent has no duty to determine

or inquire into the happening or occurrence of any event or contingency or the performance or

failure of performance of the District with respect to arrangements or contracts with others, the

Escrow Agent’s sole duty hereunder being to safeguard the Escrow Fund and to dispose of and

deliver the same in accordance with this Agreement. However, if the Escrow Agent is called

upon by the terms of this Agreement to determine the occurrence of any event or contingency,

the Escrow Agent shall be obligated, in making such determination, only to exercise reasonable

care and diligence, and in the event of error in making such determination the Escrow Agent

shall be liable only for its own misconduct or its negligence. In determining the occurrence of

any such event or contingency the Escrow Agent may request from the District or any other

person such reasonable additional evidence as the Escrow Agent in its discretion may deem

necessary to determine any fact relating to the occurrence of such event or contingency, and in

this connection may inquire and consult, among others, with the District at any time, and the

Escrow Agent shall not be liable for any damages resulting from its reasonable delay in acting

hereunder pending its examination of the additional evidence requested by it.

The Escrow Agent makes no representation as to the value, condition or sufficiency of

the Escrow Fund, the Escrowed Securities or any part thereof, or as to the title of the District

thereto, or as to the security afforded thereby or hereby, and the Escrow Agent shall not incur

any liability or responsibility with respect to any of such matters.

In the absence of bad faith, the Escrow Agent may rely conclusively upon the truth,

completeness and accuracy of the statements, certificates, opinions, resolutions and other

documents conforming to the requirements of this Escrow Agreement, and shall not be obligated

to make any independent investigation with respect thereto.

To the full extent permitted by law, the parties agree to indemnify, defend and hold the

Escrow Agent harmless from and against any and all loss, damage, tax, liability and expense that

may be incurred by the Escrow Agent arising out of or in connection with its acceptance or

appointment as Escrow Agent hereunder, including attorneys’ fees and expenses of defending

itself against any claim or liability in connection with its performance hereunder except that the

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Escrow Agent shall not be indemnified for any loss, damage, tax, liability or expense resulting

from its own negligence or willful misconduct.

Section 6.04. Reliance by the Escrow Agent. This Agreement is between the District

and the Escrow Agent only. The Escrow Agent shall not be liable for the performance of any

duties, except such duties as are specifically set forth in this Escrow Agreement, and no implied

covenants or obligations shall be read into this Escrow Agreement against the Escrow Agent.

The duty of the Escrow Agent hereunder shall only be to the District, the Paying Agent and the

holders of the Refunded Bonds. The Escrow Agent may act upon any written notice, request,

waiver, consent, certificate, receipt, authorization, opinion of counsel, power of attorney, or other

instrument or document which the Escrow Agent in good faith believes to be genuine and to be

what it purports to be. The Escrow Agent may consult with its counsel or other counsel

satisfactory to it with respect to any question relating to its duties or responsibilities hereunder or

otherwise in connection herewith and shall not be liable for any action taken, offered or omitted

by Escrow Agent in good faith upon the advice of such counsel. The Escrow Agent may act

through its officers, employees, agents and attorneys.

The Escrow Agent shall have the right to accept and act upon instructions, including

funds transfer instructions (“Instructions”) given pursuant to this Escrow Deposit Agreement and

delivered using Electronic Means (“Electronic Means” means mean the following

communications methods: S.W.I.F.T., e-mail, facsimile transmission, secure electronic

transmission containing applicable authorization codes, passwords and/or authentication keys

issued by the Escrow Agent, or another method or system specified by the Escrow Agent as

available for use in connection with its services hereunder); provided, however, that the District

shall provide to the Escrow Agent an incumbency certificate listing officers with the District to

provide such Instructions (“Authorized Officers”) and containing specimen signatures of such

Authorized Officers, which incumbency certificate shall be amended by the District whenever a

person is to be added or deleted from the listing. If the District elects to give the Escrow Agent

Instructions using Electronic Means and the Escrow Agent in its discretion elects to act upon

such Instructions, the Escrow Agent’s understanding of such Instructions shall be deemed

controlling. The District understands and agrees that the Escrow Agent cannot determine the

identity of the actual sender of such Instructions and that the Escrow Agent shall conclusively

presume that directions that purport to have been sent by an Authorized Officer listed on the

incumbency certificate provided to the Escrow Agent have been sent by such Authorized

Officer. The District shall be responsible for ensuring that only Authorized Officers transmit

such Instructions to the Escrow Agent and that the District and all Authorized Officers are solely

responsible to safeguard the use and confidentiality of applicable user and authorization codes,

passwords and/or authentication keys upon receipt by the District. To the extent allowed by law

and excluding acts of negligence and bad faith by the Escrow Agent, the Escrow Agent shall not

be liable for any losses, costs or expenses arising directly or indirectly from the Escrow Agent’s

good faith reliance upon and compliance with such Instructions, notwithstanding such directions

conflict or are inconsistent with a subsequent written instruction and the Escrow Agent will

endeavor to comply with subsequent written instruction once received. Subject to the

aforementioned limitations on District liability and assumption of risk, the District agrees: (i) to

assume all risks stated therein; (ii) to assume all risks arising out of the use of Electronic Means

to submit Instructions to the Escrow Agent, including without limitation the risk of the Escrow

Agent acting on unauthorized Instructions, and the risk of interception and misuse by third

parties; (iii) that it is fully informed of the protections and risks associated with the various

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methods of transmitting Instructions to the Escrow Agent and that there may be more secure

methods of transmitting Instructions than the method(s) selected by the District; (iv) that the

security procedures (if any) to be followed in connection with its transmission of Instructions

provide to it a commercially reasonable degree of protection in light of its particular needs and

circumstances; and (v) to notify the Escrow Agent immediately upon learning of any

compromise or unauthorized use of the security procedures.

Section 6.05. Resolution of Disagreements. In the event of any disagreement or

controversy hereunder, or if conflicting demands or notices are made upon the Escrow Agent

growing out of or relating to this Agreement, or in the event that the Escrow Agent in good faith

is in doubt as to what action it should take hereunder, the District expressly agrees and consents

that the Escrow Agent shall have the absolute right to file a suit in interpleader, in any court of

competent jurisdiction in the State of Texas where either the Bank Office or the Administrative

Office of the District is located, and obtain an order from a court of appropriate jurisdiction

requiring all persons involved to interplead and litigate in such court their several claims and

rights among themselves and that the Escrow Agent shall be reimbursed for reasonable

attorneys’ fees by the District from moneys other than the moneys in the Escrow Fund; provided

however, that this Section 6.05 shall not apply to the unconditional duty of the Escrow Agent to

hold the Escrowed Securities and to timely collect and receive the principal of and interest on the

Escrowed Securities, and funds to pay or to transfer to and deposit with the Paying Agent to pay

the principal of and interest on the Refunded Bonds as the same come due and are payable, in

accordance with this Agreement.

ARTICLE VII

MISCELLANEOUS

Section 7.01. Notice. Any notice, authorization, request or demand required or

permitted to be given herein shall be in writing and shall be deemed to have been duly given

when deposited in the United States mail, first-class, postage prepaid.

Any request, authorization, direction, notice, consent, waiver, report or other document

provided or permitted by this Escrow Agreement to be made upon, given or furnished to, or filed

with:

(a) the District by the Escrow Agent shall be sufficient for every purpose hereunder if

in writing and mailed, first-class, postage prepaid, to the District addressed to it at 2727 Allen

Parkway, Suite 1100, Houston, Texas 77019, or at any other address furnished in writing to the

Escrow Agent by the District; or

(b) the Escrow Agent by the District shall be sufficient for every purpose hereunder if

in writing and mailed, first-class, postage prepaid, to the Escrow Agent at 2001 Bryan St., 10th

Floor, Dallas, TX 75201, Attention: Corporate Trust Department, or at any other address

furnished in writing to the District by the Escrow Agent.

Section 7.02. Term. This Agreement shall be effective upon the attachment hereto of an

executed Escrow Funding Certificate by the Escrow Agent. Upon the taking of all the actions as

described herein by the Escrow Agent, the Escrow Agent shall have no further obligations or

responsibilities hereunder to the District, the holders of the Refunded Bonds or to any other

person or persons in connection with this Agreement except as otherwise provided in the Series

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2020 Refunding Bond Order. In any event, the term of this Agreement shall not exceed thirty

(30) years from the date of this Agreement.

Section 7.03. Binding Agreement. This Agreement shall be binding upon the District

and the Escrow Agent and their respective successors and legal representatives, and shall inure

solely to the benefit of the holders of the Refunded Bonds, the District, the Escrow Agent and

their respective successors and legal representatives. The Escrow Agent and the District

recognize that this Agreement is entered into for the benefit of the holders of the Refunded

Bonds from time to time, and the Escrow Agent hereby accepts the benefits hereof on behalf of

such holders; provided that the Escrow Agent and the District agree that this Agreement may be

amended without the prior written consent of each holder of a Refunded Bond who would be

adversely affected by such amendment (i) to cure any ambiguity, formal defect or omission

herein, (ii) to grant to or confer upon the Paying Agent, for the benefit of the holders of the

Refunded Bonds, any additional rights, remedies, power or authority that may be conferred upon

such holders or the Escrow Agent or (iii) to subject additional funds, securities or other property

to the terms of this Agreement. This Agreement shall never be amended for any other purpose

without the prior written consent of the holders of all Refunded Bonds not theretofore finally

paid, and shall never be amended so as to negate the firm banking and financial arrangements

established by this Agreement as required by Tex. Gov’t Code Ann. Chapter 1201, et. seq.

Section 7.04. Severability. In the event any one or more of the provisions contained in

this Agreement shall for any reason be held to be invalid, illegal or unenforceable, such

invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement,

and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had

never been contained herein.

Section 7.05. Texas Law Governs. This Agreement shall be governed exclusively by

the provisions hereof and by the applicable laws of the State of Texas.

Section 7.06. Time of the Essence. Time shall be of the essence in the performance of

the obligations imposed upon the Escrow Agent by this Agreement.

Section 7.07. Performance on Business Days. Whenever under the terms of this

Agreement the performance date of any provision hereof shall fall on a day which is not a legal

banking day, and on which the Escrow Agent is not open for business, the performance thereof

on the next succeeding business day of the Escrow Agent shall be deemed to be in full

compliance. Whenever time is referred to in this Agreement it shall be time recognized by the

Escrow Agent in the ordinary conduct of its normal business transactions.

Section 7.08. Inability of the Escrow Agent. In the event the Escrow Agent or its legal

successor or successors should at any time become unable, through operation of law or

otherwise, to act as Escrow Agent, or if its property and affairs shall be taken under the control

of any state or federal court or administrative body because of insolvency or bankruptcy or for

any other reason, a vacancy shall forthwith and ipso facto exist in the office of Escrow Agent,

and a successor Escrow Agent shall be appointed by the District which shall be qualified under

Tex. Gov’t Code Ann. Chapter 1201, et. seq.

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Section 7.09. Compliance with Texas Government Code Section 2271.002. A Bank is a

“Company” as defined by Section 808.001(2) and Section 2271.001(2) of the Texas Government

Code and as required by Section 2271.002 of the Texas Government Code, the Escrow Agent

hereby verifies that it does not boycott Israel and will not boycott Israel during the term of this

Agreement. For purposes of this Agreement, the phrase “boycott Israel” means refusing to deal

with, terminating business activities with, or otherwise taking any action that is intended to

penalize, inflict economic harm on, or limit commercial relations specifically with Israel or in an

Israeli-controlled territory, but does not include an action made for ordinary business purposes.


Section 2252.152 of the Texas Government Code, Bank hereby verifies that it is not engaged in

active business operations with Sudan, Iran, or a foreign terrorist organization. For purposes of

this Agreement, the phrase “foreign terrorist organization” means an organization designated as a

foreign terrorist organization by the United States secretary of state as authorized by 8 U.S.C.

Section 1189.


Section 2252.908(c)(4), Texas Government Code, the Form 1295 filing requirement does not

apply to a contract with a publicly traded business entity, including a wholly owned subsidiary of

the business entity. The Escrow Agent hereby represents to Issuer that it is a wholly owned

subsidiary of The Bank of New York Mellon Corporation, a publicly traded business entity. As

such, the Escrow Agent is not required to deliver a Form 1295.


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IN WITNESS WHEREOF, the parties have executed this Escrow Agreement as of the

date and year first written above.



By:


ATTEST:

_________________________________


(DISTRICT SEAL)

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COMPANY, N.A.

By: ______________________________________

Name: ____________________________________

Title: _____________________________________

ATTEST:

By: _______________________________

Name: _____________________________

Title: ______________________________

(SEAL)

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EXHIBIT A - FEE SCHEDULE

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EXHIBIT B

ESCROW FUNDING CERTIFICATE

to

ESCROW AGREEMENT

between


and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

The undersigned Escrow Agent hereby represents and acknowledges receipt of the

following:

(i) all moneys and securities identified in the Verification Report (“Report”) have

been deposited in the Escrow Fund; and

(ii) one or more copies of the Report, executed by the firm of certified public

accountants which prepared it, a copy of which has been attached to the Escrow Agreement.

THE BANK OF NEW YORK MELLON

TRUST COMPANY, N.A., as Escrow

Agent

By: _______________________________

Name: _____________________________

Title: ______________________________

Dated: ______________

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AUTHENTICATION AND SIGNATURE IDENTIFICATION

CERTIFICATE OF ESCROW AGENT

The undersigned officer of The Bank of New York Mellon Trust Company, N.A., a

national banking association organized and existing under the laws of the United States of

America, with its operations office in Dallas, Texas, serving as Escrow Agent (the “Escrow

Agent”) under the Escrow Agreement (the “Escrow Agreement”), between Montgomery County

Municipal Utility District No. 115 (the “District”) and the Escrow Agent, for the District’s

Unlimited Tax Refunding Bonds, Series 2020 (the “Series 2020 Bonds”), hereby certifies as

follows:

a. The Escrow Agreement was executed on behalf of the Escrow Agent by the

persons named below whose offices appear set opposite their name, and said

persons were at the time of executing the Escrow Agreement and are now duly

elected, qualified and acting incumbents of their offices, and the signatures

appearing after said persons’ names are the true and correct specimens of such

persons’ genuine signatures:

NAME OFFICE SIGNATURE

____________________ ____________________

___________________ ____________________

b. The foregoing officers of the Escrow Agent named in paragraph (a), by virtue of

the authority delegated to them by the Board of Directors of the Escrow Agent

pursuant to a resolution, a true and correct copy of which is attached hereto as

Exhibit “A”, are authorized to execute and deliver the Escrow Agreement, and the

officers of the Escrow Agent named in paragraph (a), by virtue of the authority

delegated to them by the Board of Directors pursuant to the aforementioned

resolution, are authorized to execute, on behalf of the Escrow Agent, such other

and further documents as may be necessary or incidental to the acceptance and

performance of the duties set forth in the Escrow Agreement, to attest to any of

the foregoing, and to apply the seal of the Escrow Agent thereto.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of

the Escrow Agent this ________________________.


COMPANY, N.A.

By:

(SEAL) Name:

Title:

Exhibit “A” - Resolution of Board of Directors of Escrow Agent

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General Certificate

The undersigned do hereby certify that we are the President and Secretary of the

Board of Directors of Montgomery County Municipal Utility District No. 115 (the “District”)

and do hereby execute and deliver this certificate for the benefit of all persons interested in the

District’s $4,545,000 Unlimited Tax Refunding Bonds, Series 2020 (the “Series 2020 Refunding

Bonds” or the “Bonds”), and do further certify to the following:

1. The District is a conservation and reclamation district created pursuant to

Article XVI, Section 59 of the Texas Constitution, and operates pursuant to Chapters 49 and 54

of the Texas Water Code, as amended (the “Code”). The District is authorized and empowered

by law, including particularly, but not by way of limitation, the provisions of the Code and Tex.

Gov’t Code Ann. §1207, et seq, to issue refunding bonds secured by ad valorem taxes, and to use

the proceeds thereof to refund, defease and redeem those portions of the District’s issues of (1)

$2,800,000 Unlimited Tax Bonds, Series 2010 (the “Series 2010 Bonds”) being those certain

serial bonds with original maturities (or mandatory redemption dates, as applicable) of

September 1, 2022 and September 1, 2023, in the aggregate principal amount of $235,000 (the

“Series 2010 Refunded Bonds”); (2) $2,120,000 Unlimited Tax Bonds, Series 2011 (the “Series

2011 Bonds”) being those certain term bonds with original maturities (or mandatory redemption

dates, as applicable) on September 1, 2022, September 1, 2024, and September 1, 2027

(specifically September 1, 2021 through September 1, 2027, inclusive), in the aggregate principal

amount of $525,000 (the “Series 2011 Refunded Bonds”); (3) $2,120,000 Unlimited Tax Bonds,

Series 2012 (the “Series 2012 Bonds”) being those certain serial bonds with original maturities

(or mandatory redemption dates, as applicable) from September 1, 2023 through September 1,

2027, inclusive, and term bonds with original maturities on September 1, 2029, September 1,

2032, and September 1, 2035 (specifically September 1, 2028 through September 1, 2035,

inclusive), in the aggregate principal amount of $1,635,000 (the “Series 2012 Refunded Bonds”);

and (4) $2,920,000 Unlimited Tax Bonds, Series 2013 (the “Series 2013 Bonds”) being those

certain serial bonds with original maturities (or mandatory redemption dates, as applicable) from

September 1, 2025 through September 1, 2031, inclusive, and a term bond with original maturity

on September 1, 2037 (specifically September 1, 2032 through September 1, 2037, inclusive), in

the aggregate principal amount of $1,920,000 (the “Series 2013 Refunded Bonds”). The portions

of the Series 2010 Bonds, Series 2011 Bonds, Series 2012 Bonds and Series 2013 Bonds to be so

refunded, defeased and redeemed are also referred to collectively as the “Refunded Bonds.”

2. On May 7, 2020, and at all times since such date, (a) the following named

persons have duly constituted the Board of Directors (the “Board”) of the District, (b) all

presently appointed or elected officials of the District are qualified, and those required by statute

to furnish bonds, including its directors, have made and furnished bonds which have been filed

and approved as provided by law, (c) as indicated below, certain of the Directors have been the

duly elected, qualified and acting officers of the Board of the District for the offices set forth

opposite their names and (d) the terms of the Directors expire as shown below:

DIRECTORS OFFICES TERM EXPIRES

Hal B. Sharp President May, 2024

Catherine Athearn Vice President May, 2024

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Cynthia A. Giles Secretary May, 2024

Leona G. Ohrt Director May, 2022

Ben Mitchell Director May, 2022

3. The Bond Order of the Board authorizing the issuance of the Series 2020

Refunding Bonds (the “Bond Order”) was adopted at a duly convened meeting of the Board on

May 7, 2020, during which a quorum of the Board was present and voting throughout. The

original of the Bond Order is on file in the official records of the District. The Bond Order has

not been amended and is in full force and effect, and the District has duly authorized by all

necessary action the due performance of the Bond Order. Notice of the meeting mentioned

above was posted in compliance with the Open Meetings Act, Tex. Gov’t. Code Ann. § 551.001

et seq., as amended, as suspended in part by the Governor of Texas on March 16, 2020. Each

member of the Board received notice of the meeting mentioned above.

4. The Series 2020 Refunding Bonds shall be secured by and paid from ad

valorem taxes collected upon taxable property within the District. Any taxes assessed, levied

and to be collected by the District are upon the ad valorem basis as provided by law. The Series

2020 Refunding Bonds are issued in order to provide funds to refund the Refunded Bonds and to

pay certain costs and expenses incurred in connection with the issuance of the Series 2020

Refunding Bonds. The proceeds received from the sale of the Series 2020 Refunding Bonds

(including an amount representing accrued interest on the Series 2020 Refunding Bonds)

together with other lawfully available funds of the District, will be disbursed as follows: (a) a

portion of such proceeds will be deposited with The Bank of New York Mellon Trust Company,

N.A., Dallas, Texas, a national banking association organized and existing under the laws of the

United States of America, as escrow agent (the “Escrow Agent”), to be used in accordance with

the provisions of the Bond Order, corresponding Approval Certificate dated

_________________, 2020 (the “Approval Certificate”) and that certain Escrow Agreement

dated May 7, 2020 and effective on ________________, 2020 (the “Escrow Agreement”) to

effect the refunding, defeasance, and redemption of the Refunded Bonds; (b) accrued interest

from June 1, 2020 to the date of closing will be deposited in the District’s Debt Service Fund to

be used to pay interest on the Series 2020 Refunding Bonds; and (c) the balance of such funds

will be deposited with The Bank of New York Mellon Trust Company, N.A., Dallas, Texas, a

national banking association organized and existing under the laws of the United States of

America, to pay costs of issuance of the Series 2020 Refunding Bonds, and thereafter to the

District's Cost of Issuance Account of the General Fund to pay costs of issuance of the Series

2020 Refunding Bonds.

5. The Board has approved the form and content of the Preliminary Official

Statement dated May 7, 2020 (the “Preliminary Official Statement”), and the Authorized Officer

(as defined in the Bond Order) has approved the Official Statement dated ___________, 2020

(the “Official Statement”), and the distribution thereof by Masterson Advisors LLC (the

“Financial Advisor”) pursuant to the District’s Order Approving the Bond Purchase Agreement,

the Bond Purchase Agreement and the Bond Order, in connection with the offering and sale of

the Series 2020 Refunding Bonds.

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6. The representations, warranties and covenants of the District contained in

the District’s Order Approving the Bond Purchase Agreement, the Bond Purchase Agreement

and the Bond Order, are true and correct in all material respects on and as of the date hereof.

7. The District has complied in all material respects with the terms and

conditions of the District’s Order Approving the Bond Purchase Agreement, the Bond Purchase

Agreement and the Bond Order, and has satisfied all material conditions on its part to be satisfied

at or prior to the date hereof.

8. The Bond Order, the Escrow Agreement, the District’s Order Approving

the Bond Purchase Agreement, and the Bond Purchase Agreement have not been amended,

modified, supplemented, or repealed, and are in full force and effect. Additionally, the Bond

Order, the Escrow Agreement, the District’s Order Approving the Bond Purchase Agreement,

the Bond Purchase Agreement and the Series 2020 Refunding Bonds, as executed and delivered

by the duly authorized officers of the District acting solely in their official capacities, are in

substantially the same form and text as the copies of such instruments which were authorized and

approved by the Board, with such changes and revisions therein as have been approved by the

Board or by the officers executing the same, and are in full force and effect on the date hereof.

The Official Statement has been duly executed by duly authorized officers of the District acting

in their official capacities and in substantially the same form and text as the copy of such

document which was authorized and approved by the Board, with such changes and revisions

therein as have been approved by the Board or by the officers executing the same. Further, to the

best knowledge and belief of the undersigned, (a) the descriptions and statements of or pertaining

to the District contained in the Official Statement on ___________________, 2020 and on the

date hereof, were and are true and correct in all material respects; (b) insofar as the District and

its affairs, including its financial affairs, are concerned, the Official Statement did not and does

not contain an untrue statement of material fact or omit to state any material fact required to be

stated therein or necessary to make the statements therein, in the light of the circumstances under

which they were made, not misleading; (c) there have been no material or adverse changes in the

affairs or financial condition of the District since May 31, 2019, the latest date as to which

audited financial information is available; (d) insofar as the descriptions and statements,

including financial data contained in the Official Statement, or pertaining to entities other than

the District and their activities are concerned, such statements and data have been obtained from

sources which the District believes to be reliable, and the District has no reason to believe that

they are untrue in any material respect; and (e) no event affecting the District has occurred since

the date of the Official Statement which should be disclosed in the Official Statement for the

purposes for which the Official Statement is to be used or which it is necessary to disclose

therein in order to make the statements and information therein not misleading in any respect.

9. None of the proceedings or authorizations heretofore taken or given for

issuance of the Series 2020 Refunding Bonds or for the payment or security thereof has been

repealed, revoked or rescinded. The District has full power and authority (a) to execute and

deliver the Bond Order, the Escrow Agreement, the Bond Purchase Agreement and the Series

2020 Refunding Bonds; (b) to issue, sell and deliver the Series 2020 Refunding Bonds; (c) to use

the proceeds of the Series 2020 Refunding Bonds to redeem and refund the Refunded Bonds; and

(d) to consummate the transactions contemplated by, and perform its obligations under the

Official Statement, the Bond Order, the Escrow Agreement, the District’s Order Approving the

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Bond Purchase Agreement, the Bond Purchase Agreement, and the Series 2020 Refunding

Bonds.

10. The Board of Directors of the District has never adopted a resolution,

made an order or taken any action limiting the indebtedness which may be incurred by the

District; no request has been made to said Board by any resident of the District, property owner

therein, or other person, that such a limitation be adopted or imposed; and no election on such

question has ever been held for or within the District. Further, the District is not in default as to

any covenants in any of the outstanding bond orders.

11. No litigation is pending or, to the knowledge of the undersigned,

threatened, either in state or federal courts, contesting or attacking the Bonds or restraining or

enjoining the levy, assessment or collection of ad valorem taxes, which are pledged to the

payment of the Bonds, or affecting the security for the Bonds, or in any manner questioning the

authority or proceedings for the issuance, execution or delivery of the Bonds, or affecting the

validity of the Bonds, contesting in any way the accuracy, completeness or fairness of the

Preliminary Official Statement or the Official Statement, or the title of the present officers and

directors of the District or challenging the boundaries of the District.

12. The District does not have outstanding any revenue notes, tax anticipation

notes or bond anticipation notes, as authorized by Sections 49.153 and 49.154 of the Texas

Water Code, as amended.

13. Other than the Series 2020 Refunding Bonds and the following bonds of

the District which have been previously sold and are presently outstanding, without taking into

account the Refunded Bonds to be redeemed or refunded at the closing of the issuance of the

Bonds:
















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92115-003 474713v1

























The total amount of ad valorem tax supported indebtedness outstanding after giving effect to the

Series 2020 Refunding Bonds will be $_______________.

14. There have been no changes in the area or boundaries of the District

since its creation by order of the Texas Commission on Environmental Quality issued and dated

March 22, 2006, except the addition of 109.20 acres by order of the Board of Directors dated

February 1, 2007. No litigation is pending or, to the knowledge of the undersigned, threatened,

either in state or federal courts challenging the boundaries of the District.

15. As of the date hereof, all information required by law to be filed by the

District with the Texas Commission on Environmental Quality has been filed and the District has

complied with all applicable ordinances of the City of Conroe, Texas.

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16. The true interest cost on the Bonds does not exceed 2% above the highest

average interest rate reported by the Bond Buyer in its weekly 20-Bond Index during the one-

month period next preceding the date of sale of the Bonds.

17. The total debt service payments on the Series 2020 Bonds is less than the

total debt service on the Refunded Bonds. The net present value savings resulting from issuance

of the Bonds is $_______________.

18. The District has appropriated from the District’s Debt Service Fund,

which is certified to be on hand and available for such purpose, funds allocable to the Refunded

Bonds in an amount, together with the accrued interest on the Series 2020 Refunding Bonds

referred to in paragraph 4, above, that is sufficient to pay interest coming due on the Series 2020

Refunding Bonds on September 1, 2020.

19. The Paying Agent/Registrar for the Series 2010 Bonds, Series 2011

Bonds, Series 2012 Bonds, and Series 2013 Bonds which are being refunded has agreed to

continue providing paying agency services until redemption of the Series 2010 Bonds, Series

2011 Bonds, Series 2012 Bonds, and Series 2013 Bonds, with the remedy for nonpayment

being solely an action for amounts owing under the paying agent agreement for the Series 2010

Bonds, Series 2011 Bonds, Series 2012 Bonds, and Series 2013 Bonds.

20. All meetings of the Board of Directors of the District relating to the

November 7, 2006 bond election and issuance of the Series 2020 Refunding Bonds were held in

compliance with the provisions of Sections 49.062 and 49.063 of the Texas Water Code.

19. The District has heretofore complied with the provisions of the Federal

Voting Rights Act of 1965, as amended and with the provisions of Chapter 272 of the Texas

Election Code, as amended.

20. The board of directors has appointed a depository for the District, and said

depository has qualified and has agreed to furnish proper security for all funds to be deposited

with it by the District.

21. At the date of creation of the District and at the date land was added to the

District, the area of the District did not lie within the extraterritorial jurisdiction of any city. As a

result of population growth in the City of Conroe, Texas, the City of Conroe, Texas expanded its

extraterritorial jurisdiction. The District now lies within the extraterritorial jurisdiction of the

City of Conroe, Texas, and no part of the District is within the extraterritorial jurisdiction of any

other city. If the District is annexed by the City of Conroe, Texas for full purposes, the City of

Conroe, Texas must assume all of the debts, liabilities and obligations of the District, and must

perform all of the functions of the District, including the provision of services.

22. Except for the Bonds, the District does not have any debts or indebtedness

other than the obligations referred to in paragraph number 13 above.

23. The District certifies that there is hereby appropriated from lawfully

available funds in the District’s Debt Service Fund of the Refunded Bonds to the extent not

transferred to the escrow fund, an amount sufficient to provide for the payment of interest due on

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the Bonds on September 1, 2020, and that such monies will be used to pay such interest and for

no other purposes.

24. All meetings of the Board of Directors of the District have been accessible

to the public, and notices of all meetings were posted as required by the Open Meetings Act,

Tex. Gov’t. Code Ann. § 551.001 et seq., as amended, as suspended in part by the Governor of

Texas on March 16, 2020. All meetings of the Board of Directors of the District were held in

compliance with the provisions of the Tex. Water Code Ann. § 49.063.

25. The board of directors has determined that the authorization of bonds at

the election held on November 7, 2006 was valid and lawful and not limited in time, and that the

authority and purposes for which the Bonds were authorized remain valid and lawful.

26. Any taxes assessed, levied and to be collected by the District are upon the

ad valorem basis as provided by law.

27. A Statement of Directors and amendments thereto have been filed as

required by Section 49.455 Texas Water Code, as amended.

28. The District will not use any Bond proceeds for the purchase of fire-

fighting equipment or facilities.

29. The District certifies that the District does not currently have nor did the

District have a website at the time of the November 7, 2006 bond election.

30. The District certifies that it is in compliance with Texas Government Code

§2252.908 with respect to the contracts contained within this transcript of proceedings, and that

all disclosure filings and acknowledgments required by §2252.908, Texas Government Code,

and by the rules of the Texas Ethics Commission related to said provision, have been made.

31. The District certifies that none of the Refunded Bonds were ever

purchased by or held in the sinking fund created for their payment and redemption, and that none

of the Refunded Bonds are now held in or owned by the sinking fund created for the purpose of

paying off or redeeming any of said Refunded Bonds.


§2252.908 with respect to the contracts contained within this transcript of proceedings, and that

all disclosure filings and acknowledgments required by §2252.908, Texas Government Code,

and by the rules of the Texas Ethics Commission related to said provision, have been made.


Chapter 2252 Subchapter F with respect to the contracts contained within this transcript of

proceedings, and the District certifies that it has checked the lists of Companies maintained in

accordance with Subchapter F and has no contracts within this transcript of proceedings with

Companies on such lists. The District further certifies that it has not entered into and will not

enter into a contract with a counterparty that is a Company identified on a list prepared and

published by the Comptroller pursuant to Sections 2270.002 and 2252.153 of the Government

Code. "Company" or “Companies” means a for-profit sole proprietorship, organization,

association, corporation, partnership, joint venture, limited partnership, limited liability

partnership, or limited liability company, including a wholly owned subsidiary, majority-owned

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subsidiary, parent company, or affiliate of those entities or business associations that exists to

make a profit.


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92115-003 474713v1

WITNESS MY HAND AND THE OFFICIAL SEAL OF THE DISTRICT this

___________________________.

____________________________________

President

ATTEST:

Secretary

[SEAL]

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92115-003 445829v1


Signature and No-Litigation Certificate

We, Hal B. Sharp, the undersigned President, and Cynthia A. Giles, the

undersigned Secretary, of the Board of Directors of Montgomery County Municipal Utility

District No. 115 ("the District"), hereby certify as follows:

1. Said Board of Directors has heretofore ordered to be issued the following

described bonds (hereinafter collectively referred to as "the Bonds," which include the initial

bond representing all of the Bonds [the "Initial Bond"] which will be exchanged upon

instructions from the original purchaser for printed Bonds in varying amounts and maturities [the

"Definitive Bonds"]):

$4,545,000 Montgomery County Municipal Utility District No.

115 Unlimited Tax Refunding Bonds, Series 2020, dated June 1,

2020.

2. Each of us from May 7, 2020, and continuously thereafter to the date

hereof, has held the office shown by the official title set opposite his or her name.

3. The Initial Bond, being Bond No. IB-1, was manually signed by the

President and the Secretary of the Board of Directors, and said manual signatures were

confirmed and adopted by each of them.

4. The Definitive Bonds were manually signed by the President and the

Secretary of the Board of Directors, and said manual signatures were confirmed and adopted by

each of them.

5. The seal which has been impressed or placed upon all of the Bonds and

this certificate is the legally adopted, proper and official seal of the District.

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2 92115-003 474719v1

6. No resolution, order, proceeding or authority for the issuance, execution or

delivery of the Bonds has been repealed, rescinded or revoked.

7. No litigation is now pending, or to the knowledge of the undersigned,

threatened, before any state or federal court, governmental agency, public board or body,

contesting or attacking Bonds or any documents adopted or agreements entered into by the

District necessary for the issuance of the Bonds or restraining or enjoining the levy, assessment

and collection of ad valorem taxes which are pledged to the payment of the Bonds, or contesting

the boundaries of the District or the exclusion from gross income of interest on the Bonds for

federal income tax purposes or in any manner questioning the authority or proceedings for the

sale, issuance, execution or delivery of the Bonds, or affecting the validity or enforceability of

the Bonds or the title of the present officers and directors of the District.


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3 92115-003 474719v1

Witness our hands and the seal of the District, this ______________________.

SIGNATURE TITLE OF OFFICE


Hal B. Sharp


Cynthia A. Giles

District's Seal

THE STATE OF TEXAS §

COUNTY OF MONTGOMERY §

Before me, the undersigned Notary Public, on this day personally appeared Hal B.

Sharp and Cynthia A. Giles, the President and Secretary of the above District, who stated to me,

upon oath, that they are the President and Secretary of the Board of Directors of the District,

respectively, that they executed the above and foregoing document in such capacities, and on

behalf of the District.

GIVEN UNDER MY HAND AND SEAL OF OFFICE this ________________.

Notary Public, State of Texas

000197

92115-003 474717v1


Certificate of Compliance with Approving Orders

of the Texas Commission on Environmental Quality


Municipal Utility District No. 115 (the “District”), hereby certify as follows:

Montgomery County Municipal Utility District No. 115 (the “District”) was

created by order of the Texas Commission on Environmental Quality issued and dated March 22,

2006.

The District remains a lawfully created municipal utility district operating under

the provisions of Chapters 49 and 54 of the Texas Water Code, as amended. All data required to

be filed by the District with the Texas Commission on Environmental Quality (“Commission”)

pursuant to the Texas Water Code or the Rules of the Commission have been so filed, to the best

of my knowledge.

Witness my hand and the seal of the District, this _____________________.

Secretary

000198

92115-003 474718v1


Incorporation Certificate


Municipal Utility District No. 115, hereby certify as follows:

Montgomery County Municipal Utility District No. 115 (the “District”) was

created by order of the Texas Commission on Environmental Quality issued and dated March 22,

2006, confirmed by the voters of the District at an election held on November 7, 2006, and the

Board’s Order dated November 16, 2006, declaring the results of that election is recorded in the

Real Property Records of Montgomery County, Texas, Film Code Sequence 226-11-0873 to

226-11-0882 (File No. 2006-137268).

The District remains a lawfully created municipal utility district operating under

the provisions of Chapters 49 and 54 of the Texas Water Code, as amended. All data required to

be filed by the District with the Texas Commission on Environmental Quality pursuant to said

Texas Water Code or the Rules of the Commission have been so filed.

Witness my hand and the seal of the District, this ________________________.

Secretary

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92115-003 474715v1


Schedule of Incumbency of Directors and Officers


Municipal Utility District No. 115 (the "District"), hereby certify that the following schedule

correctly shows the incumbency of directors of the District from May 7, 2020 to the date of this

Certificate:

From May 7, 2020 to the date of this Certificate:

Hal B. Sharp

Catherine Athearn

Cynthia A. Giles

Leona G. Ohrt

Ben Mitchell

I further certify that the following schedule correctly shows the incumbency of

officers of the District from May 7, 2020 to the date of this Certificate:

From May 7, 2020 to the date of this Certificate:




_____________, Treasurer


000200

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92115-003 474715v1

To certify which, witness my hand and the official seal of the District, this

___________________.

Secretary

000201

92115-003 474721v1


ISSUER'S RULE 15c2-12 CERTIFICATE

The Board of Directors of Montgomery County Municipal Utility District No. 115

(the "District"), the issuer of the bonds described herein, as of the date hereof, hereby "deems

final" within the meaning of Securities and Exchange Act of 1934 Rule 15c2-12 ("Rule 15c2-

12") the Preliminary Official Statement, dated May 7, 2020, relating to the $4,545,000

Montgomery County Municipal Utility District No. 115 Unlimited Tax Refunding Bonds, Series

2020, except for the permitted omissions described in paragraph (b)(1) of Rule 15c2-12.


000202

92115-003 474721v1

SIGNED AND SEALED this _________________.

President

ATTEST:

Secretary

(SEAL)

000203

92115-003 474716v1


Secretary's Certificate to Map

I, the secretary of Montgomery County Municipal Utility District No. 115, hereby

certify that the foregoing boundary map is a true and correct map showing the boundaries of said

District as of this date; that no lands or territory have been added to or annexed by the District nor

excluded therefrom since its creation by order of the Texas Commission on Environmental Quality

issued and dated March 22, 2006, except the addition of 109.20 acres by order of the Board of

Directors dated February 1, 2007.

Witness my hand and the official seal of the District this _____________________.

Secretary

000204




May 7, 2020

To the Bank handling the delivery to

the Purchaser of the captioned Bonds:

Re: Montgomery County Municipal Utility District No. 115; Unlimited Tax

Refunding Bonds, Series 2020

Ladies and Gentlemen:

You are authorized to receive and follow instructions as to the delivery of the

captioned bonds from Smith, Murdaugh, Little & Bonham, L.L.P., the District's attorneys.

By: ____________________________________

President

You are authorized to deliver the captioned bonds to the purchaser.

SMITH, MURDAUGH, LITTLE & BONHAM,

L.L.P.

By: ______________________________________

Partner

000205




May 7, 2020

Public Finance Division

Office of the Attorney General

Austin, Texas 78711




Attached is a signature and no-litigation certificate in connection with your approval of

the captioned bonds. The certificate has been executed but is undated. You are authorized to

date the certificate as of the date of your approval of the bonds.

If at any time prior to your dating of the certificate any statement therein should become

incorrect, we will call you immediately and will also confirm by letter.

Very truly yours,



000206




May 7, 2020

Public Finance Division

Office of the Attorney General

Austin, Texas 78711




Attached is a general certificate in connection with your approval of the captioned

bonds. The certificate has been executed but is undated. You are authorized to date the

certificate as of the date of your approval of the bonds.

If at any time prior to your dating of the certificate any statement therein should become

incorrect, we will call you immediately and will also confirm by letter.

Very truly yours,



000207




May 7, 2020

Bond Registration Division

Office of the Comptroller

of Public Accounts

P.O. Box 13528

Capitol Station

Austin, Texas 78711



Dear Sir or Madam:

When you have registered the captioned bonds, you are authorized to receive

instructions as to the delivery of the bonds from Smith, Murdaugh, Little & Bonham, L.L.P., the

District's attorneys.

By:


Please deliver the bonds to Smith, Murdaugh, Little & Bonham, L.L.P., 2727

Allen Parkway, Suite 1100, Houston, Texas 77019; Attention Ms. Lori G. Aylett.

SMITH, MURDAUGH, LITTLE & BONHAM,

L.L.P.

By:

Partner

000208