· $56,150,000 revenue bonds, district redevelopment project)) bonds)))

Nt:\\, ISSUE !lOOK,ENTRY O:\LY

$56,150,000FEDERALI,YTAXABLE SUBOUDINATE

REVENUE BONDS, SERIES 20llC(PYRA.'\IJD AND PINCH DISTRICT

REDEVELOPMENT PROJECT)

c-- Itlll"g., Su "RATING' h~,dn

/" the o".i"ion tl/Q>.&1Wf Co~...-rl. ~lWfrruUri"j1I<1'" Q"d a»~",i"g m",plilln«! with rM I,u """'111"1.,< tk.lTibft! I,nri", ,,,,,IIl,e QI'C""'Q1 oj«ffa;" "l',....e"l<Irio"sm,,1 emil!rM''''rs """Ie £y the #,,,,,,r,,,,,1 rhe Cil/l ,'rsrri/;t:il hrtri". i'Jferr~1onlloe .'ierle.. 201 In S"t..",Ii"me T,.,. £"""""" &,,,1..- is =1"""Ij",,,, /lJn.<S inromejor j",1rrtUiN;<l"w ~lr P"'l>OS<!.f underS«lil)n 103 qflhe I"'~'rnillH""","e Co<le qf J986. <U n'.....W (Uwl "C<><k'). (;I)·fund 00"'Uri is 01..-0 oj lJwl opinion 11"11 .ud< i"I"",,1 On lJwl.sen...WI In Sub<mlinole T...... F..remlll&lIdJ is no! h~,I"" ... °PrQcrn\U il"n in ralndoting IheoU<'T'I'IIlti"" ",i"i","", I...... im,.,.."I"",lrrlhe O",le.,-i/h mrwt '" i"'Ii"id"ol6o"d"''l'''''lIi,,,,,•. Co-B","' Co"tu</ i.j"rlJ,,·rqfIJoc "I,inion Ihlll i'"""";1 0" II,,,S,"-;,,. roll 71l."'ble Bo",/.< i. ""I ""d"d",lj",,,, 9"". i"<'1"""j". jc:k1U1 i"",,,,c to..!- P"t'JIGICS,Co·/lo",1 CO'Ulul isj"rrhrrojthe opin;o" thot "'''kr T""''' ....... I0,,' lJwl!kriu WI 1 Bonll. 0",' in~llh."..""orr "OI.~bjNll<> iJlrome In.mli"" i" theSI<llC qfT"",..n.~.UC't'/>ljorT""nC1«<j""'d"M'l<\..ra. StIr "TAX J/,I'TTF.P.S· he>ri" "'ll"Inli"g """"'i" olkT 1(1.1'" "'...iden>Ilo.....

~IPms CENTER CITY REVENUE FINANCE CORPORATION

s.&0,540,OOO - $100,2.15,000FEDERALLY TA,UDLE SENIOR TAX EXEMPT SUBORDINATE

RE\'ENUE BONDS, SERIES 201lA REVENUE BONDS, SERIES 20118(PYRA.\UD AND PINCH DISTRICf (P\,R.,,",MlD A.l~D PINCH DISTRICT

REDEVEI,OI'MENT PROJECT) REDEVELOPMENT PROJECT)

OAl ..d, 0",,, nrll~ll.... C)" 1\".. : N,,~..mlo..r I. all ~b",", nn 1",ld" "",-rr

nils OfllcL'lI SL~t ..mem ..W('S 10 th.. 1ssu."Ir\C~ 1».' II,.. ~l~mph\3 Cone, CI,y R,-"~,,,e I'\II.'\I'C" Corpo,,,doll (tI,~ ·l r'") of 14().5-IO,OOO b' aw"g.'\I" l\rInd".ll "I'I\OW\t olIL.~·..dN31l,l' T;u:d,l.. Se"lor R",..m,.. Ilo"'l.. S..ries 20 11A (1\r.un1'1 ",,,II'i,,d, nlslrl<"l R.... k·\"I'lop"'..'" l'to.iN'1) (Ill. 'So'ri 2011 A Senio. T.uabl" llollds"). 1100.2'15,000 in agg<"p<~

pri"dlJ'll <unOW'.' ofilll T:u Exen'l>! SUbo"Ii....'\I~ R",..,nll<'!londs, s".los ~llB (l'!.·r.'llIIl,1 ""d Pinch Diotrk1 RM"''''IoI'",eo' f'l'o)ea) (d", "Mrios2011D S"bor¢"".. T"", l:""rnplllot"l'1 ""'I $56,150.000 m o.ggrrplc principal am(IlUll of t... f'l"drrnli)' T:u:l\Illr S"bo"H,.uc R....·N'U.. Bon,l., Srrir5 201lC (1'lT:VItid '''''I Pinrh Ill"lriCl R...I",..loll",elll 1't'll.M)('he 'Scn"" WIIC S"l>onhn.lIeT"""ble llo"ds- ",,,I tOllell,., wid' d,c Sert"" 2011A Sc1llo,Ta""bl. Bonds ""d oI,e S.ries 2011B S"t.>,d~L~le T"", ."'cmpt llontbar" .eferred loasth. 'Mlies 2011 Bontb') l'nml.'II11 to ""d b' """""I'IIlCe ...'101, a Tnw Inde",,,,.., d3lM :Ill at Sftxombu I. 2011 (I/oe ·1.nd'l\lur~') btI...-..... til. Issuer and IUoglo"s Bank, as UU51~N'""1'ruslH') :",,1 p""isiOl'" ofT"'u'.-..ta...· "'1'1\01" IlaI1i<.'ll1:uly d....,nbi'd I.....u. Th.. Seriell 201 III Subo,dwte Tax f:xen'I" Bon,1s '\"d I/o.. Seri... 201lC Subu.dillMe T~I~Bonds are h~.~in."\llfJ , ..I"r.-e-f/ 10:\< oI,e 'Stril'S 2011 S"borditwc Bond,.. nle S~,iM 20IIA Sertio, Taxablo lionds a",1 tile "",I..~ 201lC S"bo"li'~~leTax,'u>t;- Ilonds "'0 her..III,JI~.Idom'llI" "" 11", 'Scrie~ ~Oll Tax:<iJlc Bo,,,I0.· n,~ Seri.,. 2011 Bor'ds "'.. ~blj!: lo.sw.'Il ... full,l' ,cgla,c,e-f/ bo",ls, b,ltl.lli)' ,ollis""e-f/it, lito ""'tIC olCed<: 11: Co, • .... lIomin""ofTI'..Otposl,or)·Tru>1 Comp....v. :'>'..". York. :'>'ew York ('1lTC'). 1'u,chasH ofb,,,..lIdaI inWts\5 in 01", s"ri.... 2011llofllh iU be m:we in bool:~l\lry form 0l'I1J,'. in dOl\OminMlo,,~of

$<>,000 or any blt~"'" mullipl" d,..,""f, as df'!OCrib"d herein. rme"'....,,,, of benrftd:d it"r"""" inlhr Sen"" 2011 Bond ill no, '''''.i..... 1'1l}'Sirnlllrlh'ery of cerlift".".... T"".ifrrs01 '*t\.lk~lllm.,"sts b' Ih" Sen.. 20 II Bo,,,1s ...ill b~ o(fecl..1'h,ough the DTC book-emf}' ~.,;t.. n, as d.,.;n\led /O.... 11l. s.., "TilE SERlf:S 2011 BO~WS " llool:-EnU)· 0niJ,~ ho'rin.All ""I'ltalli"d ,."'''' ' .....1h...itl lU,,1 000 OII.. ''''i.... Mtlned "'~ 'lSf<! ...ith ,he n..:...ingo U<lgnod ,h,,",o it, •APPI::-;Ol.,\ A "o.:~lSmO:'>'S Of' CI:P.TAI:'>' TER'olS A:-;D SlJ}lllARrOI'C.:RT.>J:-; I'RO\1SI0:-;S OI'TII~: 1:,>,a.::-'1lJRI:. LOAS AOItE!:.\IEST A.'\J) IU:PLI::'>'lSIlMEST AGREI:~IE:-"" on"C!le-f/ h.,,',o.

n,e Scri..s 2011 Ik",'1< "ill be'" i'ttere>! 01 tl'" ,a,.,. .. t folth 011 ,I", itlSi'l" """er of ollis 0l'lIc~'\I S~~I.mellll.'lyabl" ...nltaruu1.11l,l· On ~L\\' 1 lUld 1'0,·..",1>0, I of """h ye.v,"onun""ctllg on So,-embel I. '!I.lI J. ""to mMwi1.)· 0' "",Ii", ,e-f/cm~loll0111,.. $crlcs 2011 llonds. 1m"","" 011 the s"rieII2011 llot"'" ...1U be 1I")':Ibll: h)' ,h.. TnlSl..... b' i15 <31>:><11.)"as lI")ing agl'lll to CflI.. 1r. Co.• :\< nomin"" ofOTC. on ..""h h""..... Pl\loml'l" D:ue. P,wm"""1of I'rlnclp,ll of. ,eden'I~lon p,,,,,,;un,, lflUOY. 3Ild In"."", on. 'llc Seri.., 20111lo,"'s",11 b. n""l" n' 'he d..il;\.lI",1 cl)fl'0::lle In .... ome.. of til" Ttll..,.e. Sci: 111f: SI:RlE:.<; 2011 IlONlJS' h",~b,.

1~''''''''II''IU 01", I"'lemure. d,. 1"""""'ls of tI,c Scriell ~Oll Bom'" ,,;0 "" """" 10. ""~ olhe' oILi,np. p""1de Iw><b '0 I\Iak. a 1o"., (!he 'Mn... 20111.00.,-) 1o !he CUyI)IMO"'l,h"'. T."'......,., (d,. 'Cill') 1"""'."'\ '0 a loal' Agt....."'...., d.~t..1"'" of s.,~..mbe, I. 2011 (,ho 'Lo:u, Agt...."'.ntj be1"'...n tI,.. I"",er "",I tile (;11)'. Tht Ci,y "ill ..... 'heIm,..""ds ofd,e Serio" ~011 w.", 10: (a) Ii,""".. o. n'huh,,~the City fo' a po"lon of oI'e "Qs\i< """""'~dc,1 ,..I,h 0I1e :IC'I"";I;01~ c"O"SIru<t1o'~ d",..I"l'lllem. "''''''-:lIlo'' ",ul e<:jWI'I'in.;ofd'" Sen"" 2011 f'l'ojoet (as d.fi"ed he.ob,), (b) I,,"d ""plwi.led b'tfJest 0/1 Ih.. s"ri.. %011 Boods, (cl f,u,d a d"posillo tII~ Senlo, Dobl Se"i". Resen-e """,,,,,,,, in"" amou.~1

e<p.W 10 0I1e Sellio. lkllt Se"i"" ltclIe"" Ileqcile"'''''l "1'I'ti"abl" 10 til.. Senes 201lA SctUorT:u:<iJlc llonds. (d) Iw'" a ,IOPO,,;1 1<> 01", Sub",di""llc I>'bl Se"ice Rese,ve AlXO\ult I"an an,oum eqll3l to d,e Sllbo.din.lI.. Debt g,."i".. n•...,"" 1~"lu;."n'o"l aJlptic.'hl~ 10 ,h.. Sfori"" 2011 S"t.>,dbL,I.. 1Io1ld. and (e) ILlY the C<l>l~011"""''Il\'''' ,,1lh 'PSI'ed. 10 dIe Serl••2011 llonds. inrlwli"Il'h" premi"m for tl'" Polley (a.. ho",ln ,Ieflned). s..e 'n If: PROJl:cr and -Pl.AN m" ~lSA.>;CF.· he.el... The p,mk:.,L" ,....,. of o""h ..,riC! ollh" Seri"" 2011Ilot"h ate set forth """,In WId'" 'I'I.A.'\ OF F1:'>'A.>;CI: . F:sIlnwM Sow"", ""d UW<! 01.'11<1""" h••• in.

n,.. s"rlrs 2011 11o",ls "''' Ilmlled obllg.ltlo". Ollh.. Is.s,,", ..= ..,1 loy "" """lg"meHI ""d I'ledll.l)ltlre TnlSl Es~~lf. "'hid, "0'1Sis'''' pri"."lril,l· of"," l"')'rne"L, and l"op.\\·n"·"/5,eq"h~d 10 "" ",,".I. by d,~ Cit)· ,n,d,·, :lnd 1'''='110 the Lo:u, Agre,,,nrm "-Id,,h "''' 11) "" n""'. f,um the TDl R,,'""''''. (as dcfo'ed h...b,). 1~1f$UO>1t '0 110" I"d.,,'''''. :ill 01 01,.pa)mfll'" """ I""?'Q"'''''''I b>" d.. CI",,· 'If\df' the l.oa" AS'...."'.'" "'we l:M-eo plfdlled '011'" l"'J"I\Ienl at 01.. I'rlnc;palof. l" .. ntilllll, il"aroy.....d b"...ost on the Mri"" 2011 Bond..lin,"'",·". llte Seri." 201IA Sl'roor T:u:dJlc llo"o1i ""d :ill Addltiollalllotuis 01 Ihc ""'". l'tlorily wi'h d," SenCll 2011A Sc~dor T""'d>lc BOlld~ (d,. 'So·,,;o, /londs') "",I: ""d h",·."ngltt ofl>aymetl1 from Ih. T07.I~ewnue~,lIl",rio, '0 11,.. Se,le. 2011 S.,I>o,dim'e 1I0n""a,,":ill A,I,II11onal non,1s ollhes:u".. l'rlontywllh Ule Scrleo2011 S<'bordina'" Don'" (11'..'S"bo"I,,~'Oo no,uls") and Ih~ Sld>Or<U",,,,, li<Mul~ 'lU,I<:uuI h...".." ,igIn 01 par",r", flOm ,Ill" mz RM.....' .... ''1",d 'o .......h 001..... s.... -SI'.cUllm· A:'>'D SOURCE.<; Of' p.~nIE:-ifOR nlE SERlE:S 2IJIIIlOSDS' herein.

1" o,d., 10 lunh~, 5"<:Ur' the S"llordlr.'>!" 11o1l'1s, oI,e City ""d Ute lMue. ",Ill enl., buo a ~bl s",,'1"~ R.....'w I1crlorlishment AIl,,,,,ml'lu ,L~tM "" of ~Ien,~, 1.2011(1I., ·R.pleni5lu'....~" ,\i,eeffiC1u'). 1>='110 ,,-Idd, U", City "'ill "S'~ to "",p'oprl:tlo ..."d 11")". f,om :'>'ot..T"" R"'·..,u follo...ing 1'<'O:;p, of n 1>.lIdl'll<y Sotice (as \lef",""h...In). monty sufllci..<tl '0 ,..,,:co.. d\~ S.,llordwt.. D~bl So"i". 1II-se,,'" At"",UII '0 til.. SubordJIl.~t .. DoI>I Sen1c. R.,." Rfq";".,e,,,. as described in mo'e de~'\ll h..eit. s...'S~CIJlUTI" AND SOUltn:s OF I'AnlE:-T HlR TlI!"; SI::Rlt:S 20111lOsDS" lI"lllelllsl,,,,e,,I.\S',,,,,,,",,, 'n"l- No"·T,,,, H" m"",· hmb' .'II,d ·AI·!'I:SDl." A· DH1SITlOSS OFCERT'\INTI:R~ISA.'mSml.\lAHY Of' CI:P.TAJ:-' PHO\-lSIOSS OI'TIIE I:,>,DE:-"TlIRE,I.OAS AGRt:r.m::-T A:'>'D RI:I'LF.:'>'ISmlr.:-, AGIlEE:..\IE:-T ....t:lCI...I he""o.

n,.. sd,..luled 1I")'",enl oll'ri."c;paJ ol:uul it""est on Ihe Seri ... 2011 Bor,,1s ...i,erl ,I". willi", guar:u"""" undo' "" itlSll""'C" I>olk}" 10 ~ iMIlM cO'IC't/I""dy "'lth tlo.d"li.,cry ofll'" Seri.. 2011 /lond.1Jy Assn'c,1 Gu."",oty ~lu"ldl,ll CO'l" s.-e "APPESDIX r:" SPl":ClM~:N ~lUNICll'AI.IlO:'>'lJ ISSURA.'\C.: l'OlJC\- :U1,,,,h,,,1 he,el",

f\sSUREDGUAllANTY"

"UN,(,.~,

n,o Senn 2011 Bor,,1s ar..."lUt'<:t 10 01'1I01l.11 ,...I"mpllon. ""","'lOr)· .b,kllllllw,d IMempllon 3IId "",,,,,,rdlnary red.mption pno. 10 """unl)', all ... mOre hdIJ' descnbedhe"'n, See "THI:SI:IUI:s 2011 UOSllS' h....bL

TIlE Smlll'.5 201 t DO:-'US. A."lJ TilE I:-'·.:REST TIIERt:O~. DO NOT NOlI' A.'\lJ SIl.Ul. NEn;H CONSTI1UI"E A CHARGE AGAINST TllI: GE:'>'t:RALCRlmIT Oil TAXING l'O\\T.il m' Till; CITY. Tilt: !<,ATE OF "IT.~"Nt:'SSEf.(TilE "STATE') OB. A.'\,," l'Ol.ITICAL SUtltJl\'lSION TIIF,llt:OF ISCUIDING. WITIIOllf1.1~IlTATION.TIlE CITY ANI) TItE COUNn' Ot' SIIF,l.Ilr. TF,NNl:SSl":r. (Til!"; "COUNTY") ANn SUCII SP.HIES 2011 BONDS ANIl TilE I~TEB.I'.5T PAYAUI.f.Tllt:lI.t:ON tJO NtIT NOlI' AN]) SUALt. Nt:.\'EII. COS!<"TrrJ!fE A IJt:.BT 01' 'I'm: loTATt:. OK A.""Y POl.ITICAl. SIJIlIll\'ISION TllEllt:OI'. I:'>'CLUlll:,>,t;. WITIIOIlfLt~'ITATIOS.TIlE Cln' MID TilE COII:-T\". ",ITltlN TlIP. ~n:A."'lsc; OF A.'i\' COSSTITllftONAL OK I>TATlJTOII.\· PROVISION \\1IATSOt:\"ER. SEmn:BTilt: STAn: NOil ANY POl.ITICAL SIJIlD1\'1S10N THEREOF (OTIlJ::II. TIIAN TilE CITY) SHAlt. IS ANY E\')-;I\"T liE I.tAIII£ .'011. Til!": I'AYME~T OF TItEPRINCIPAl. Ot'. PRt:~IIU~I, U' ANY, OK 11\"EKt:ST ONTm: St:II.It:S 2011 1t0NIlS OR t'OK Tilt: 1't:RI'OIl..\lASCt: Ill' A."Y I'I.t:tJGt: ..\tORTGAGt:.. OIlI.tGATIll."iOR AGRt:.E~It:~T Ot' ANY KINII "'1IATSOE\·t;ll "111<:11 MAY lit: IDilJEII.TAKt:s Ill' Tilt: ISSUt:ll. SO BREACII Ill' 'I'll.: ISSU.:R Ot' A:-'y SUCII PLEIHa:..\IOII.TGAGE. OBLIGATION OK AGREUII'_"T )lAY I.\IPOSE AS\" 1.I,\BIl.ITY. r.:CUNlAllY OR OTm:R\\1St:. (WON TilE CIT\". TlIB I\,An: 011 AN\" l'Ol.ITIC"l.SUhlllVISIOS TIlEREOt· INCI,umXG, WITHOllf L1MITATIO:-'. TilE CITY ANll Tltt:. COUi"ITY. 011 ANY CIlAII.Gt: UI'ON TIIEIR lit:NEKAI. CRf.DIT OK TAXINGI'OWEII.. Tilt; tSSllt:R liAS NO TAXIS(; l'OIH:R.

nils "",'c, 1''lI~ "<nlL",1S IIlnl1r<llt1f"'''....oo,, fo' 'l'"el< refo""""" "'ob. 11 10 ''''' a "",m,llIry 01 01,. 'nal""~ ,~L:"1:'lI '0 lI\e So-ne.. ~011 110..,10. I'o,..,,~ll i'''''''''QfO 1m.." r."d U,.emlf" om"i31 Slotemem (It,dudl,,g Ih" co"c' page ",,,I "II '\I'I"·",lk.. ""achod 1",,,,0) 10 obloln b,fo,,,,,,,;o,, ......"!l:d ,n 1/0" ""<I<;,,g <If '''' b1fOl"'t~1 ;n' unelll ded:don,

TheSeri... 1011lJands 0'"" ki"9 o,U"""hrhcn. os ond if i&nuU bj/ /he I.......~. "'~IIO prior501c ond 10 .dl1l<lnn.aI 0' nwdi/i<»lio" qf~ o,Ur rilhoul nol......."<I.~4i«110 wopp"",,1 qf~dr,alidily~ySi.n>" l".,biJdy /J.P. S ...., I'ork. S"", j"o'*. .. ,,,I Brill"""'" B",<O". PUC• •U",,,phi•. Ten"""..... Q>.&",I C""',,,I'I. C"'1ni" Itgal moll= ,dUbe 1""'«/ UI"''' b/l Ad"",. ""d noose I.l,P. •If"",phi•. Tel,"""l"". i" ill ""/",";111'" Ce~""ti Ie 'hr luu("1". eMoi" 1'tJ"1 ",ntl= ".ill be I""",r<l "po"jo.,he Cilll bll !fo"·j;i ....lldqJ\rltI & lI"ood /JJ'. XCVl Y"rt. Xcu' fort. in its trlponlll '-" CcufUd ro 110" Cill/. Cert.o'" Ir]j<JI ""'II..... "'ill be po.unl oponjor lJwl U",I""''';I''''' bl/lheir u........ G......./,;npn.."rig, P.A" (}rl.Jtu1o. floridll. Fi"'l So,,/hual (;I)mpo"l/. 1Jo/4'ls. Tr.ms m>lll Co",Cml' AdrUo,,-. md"';.io,, qf C...."',"'ill/ CopilQL .Ifen'l"'is. T"""" "" mnl "'''';''9 osCo·}'j""llriol ,Idllis,,'" 10 llie 11l"~r. II i. ~'7""'ltd lI"'IU,,,&rics WI I {fonds '<'i/l t.o ,,,.,iwWeJ~r ,lcfi",,'li Ih"Jtlyl, II",j"dlili.,.. if /)1'(.' in Sev.. 1'0'*. New I'o,*~" orobout.'i<'pI"",,,,,,"3Q, Mil.

MORGAN KEEGANDUNCAN-WILLlAlI1S

s.po,,'ob<-r21.:JI11

SUNTIWST 1l0BINSO~ IIU(',IPIIUEY

CITIGRQUl'IIAItVESTONS SECURITIES. INC.

MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES,PRICES OR YIELDS AND CUSIPSt

$40,540,000FEDERALLY TAXABLE SENIOR REVENUE BONDS, SERIES 20l1A(PYRAMID AND PINCH DISTRICT REDEVELOPMENT PROJECT)

Maturity(November 1)

20142015201620172018201920202021202220232024202520262027

PrincipalAmount

$ 790,000840,000885,000935,000

1,000,0001,480,0001,565,0001,650,0002,735,0002,890,0003,055,0003,240,0003,435,0003,645,000

InterestRate

2.040%2.5402.8903.1903.3203.5703.8704.2304.4804.6304.7304.8805.0305.180

Price100%100100100100100100100100100100100100100

Yield2.040%2.5402.8903.1903.3203.5703.8704.2304.4804.6304.7304.8805.0305.180

InitialCUSIP No.t

58607EBP858607EBQ658607EBR458607EBS258607EBTO58607EBU758607EBV558607EBW358607EBX158607EBY958607EBZ658607ECAO58607ECB858607ECC6

t

$12,395,000 5.530% Term Bond, Due November 1, 2030, Yield 5.530%,Initial CUSIP No.: 58607ECD4,t Price: 100%

CUSIP numbers have been assigned by an organization not affiliated with the Issuer or the City and areincluded for the convenience of the holders of the Series 2011 Bonds. Neither the Issuer nor the City isresponsible for the selection or uses of these CUSIP numbers, nor is any representation made as to theiraccuracy on the Series 2011 Bonds, or as indicated above.

c

MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES,PRICES OR YIELDS AND CUSIPst

5100,245,000TAX EXEMPT SUBORDINATE REVENUE BONDS, SERIES 2011B(pYRAMID AND PINCH DISTRICT REDEVELOPMENT PROJECT

529,560,000 4.000% Term Bond, Due November 1, 2025, Yield 4.180%,Initial CUSIP No.: 58607EBM5,t Price: 98.095%

59,500,000 5.250% Term Bond, Due November 1, 2025, Yield 4.060%,Initial CUSIP No.: 58607EBK9,t Price: 109.764%c

521,185,000 4.500% Term Bond, Due November 1, 2030, Yield 4.640%,Initial CUSIP No.: 58607EBN3,t Price: 98.236%

540,000,000 5.250% Term Bond, Due November 1,2030, Yield 4.590%,Initial CUSIP No.: 58607EBL7,t Price: 105.276%c

CUSIP numbers have been assigned by an organization not affiliated with the Issuer or the City and areincluded for the convenience ofthe holders of the Series 2011 Bonds. Neither the Issuer nor the City isresponsible for the selection or uses ofthese CUSIP numbers, nor is any representation made as to theiraccuracy on the Series 20 II Bonds, or as indicated above.Priced to the call date ofNovember 1,2021 at par.

eza,...._ '~~""". , ,Ce.' .".£/.."6",, ,,,,,...(QQ(tQQWJ%J" ....... (l6.Gi J 4 .. t ( . AmJ.W.··

MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES,PRICES OR YIELDS AND CUSIPSt

556,150,000FEDERALLY TAXABLE SUBORDINATE REVENUE BONDS, SERIES 2011C

(pYRAMID AND PINCH DISTRICT REDEVELOPMENT PROJECT)

Maturity(November 1)

20142015201620172018201920202021

PrincipalAmount

$6,180,0006,385,0006,635,0006,915,0007,215,0007,550,0007,920,0007,350,000

InterestRate

1.890%2.3902.7903.0903.2203.5203.8704.180

Price100%100100100100100100100

Yield1.890%2.3902.7903.0903.2203.5203.8704.180

InitialCUSIP No.t

58607ECE258607ECF958607ECG758607ECH558607ECJ158607ECK858607ECL658607ECM4

CUSIP numbers have been assigned by an organization not affiliated with the Issuer or the City and areincluded for the convenience of the holders of the Series 2011 Bonds. Neither the Issuer nor the City isresponsible for the selection or uses ofthese CUSIP numbers, nor is any representation made as to theiraccuracy on the Series 2011 Bonds, or as indicated above.

Berlin BoydWilliam C. Boyd

JoeW. BrownHarold B. Collins

Kemp ConradShea Flinn

MEMPHIS CENTER CITY REVENUE FINANCE CORPORATION

Board MembersRobert Spence Jr., Chainnan

Luke Yancy, IV, Vice CbainnanCarla Peach-Ryan, Secretary

Martin Truitt, TreasurerDana Burkett.

Lucy ShawBrandy Johnson-Ward

Wesley GraceWalter Person

President

Paul Morris

CITY OF MEMPHIS ELECTED OFFICIALS

MayorA C Wharton, Jr.

City CouncilMyron Lowery, Chairman

Edmund Ford, Jr.Janis FulliloveWanda HalbertReid HedgepethBill MorrisonJim Strickland

CONSULTANTS TO THE ISSUER, THE CITY AND THE UNDERWRITERS

Co-Financial AdvisorsFirst Southwest Company

Dallas, Texas

ComCap Advisors, a division ofCommunity CapitalMemphis, Tennessee

Economic Planning and Real Estate ConsultantsRKG Associates, Inc.

Dover, New Hampshire.

Co-Bond CounselNixon Peabody LLP

New York, New York

Brittenum Bruce, PLLCMemphis, Tennessee

Issuer's CounselAdams and Reese LLPMemphis, Tennessee

Counsel to the CityHawkins Delafield & Wood LLP

New York, New York

Underwriters' CounselGreenberg Traurig, P.A.

Orlando, Florida

Memphis Central BusinessImprovement District (CBID)

I)· ... r,·, ... · It· iJ"":':"!II' ,r,,~'l'~"1 h· I

NorthMemphis

North (BID

M"" •Island I I

~ u'-''''1

Uptown

~~..y

Pinch District

MainSttecl!

i# Downtown

Core

C[Nl[R CITY COMMISSION

Sports &~ Entertainment u...o.. ...".

§' .;. ~$' Medical District a

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South (BID

THIS OFFICIAL STATEMENT DOES NOT CONSTITUTE A CONTRACT AMONG THE ISSUER.THE CITY, OR THE UNDERWRITERS AND ANY ONE OR MORE OWNERS OF THE SERIES 2011 BONDSNOR DOES IT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY THESERIES 2011 BONDS IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKESUCH AN OFFER IN SUCH JURISDICTION. INVESTORS SHOULD CONSULT THEIR FINANCIALADVISORS AND LEGAL COUNSEL WITH QUESTIONS ABOUT THIS OFFICIAL STATEMENT AND THESERIES 20 II BONDS BEING OFFERED, OR ANYTHING ELSE RELATED TO THE SERIES 20 II BONDS.

NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED BY THE ISSUER.THE CITY, OR THE UNDERWRITERS TO GIVE ANY INFORMATION OR TO MAKE ANYREPRESENTATIONS, OTHER THAN THOSE CONTAINED HEREIN, IN CONNECTION WITH THEOFFERING OF THE SERIES 2011 BONDS, AND IF GIVEN OR MADE, SUCH INFORMATION ORREPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE ISSUER.THE CITY OR ANY OTHER PERSON. THE INFORMATION AND EXPRESSIONS OF OPINION HEREINARE SUBJECT TO CHANGE WITHOUT NOTICE, AND NEITHER THE DELIVERY OF THIS OFFICIALSTATEMENT NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATETHE IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE MATIERS DESCRIBED HEREINSINCE THE DATE HEREOF. THE INFORMATION CONTAINED IN THIS OFFICIAL STATEMENT,INCLUDING IN THE APPENDICES, HAS BEEN OBTAINED FROM REPRESENTATIVES OF THE ISSUER.THE CITY, PUBLIC DOCUMENTS, RECORDS AND OTHER SOURCES CONSIDERED TO BE RELIABLE.

INFORMATION AND EXPRESSIONS OF OPINION ARE SUBJECT TO CHANGE WITHOUTNOTICE, AND IT SHOULD NOT BE INFERRED THAT THERE HAVE BEEN NO CHANGES SINCE THEDATE OF THIS DOCUMENT. NEITHER THE DELIVERY OF, NOR ANY SALE MADE UNDER. THISOFFICIAL STATEMENT SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THATTHERE HAS BEEN NO CHANGE IN THE ISSUER'S OR THE CITY'S AFFAIRS OR IN ANY OTHERMATIERS DESCRIBED HEREIN.

MANY STATEMENTS CONTAINED IN THIS OFFICIAL STATEMENT, INCLUDING THEDOCUMENTS INCLUDED BY SPECIFIC CROSS REFERENCE, THAT ARE NOT HISTORICAL FACTS AREFORWARD·LOOKING STATEMENTS, WHICH ARE BASED ON THE CITY'S BELIEFS, AS WELL ASASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO, THE MANAGEMENTAND STAFF OF THE CITY. BECAUSE THE STATEMENTS ARE BASED ON EXPECTATIONS ABOUTFUTURE EVENTS AND ECONOMIC PERFORMANCE AND ARE NOT STATEMENTS OF FACT, ACTUALRESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED. THE WORDS "ANTICIPATE,""ASSUME:' "ESTIMATE," "EXPECT," "OBJECTIVE," "PROJECTION," "PLAN:' "FORECAST," "GOAL,""BUDGET" OR SIMILAR WORDS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS.THE WORDS OR PHRASES "TO DATE," "NOW:' "CURRENTLY:' AND THE LIKE ARE INTENDED TOMEAN AS OF THE DATE OF THIS OFFICIAL STATEMENT.

THE PROJECTIONS SET FORTH IN THIS OFFICIAL STATEMENT WERE NOT PREPARED WITHA VIEW TOWARD COMPLYING WITH THE GUIDELINES ESTABLISHED BY THE AMERICANINSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS WITH RESPECT TO PROSPECTIVE FINANCIALINFORMATION, BUT, IN THE VIEW OF THE CITY'S MANAGEMENT, WERE PREPARED ON AREASONABLE BASIS, REFLECT THE BEST CURRENTLY AVAILABLE ESTIMATES AND JUDGMENTS,AND PRESENT, TO THE BEST OF MANAGEMENT'S KNOWLEDGE AND BELIEF, THE EXPECTEDCOURSE OF ACTION AND THE EXPECTED FUTURE RECEIPT OF THE TDZ REVENUES BY THE CITY.HOWEVER, THIS INFORMATION IS NOT FACT AND SHOULD NOT BE RELIED UPON AS BEINGNECESSARILY INDICATIVE OF FUTURE RESULTS, AND READERS OF THIS OFFICIAL STATEMENTARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THE PROSPECTIVE FINANCIALINFORMATION. NEITHER THE CITY'S INDEPENDENT AUDITORS, NOR ANY OTHER INDEPENDENTACCOUNTANTS, HAVE COMPILED, EXAMINED, OR PERFORMED ANY PROCEDURES WITH RESPECTTO THE PROSPECTIVE FINANCIAL INFORMATION CONTAINED HEREIN, NOR HAVE THEYEXPRESSED ANY OPINION OR ANY OTHER FORM OF ASSURANCE ON SUCH INFORMATION OR ITSACHIEVABILITY, AND ASSUME NO RESPONSIBILITY FOR. AND DISCLAIM ANY ASSOCIATIONWITH, THE PROSPECTIVE FINANCIAL INFORMATION.

THE UNDERWRITERS HAVE PROVIDED THE FOLLOWING SENTENCE FOR INCLUSION INTHIS OFFICIAL STATEMENT: THE UNDERWRITERS HAVE REVIEWED THE INFORMATION IN THISOFFICIAL STATEMENT IN ACCORDANCE WITH, AND AS PART OF, ITS RESPONSIBILITY TOINVESTORS UNDER THE FEDERAL SECURITIES LAWS AS APPLIED TO THE FACTS ANDCIRCUMSTANCES OF THIS TRANSACTION, BUT THE UNDERWRITERS DO NOT GUARANTEE THEACCURACY OR COMPLETENESS OF SUCH INFORMATION.

IN CONNECTION WITH THE OFFERING OF THE SERIES 2011 BONDS, THE UNDERWRITERSMAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKETPRICE OF THE SERIES 2011 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAILIN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANYTIME.

THE SERIES 2011 BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR HAS THEINDENTURE BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, INRELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. THE REGISTRATION ORQUALIFICATION OF THE SERIES 2011 BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OFTHE SECURITIES LAWS OF THE STATES, IF ANY, IN WHICH THE SERIES 2011 BONDS HAVE BEENREGISTERED OR QUALIFIED AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION INCERTAIN OTHER STATES CANNOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHERTHESE STATES NOR ANY OF THEIR AGENCIES HAVE PASSED UPON THE MERITS OF THE SERIES2011 BONDS OR THE ACCURACY OR COMPLETENESS OF THIS OFFICIAL STATEMENT. ANYREPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE.

ASSURED GUARANTY MUNICIPAL CORP. ("AGM") MAKES NO REPRESENTATIONREGARDING THE SERIES 2011 BONDS OR THE ADVISABILITY OF INVESTING IN THE SERIES 2011BONDS. IN ADDITION, AGM HAS NOT INDEPENDENTLY VERIFIED, MAKES NO REPRESENTATIONREGARDING, AND DOES NOT ACCEPT ANY RESPONSIBILITY FOR THE ACCURACY ORCOMPLETENESS OF THIS OFFICIAL STATEMENT OR ANY INFORMATION OR DISCLOSURECONTAINED HEREIN, OR OMITTED HEREFROM, OTHER THAN WITH RESPECT TO THE ACCURACYOF THE INFORMATION REGARDING AGM SUPPLIED BY AGM AND PRESENTED UNDER THEHEADING "MUNICIPAL BOND INSURANCE" AND IIAPPENDIX E - SPECIMEN MUNICIPAL BONDINSURANCE POLICY."

THIS OFFICIAL STATEMENT IS BEING PROVIDED TO PROSPECTIVE PURCHASERS IN EITHERBOUND OR PRINTED FORMAT ("ORIGINAL BOUND FORMAT"), OR IN ELECTRONIC FORMAT ONTHE FOLLOWING WEBSITE: WWW.MUNIOS.COM.

TABLE OF CONTENTS

INTRODUCTION 1General 1The Issuer and the City 2Authority for Issuance 2The Project 2Purpose of the Series 2011 Bonds 2Description of the Series 2011 Bonds 3Trustee, Paying Agent and Bond Registrar 3Market Study 3Sources ofPayment for the Series 2011 Bonds 4Bond Insurance 5Continuing Disclosure 6Other Infonnation 6

THE ISSUER 7THE CITY 8THE PROJECT 9PLAN OF FINANCE 10

General 10Estimated Sources and Uses ofFunds 11

THE SERIES 2011 BONDS 11General 11Book-Entry Only System 12Discontinuance of Book-Entry Only System 14Optional Redemption 14Mandatory Sinking Fund Redemption 15Extraordinary Redemption 17Selection of Bonds to be Redeemed 18Notice ofRedemption 19Transfer and Exchange of Series 2011 Bonds 19

DEBT SERVICE REQUIREMENTS FOR THE SERIES 2011 BONDS 21MUNICIPAL BOND INSURANCE 21

Bond Insurance Policy 21Assured Guaranty Municipal Corp 22

SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2011 BONDS 24Limited Obligations 24Trust Estate 25TDZ Revenues 25Historical and Projected Debt Service Coverage 27Replenishment Agreement 29Non-Tax Revenues 29Additional Obligations Payable from Non-Tax Revenues 30Flow of Funds 31Debt Service Fund 32

(i)

Debt Service Reserve Fund 34Expense Fund 35Surplus Fund 35Construction Fund 36Optional Redemption Fund 37Additional Bonds 37Refunding Bonds 38

MARKET STUDy 39RKG 39Executive Summary of the Market Study 39

INVESTMENT CONSIDERATIONS 41General 41Enforceability ofRemedies 41Early Payment Prior to Maturity 41Non-Recourse Obligation 42Achievement ofProjections 42Considerations Relating To TDZ Revenues 42Considerations Relating To Non-Tax Revenues 43Ratings 44Limitations On Remedies 44Secondary Market Prices 44Forward-Looking Statements 45

LEGAL MATTERS 45TAX MATIERS 46

Series 2011B Subordinate Tax Exempt Bonds 46Series 2011 Taxable Bonds 49

LITIGATION 53The Issuer 53The City 53

FINANCIAL ADVISORS 53UNDERWRITING 54RATINGS 55CONTINUING DISCLOSURE 55CERTAIN REFERENCES 56MISCELLANEOUS 56

APPENDIX A - DEFINITIONS OF CERTAIN TERMS AND SUMMARY OF CERTAINPROVISIONS OF THE INDENTURE. LOAN AGREEMENT ANDREPLENISHMENT AGREEMENT

APPENDIX B - MARKET STUDY AND IMPACT ANALYSISAPPENDIX C - FORM OF CONTINUING DISCLOSURE AGREEMENTAPPENDIX D - FORM OF OPINIONS OF CO-BOND COUNSELAPPENDIX E - SPECIMEN MUNICIPAL BOND INSURANCE POLICY

(ii)

OFFICIAL STATEMENT

relating to

MEMPHIS CENTER CITY REVENUE FINANCE CORPORATION

$40,540,000FEDERALLY

TAXABLE SENIORREVENUE BONDS,

SERIES 2011A(pYRAMID AND

PINCH DISTRICTREDEVELOPMENT

PROJECT)

General

$100,245,000TAX EXEMPT SUBORDINATE

REVENUE BONDS,SERIES 2011B (pYRAMID AND

PINCH DISTRICTREDEVELOPMENT PROJECT)

INTRODUCTION

$56,150,000FEDERALLY TAXABLE

SUBORDINATEREVENUE BONDS,

SERIES 2011C(pYRAMID AND PINCH

DISTRICTREDEVELOPMENT

PROJECT)

The purpose of this Official Statement, which includes the cover page and theAppendices hereto, is to furnish certain information in connection with the sale by the MemphisCenter City Revenue Finance Corporation (the "Issuer") of $40,540,000 in aggregate principalamount of its Federally Taxable Senior Revenue Bonds, Series 20llA (pyramid and PinchDistrict Redevelopment Project) (the "Series 20llA Senior Taxable Bonds"), $100,245,000 inaggregate principal amount of its Tax Exempt Subordinate Revenue Bonds, Series 20IIB(Pyramid and Pinch District Redevelopment Project) (the "Series 20llB Subordinate TaxExempt Bondsll

) and $56,150,000 in aggregate principal amount of its Federally TaxableSubordinate Revenue Bonds, Series 201lC (Pyramid and Pinch District Redevelopment Project)(the "Series 201lC Subordinate Taxable Bonds" and together with the Series 201lA SeniorTaxable Bonds and the Series 20IIB Subordinate Tax Exempt Bonds are referred to as the"Series 20 II Bonds ll

) pursuant to and in accordance with a Trust Indenture dated as ofSeptember I, 2011 (the IIIndenturell

) between the Issuer and Regions Bank, as trustee (the"Trusteell

) and provisions of Tennessee law as more particularly described herein. The Series20llB Subordinate Tax Exempt Bonds and the Series 20llC Subordinate Taxable Bonds arecollectively hereinafter referred to as the IISeries 2011 Subordinate Bonds." The Series 201lASenior Taxable Bonds and the Series 201lC Subordinate Taxable Bonds are collectivelyhereinafter referred to as the "Series 2011 Taxable Bonds."

This introduction is not a summary of this Official Statement and is intended only forquick reference. It is only a briefdescription ofand guide to, and is qualified in its entirety byreference to, more complete and detailed information contained in the entire Official Statement,including the cover page and the Appendices hereto, and the documents summarized ordescribed herein. A full review should be made of the entire Official Statement and of thedocuments summarized or described herein, ifnecessary. The offering ofthe Series 2011 Bondsto potential investors is made only by means of the entire Official Statement, including the

Appendices hereto. No person is authorized to detach this Introduction from the OfficialStatement or to othenvise use it without the entire Official Statement including the Appendiceshereto. All capitalized terms used in this Official Statement and not otherwise defined hereinshall have the meanings set forth under ''APPENDIXA - DEFINITIONS OF CERTAIN TERMSAND SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE, LOAN AGREEMENTAND REPLENISHMENTAGREEMENT" attached hereto.

The Issuer and the City

The Issuer, is a public nonprofit corporation organized pursuant to the laws of the State ofTennessee (the "State"), specifically the provisions of Part 101 et seq. of Chapter 53 of Title 7,Tennessee Code Annotated, as amended (the "Act"). The Issuer is authorized by the Act tofinance the acquisition, construction and equipping of manufacturing, industrial, commercial,financial and recreational facilities. See "THE ISSUER" herein. The City of Memphis,Tennessee (the "City") is a municipal corporation organized under the laws of the State. See"THE CITY" herein.

Authority for Issuance

The Series 2011 Bonds are being issued in accordance with the provisions of the Act, theIndenture and resolutions adopted and approved by the Issuer and the City authorizing, amongother things, the execution and delivery of the Indenture, the hereinafter described LoanAgreement and Replenishment Agreement and the issuance and sale of the Series 2011 Bonds.

The Project

The City proposes to redevelop the public arena and related properties located in thecenter city area of the City comprising approximately 41 acres of land commonly known as the"Pyramid Arena" as a world-class commercial and retail amenity (the "Pyramid Arena Project").In connection with the Pyramid Arena Project, the City proposes to acquire, for futureredevelopment and renovation, (a) certain properties in the vicinity of the Pyramid Arena andlocated in the center city area of the City commonly known as the "Pinch District" comprising a34 parcels of land aggregating to approximately II acres of land (collectively, the "Pinch DistrictProject") and (b) an approximately 7 acre property located immediately west and adjacent to thePyramid Arena commonly known as the Lonestar Industries site (the "Lonestar Site"). In orderfor the City to obtain sole and unfettered access and control of the TDZ Revenues (as definedherein) and pledge the same to the repayment of the Series 2011 Loan (as defined herein), theCity also proposes to acquire the interest of Shelby County, Tennessee (the "County") in theMemphis Cook Convention Center (the "Convention Center"). The Pyramid Arena Project, theacquisition of the Pinch District Project and the Lonestar Site together with acquisition of theCounty's interest in the Convention Center are hereinafter collectively referred to as the"Project." See "PLAN OF FINANCE - Estimated Sources and Uses of Funds" and "THEPROJECT" herein.

Purpose of the Series 2011 Bonds

Pursuant to the Indenture, the proceeds of the Series 20 II Bonds will be used to, amongother things, provide funds to make a loan (the "Series 2011 Loan") to the City pursuant to that

2

certain Loan Agreement dated as of September 1, 2011 (the "Loan Agreementll) between the

Issuer and the City. The City will use the proceeds of the Series 2011 Loan to: (a) fmance orreimburse the City for the costs associated with the Series 2011 Project (as defined herein),(b) fund capitalized interest on the Series 2011 Bonds, (c) fund a deposit to the Senior DebtService Reserve Account in an amount equal to the Senior Debt Service Reserve Requirementapplicable to the Series 2011A Senior Taxable Bonds, (d) fund a deposit to the Subordinate DebtService Reserve Account in an amount equal to the Subordinate Debt Service ReserveRequirement applicable to the Series 2011 Subordinate Bonds and (e) pay the costs of issuancewith respect to the Series 2011 Bonds, including the premium for the Policy (as herein defined).See "THE PROJECT" and "PLAN OF FINANCE" herein. The particular uses of each series ofthe Series 2011 Bonds are set forth herein under "PLAN OF FINANCE - Estimated Sources andUses ofFunds" herein.

For a more detailed discussion of the Project and the elements of the Project includedwithin the Series 2011 Project, see "THE PROJECT" herein.

Description of the Series 2011 Bonds

The Series 2011 Bonds are being issued in book-entry only form as fully registered bondsin denominations of $5,000 or any integral multiple thereof, and when issued, shall, as describedherein, be registered in the name of Cede & Co., as Owner and securities depository nominee ofThe Depository Trust Company, New York, New York. Individual purchases of beneficialinterests in the Series 2011 Bonds will be made in book-entry form only through DirectParticipants, as described herein. See "THE SERIES 2011 BONDS - Book-Entry Only" herein.Interest on the Series 2011 Bonds is payable semiannually on each May 1 and November I,commencing on November I, 2011. The Series 2011 Bonds are subject to optional redemption,mandatory sinking fund redemption and extraordinary redemption prior to maturity, all as morefully described herein.

For a more complete description of the Series 2011 Bonds, see "THE SERIES2011 BONDS" herein.

Trustee, Paying Agent and Bond Registrar

Regions Bank, a state banking association duly organized under the laws of the State ofAlabama, will act as trustee, paying agent and bond registrar for the Series 2011 Bonds.

Market Study

In connection with the issuance of the Series 2011 Bonds, RKG Associates, Inc. ("RKG")was retained by the City to prepare the Market Study and Impact Analysis dated July 13,2011attached hereto as Appendix B (the IlMarket Study") with respect to the development of thePyramid Arena Project in downtown Memphis to review the City's capacity to absorb additionalretaiVrestaurantlhotel development, resulting in the creation ofjobs, wages and net new sales taxwithin the City's existing Central Business Improvement District and to provide an estimate ofthe retail sales taxes from new consumer activity at the Pyramid Arena Project resulting in newTDZ Revenues. The boundaries of the Central Business Improvement District are identical tothe boundaries of the existing Memphis Cook Convention Center Tourism Development Zone

3

(the "TDZ"). The Market Study describes the development plans associated with the PyramidArena Project and the Pinch District Project, presents an overview of selected baselinesocioeconomic and retail related indicators utilized in estimating retail sales which in turn formthe basis for estimating net new sales tax revenues to be generated by the Pyramid Arena Project,presents an analysis of the economic impacts and the estimated net new TDZ Revenuesassociated with the proposed components of the Pyramid Arena Project and sets forthassumptions on which such estimates are based. The Pinch District Project is a future phase ofredevelopment and an analysis of new TDZ Revenues to be generated within the Pinch DistrictProject is not included in the Market Study. See "APPENDIX B - MARKET STUDY ANDIMPACT ANALYSIS" herein.

There is no assurance that actual events will correspond with the assumptions on whichsuch estimates are based. Consequently, no guarantee can be made that the estimated net newTDZ Revenues will correspond with the results actually achieved in the future. The MarketStudy should be read in its entirety for an understanding of the estimated net new TDZ Revenuesand the underlying assumptions and inputs. See "INVESTMENTCONSIDERATIONS - Forward-Looking Statements" herein.

Sources of Payment for the Series 2011 Bonds

The Series 20II Bonds are limited obligations of the Issuer secured by an assignment andpledge of the Trust Estate, which consists primarily of the payments and prepayments required tobe made by the City under and pursuant to the Loan Agreement which are to be made from theTDZ Revenues. Pursuant to the Indenture, all of the payments and prepayments by the Cityunder the Loan Agreement have been pledged to the payment of the principal of, premium, ifany, and interest on the Series 2011 Bonds. However, the Series 201lA Senior Taxable Bondsand all Additional Bonds of the same Priority with the Series 201lA Senior Taxable Bonds (the"Senior Bonds") rank and have a right of payment from the TDZ Revenues superior to the Series20II Subordinate Bonds and all Additional Bonds of the same Priority with the Series 20 IISubordinate Bonds (the "Subordinate Bonds") and the Subordinate Bonds rank and have a rightof payment from the TDZ Revenues equal to each other. See "SECURITY AND SOURCES OFPAYMENT FOR THE SERIES 2011 BONDS" herein.

The Series 20 II Bonds will also be secured by the applicable account within the DebtService Reserve Fund to be held in trust for the owners of all of the applicable Series 20IIBonds under the terms of the Indenture. Each account within the Debt Service Reserve Fundwill be fully funded to the applicable Debt Service Reserve Requirement upon the issuance ofthe Series 20II Bonds from the proceeds of the Series 20II Bonds. See "SECURITY ANDSOURCES OF PAYMENT FOR THE SERIES 2011 BONDS - Debt Service Reserve Fund"herein and "APPENDIX A - DEFINITIONS OF CERTAIN TERMS AND SUMMARY OFCERTAlN PROVISIONS OF THE INDENTURE, LOAN AGREEMENT ANDREPLENISHMENT AGREEMENT" attached hereto.

In order to further secure the Subordinate Bonds, the City and the Issuer will enter into aDebt Service Reserve Replenishment Agreement, dated as of September I, 2011 (the"Replenishment Agreement") pursuant to which the City has agreed to appropriate and pay, fromNon-Tax Revenues (as defined therein) following receipt of a Deficiency Notice, money

4

sufficient to restore the Subordinate Debt Service Reserve Account to the Subordinate DebtService Reserve Requirement (collectively, "Replenishment Obligation"). The ReplenishmentObligation is not a general obligation of the City but rather is required to be paid solely from theNon-Tax Revenues appropriated by the City for such payments. The Replenishment Agreementruns in favor of the holders of the Subordinate Bonds only and the holders of the Senior Bondswill have no right of payment from, or a lien upon, the payments made from such appropriatedNon-Tax Revenues. See "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES2011 BONDS - Replenishment Agreement" and "-Non-Tax Revenues" herein and"APPENDIX A - DEFINITIONS OF CERTAIN TERMS AND SUMMARY OF CERTAINPROVISIONS OF THE INDENTURE, LOAN AGREEMENT AND REPLENISHMENTAGREEMENT" attached hereto.

Pursuant to the Indenture, the Issuer may, from time to time, issue Additional Bondswhich will have the rank or right of payment from the TDZ Revenues as provided in theSupplemental Indenture authorizing their issuance. See "APPENDIX A - DEFINITIONS OFCERTAIN TERMS AND SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE,LOAN AGREEMENT AND REPLENISHMENT AGREEMENT" attached hereto.

For a more detailed discussion of such pledge, see "SECURITY AND SOURCES OFPAYMENT FOR THE SERIES 2011 BONDS" herein.

THE SERIES 2011 BONDS, AND THE INTEREST THEREON, DO NOT NOWAND SHALL NEVER CONSTITUTE A CHARGE AGAINST THE GENERAL CREDITOR TAXING POWER OF THE CITY, THE STATE OR ANY POLmCALSUBDIVISION THEREOF INCLUDING, WITHOUT LIMITATION, THE CITY ANDTHE COUNTY AND SUCH SERIES 2011 BONDS AND THE INTEREST PAYABLETHEREON DO NOT NOW AND SHALL NEVER CONSTITUTE A DEBT OF mESTATE OR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING, WImOUTLIMITATION, THE CITY AND THE COUNTY, WITHIN THE MEANING OF ANYCONSTITUTIONAL OR STATUTORY PROVISION WHATSOEVER. NEITHER THESTATE NOR ANY POLITICAL SUBDIVISION THEREOF (OTHER THAN THE CITY)SHALL IN ANY EVENT BE LIABLE FOR THE PAYMENT OF THE PRINCIPAL OF,PREMIUM, IF ANY, OR INTEREST ON THE SERIES 2011 BONDS OR FOR THEPERFORMANCE OF ANY PLEDGE, MORTGAGE, OBLIGATION OR AGREEMENTOF ANY KIND WHATSOEVER WHICH MAY BE UNDERTAKEN BY THE ISSUER.NO BREACH BY THE ISSUER OF ANY SUCH PLEDGE, MORTGAGE, OBLIGATIONOR AGREEMENT MAY IMPOSE ANY LIABILITY, PECUNIARY OR OTHERWISE,UPON THE CITY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOFINCLUDING, WITHOUT LIMITATION, THE CITY AND THE COUNTY, OR ANYCHARGE UPON THEIR GENERAL CREDIT OR TAXING POWER. THE ISSUERHAS NO TAXING POWER.

Bond Insurance

The scheduled payment of principal of and interest on the Series 2011 Bonds when duewill be guaranteed under an insurance policy to be issued concurrently with the delivery of theSeries 2011 Bonds by Assured Guaranty Municipal Corp. See "MUNICIPAL BOND

5

INSURANCE" and "APPENDIX E - SPECIMEN MUNICIPAL BOND INSURANCEPOLICY." As a condition to the issuance of the Policy (as defmed herein), the Indenture and theLoan Agreement grants to Assured Guaranty Municipal Corp., under certain circumstances,certain rights which may include, among others, (i) the right to exercise any right or power, toconsent to amendments, modifications or waivers, or to request or direct the Trustee to take anyactions, which rights it may exercise as if it were, and in stead of, the holders of the Series 2011Bonds, (ii) a right, upon payment made by it under the Policy, of subrogation to the rights of theholders of the Series 2011 Bonds for which such payment was made, and (iii) rights as a thirdparty beneficiary under the Indenture and the Loan Agreement. For a description of certain ofsuch rights, see "APPENDIX A - DEFINITIONS OF CERTAIN TERMS AND SUMMARY OFCERTAIN PROVISIONS OF THE INDENTURE, LOAN AGREEMENT ANDREPLENISHMENT AGREEMENT" attached hereto.

Continuing Disclosure

The Issuer has determined that no financial or operating data concerning the Issuer ismaterial to any decision to purchase, hold, or sell the Series 2011 Bonds, and the Issuer will notprovide any such information. The City has undertaken all responsibility for any continuingdisclosure to Beneficial Owners (as defined herein) of the Series 2011 Bonds, as describedbelow, and the Issuer will have no liability to such Beneficial Owners of the Series 2011 Bondsor any other person with respect to such disclosures.

In order to provide continuing disclosure with respect to the Series 2011 Bonds inaccordance with Rule 15c2-12 (the "Rule") promulgated by the Securities and ExchangeCommission (the "SEC") and as in effect on the date hereof, the City and the Trustee haveentered into a Continuing Disclosure Agreement dated as of September 1, 2011 (the "DisclosureAgreement") for the benefit of the Beneficial Owners of the Series 2011 Bonds. See"CONTINUING DISCLOSURE" herein and "APPENDIX C - FORM OF CONTINUINGDISCLOSURE AGREEMENT" attached hereto. These covenants have been made in order toassist the Underwriters (as defined herein) in complying with the Rule.

The Issuer has not undertaken any responsibility with respect to any reports, notices ordisclosures provided or required under the Indenture, the Loan Agreement or the ContinuingDisclosure Agreement and has no liability to any person with respect to such reports, notices ordisclosures by the City.

Other Information

This Official Statement speaks only as of its date, and the information contained herein issubject to change.

This Official Statement and the Appendices hereto contain brief descriptions of, amongother matters, the Issuer, the City, the Project, the Series 2011 Bonds and the security andsources of payment for the Series 2011 Bonds, the Indenture, the Loan Agreement, theReplenishment Agreement and the Disclosure Agreement. Such descriptions and information donot purport to be comprehensive or definitive. The summaries of various constitutionalprovisions, statutes, the Indenture, the Loan Agreement, the Replenishment Agreement and other

6

documents are intended as summaries only, do not purport to be complete, comprehensive ordefinitive, and are qualified in their entirety by reference to such documents and references to theSeries 2011 Bonds are qualified in their entirety by reference to the forms of the Series 20IIBonds included in the Indenture. After the date of issuance of the Series 2011 Bonds, copies ofthe Indenture, the Loan Agreement, the Replenishment Agreement, the Disclosure Agreementand other relevant documents and information are available upon written request and uponpayment to the City of a charge for copying, mailing and handling, from the City, DeputyDirector ofFinance and Administration, 125 North Main Street, Room 368, Memphis, Tennessee38103. During the period of the offering of the Series 2011 Bonds, copies of such documents areavailable, upon request and upon payment to Morgan Keegan & Company, Inc. of a charge forcopying, mailing and handling, from Morgan Keegan & Company, Inc., 50 North Front Street,Suite 1600, Memphis, Tennessee, 38103.

There are risks associated with an investment in the Series 2011 Bonds. For informationconcerning certain risks relating to future TDZ Revenues of the City, possible limitations on theenforceability of the Indenture, the Loan Agreement or the Replenishment Agreement and otherinvestment risks, see "INVESTMENT CONSIDERAnONS" herein.

THE ISSUER

The Issuer is an affiliate of the Downtown Memphis Commission (the "DMC"), apartnership among the City, the County and the private business community created by separateordinances of the City and the County. The purpose of the DMC is to manage and coordinate theredevelopment of the City's center city area, a central business improvement district, as theeconomic, cultural and government heart of the City and the County. The properties includedwithin the Pyramid Arena Project and the Pinch District Project are located in the City's centercity area.

The Issuer was incorporated on March 17, 1978, pursuant to authorization of thegoverning bodies of the City and the County, and is governed by a board of directors, not toexceed nine members, nominated by the City and County mayors and approved by the CityCouncil and County Commission, respectively. Pursuant to the Act, directors serve withoutcompensation, except that they shall be reimbursed for their actual expenses in and about theperformance of their duties.

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The present members of the board of directors of the Issuer and their respective officesare as follows:

NameRobert Spence Jr.Luke Yancy, IVCarla Peacher-RyanMartin TruittDana BurkettLucy ShawBrandy Johnson-WardWesley GraceWalter Person

ChairmanVice-ChairmanSecretaryTreasurerBoard MemberBoard MemberBoard MemberBoard MemberBoard Member

Office

Except for the information contained under the caption liTHE ISSUERII andIlLITIGATION-The Issuer, II the Issuer has not provided any of the information contained in thisOfficial Statement. The Issuer is not responsible for and does not certify as to the accuracy orsufficiency of the disclosures made herein or any other information provided by the City or anyother person. While the Issuer has no reason to believe that such information is incomplete orinaccurate, the Issuer has not independently investigated or confIrmed the accuracy orcompleteness thereof. The Issuer makes no representation or warranty whatsoever concerningthe economic feasibility of the Project or the creditworthiness of the City and no suchrepresentation or warranty is to be inferred from the issuance of the Series 20II Bonds or theother transactions described or contemplated herein. The Issuer's role is limited to the issuanceof the Series 2011 Bonds.

Neither the members of the board of directors of the Issuer nor any person executing theSeries 2011 Bonds are liable personally on the Series 2011 Bonds by reason of the issuancethereof.

The Issuer has no taxing power, nor does it have the power to pledge the generalcredit or taxing power of the City, the County, the State or any political subdivisionthereof.

THE CITY

The City is located on the east bank of the Mississippi River in the southwest comer ofTennessee. The City is the State's largest city and the county seat of Shelby County. Thecorporate limits contain 324.5 square miles, representing 40.9 percent of the total land area of theCounty. The City ranks as the 18th largest city in the nation. According to the U.S. Bureau ofthe Census, the 2000 population was 650,100.

The City was incorporated as a city in 1826. Memphis operated under a commissionform of government from 1909 until January 1, 1968. At that time, a Mayor-Council form ofgovernment was established. The City Council is composed of thirteen representative citizenswho are elected for four-year terms. Six council members are elected at large in multi-memberdistricts, which territorial boundaries are determined by dividing the City in half with each multi-

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member district consisting of three council member numbered positions. Single memberdistricts, numbered 1-7, elect the remaining seven council members. The City Council elects itsown chairperson, exercises legislative powers, approves budgets and establishes the tax rate.The Mayor is elected to a four-year tenn. The Mayor carries out the policies of the City andappoints City board members, officers and division directors, with City Council approval. TheCity's operating and service departments are organized under the Chief Administrative Officerwho is appointed by and serves at the pleasure of the Mayor. The Mayor may veto action of theCity Council, but a simple majority can override any veto.

The Chief Administrative Officer, under the direction of the Mayor, coordinates theactivities of all administrative divisions of City Government. The Chief Administrative Officeracts as liaison officer between the Mayor and all divisions, bureaus, boards, commissions andauthorities. The directors of all divisions, excluding the City Attorney, report to the ChiefAdministrative Officer on administrative procedures.

The major administrative divisions of the City include: Engineering, Executive, Finance,Fire Services, General Services, Housing and Community Development, Human Resources,Information Systems, Legal, Park Services, Office of Planning and Development, PoliceServices, Public Works/Sanitation, Community Enhancement and Public Services andNeighborhoods.

The Mayor is responsible for all City appointments to boards which serve the City.These include the boards of the Memphis Light, Gas and Water Division; Memphis Area TransitAuthority; Memphis Housing Authority; the DMC; Memphis & Shelby County ConventionCenter Complex; Memphis Brooks Museum of Art; Mid-South Coliseum; Memphis & ShelbyCounty Building Code Advisory Board; and Memphis & Shelby County Public Library Board.The Mayor appoints five of the seven members of the Board of the Memphis-Shelby CountyAirport Authority. Many of these boards also have members appointed by the Mayor of theCounty. Most of the members of these boards are private citizens giving their time to the Citywithout compensation.

THE PROJECT

As part of the Pyramid Arena Project, the City proposes to redevelop the public arena andrelated properties located in the center city area of the City commonly known as the "PyramidArena" as a world-class commercial and retail amenity. The Pyramid Arena Project, uponcompletion, will be a retail tourism destination featuring a proposed 300,000 square foot "BassPro Shops Outdoor World" facility which will include retail space, exhibit/entertainment spaceand an on-site (interior) restaurant along with an approximate 80-room, 41,600 square foot hotel.Potential future development at the Pyramid Arena may also include a parking garage, and outparcel (along North Front Street) development of assorted retail, service and commercialdevelopment. In August 2010, the City entered into a Lease and Development Agreement, datedAugust 10,2010 with Bass Pro Memphis Development Company, LLC ("Bass Pro") pursuant towhich Bass Pro will lease the "Pyramid Arena" and develop thereon a "Bass Pro Shops OutdoorWorld" facility as described above. The lease provides for an initial 20-year term with sevenfive-year renewal periods, for a possible total lease term of 55 years.

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In connection with the Pyramid Arena Project, the City has or will acquire and renovatecertain properties in the vicinity of the Pyramid Arena and located in the center city area of theCity commonly known as the "Pinch District" as part of the Pinch District Project. In order tofacilitate the development of the Pyramid Arena Project and the Pinch District Project, the Cityhas agreed to make certain improvements to the Pyramid Arena and the Pinch District. Theconceptual plan for the Pinch District Project involves the City acting as master developer andengaging a nationally recognized firm to develop certain Pinch District property adjacent to thePyramid Arena Project as a value-oriented lifestyle center.

The properties included within the Pyramid Arena Project and the Pinch District Projectare located in the City's Central Business Improvement District and are within walking distanceand also accessible by the existing downtown trolley service of many downtown attractions andnotable locations.

The Pyramid Arena Project and the Pinch District Project are part of the existing TDZcreated pursuant to Tennessee Code Annotated, Title 7, Chapter 88, commonly known as theConvention Center and Tourism Development Financing Act of 1998 (the "TDZ Statute"), whichpermits the incremental new sales tax generated in the TDZ to form the basis ofa revenue streamand a "fmancing mechanism" utilized to retire bonding debt for public infrastructure investmentin the economic development projects located within the TDZ. In order for the City to obtainsole and unfettered access to and control of the TDZ Revenues and pledge the same to therepayment of the Series 2011 Loan, the City also will acquire the interest of the County in theConvention Center.

The City has determined that the development of the Pyramid Arena Project and thePinch District Project will result in increased economic benefits to the City, including additionalTDZ Revenues, employment opportunities and economic activity.

PLAN OF FINANCE

General

Pursuant to the Indenture, the proceeds of the Series 2011 Bonds will be used to, amongother things, provide funds to make the Series 2011 Loan to the City pursuant to the LoanAgreement. The City will use the proceeds of the Series 2011 Loan to: (a) finance or reimbursethe City for all or a portion of the costs associated with the acquisition, construction,development, renovation and equipping, as applicable, of the Pyramid Arena Project, theConvention Center Acquisition and the Lone Star Acquisition (collectively, the "Series 2011Project"), (b) fund capitalized interest on a portion of the Series 2011 Bonds through August I,2013, (c) fund a deposit to the Senior Debt Service Reserve Account in an amount equal to theSenior Debt Service Reserve Requirement applicable to the Series 2011A Senior Taxable Bonds,(d) fund a deposit to the Subordinate Debt Service Reserve Account in an amount equal to theSubordinate Debt Service Reserve Requirement applicable to the Series 2011 Subordinate Bondsand (e) pay the costs of issuance with respect to the Series 2011 Bonds, including the premiumfor the Policy. The particular uses of each series of the Series 2011 Bonds are set forth belowunder "PLAN OF FINANCE - Estimated Sources and Uses of Funds" herein.

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For a more detailed discussion of the Project and the elements of the Project includedwithin the Series 20 II Project, see "THE PROJECT" herein.

Estimated Sources and Uses of Funds

The table below sets forth the estimated sources and uses of funds to finance the costsassociated with the Series 20II Project and to fund certain other requirements related to theSeries 20II Project and the Series 20II Bonds.

Estimated Sources and Uses of Funds

Series 201lA Series 201lB Series 2011CSenior Taxable Subordinate Tax Subordinate

Bonds Exempt Bonds Taxable Bonds Total

SOURCES

Par Amount $40,540,000.00 $100,245,000.00 $56,150,000.00 $196,935,000.00Net Original Issue PremiumlDiscount 2,101,158.60 2,101,158.60

Total Sources 540,540,000.00 5102,346,158.60 556,150,000.00 5199,036,158.60

USES

Underwriters' Discount $ 399,743.80 $ 1,024,503.90 $ 479,665.50 S 1,903,913.20Bond Insurance Premium 394,797.80 434,817.98 172,637.23 1,002,253.01Deposit to Capitalized Interest Account 1,758,292.14 4,346,511.08 1,634,148.54 7,738,951.76Deposit to Construction Fund 33,000,000.00 86,490,000.00 48,200,000.00 167,690,000.00Deposit to Debt Service Reserve Account 4,638,043.50 9,190,055.12 5,177,857.38 19,005,956.00Deposit to Costs oflssuance Fund(l) 349,122.76 860,270.52 485,691.35 1,695,084.63

Total Uses 540,540,000.00 5102,346,158.60 556,150,000.00 5199,036,158.60

(I) Includes legal and accounting fees, financial advisor fees, rating agency fees, initial Trustee fees, printing costs,and other miscellaneous costs ofissuance and other miscellaneous expenses.

THE SERIES 2011 BONDS

General

The Series 20II Bonds will be dated as of their date of delivery. The Series 20II Bondswill bear interest at the rates specified on the inside cover page, payable semiannually on May Iand November I in each year beginning November I, 2011, and will be in denominations of$5,000 or any integral multiple thereof, the Series 20 II Bonds will mature on November I ineach of the years and in the amounts as specified on the inside cover page. The principal of andredemption premium, if any, and interest on all Series 20 II Bonds is payable at the office of theTrustee, upon the presentation and surrender of the Series 20II Bonds as the same become dueand payable. Payment of the interest on any Series 20 II Bond due on any Interest Payment Datewill be made to the Person appearing on the Bond Register as the registered owner thereof as ofthe close of business of the Trustee on the Record Date for such interest payment and will bepaid (a) by check or draft of the Trustee mailed on the Interest Payment Date to such registeredowner at such owner's address as it appears on the Bond Register or at such other address as is

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furnished to the Trustee in writing by such owner or (b) in the case of an interest payment on theSeries 2011 Bonds to any such registered owner of $1,000,000 or more in aggregate principalamount of Series 2011 Bonds of such series as of the close of business of the Trustee on theRecord Date for a particular Interest Payment Date, by wire transfer to such registered ownerupon written request from such registered owner.

Book-Entry Only System

The information in this section concerning The Depository Trust Company ("DTCIt),New Yorlc, New York and DTCs book-entry system has been obtained from sources that theIssuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof.

DTC will act as securities depository for the Series 20II Bonds. The Series20 II A Bonds will be issued as fully-registered securities registered in the name of Cede & Co.(DTCs partnership nominee) or such other name as may be requested by an authorizedrepresentative of DTC. One fully-registered Series 2011 Bond certificate will be issued for eachmaturity of the Series 20 II Bonds, as set forth on the inside cover of this Official Statement,each in the aggregate principal amount ofsuch maturity, and will be deposited with DTC.

DTC, the world's largest securities depository, is a limited-purpose trust companyorganized under the New York Banking Law, a Itbanking organization" within the meaning ofthe 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 Itclearing agency"registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934.DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equityissues, corporate and municipal debt issues, and money market instruments (from over 100countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitatesthe post-trade settlement among Direct Participants of sales and other securities transactions indeposited securities through electronic computerized book-entry transfers and pledges betweenDirect Participants' accounts. This eliminates the need for physical movement of securitiescertificates. 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 awholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC isthe holding company for DTC, National Securities Clearing Corporation and Fixed IncomeClearing Corporation, all of which are registered clearing agencies. DTCC is owned bymembers of its regulated subsidiaries. Access to the DTC system is also available to others suchas both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearingcorporations that clear through or maintain a custodial relationship with a Direct Participant,either directly or indirectly ("Indirect Participants"). DTC has Standard & Poor's highest rating:AAA. The DTC Rules applicable to its DTC Participants are on file with the Securities andExchange Commission. More information about DTC can be found at http://www.dtcc.com andwww.dtc.org.

Purchases of Series 20II Bonds under the DTC system must be made by or throughDirect Participants, which will receive a credit for the Series 20 II Bonds on DTC's records. Theownership interest of each actual purchaser of each Series 2011 Bond (ItBeneficial Owner") is inturn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not

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receive written confmnation from DTC of their purchase. Beneficial Owners are, however,expected to receive written confirmations providing details of the transaction, as well as periodicstatements of their holdings, from the Direct or Indirect Participant through which the BeneficialOwner entered into the transaction. Transfers of ownership interests in the Series 2011 Bondsare to be accomplished by entries made on the books ofDirect and Indirect Participants acting onbehalf of Beneficial Owners. Beneficial Owners will not receive certificates representing theirownership interests in the Series 20 II Bonds, except in the event that use of the book-entrysystem for the Series 2011 Bonds is discontinued.

To facilitate subsequent transfers, all Series 2011 Bonds deposited by Direct Participantswith DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such othername as may be requested by an authorized representative of DTC. The deposit of the Series2011 Bonds with DTC and their registration in the name of Cede & Co. or such other DTCnominee do not effect any change in beneficial ownership. DTC has no knowledge of the actualBeneficial Owners of the Series 2011 Bonds; DTC's records reflect only the identity of the DirectParticipants to whose accounts such Series 20 II Bonds are credited, which mayor may not bethe Beneficial Owners. The Direct and Indirect Participants will remain responsible for keepingaccount of their holdings on behalfof their customers.

Conveyance of notices and other communications by DTC to Direct Participants, byDirect Participants to Indirect Participants, and by Direct Participants and Indirect Participants toBeneficial Owners will be governed by arrangements among them, subject to any statutory orregulatory requirements as may be in effect from time to time. Beneficial Owners of Series2011 Bonds may wish to take certain steps to augment the transmission to them of notices ofsignificant events with respect to the Series 2011 Bonds, such as redemptions, tenders, defaults,and proposed amendments to the Series 20 II Bond documents. For example, Beneficial Ownersof Series 2011 Bonds may wish to ascertain that the nominee holding the Series 2011 Bonds fortheir benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative,Beneficial Owners may wish to provide their names and addresses to the Trustee, in its capacityas registrar and request that copies of notices be provided directly to them.

Redemption notices shall be sent to DTC. Ifless than all of the Series 2011 Bonds withina series or maturity of a series are being redeemed, DTC's practice is to determine by lot theamount of the interest of each Direct Participant in such series or maturity to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote withrespect to the Series 2011 Bonds unless authorized by a Direct Participant in accordance withDTC's MMI procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issueras soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consentingor voting rights to those Direct Participants to whose accounts Series 2011 Bonds are credited onthe record date (identified in a listing attached to the Omnibus Proxy).

Principal, premium, if any, and interest payments on the Series 2011 Bonds will be madeto Cede & Co., or such other nominee as may be requested by an authorized representative ofDTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds andcorresponding detail information from the Issuer or the Trustee on payable date in accordancewith their respective holdings shown on DTC's records. Payments by Participants to Beneficial

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Owners will be governed by standing instructions and customary practices, as is the case withsecurities held for the accounts of customers in bearer form or registered in "street name," andwill be the responsibility ofsuch Participant and not ofDTC, the Trustee, as trustee, registrar andpaying agent, or the Issuer, subject to any statutory or regulatory requirements as may be ineffect from time to time. Payment of principal, premium, if any, and interest on the Series20 II Bonds, to Cede & Co. (or such other nominee as may be requested by an authorizedrepresentative of DTC) is the responsibility of the Issuer and/or the Trustee, disbursement ofsuch payments to Direct Participants will be the responsibility of DTC, and disbursement of suchpayments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

The Issuer and the Trustee, as trustee, registrar and paying agent, do not have anyresponsibility or obligation to the Direct Participants, Indirect Participants or theBeneficial Owners with respect to (1) the accuracy of any records maintained by DTC orany Direct Participant or Indirect Participant, (2) the payment by DTC or any DirectParticipant or Indirect Participant of any amount due to any Beneficial Owner in respectof the principal of and interest on the Series 2011 Bonds, (3) the delivery or timeliness ofdelivery by DTC or any Direct Participant or Indirect Participant of any notice to anyBeneficial Owner which is required or permitted under the terms of the Indenture to begiven to Bondholders, or (4) any consent given or other action taken by DTC, or itsnominee, Cede & Co., as Bondholders.

Discontinuance of Book-Entry Only System

DTC may discontinue providing its services as securities depository with respect to theSeries 2011 Bonds at any time by giving reasonable notice to the Issuer. Under suchcircumstances, in the event that a successor securities depository is not obtained, Series 2011Bond certificates are required to be printed and delivered directly to the Beneficial Owners of theSeries 2011 Bonds or their nominees.

The Issuer may decide to discontinue use of the system of book-entry transfers throughDTC (or a successor securities depository). In that event, Series 2011 Bond certificates will beprinted and delivered.

So long as Cede & Co. is the registered owner of the Series 20 II Bonds, as nominee ofDTC, references in this Official Statement to the Bondholders of Series 20II Bonds or registeredowners of the Series 20II Bonds means Cede & Co., and does not mean the Beneficial Ownersof the Series 2011 Bonds.

Optional Redemption

Series 2011A Senior Taxable Bonds and Series 2011B Subordinate Tax ExemptBonds. The Series 2011A Senior Taxable Bonds and the Series 2011B Subordinate Tax ExemptBonds maturing on or after November 1, 2022 are subject to optional redemption prior tomaturity upon written direction of the City on or after November I, 2021, out of amountsdeposited in the Optional Redemption Fund, in whole or in part from time to time, on any date,at a redemption price equal to 100% of the principal amount of Series 2011A Senior Taxable

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Bonds or Series 2011 B Subordinate Tax Exempt Bonds to be redeemed, plus accrued interestthereon to the date of redemption.

Series 201 Ie Subordinate Taxable Bonds. The Series 2011C Subordinate Taxable Bondsare not subject to optional redemption prior to maturity, other than as described under liTHESERIES 2011 BONDS - Extraordinary Redemption" below.

Purchase in Lieu of Optional Redemption of Series 201 I Bonds. In lieu of redeemingSeries 2011 Bonds as set forth above, the City may use such money otherwise available underthe Indenture for redemption of Series 2011 Bonds to purchase Series 2011 Bonds in the openmarket at a price not exceeding the redemption price then applicable hereunder, plus accruedinterest thereon to the date of purchase, and direct the Trustee to apply such money to thepayment of the purchase price of the Series 2011 Bonds so purchased. The Series 2011 Bonds sopurchased shall be delivered to the Trustee for cancelation and the Issuer shall receive credit forany such Series 2011 Bonds so purchased in the same manner as if such Series 2011 Bonds hadbeen redeemed.

Mandatory Sinking Fund Redemption

Series 2011A Senior Taxable Bonds. The Series 2011A Senior Taxable Bonds maturingon November 1, 2030 are subject to mandatory Sinking Fund Redemption prior to maturity, inpart, on November 1 of the respective years and in the respective principal amounts set forth inthe table below at a redemption price equal to 100% of the principal amount of such Series2011A Senior Taxable Bonds to be redeemed, plus accrued interest thereon to the date ofredemption:

Series 2011A Senior Taxable Term Bond Maturing November 1, 2030

Year202820292030·

·Final Maturity

PrincipalAmount

$3,875,0004,125,0004,395,000

Series 2011B Subordinate Tax Exempt Bonds. The Series 2011B Subordinate TaxExempt Bonds maturing on November 1,2025 and November 1, 2030 are subject to mandatorySinking Fund Redemption prior to maturity, in part, on November 1 of the respective years andin the respective principal amounts set forth in the table below at a redemption price equal to100% of the principal amount of such Series 2011 B Subordinate Tax Exempt Bonds to beredeemed, plus accrued interest thereon to the date of redemption:

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Series 2011B Subordinate Tax Exempt Term Bond Maturing November 1, 2025 bearing a4% coupon

PrincipalYear Amount2021 $ 745,0002022 6,645,0002023 7,010,0002024 7,385,0002025- 7,775,000

*Final Maturity

Series 2011B Subordinate Tax Exempt Term Bond Maturing November 1, 2025 bearing a5.25% coupon

PrincipalYear Amount2021 $ 240,0002022 2,135,0002023 2,250,0002024 2,375,0002025- 2,500,000

·Final Maturity

Series 2011B Subordinate Tax Exempt Term Bond Maturing November 1,2030 bearing a4.50% coupon

PrincipalYear Amount2026 $3,760,0002027 3,985,0002028 4,225,0002029 4,475,0002030- 4,740,000

·Final Maturity

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Series 20118 Subordinate Tax Exempt Term Bond Maturing November 1, 2030 bearing a5.25% coupon

Year20262027202820292030·

*Final Maturity

PrincipalAmount

$7,100,0007,530,0007,975,0008,450,0008,945,000

Series 2011C Subordinate Taxable Bonds. The Series 2011C Subordinate Taxable Bondsare not subject to mandatory Sinking Fund Redemption prior to maturity.

In the event the Series 2011 Bonds of a series that mature on a specific date have beenfully paid and sufficient money is on deposit in the Debt Service Fund to redeem Series 2011Bonds of such series that mature on that specific maturity date, then such money will be appliedto payment of Series 2011 Bonds of the same series that mature on the next succeeding maturitydate in the order above set forth. The Series 2011 Bonds will be redeemed by the Trusteepursuant to this provision without any notice from or direction by the Issuer or the City.

The principal amount of any Series 2011 Bonds of a series and maturity entitled tomandatory Sinking Fund Redemption purchased with money in the Debt Service Fund inaccordance with the provisions of the Indenture, as applicable, will be credited against and insatisfaction of the mandatory Sinking Fund Redemption of the Series 2011 Bonds of such seriesand maturity payable on the November 1 next succeeding the date such Series 2011 Bond wereso purchased. In addition, the principal amount of Series 2011 Bonds of a series and maturityentitled to mandatory Sinking Fund Redemption that are (a) redeemed at the option of the Issuer,(b) purchased by the City or the Issuer and delivered to the Trustee for cancellation or (c)defeased in accordance with the Indenture will be applied in satisfaction, in whole or in part, ofone or more mandatory Sinking Fund Redemptions as the City, in its discretion, may direct, inwriting, to the Trustee.

Extraordinary Redemption

The Series 2011 Bonds are subject to extraordinary redemption prior to maturity uponwritten direction of the City at a redemption price equal to 100% of the principal amount ofSeries 2011 Bonds to be redeemed, plus accrued interest thereon to the date of redemption:

(a) in whole at any time if, as a result of any changes in the Constitution of the Stateor the Constitution of the United States of America or of legislative or administrative action(whether state or federal) or by final direction, judgment or order of any court or administrativebody (whether state or federal) entered after the contest thereof by the City in good faith, theLoan Agreement or the Indenture becomes void or unenforceable or impossible of performancein accordance with the intent and purposes of the parties as expressed in the Loan Agreement orthe Indenture; or

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(b) in whole or in part at any time, in any order detennined by the City, upon anydamage, destruction or condemnation of the Project or part thereof or a taking of the title to, orthe temporary use of the Project or part thereof, under the power ofeminent domain, in each casefrom the proceeds of any property insurance, condemnation award or award for such taking thatare not applied to the restoration of the Project.

The Series 2011 Bonds are also subject to extraordinary redemption prior to maturityupon written direction of the City, in any order detennined by the City, at a redemption priceequal to 100% of the principal amount of the Series 2011 Bonds to be redeemed, plus accruedinterest thereon to the date of redemption, in whole at any time, if either the Convention Centerceases to qualify as a "qualified public use facility," as defmed under the TDZ Statute, or it is nolonger used as a convention and exposition facility.

Selection of Bonds to be Redeemed

Series 2011 Taxable Bonds. If less than all of the Outstanding Series 2011 TaxableBonds of a maturity are to be redeemed pursuant to the Indenture, the Series 2011 TaxableBonds of such maturity to be redeemed will be selected as follows: subject to the followingparagraph, any redemption of less than all of a maturity of Series 2011 Taxable Bonds will beallocated among the Holders of such Series 2011 Taxable Bonds as nearly as practicable pro ratain proportion to the principal amounts of Series 2011 Taxable Bonds owned by each Holder,subject to the authorized denominations applicable to the Series 2011 Taxable Bonds. Thecalculation ofsuch proportion will be based on the following formula:

(principal to be redeemed) x (principal owned by a Holder)(principal amount Outstanding)

If the Series 2011 Taxable Bonds to be redeemed are registered in book-entry fonn andso long as DTC is the sole registered Holder of the Series 2011 Taxable Bonds of the maturity tobe redeemed, it is the Issuer's intent that the Series 2011 Taxable Bonds of such maturity orportions thereof to be redeemed will be selected on a pro rata pass-through distribution ofprincipal basis in accordance with DTC procedures then in effect with respect to redemptions ofless than all of the Outstanding Series 2011 Taxable Bonds of maturity. However, neither theIssuer nor the City can provide any assurance that DTC, DTCls direct and indirect participants orany other intennediary will allocate the redemption of Series 2011 Taxable Bonds on such basis.If the DTC operational arrangements do not allow for the redemption of the Series 2011 TaxableBonds on a pro rata pass-through distribution of principal basis, then the Series Taxable Bondsofa maturity to be redeemed will be selected, in accordance with DTC procedures, by lot. If, atthe time of redemption of the Series 2011 Taxable Bonds on a pro rata pass-through distributionof principal basis, the Trustee has failed to notify DTC that the Series 2011 Taxable Bonds to beredeemed are to be redeemed pursuant to DTC's pro rata pass-through distribution of principalprocedures, or has failed to furnish to DTC the factor to be applied by it in determining the prorata allocation of the principal to be redeemed, then the Series 2011 Taxable Bonds ofa maturityto be redeemed may be selected, in accordance with DTC procedures, by lot.

Series 20nB Subordinate Tax Exempt Bonds. Ifless than all of the Outstanding Series2011B Subordinate Tax Exempt Bonds of a maturity are to be redeemed pursuant to the

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Indenture, the Series 2011B Subordinate Tax Exempt Bonds of such maturity to be redeemedwill be selected by the Trustee at random in such manner as the Trustee, in its discretion, maydeem fair and appropriate.

Notice of Redemption

Series 2011 Bonds will be called for redemption or purchased by the Trustee pursuant tothe Indenture upon receipt by the Trustee at least 60 days prior to the redemption or purchasedate of a Written Request of the City requesting such redemption or purchase; provided,however, that the City may give such Written Request at such later time as may be approved bythe Trustee, in its sole discretion, but in no event may such Written Request be given less than 30days prior to the redemption date. Such Written Request is to specify the series, maturity andprincipal amount of the Series 2011 Bonds so to be called for redemption or of the Series 2011 BBonds so to be purchased, the applicable redemption price or prices and the provision orprovisions above specified pursuant to which such Series 2011 Bonds are to be called forredemption.

Notice of the call for any redemption is to state, among other things, that on theredemption date for such Series 2011 Bonds there will become due and payable upon each Series2011 Bond to be redeemed the redemption price thereof, or the redemption price of the specifiedportion of the principal amount thereof in the case of a Series 2011 Bond to be redeemed in partonly, with interest accrued and unpaid to such date, and that from and after such date, interestthereon will cease to accrue and be payable. The redemption notice will be given by mailing acopy ofsuch notice of redemption by first class mail, postage prepaid, to the registered owners ofthe Series 2011 Bonds to be redeemed to the address shown on the Bond Register not less thanthirty or more than 60 days prior to the redemption date; provided, however, that failure to givesuch notice by mailing or a defect in the notice or the mailing as to any Series 2011 Bond willnot affect the validity of any proceedings for redemption as to any other Series 2011 Bond withrespect to which notice was properly given. Except for a mandatory Sinking Fund Redemptionpursuant to the Indenture, prior to the date that the redemption notice is first mailed as required,funds will be placed with the Trustee to pay the principal of such Series 2011 Bonds, the accruedinterest thereon to the redemption date and the premium, if any, thereon. If a notice ofredemption is mailed in accordance with the provisions of the Indenture, the Series 2011 Bonds,or portions thereof, thus called will not bear interest after the applicable Redemption Date, willno longer be protected by the Indenture and will not be deemed to be Outstanding under theprovisions of the Indenture. The Trustee will redeem, in the manner provided in the Indenture,such an aggregate principal amount of such Series 2011 Bonds at the principal amount thereofplus accrued interest thereon to the redemption date and premium, if any, as will exhaust asnearly as practicable such funds placed on deposit with the Trustee to pay principal, premium, ifany, and interest on such Series 2011 Bonds. At the direction of the City, such funds may beinvested in United States Government Obligations until needed for payment of the redemptionprice.

Transfer and Exchange of Series 2011 Bonds

Upon surrender for transfer of any Series 2011 Bond at the designated corporate trustoffice of the Trustee, the Issuer will execute and the Trustee will authenticate and deliver in the

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name of the transferee or transferees a new fully registered Series 2011 Bond or Series 2011Bonds of the same series and maturity and of authorized denomination for the aggregateprincipal amount which the registered owner is entitled to receive. Any Series 2011 Bond orSeries 2011 Bonds may be exchanged at the designated corporate trust office of the Trustee for alike aggregate principal amount of Series 2011 Bond or Series 2011 Bonds of the same seriesand maturity of other authorized denominations. No service charge will be imposed for anyexchange or transfer of Series 2011 Bonds. The Issuer and the Trustee may, however, requirepayment by the person requesting an exchange or transfer of Series 2011 Bonds of a sumsufficient to cover any tax, fee or other governmental charge that may be imposed in relationthereto, except in the case of the issuance of a Series 2011 Bond or Series 2011 Bonds for theunredeemed portion of a Bond surrendered for redemption. New Series 2011 Bonds deliveredupon any transfer or exchange will be valid obligations of the Issuer, evidencing the same debt asthe Series 2011 Bonds surrendered, will be secured by the Indenture and will be entitled to all ofthe security and benefits thereof to the same extent as the Series 2011 Bond surrendered. TheIssuer and the Trustee may, subject to the provisions of the Indenture, treat the registered ownerof any Series 2011 Bond as the absolute owner thereof for all purposes, whether or not suchSeries 2011 Bond is overdue, and will not be bound by any notice to the contrary. Any Series2011 Bond surrendered for the purpose of payment or retirement or for exchange or transfer orfor replacement pursuant to the Indenture, will be cancelled upon surrender thereof to the Trusteeor any paying agent.


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DEBT SERVICE REQUIREMENTS FOR THE SERIES 2011 BONDS

The following table sets forth for each Fiscal Year the total principal and interestpayment requirements with respect to the Series 20 II Bonds and total debt service requirementson the Series 20II Bonds.

FiscalYear ending

June 3020122013201420152016201720182019202020212022202320242025202620272028202920302031

Principal

$ 6,970,000.007,225,000.007,520,000.007,850,000.008,215,000.009,030,000.009,485,000.009,985,000.00

11,515,000.0012,150,000.0012,815,000.0013,515,000.0014,295,000.0015,160,000.0016,075,000.0017,050,000.0018,080,000.00

$196,935,000.00

Interest(1)(2)

$ 2,470,3764,214,8607,376,0058,363,2628,209,8348,017,5197,790,4227,535,9117,243,8516,901,0186,507,7716,047,8515,531,4774,983,0174,400,5413,742,9953,003,8992,210,6191,362,512

462,978$106,376,716

Total Debt ServiceRequirements(1)(2)

$ 2,470,3764,214,8607,376,005

15,333,26215,434,83415,537,51915,640,42215,750,91116,273,85116,386,01816,492,77117,562,85117,681,47717,798,01717,915,54118,037,99518,163,89918,285,61918,412,51218,542,978

$303,311,716

(I) Debt service net ofcapitalized interest.(2) Totals may not add due to rounding.Source: Morgan Keegan & Company, Inc.

MUNICIPAL BOND INSURANCE

Bond Insurance Policy

Concurrently with the issuance of the Series 2011 Bonds, Assured Guaranty MunicipalCorp. ("AGM") will issue its Municipal Bond Insurance Policy for the Series 2011 Bonds (the"Policy"). The Policy guarantees the scheduled payment of principal of and interest on theSeries 2011 Bonds when due as set forth in the form of the Policy included as Appendix E to thisOfficial Statement.

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The Policy is not covered by any insurance security or guaranty fund established underNew York, California, Connecticut or Florida insurance law.

Assured Guaranty Municipal Corp.

AGM is a New York domiciled financial guaranty insurance company and a whollyowned subsidiary of Assured Guaranty Municipal Holdings Inc. ("Holdings"). Holdings is anindirect subsidiary of Assured Guaranty Ltd. ("AGL"), a Bermuda-based holding companywhose shares are publicly traded and are listed on the New York Stock Exchange under thesymbol"AGO." AGL, through its operating subsidiaries, provides credit enhancement productsto the U.S. and global public finance, infrastructure and structured finance markets. Noshareholder ofAGL, Holdings or AGM is liable for the obligations ofAGM.

AGM's fmancial strength is rated "AA+" (negative outlook) by Standard and Poor'sRatings Services, a Standard & Poor's Financial Services LLC business ("S&P") and "Aa3"(negative outlook) by Moody's Investors Service, Inc. ("Moody's"). An explanation of thesignificance of the above ratings may be obtained from the applicable rating agency. The aboveratings are not recommendations to buy, sell or hold any security, and such ratings are subject torevision or withdrawal at any time by the rating agencies, including withdrawal initiated at therequest of AGM in its sole discretion. In addition, the rating agencies may at any time changeAGM's long-term rating outlooks or place such ratings on a watch list for possible downgrade inthe near term. Any downward revision or withdrawal ofany ofthe above ratings, the assignmentof a negative outlook to such ratings or the placement of such ratings on a negative watch listmay have an adverse effect on the market price of any security guaranteed by AGM. AGM doesnot guarantee the market price of the securities it insures, nor does it guarantee that the ratings onsuch securities will not be revised or withdrawn.

Current Financial Strength Ratings

On August 25, 2011, S&P published Bond Insurance Rating Methodology andAssumptions, a criteria article that follows S&P's Request for Comment: Bond InsuranceCriteria, published January 24, 2011. The criteria described in the article update and supersedeS&P's previous criteria for rating bond insurers. S&P noted that the impact of new bondinsurance rating criteria could result in financial strength ratings on investment-grade bondinsurers (such as AGM) being lowered by one or more rating categories. The article states thatthe criteria are effective immediately and that S&P expects any rating changes as a result of thenew methodology and assumptions would occur after its review of third quarter 2011 financialstatements, but no later than November 30, 20 II. However, as noted above, a rating agency mayplace a company's financial strength rating on credit watch for a downgrade at any time. For thecomplete text of S&P's comments, both publications are available atwww.standardandpoors.com.

AGM and its affiliates are currently reviewing S&P's revised bond insurance ratingcriteria. The final criteria contain a number of changes from the proposals submitted in January2011 for comment from market participants, including a new Largest Obligors Test that was notincluded in the January 2011 Request for Comment. This test appears to have the effect of

22

significantly reducing AGM and its affiliates' allowed single risk limits and limiting theirfinancial strength rating level.

On August 8, 2011, S&P published a Research Update in which it affirmed the "AA+"financial strength rating of AGM. At the same time, S&P revised the rating outlook on AGM tonegative from stable. Reference is made to the Research Update, a copy of which is available atwww.standardandpoors.com. for the complete text ofS&P's comments.

On December 18, 2009, Moody's issued a press release stating that it had affirmed the"Aa3" insurance fmancial strength rating of AGM, with a negative outlook. Reference is madeto the press release, a copy of which is available at www.moodys.com. for the complete text ofMoody's comments.

There can be no assurance as to any further ratings action that S&P or Moody's may takewith respect to AGM.

For more information regarding AGM's financial strength ratings and the risks relatingthereto, see AGL's Annual Report on Form 10-K for the fiscal year ended December 31, 2010,which was filed by AGL with the Securities and Exchange Commission (the "SEC") on March 1,2011, AGL's Quarterly Report on Form lO-Q for the quarterly period ended March 31, 2011,which was filed by AGL with the SEC on May 10, 2011, and AGL's Quarterly Report onForm lO-Q for the quarterly period ended June 30,2011, which was filed by AGL with the SECon August 9, 2011.

Capitalization ofAGM

At June 30, 2011, AGM's consolidated policyholders' surplus and contingency reserveswere approximately $3,050,613,849 and its total net unearned premium reserve wasapproximately $2,254,726,646, in each case, in accordance with statutory accounting principles.

Incorporation ofCertain Documents by Reference

Portions of the following documents filed by AGL with the SEC that relate to AGM areincorporated by reference into this Official Statement and shall be deemed to be a part hereof:

(i) the Annual Report on Form 10-K for the fiscal year ended December 31, 2010(which was filed by AGL with the SEC on March 1,2011);

(ii) the Quarterly Report on Form 10-Q for the quarterly period ended March 31,2011 (which was filed by AGL with the SEC on May 10,2011); and

(iii) the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011(which was filed by AGL with the SEC on August 9, 2011).

All information relating to AGM included in, or as exhibits to, documents filed by AGLpursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, after thefiling of the last document referred to above and before the termination of the offering of theSeries 2011 Bonds shall be deemed incorporated by reference into this Official Statement and to

23

be a part hereof from the respective dates of filing such documents. Copies of materialsincorporated by reference are available over the internet at the SEC's website athttp://www.sec.gov, at AGL's website at http://www.assuredguaranty.com, or will be providedupon request to Assured Guaranty Municipal Corp.: 31 West 52nd Street, New York, New York10019, Attention: Communications Department (telephone (212) 826-0100).

Any information regarding AGM included herein under the caption "MUNICIPALBOND INSURANCE - Assured Guaranty Municipal Corp." or included in a documentincorporated by reference herein (collectively, the "AGM Information") shall be modified orsuperseded to the extent that any subsequently included AGM Information (either directly orthrough incorporation by reference) modifies or supersedes such previously included AGMInformation. Any AGM Information so modified or superseded shall not constitute a part of thisOfficial Statement, except as so modified or superseded.

AGM makes no representation regarding the Series 2011 Bonds or the advisability ofinvesting in the Series 2011 Bonds. In addition, AGM has not independently verified, makes norepresentation regarding, and does not accept any responsibility for the accuracy or completenessof this Official Statement or any information or disclosure contained herein, or omitted herefrom,other than with respect to the accuracy of the information regarding AGM supplied by AGM andpresented under the heading "MUNICIPAL BOND INSURANCE."

SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2011 BONDS

Limited Obligations

The Series 2011 Bonds are limited special obligations of the Issuer. In accordance withthe Indenture, the Series 2011 Bonds are payable solely from the Trust Estate.

THE SERIES 2011 BONDS, AND THE INTEREST THEREON, DO NOT NOWAND SHALL NEVER CONSTITUTE A CHARGE AGAINST THE GENERAL CREDITOR TAXING POWER OF THE CITY, THE STATE OR ANY POLITICALSUBDIVISION THEREOF INCLUDING, WITHOUT LIMITATION, THE CITY ANDTHE AND SUCH SERIES 2011 BONDS AND THE INTEREST PAYABLE THEREONDO NOT NOW AND SHALL NEVER CONSTITUTE A DEBT OF THE STATE OR ANYPOLITICAL SUBDIVISION THEREOF, INCLUDING, WITHOUT LIMITATION, THECITY AND THE COUNTY, WITHIN THE MEANING OF ANY CONSTITUTIONALOR STATUTORY PROVISION WHATSOEVER. NEITHER THE STATE NOR ANYPOLITICAL SUBDIVISION THEREOF (OTHER THAN THE CITY) SHALL IN ANYEVENT BE LIABLE FOR THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IFANY, OR INTEREST ON THE SERIES 2011 BONDS OR FOR THE PERFORMANCEOF ANY PLEDGE, MORTGAGE, OBLIGAnON OR AGREEMENT OF ANY KINDWHATSOEVER WIDCH MAY BE UNDERTAKEN BY THE ISSUER. NO BREACHBY THE ISSUER OF ANY SUCH PLEDGE, MORTGAGE, OBLIGATION ORAGREEMENT MAY IMPOSE ANY LIABILITY, PECUNIARY OR OTHERWISE,UPON THE CITY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOFINCLUDING, WITHOUT LIMITATION, THE CITY AND THE COUNTY, OR ANY

24

CHARGE UPON THEIR GENERAL CREDIT OR TAXING POWER. THE ISSUERHAS NO TAXING POWER.

Trust Estate

Pursuant to the Indenture, the Issuer will pledge, transfer and assign to the Trustee all ofits right, title and interest in and to the Trust Estate to secure the Series 2011 Bonds. The TrustEstate, as described in the Indenture, consists primarily of the following (including, withoutlimitation, the right to enforce any of the terms thereof):

(a) All right, title and interest of the Issuer in and to the Loan Agreement and allamounts payable to the Issuer under the Loan Agreement and all security therefor(excluding Unassigned Rights);

(b) All right, title and interest of the Issuer in and to the funds, accounts andsubaccounts established pursuant to the Indenture and the assets thereof andincome and earnings thereon, except that the Senior Debt Service ReserveAccount of the Debt Service Reserve Fund, each subaccount therein, the assetsthereof and the income and earnings thereon shall be for the sole benefit of theHolders of Outstanding Senior Bonds and that the Subordinate Debt ServiceReserve Account of the Debt Service Reserve Fund, each subaccount therein, theassets thereof and the income and earnings thereon shall be for the sole benefit ofthe Holders ofOutstanding Subordinate Bonds;

(c) All right, title and interest in and to the Replenishment Agreement and allamounts payable to the Issuer under the Indenture, solely for the benefit of theHolders of Outstanding Subordinate Bonds, including the Series 2011Subordinate Bonds;

(d) Any and all other property of every kind and nature from time to time hereafter,by delivery or by writing of any kind, conveyed, pledged, assigned or transferredas and for additional security under the Indenture by the Issuer or the City or byanyone on their behalf to the Trustee, including without limitation funds of theCity held by the Trustee as security for the Bonds.

The Series 2011A Senior Taxable Bonds and any other Outstanding Senior Bonds rankand have a right of payment from the Trust Estate, superior to the Series 2011 SubordinateBonds and any other Outstanding Subordinate Bonds and the Series 2011 Subordinate Bonds andany other Outstanding Subordinate Bonds rank and have a right of payment from the Trust Estateequal to each other.

TDZ Revenues

Pursuant to the TDZ Statute, the City is entitled to receive a distribution of state and localsales and use taxes, authorized pursuant to the TDZ Statute, resulting from sales made in theTDZ to support indebtedness with respect to the Convention Center (and any qualified ancillarystructures and facilities and associated developments) for a period equal to the earlier of: (a)30 years from the anniversary of the commencement ofoperations of the Convention Center as a

25

"qualified public use facility" (as defined in the TDZ Statute); (b) the date the cumulativeamount apportioned and distributed to the City equals the cost of the Convention Center or anyother "qualified public use facility" financed with indebtedness secured by such state and localsales and use taxes plus any interest on such indebtedness; or (c) the Convention Center or anysuch other "qualified public use facility" ceases to be a "qualified public use facility" inaccordance with the provisions of the TDZ Statute ("TDZ Revenues"). The purpose of the TDZStatute is to allocate from the State to local governments the revenues resulting from sales taxgrowth within tourism development zones as a result of the construction of major, tourist-relatedpublic works projects, but only to the extent that the growth in the tourism development zoneexceeds that of the sales tax growth in the broader boundaries of the local governments.

The amount of TDZ Revenues allocated to the City as a result of the Convention Centerand its ancillary facilities is calculated on an annual basis in the following manner. The Stateallocates to the City an amount equal to the incremental increase in (a) state and local sales taxcollections in the TDZ in the then-current fiscal year of the State over (b) state and local sales taxcollections in the TDZ (the "Base Year TDZ Collections") in the State's fiscal year preceding theopening of the Convention Center (the "Base Year"); provided, however, Base Year TDZCollections will, each year, be adjusted up or down in proportion to the percentage increase ordecrease in state and local sales tax collections from the Base Year within the County as a whole.Increases in the State rate are not taken into account for these purposes. The State's fiscal yearcurrently ends on June 30 and the TDZ Statute requires the State to allocate TDZ Revenues tothe City within 90 days of the end ofthe State's fiscal year.

The TDZ was approved by the State in 2001 and includes all of the area within the City'sCentral Business Improvement Districts which include the areas which encompass the PyramidArena Project and the Pinch District Project. Pursuant to the TDZ Statute, the City has qualifiedthe Convention Center as a "qualified public use facility" and the Pyramid Arena Project and thePinch District Project as qualified ancillary facilities. The Convention Center commencedoperations as a public use facility during the Fiscal Year ended June 30, 200 I; accordingly,under the TDZ Statute, the City received its first distribution of TDZ Revenues in September200 I and may be entitled to receive TDZ Revenues until September 2030. See "INVESTMENTCONSIDERATIONS - Considerations Relating to TDZ Revenues" herein.

In connection with the issuance of the Series 20 II Bonds, the City received approvalfrom the State of an application and debt service schedule which entitles the City to receive TDZRevenues in an amount at least equal to the amount of the debt service on the Series 20II Bondsand the existing Borrower's Obligations identified on a schedule to the Indenture during a 30year period which began during the Fiscal Year ended June 30, 2002, unless earlier terminated inaccordance with the TDZ Statute. Pursuant to the TDZ Statute, the City's right to receivecontinuing distributions of TDZ Revenues with respect to the Convention Center and itsancillary facilities may be terminated by the State at any time the cumulative amount of TDZRevenues apportioned and distributed to the City equals the cost of the Convention Center andany such ancillary facilities financed with indebtedness secured by TDZ Revenues plus anyinterest on such indebtedness, all as reflected in a debt service schedule provided by the City andapproved by the State. However, prior to the issuance of Additional Bonds or the use of TDZRevenues to payor reimburse the City for Costs of the Project, the City is required to: (a) obtainthe approval by the State of an amended debt service schedule reflecting the additional debt

26

service associated with such Additional Bonds or Costs of the Project and (b) in the case of Costsof the Project to be paid from TDZ Revenues deposited in the Surplus Fund~ certify to theTrustee and the Issuer tha~ after any such application of such money~ the TDZ Revenues whichthe City is legally entitled to receive are projected to be sufficient to pay the principal of andinterest on the Bonds then Outstanding and all other obligations then legally authorized to bepaid from TDZ Revenues.

Historical and Projected Debt Service Coverage

The tables below present historical receipts of TDZ Revenues for the Fiscal Years endingJune 30~ 2002 through June 30, 2010, actual debt service for the Series 2011 Bonds~ projectedTDZ Revenues and debt service coverage. Since all projections are based on estimates andassumptions which are inherently subject to uncertainty and variations depending on futureevents~ there are likely to be differences between the projections and actual results~ and thedifferences may be material. See "MARKET STUDY" and "INVESTMENTCONSIDERAnONS - Considerations Relating to TDZ Revenues" herein andAPPENDIX B - MARKET STUDY AND IMPACT ANALYSIS attached hereto.

Schedule of Historical Receipts of TDZ Revenues(l)

Fiscal YearEnded (June

30)2002200320042005200620072008200920102011

TDZ Revenues$ 3,617,750

3~676,709

3,439~872

7~630,819

7~976,136

9~384,307

10,141,09711,872,34815,522,63112,821,734

(I)TDZ Revenues are received by the City in one lump sum payment from the State inSeptember of each year based on incremental state and local sales tax collections in theTDZ by the State as ofJune 30 ofthat same year.

Source: City ofMemphis. Tennessee.


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Projected TDZ Revenues and Debt Service Coverage(S)

Senior DebtService SuborcUDlIte

Totol Series Coverage Senior Debt Debt

EstilDllted Existing lOll A Ratio from Service ServiceFiscal TDZ Obligations Senior Current Coverage Series 1011 CoverllgeYear Revenues Projected TDZ PlIidfrom TlWlble Total Senior TDZ Ratio from SuborcUnlite Ratio from

EocUng from Current Revenues from TDZ Bonds Debt Debt Revenues I1I1TDZ Bonds Debt oIITDZJune 30 Sourees"M1l 1111 Sources"MZI Revenuesl)) Service") Service'JM~ only'! Revenuesl~ Service") Revenues")

2012 $ 11.948,423 $ 11.948,423 $1,365.930 S 561,270 $ 1.927.200 6.20x 6.20x $ 1,909,106 3.11x

2013 11,948,423 11,948,423 1,362,131 957.618 2.319.749 5.15x 5.15x 3,257.243 2.14x

2014 11,948,423 11.948,423 1,360,957 1,675.831 3.036,788 3.93x 3.93x 5,700,175 l.37x

2015 11,948,423 20,262,437 1.367,353 2.697,177 4,064,530 2.94x 4.99x 12.636,085 1.21x

2016 11,948,423 20,387,147 1.365.752 2.728,451 4,094,203 2.92x 4.98x 12,706,383 1.21x

2017 11,948,423 20,513,728 1,366,517 2,749.995 4,116.512 2.9Ox 4.98x 12,787.524 1.2lx

2018 11.948,423 20.642.208 1,369,310 2,772,293 4,141.603 2.88x 4.98x 12.868.129 1.21x

2019 11.948.423 20,772,614 1,368,883 2,805.780 4.174,663 2.86x 4.98x 12.945.131 I.2lx

2020 11.948.423 20,904,977 955.232 3.242.762 4.197,994 2.85x 4.98x 13.031.089 I.2lx

2021 11.948,423 21.039,326 951.866 3.271,061 4,222,927 2.83x 4.98x 13,114,957 L2l:1l

2022 11,948,423 21,175,689 956,796 3,290,881 4,247,677 2.81x 4.99x 13,201,890 L2b

2023 11.948,423 21,314,098 4,279,720 4,279.720 2.79x 4.98x 13,283,13\ L2b

2024 11.948.423 21,454,583 4,306,552 4,306.552 2.77x 4.98x 13,374,925 1.2lx

2025 11.948.423 21,597,176 4,332,398 4,332,398 2.76x 4.99x 13.465.619 1.21x

2026 11,948,423 21,741,907 4,366,091 4.366,091 2.74x 4.98x 13.549,450 L21x

2027 11,948,423 21.888,809 4,395,645 4.395,645 2.72x 4.98x 13.642,350 L21x

2028 11,948,423 22.037.915 4,424.849 4.424,849 2.70x 4.98x 13.739,050 L21x

2029 11,948,423 22.189.260 4.453,300 4.453,300 2.68x 4.98x 13.832,319 L21x

2030 11,948,423 22,342.870 4.482,100 4,482,100 2.67x 4.98x 13.930,413 L21x

2031 11.948.423 22,498,787 4,5\6,522 4,516,522 2.65x 4.98x 14,026,456 L21x

Totals 5138.968,465 5398.608,805 513,790,727 566,310,294 580,101,021 5237,001,421

(I) TDZ Revenues are received by the City in one lump sum payment from the State in September ofeach year based on incremental stateand local sales tax collections in the TDZ by the State as ofJune 30 of that same year. Estimated TDZ Revenues from current sourcesare as estimated by the City based on actual previous receipts of TDZ Revenues and is held constant throughout the forecast period.Projected TDZ Revenues from all sources are as projected by RKG in the Market Study attached hereto as Appendix B based on theestimated TDZ Revenues from current sources for the Fiscal Years ending 2012 through 2014 and incremental new TDZ Revenues tobe generated solely by the Pyramid Arena Project for the Fiscal Years ending 2015 through 2031 which is inflated annually at a rate of1.5%. See "APPENDIX B - MARKET STIJDY AND FINANCIAL ANALYSIS" herein.

(2) Pursuant to the TDZ Statute. the last Fiscal Year in which TDZ Revenues may be received is the Fiscal Year ending June 30, 2031.which last distribution is anticipated to be received from the State in September 2030.

(l) Total existing obligations paid from TDZ Revenues consists of current existing obligations of the City related to the expansion of theConvention Center, including an annual payment to the Convention and Visitors Bureau, all of which are included on the list of theBorrower's Obligations identified on a schedule to the Indenture and will be paid from amounts on deposit in the Revenue Fund on apari passu basis with the Senior Bonds. See "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2011 BONDS· FlowofFunds" herein.

(') Debt service net ofcapitalized interest.(5) Totals may not add due to rounding.Source: City ofMemphis. Tennessee. RKG Associates, Inc. and Morgan Keegan & Company, Inc.

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Replenishment Agreement

Not later than by May 15 of each Fiscal Year the Trustee is required by the Indenture togive notice to the City setting forth the amount, if any, by which tile amount on deposit in theSubordinate Debt Service Reserve Account on the preceding April 30 is less than the thenSubordinate Debt Service Reserve Requirement (a "Deficiency Notice"). Upon receipt of aDeficiency Notice the City, bl the later of October. 15 of a~y y~ar in .whic~ it rec~ives .aDeficiency Notice and the 60 day after such Deficlcncy Notice IS received, IS reqUired, In

accordance with the Replenishment Agreement, to pay to the Trustee for deposit in theSubordinate Debt Service Reserve Account, the amount set forth in such Deficiency Notice asthe amount by which the amount on deposit in the Subordinate Debt Service Reserve Account onthe preceding April 30 was less than the Subordinate Debt Service Reserve Requirement on suchApril 30. The Replenishment Obligation is not a general obligation of the City but rather isrequired to be paid solely from the Non-Tax Revenues appropriated by the City for suchpayments. In accordance with the Replenishment Agreement, the City has agreed that, by thelater of October 5 of any year in which it is receives a Deficiency Notice and the 45 lh day aftersuch notice is received, it will, in its budget for the Fiscal Year during which such October 5occurs, appropriate for payment to the Trustee Non-Tax Revenues in an amount sufficient to payany Replenishment Obligation due thereunder. The failure of the Trustee to give timely notice tothe City of a deficiency in the Subordinate Debt Service Reserve Account in accordance with thetenns of the Indenture will not excuse the City's obligation to make the payment required by theReplenishment Agreement. Sec "SECURITY AND SOURCES OF PAYMENT FOR THESERIES 2011 BONDS - Non-Tax Revenues and - Subordinate Debt Service Reserve Account"herein and "APPENDIX A -- DEFINlTlONS OF CERTAIN TERMS AND SUMMARY OFCERTAIN PROVISIONS OF THE INDENTURE, LOAN AGREEMENT ANDREPLENISHMENT AGREEMENT" anaehed hereto.

The Replenishment Agreement runs in favor of the holders of the Subordinate Bondsonly and the holders of the Senior Bonds will have no right of payment from, or a lien upon, thepayments made from such appropriated Non-Tax Revenues.

Non-Tax Revenues

In aC,eordance ~vith the Replenishment Agreement, the City has agreed to timely budgetand appropnate from ItS Non-Tax Revenues sufficient money to pay to the Trustee the amountset fOrlh in any Deficiency Notice received from the Trustee for deposit to the credit of theSUbo~dinate Debt Service Reserve Account. Any such Replenishment Obligation will be paid bythe Cuy solely from legally available revenues of the City derived from any source, other thanTDZ Revenues and ad valorem property taxes, appropriated by the City (the "Non-TaxRevenues"). The Non-Tax Revenues include the following: Loeal Taxes State Taxes Licensesand Permits; Fines an~ For.feitures; C~arges for Services; and Use of Mo~ey and Prop~rty. Thetabl~ below presents historical collectIOn by tbe City of Non~Tax Revenues for the Fiscal Yearscndmg June 30, 2006 through June 30, 20 IO.

20065156,771,216

57,352,53311,995,5799,223,529

20,718,6071,4202818

Schedule of Historic Collection of Non-Tax Revenucs(l)2010 2009 2008 Z007

5155,958,362 5157,008,904 5158,873,455 5158,869,01054,713,105 59,035,786 67,383,830 64,545,22511,118,672 11,427,648 11,933,999 11,917,96412,161,982 10,236,681 10,040,036 8,838,05831,815,232 27,280,309 28,395,067 23,644,440

876,828 3,064,197 4,072,227 4,481,357

Local TaxcsState TaxesLicenses and PennitsFines and ForfeituresCharges for ServicesUse of Money and Propcny

TOTAL NON-TAXREVENUES S266,644,181 5268,053,525 5280,698,614 $272,296,054 S257,421,745

Local Taxes. Local taxes consist of alllocnlly collected taxes and fees with the exceptionof ad valorem revenues, other payments in lieu of taxes, licenses and pennits, franchise fees,fines and forfeitures, charges for services and usc of money and properly. Loeallaxes include,among other things, the local sales tax, alcoholic beverage inspection fcc. gross receipts businesstax and beer sales tax.

Srore Taxes. State taxes consist of the City'S share of the State income tax, sales tax,telecommunication sales lax, state-shared beer tax, alcoholic beverage tax and special petroleumproduct tax.

Licenses and Perm;rs. Licenses and pennits consist of revenues from businesses andoccupations which must be licensed before doing business within the jurisdiction of the City orthat benefit from an activity licensed by the City. Major license sources are motor vehiclelicenses and liquor licenses. Major pennils arc those related 10 construction and security alanns.

Fines and FOIfe;rures. Fines and forfeitures consist of money derived from Iheimposition of penalties for the commission of statutory offenses or violation of rules orregulations, or money derived from the confiscation of deposits held as perfonnance guarantees.

Charges for Services. Charges for services consist of fees charged by variousdepartments and agencies of the City to the user of the service. These fees cover a wide range ofservices from vehicle emission testing fees to parking fees, emergency ambulance fees andadmission fees at the pool and golf courses.

U<;e of Money and Property. Revenues from the use of money and property consist ofinterest on investments and money eamed from the lease or rental of government property.

Additional Obligations Payable from Non-Tax Revenues

Pursuant to an interlocal agreement by and among The Memphis and Shelby CountySports Authority, Inc. (the "Sports Authority"), the City and the County, in the event thcrevenues pledged to the support of certain scnior lien bonds issued by the Sports Authority (thc"Sports Authority Bonds") prove to be insufficicnl to pay debt service on such Scnior LicnBonds in any bond year (ending on October 31), the Counry and the City have covenanted to

30

timely appropriate from legally available non-ad valorem revenues, not later than October 31 ofthe fiscal year ending June 30 following the date of such deficit, sufficient money to replenishdraws from the debt service reserve fund used to make scheduled debt service on the SportsAuthority Bonds in the prior year. As of June 30, 2011, the Sports Authority Bonds wereoutstanding in an aggregate principal amount of $207,260,000. The obligation of the County andthe City to replenish draws on the debt service reserve fund relating to the Sports AuthorityBonds is apportioned on the following basis: 50% from the County and 50% from the City, but isnot a joint obligation. The maximum amount of the County's or City's debt service reserve fundreplenishment obligation, respectively, under the interlocal agreement relating to the SportsAuthority Bonds, is the debt service paYments on not to exceed $115,000,000 of the SportsAuthority Bonds, which is approximately one-half of the authorized Sports Authority Bonds.The obligation to replenish the debt service reserve fund relating to the Sports Authority Bondsis not a general obligation of the City.

The Memphis and Shelby County Port Commission (the tlport Commissiontl) issued its$40,795,000 Development Revenue Bonds, Series 2011 (the "2011 Port Commission Bondstl) onSeptember 7, 2011. Pursuant to an interloca1 agreement by and among the Port Commission, theCounty and the City, the 2011 Port Commission Bonds are secured by, among other things, acovenant on the part of the City and the County to appropriate from legally available non-advalorem revenues sufficient amounts to pay debt service on the 2011 Port Commission Bonds.

Other than the Sports Authority Bonds and the 2011 Port Commission Bonds, the Cityhas not committed to pay any other debt obligations from the Non-Tax Revenues. However, theCity regularly pays various operating expenses of the City from the Non-Tax Revenues and isnot prohibited from paying or agreeing to pay other obligations of the City from the Non-TaxRevenues.

Flow of Funds

All paYments made by the City pursuant to the Loan Agreement pledged under theIndenture, as and when received by the Trustee, are to be deposited in the Revenue Fund andheld therein until disbursed as provided in the Indenture. Pursuant to the assignment and pledgeof paYments under the Loan Agreement set forth in the Indenture, the Issuer will direct the Cityto make such paYments directly to the Trustee when and as the same become due and payable bythe City under the Loan Agreement.

On or prior to the second Business Day next preceding each November 1 of a Bond Year,the Trustee, from amounts on deposit in the Revenue Fund, is to make the deposits and paYmentsset forth below on the dates and in the order ofpriority set forth below:

. (~) ~ro rata based upon the ratio each of the amounts required to be paid pursuant to(~~ and (n) of thiS subparagraph (a) bears to the sum of the amounts to be paid pursuant to (i) and(n):

(i) .T? the Senior Bond Account, an amount which, together with the amountthen ~n ~eposlt 10 the S~nior B~nd Capitalized Interest Account, equals the sum of (A)the pnnclpal of Outstandmg Semor Bonds payable at maturity or through the mandatory

31

Sinking Fund Redemption on the next succeeding November 1, plus (B) the interest onthe Outstanding Senior Bonds, including the Series 20IIA Senior Taxable Bonds,payable on the next succeeding two Interest Payment Dates; then

(ii) To the City, the amount which has been certified to the Trustee by the Cityas the amount required to be paid during the next succeeding 12 calendar months for theBorrower's Obligations identified on a schedule to the Indenture; then

(b) To the Senior Debt Service Reserve Account, an amount which, together with theamount then on deposit in the Senior Debt Service Reserve Account, equals the Senior DebtService Reserve Requirement; then

(c) To the Subordinate Bond Account, an amount which, together with the amountthen on deposit in the Subordinate Bond Account, equals the sum of (i) the principal ofOutstanding Subordinate Bonds payable at maturity or through mandatory Sinking FundRedemption on the next succeeding November 1, plus (ii) the interest on OutstandingSubordinate Bonds, including the Series 2011 Subordinate Bonds, payable on the nextsucceeding two Interest Payment Dates; then

(d) To the Expense Fund, the estimated Operating Expenses for the next succeeding12 calendar months as certified to the Trustee by the City; then

(e) To the Subordinate Debt Service Reserve Account, an amount which, togetherwith the amount then on deposit in the Subordinate Debt Service Reserve Account, equals theSubordinate Debt Service Reserve Requirement; then

(f) To the City, the lesser of (i) the amount then remaining in Revenue Fund after thepreceding deposits and payments have been made, and (ii) the amount theretofore paid by theCity pursuant to the Replenishment Agreement for which it has not previously been reimbursedpursuant to this clause (f); and, then,

(g) To the Surplus Fund, any amount remaining in the Revenue Fund after thepreceding deposits and payments have been made.

Debt Service Fund

So long as any of the Series 20 II Bonds are Outstanding, the Issuer is required toestablish and maintain with the Trustee the Debt Service Fund and within the Debt Service Funda Senior Bond Account, a Senior Bond Capitalized Interest Account, a Subordinate BondAccount and a Subordinate Bond Capitalized Interest Account.

An initial deposit to the credit of the Senior Bond Capitalized Interest Account and theSubordinate Bond Capitalized Interest Account is required to be made from the proceeds of theSeries 2011 Bonds in accordance with the provisions of the Indenture.

The Trustee is required to apply the money on deposit in the Senior Bond Account, first,together with the amounts available in the Senior Bond Capitalized Interest Account, to thepayment of interest on Outstanding Senior Bonds, when due, and, then, to the payment of the

32

principal of Outstanding Senior Bonds, when due either at maturity or through mandatorySinking Fund Redemption. Notwithstanding the foregoing, the Trustee will, at the request of theCity, apply the money on deposit in the Senior Bond Account, other than income earned thereonwhich is to be transferred to other funds created under the Indenture, to purchase in the openmarket an amount of Senior Bonds of the series and maturity to be redeemed through mandatorySinking Fund Redemption on the next succeeding November 1 at prices not exceeding theprincipal amount of Senior Bonds being purchased plus accrued interest thereon (which interestwill be paid from amounts on deposit in the Senior Bond Account). The Senior Bonds of suchseries and maturity so purchased are to be cancelled by the Trustee and the principal amountthereof applied against and in reduction of the mandatory Sinking Fund Redemption due onsuch Senior Bonds on such November 1.

Money on deposit in the Senior Bond Capitalized Interest Account are, prior to anytransfer to the Senior Bond Account pursuant to the Indenture, to be transferred to the SeniorBond Account in an amount which, together with the amount then on deposit in the Senior BondAccount, equals the interest on Outstanding Senior Bonds payable on the next succeedingInterest Payment Date.

The Trustee is required to apply the money on deposit in the Subordinate Bond Account,first, together with the amounts available in the Subordinate Bond Capitalized Interest Account,to the payment of interest on Outstanding Subordinate Bonds, when due, and, then, to thepayment of the principal of Outstanding Subordinate Bonds, when due either by maturity ormandatory Sinking Fund Redemption pursuant to the Indenture.

Notwithstanding the foregoing, the Trustee will, at the request of the City, apply themoney on deposit in the Subordinate Bond Account, other than income earned thereon which isto be transferred to other funds created under the Indenture, to purchase in the open market anamount of Subordinate Bonds of the series and maturity to be redeemed through mandatorySinking Fund Redemption on the next succeeding November 1 at prices not exceeding theprincipal amount of the Subordinate Bonds being purchased plus accrued interest thereon (whichinterest will be paid from amounts on deposit in the Subordinate Bond Account). TheSubordinate Bonds of such series and maturity so purchased are to be cancelled by the Trusteeand the principal amount thereof applied against and in reduction of the mandatory Sinking FundRedemption due on such Subordinate Bonds on such November 1.

Money on deposit in the Subordinate Bond Capitalized Interest Account will, prior to anytransfer to the Subordinate Bond Account pursuant to the Indenture, be transferred to theSubordinate Bond Account in an amount which, together with the amount then on deposit in theSubordinate Bond Account, equals the interest on Outstanding Subordinate Bonds payable on thenext succeeding Interest Payment Date.

If on the third Business Day immediately prior to the date on which the principal of orinterest on Outstanding Senior Bonds or Subordinate Bonds is payable, with respect to principaleither at maturity or through Mandatory Sinking Fund Redemption, there is insufficient money inthe Senior Bond Account or Subordinate Bond Account, as applicable, to make such payment,the Trustee is required to transfer from the Surplus Fund, first, to the Senior Bond Account and,then, to the Subordinate Bond Account, an amount equal to the respective deficiencies therein. If

33

on the third Business Day immediately prior to the date on which ~e principal of or inter~st onOutstanding Senior Bonds or Subordinate Bonds is payable there IS, after the aforementionedtransfers from the Surplus Fund, insufficient money in the Senior Bond Account or theSubordinate Bond Account to make such payment, the Trustee is required to transfer from theSenior Debt Service Reserve Account to the Senior Bond Account, and from the SubordinateDebt Service Reserve Account to the Subordinate Bond Account, an amount equal to therespective deficiencies therein.

In connection with any partial redemption or defeasance prior to maturity of the Series2011 Bonds, the Trustee may, at the request of the City, use any amounts on deposit in theSenior Bond Account or the Subordinate Bond Account, as applicable, in excess of the amountneeded to pay the interest on the Series 2011 Bonds remaining Outstanding on the first interestpayment date occurring on or after the date of such redemption or defeasance to pay the principalofand interest on the Series 2011 Bonds to be redeemed or defeased.

Debt Service Reserve Fund

So long as any of the Series 2011 Bonds are Outstanding, the Issuer is required toestablish and maintain with the Trustee, pursuant to the Indenture, the Debt Service ReserveFund and within the Debt Service Fund, the Senior Debt Service Reserve Account and theSubordinate Debt Service Reserve Account.

Money in the Senior Debt Service Reserve Account is required to be withdrawn by theTrustee and deposited to the credit of the Senior Bond Account of the Debt Service Fund at thetimes and in the amounts described above as required to make timely payment of the principalof, and interest on, Outstanding Senior Bonds, when due. The income or interest earned oninvestments held for the credit of the Senior Debt Service Reserve Account is, at the writtendirection of the City, to be withdrawn by the Trustee and deposited in the Senior Bond Accountin accordance with such direction; provided, however, that no withdrawal of such income orinterest may be made if the amount in the Senior Debt Service Reserve Account is then, or uponsuch withdrawal will be, less than the Senior Debt Service Reserve Requirement. Amounts inthe Senior Debt Service Reserve Account on April 30 of a Bond Year that are in excess of theSenior Debt Service Reserve Requirement are required to be withdrawn by the Trustee anddeposited in the Senior Bond Account. If on April 30 of a Bond Year, the amount in the SeniorDebt Service Reserve Account is less than the Senior Debt Service Reserve Requirement, theT~stee is ~equired to promptly give, but in no event later than on the next succeeding May 15th,wntten notice thereof to the Issuer and the City.

Money in the Subordinate Debt Service Reserve Account of the Debt Service ReserveFund is required to be withdrawn by the Trustee and deposited to the credit of the SubordinateBond Account of the Debt Service Fund at the times and in the amounts described above asrequired to make timely payment of the principal of, and interest on, Outstanding SubordinateBonds, when due. The income or interest earned on investments held for the credit of theS~bordinate Debt Service Reserve Account shall, at the written direction of the City, beWlthdr?wn .by the ~rustee and deposited in the Subordinate Bond Account in accordance withsuch drrecti~n; proVided, ~owever, that no withdrawal of such income or interest may be made ifthe amount m the Subordmate Debt Service Reserve Account is then, or upon such withdrawal

34

will be less than the Subordinate Debt Service Reserve Requirement. Amounts in theSubordi~ate Debt Service Reserve Account on April 30 ofa Bond Year that are in excess of theSubordinale Debt Service Reserve Requirement are required to be withdrawn from theSubordinale Debl Service Reserve Account by the Trustee and deposited in the SubordinateBond Account If on April 30 of a Bond Year, the amount in the Subordinale Debt ServiceReserve Account is less than the Subordinate Debt Service Reserve Requirement, the Trustee isrequired to promptly give, but in no event later Ihan on the next succeeding May 15th, writtennotice thereof to the Issuer and the City. All amounts paid by the City in accordance with theReplenishment Agreement on account of a deficiency in the Subordinate Debt Service ReserveAccounl are, upon receipt by the Trustee, to be deposited to the Subordinate Debt ServiceReserve Account to restore such accounl to the Subordinate Debl Service Reserve Requirement.

Upon the issuance of the Series 20 II A Senior Taxable Bonds, there will be on deposit inthe Senior Debt Service Reserve Account an amount equal to $4,638,043.50 representing tbeSenior Debt Service Reserve Requirement applicable to the Series 201lA Senior Taxable Bonds.The Series 201lA Senior Taxable Bonds will only be delivered upon the required deposit to theSenior Debt Service Reserve Account. Upon the delivery of the required deposit to Ihe SeniorDebt Service Reserve Account, the Senior Debt Service Reserve Requirement will be fullyfunded. Amounts deposited in the Senior Debt Service Reserve Account are pledged solely tosecure the repayment of the Series 201lA Senior Taxable Bonds.

Upon the issuance of the Series 20 II Subordinale Bonds, there will be on deposit in theSubordinate Debt Service Reserve Account an amount equal to SI4,367,912.50 representing theSubordinate Debt Service Reserve Requirement applicable to the Series 20 II SubordinaleBonds. The Series 20 II Bonds will only be delivered upon the required deposit to theSubordinate Debl Service Reserve Account Upon the delivery of the required deposit to theSubordinate Debt Service Reserve AccoUnl, the Subordinale Debt Service Reserve Requirementwill be fully funded. Amounts deposited in the Subordinate Debt Service Reserve Account arepledged solely to secure the repayment of the Series 20 II Subordinate Bonds.

Expense Fund

. Amounls. in the Expcn~e Fund will be used only for payment of Operating Expenses or torc,mbur.se thc City for Operatmg Expenses previously paid by it for which it has nOI previouslybeen reimbursed. Such money will be paid by the Trustee upon receipt of the City's writtenrcquest 10 or upon the order of the City at such times and in such amounts as the City considersnecessary to make such payments.

Surplus Fund

AmouDls remaining in the Revenue Fund after all other deposits and payments requircdunder the Indenture have been made will be transferred to the Surplus Fund.

If on. the BU~iness Day immediately prior to the date on which the principaJ olor interesron Ou.tstandmg Semor Bonds or S~bo.rdinale Bonds is payable, with respect to principal either at~a~nty or through mandatory Smkmg Fund Redemption, Ihere is insufficient money in the

emor Bond Account or Subordinale Bond Account, as applicable, to make such payment, the

35

Trustee is required to transfer from the Surplus Fund, ftrst, to the S.enior B~nd ~ccount. and,then, to the Subordinate Bond Account, an amount equal to th~ respectiv.e d.eficlencles .therem. Ifon the Business Day immediately prior to the date on which the pnnclpal of or mterest onOutstanding Senior Bonds or Subordinate Bonds is payable there is, after the transfers refere~cedabove from the Surplus Fund, insufficient money in the Senior Bond Account or the SUb~rdmateBond Account to make such payment, the Trustee is required to transfer fro~ the Semor D~btService Reserve Account to the Senior Bond Account and from the Subordmate Debt Se~ceReserve Account to the Subordinate Bond Account, an amount equal to the respectivedeftciencies therein.

Money remaining in the Surplus Fund on June 30 of any Fiscal Year, if not then requiredfor transfer to the Senior Bond Account or the Subordinate Bond Account as described above,will be applied or paid for anyone or more of the following: (a) paid by the Trustee to the City inaccordance with the City's written request to reimburse it for payments theretofore madepursuant to the Replenishment Agreement for which it has not previously been reimbursed; (b)applied by the Trustee in accordance with the City's written request to either or both of (i) theoptional or extraordinary redemption or purchase of Outstanding Bonds with respect to theSeries 2011 Bonds or in accordance with the Supplemental Indenture authorizing the AdditionalBonds to be purchased or redeemed and (ii) defeasance of Outstanding Bonds; and (c) applied bythe Trustee in accordance with the City's written request to pay Costs of the Project or toreimburse the City for Costs of the Project theretofore paid by the City for which it has notpreviously been reimbursed.

Notwithstanding the provisions of the foregoing paragraph, money in the Surplus Fundmay not be applied for any purpose described in (b) or (c) above unless the City has certifted tothe Trustee and the Issuer that, after such application, the TDZ Revenues which the City islegally entitled to receive are projected to be sufficient to pay the principal of and interest on theBonds then Outstanding or that will remain Outstanding after any application of money inaccordance with (b) or (c) above, together with all other obligations then legally authorized to bepaid from TDZ Revenues.

Construction Fund

An initial deposit to the credit of the Construction Fund will be made from the proceedsof the Series 2011 Bonds. Any money received by the Trustee from any source for theacquisition, construction, renovating, rehabilitating, remodeling, furnishing or equipping portionsof the Project will be deposited in the Construction Fund unless otherwise speciftcally exceptedunder th~ Indenture. The money in the Construction Fund will be held in trust by the Trusteeand apph~d to the pa?'lllent of Costs of the Project. Pending such application, the money in theConstruction Fund Will be held as trust funds under the Indenture in favor of the Holders of theOutstanding Bonds and for the further security of such Holders. Disbursements from theConstruction Fund will be made by the Trustee upon receipt of a Written Request of the City or arequisition of the City in the fonn attached to the Indenture.

. Upon .c?mpletion of the Project, money then remaining in the Construction Fund, aftermakl~~ P!OVISIOn for. the payment of any costs of acquisition, construction, renovation,rehablhtatlon, remodehng, furnishings or equipment related to the Project then unpaid, will upon

36

- ,t ..

the Written Request of the City be (a) transferre~ to the Sen~or Bond Account ~d theSubordinate Bond Account of the Debt Service Fund, In the res~ective amounts .set forth In suchWritten Request, or (b) applied to the redemption or defeasance In accordance With the Indentureof Outstanding Bonds in accordance with such Written Request.

Optional Redemption Fund

In the event of (a) prepayment by or on behalf of the City of amo~ts payable un~er theLoan Agreement pledged under the Indenture, including prepayment With condemnation orinsurance proceeds, or (b) deposit with the Trustee by the City or ~e Issu~r of ~oney from anyother source for redeeming Series 2011 Bonds, except as othefWlse prOVided In the Indenture,such money will be deposited in the Optional Redemption Fund. Money .on ~eposi~ ~n ~eOptional Redemption Fund is required to be used, first, to make up any deficiencies eXistIng Inthe Senior Bond Account and the Subordinate Bond Account (in the order listed), second, tomake up any deficiency in the Senior Debt Service Reserve Account, and, third, for theredemption or purchase ofBonds in accordance with the provisions of the Indenture.

Additional Bonds

Additional Bonds may be issued by the Issuer for anyone or more of the followingpurposes: (a) paying Costs of the Project, including capitalized interest on such AdditionalBonds, (b) paying costs associated and incurred in connection with the issuance of suchAdditional Bonds, and (c) paying or providing for the payment of Outstanding Bonds or anyportion thereof.

The principal amount of such Additional Bonds may include an amount sufficient to paythe costs and expenses of issuance, establish a reserve fund or fund the Debt Service ReserveFund at its requirement after giving effect to the issuance of such Additional Bonds, providecapitalized interest and provide for such other costs as are permitted by the Act. AdditionalBonds may be issued notwithstanding the fact that no additional security is made subject to thelien of the Indenture. However, the Trustee and the Issuer are authorized to accept additionalsecurity made available upon the issuance of any Additional Bonds. Prior to the delivery of anyAdditional Bonds, there must be filed with the Trustee, among other items, the following:

(a) A written statement by an Authorized Officer of the City approving (i) theissuance and delivery of such Additional Bonds and acknowledging that payments are requiredto be made under the Loan Agreement in amounts sufficient to pay the principal and interest onsuch Additional Bonds, when due, to the same extent as if such Additional Bonds were includedin the issuance of the Series 2011 Bonds and (ii) any other matters to be approved by the Citypursuant to the Loan Agreement and the Indenture.

(b) The original executed counterparts of the Supplemental Indenture authorizing theissuance ofsuch Additional Bonds.

(c) Executed counterparts of appropriate supplements to the Loan Agreementproviding, among other things, for the City's obligation to make payments on account of theprincipal ofand interest on the Additional Bonds.

37

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' . .t. .& .' .<4-,......3'-

(d) In the case of Additional Bonds t~ be i~sued as Senior Bonds, other ~han

Refunding Bonds: (i) an Officer's Certificate of the City seumg forth the TDZ Rcve~ues receIvedduring the preceding Fiscal Year; (ii) an independent con~ultant's repo~ settmg fo~, ~heprojected TDZ Revenues for the first full Fiscal Year after proJccted comp.Jellon of the Fa:llluesconstructed with proceeds of the Additional Bonds; (iii) an Officer's Certificate of the CIt~ ~A)setting forth the Maximum Annual Debt Service on the Outstanding Senior Bonds after glVI~g

effect to the issuance of such Additional Bonds and (B) establishing that the amount set forth m(i) is at least equal to two times such Maximum Annual Debt Service set forth in (iii)(A~; and(iv) an Officer's Certificate of the City (A) setting forth the Maximum Annual Debt Service onthe Outstanding Senior Bonds after giving effect to issuance of such Additional Bonds. (B)setting forth the Maximum Annual Debt Service on the tben Outstanding Subordinate Bonds,and (C) establishing that the amount set forth in (ii) is at least equal to the sum of the amounts setforth in (iv)(A) and (iv)(B).

(e) In the case of Additional Bonds 10 be issued as Subordinate Bonds, otber thanRefunding Bonds (i) an independent consultant's report setting fOrtll the projected TDZRevenues for the first full Fiscal Year after the projected completion of the Facilities constructedwith proceeds of the Additional Bonds; and (ii) an Officer's Certificate of the City (A) separatelysetting forth the Maximum Annual Debt Service on the then Outstanding Senior Bonds and theMaximum Annual Debt Service on the Subordinate Bonds Outstanding after giving effect to theissuance of such Additional Bonds, (B) establishing that the amount set forth in (i) is at leastequal to the sum of the amounts set forth in (ii)(A) and (B), and (C) stating that the Costs of theProject to be financed through the issuance of such Additional Bonds consist of items for whichthe City may provide aid or assistance to be paid from revenues specified pursuant to TennesseeCode Annotated Section 7-53-315, as amended,

Refunding Bonds

Refunding Bonds may be issued pursuant to the Indenture to payor provide for tbepayment of any or all Outstanding Bonds. Prior to the delivery of any Refunding Bonds, theremust be filed with the Trustee. among other items, all of the following:

(a) the documents required for tbe issuance of Additional Bonds, other than thoserequired by paragrapb (d) or (e) undcr thc caption "SECURITY AND SOURCES OFPAYMENT FOR THE SERIES 2011 BONDS - Additional Bonds" above' and•

(b) eitber: (i) if the Bonds to be refunded are Senior Bonds, an Officer's Certificate ofthe Ci~ ,stating that (A) .the Maximum Annual Debt Servicc on the Senior Bonds Outstandingafter glvmg effect to the ISsuance of the Refunding Bonds will not be greater than the MaximumAnnual, Debt Service on the Senior Bonds Outstanding immediately preceding issuance of theRefundmg Bonds, an~ (~) the amount payable in any Bond Year for the principal of. includingt~r~ugh mandatory .Smkmg Fund Redemption, and interest on Senior Bonds Outstanding afterglvI,ng effect to the ISSuance of the. Refunding Bonds will not be greater than the amount payabledunng ~ny Bond Year ~~ t~e Semor Bonds Outstanding immediately preceding issuance of theRe~ndmg Bonds; ?r (II) .If the Bonds to be refunded are Subordinarc Bonds, an Officer'sCerttficate of th.c City sta~l~g that (A) the Maximum Annual Debt Service on the SubordinateBonds Outstandmg after glvmg effect to the issuance of the Refunding Bonds \Viti nor be greafer

38

, '

X). ZlI'At·Q,:a a&(lJUihM.i4lL. wf,

than the Maximum Annual Debt Service on the Subordinate Bonds Out~tanding immediatelyreceding issuance of the Refunding Bonds, and (B) the amount payable ~ any Bo~d Year for~e principal ot: including through mandatory Sinking. Fund Redemption, ~d mterest ~nSubordinate Bonds Outstanding after giving effect to the issuance of the Refundm~ Bonds w111not be greater than the amount payable during any ~ond Year on the Subordmate BondsOutstanding immediate preceding issuance of the Refundmg Bonds.

MARKET STUDY

RKG

In connection with the issuance of the Series 2011 Bonds, RKG prepared the ~arket

Study, a copy of which is attached hereto as Appendix B, setting forth, amo~g other thm.gs, aforecast of the incremental new TDZ Revenues to be generated from the Pyramid Arena Project.

RKG is a full service economic, planning and real estate consulting fmn with officeslocated in Dover, NH and Alexandria, VA. RKG specializes in the application of economic andmarket analysis to economic development, real estate development and fmancing issues, towardthe goal of attracting private sector investment and job creation. Since its' founding in 1981,RKG has successfully completed more than 2,000 consulting projects regionally, nationally andinternationally, providing a comprehensive range of market research, economic, planning, andfinancial feasibility services to governmental, business and institutional clients.

Executive Summary of the Market Study

The following executive summary ofthe Market Study was provided solely by RKG. Thecomplete Market Study is presented in "APPENDIX B - MARKET STUDY AND IMPACTANALYSIS." The Market Study describes key factors that affect demandfor the Pyramid ArenaProject and that affect the generation of incremental new TDZ Revenues and sets forthassumptions on which the forecasts and estimates set forth therein are based There is noassurance that actual events will correspond with the assumptions on which such forecasts andestimates are based Consequently, no guarantee can be made that forecasted operating resultswill correspond with the results actually achieved in the future. See "INVESTMENTCONSIDERATIONS - Forward-Looking Statements" herein. The Market Study should be readin its entirety for an understanding of the estimated operating results and the underlyingassumptions.

The Market Study provides an independent assessment of the market potential of thePyramid Arena Project and a projection of incremental new TDZ Revenues. To prepare theforecast, RKG perfonned the following tasks: (a) met with, among others

tofficials of the City

and Bass Pro involved in planning the Pyramid Arena Project and the Pinch District Project todiscuss their assumptions regarding the future development and operations of the Pyramid ArenaProject and the Pinch District Project, (b) inspected the properties within the Pyramid ArenaProject ~nd the Pinch District Project and the surrounding market area, (c) analyzed relevanteconomIC and dez,n0graphic fact?TS in the market area, (d) reviewed concept plan drawings oflliepropo~e~ Pyramid .Arena Project and the Pinch District Project, (e) reviewed legislationauthonzmg the vanous revenue sources dedicated to repayment of the Series 2011 Bonds,

39

, .. ..~ .... "_ ........ym .......

. .... f£ii$i#I.. ··,,!K!4Ui:i .. ( ,

(f) analyzed the historical receipts and trends in the TDZ Revenues and (g) forecast the financialoperations of the Pyramid Arena Project and future TDZ Revenues.

The historical performance and assumptions underlying the forecasts for TDZ Revenuesand the assumptions and inputs are described in detail in the Market Study. See "SECURITYAND SOURCES OF PAYMENT FOR THE SERIES 2011 BONDS - Historical and ProjectedDebt Service Coveragell herein for a summary of projected TDZ Revenues, as prepared by RKGand presented in the Market Study. Significant assumptions and inputs utilized in the MarketStudy include, but are not necessarily limited to the following:

(a) Short-term (direct) construction employment, in tenns of jobs and wages,associated with the development of the Pyramid and Pinch District were based on theconstruction costs (only) provided by the City; wage data (as is all wage data in this analysis) isprovided by the Tennessee Office of Labor and Workforce Development (and expressed in 2010dollars); and, RKG's estimates that approximately 35% of construction costs equate to laborcosts.

(b) Ongoing direct employment and wage data for the proposed development includeretail and restaurant components. The number of employees reflects industry averages (on a persquare foot basis) as developed by the Urban Land Institute.

(c) Estimates of indirect employment and wages as IIspin-ofi" from the short-tennconstruction activities, as well as the ongoing activities, once built, reflect an estimated localcapture rate of 30% and were estimated using multipliers developed by the U.S. Department ofCommerce for the RIMS II modeling.

(d) Economic estimates regarding employment and wages are presented as if fully-built out and at stabilized occupancy, net oftransfer where applicable.

(e) This analysis assumes an initial 60% occupancy rate for the hotel to be includedwithin the Pyramid Arena Project, reflecting the average downtown occupancy and accountingfor an estimated 2013 opening. A room rate of$130/night is used in the Market Study, reflectinga slightly higher rate assumed for a Fiscal Year 2013 opening year of operations.

(f) An annual inflation factor of 1.5% is utilized.

The estimates by RKG of net new and incremental TDZ Revenues resulting from thePyra~id Arena P~oject reflect an estimated increase in taxable consumer sales and the resultingapphcable and adjusted sales tax from these operations. The primary components include salestax fr?~ consumer acti~i!1' and spending at the Pyramid Arena Project. These estimates reflectprevalhng market condItIons in the Memphis market area and RKG's professional estimate offuture conditions.

Si~ce all projec~o~ are based on estimates and assumptions which are inherently subjectto uncertamty ~d .vanations depending on future events, there are likely to be differencesbetween.!he pr?Jections and actual results and the differences may be material. See "MARKET~TUDY herem and APPENDIX B - MARKET STUDY AND IMPACT ANALYSIS andINVESTMENT CONSIDERAnONS - Forward-Looking StatementsII herein.

40

INVESTMENT CONSIDERATIONS

General

Attention should be given to the investment considerations described below, which,among others, could affect the ability of the Issuer to pay principal of and inte.rest on the Se~es2011 Bonds and which could also affect the marketability of, or the market pnce for, the Senes

2011 Bonds.

The purchase of the Series 2011 Bonds involves certain investment considerations thatare discussed throughout this Official Statement. Certain of these investment considerations areset forth below for convenience and are not intended to be a comprehensive compilation of allpossible investment considerations nor a substitute for an independent evaluation of theinformation presented in this Official Statement. Each prospective purchaser of any Series 2011Bond should read this Official Statement in its entirety and consult such prospective purchaser'sown investment and/or legal advisor for a more complete explanation of the matters that shouldbe considered when purchasing an investment such as the Series 2011 Bonds.

Enforceability of Remedies

The remedies available to the owners of the Series 2011 Bonds upon an event of defaultunder the Indenture are in many respects dependent upon judicial actions which are often subjectto discretion and delay.

The enforceability of remedies or rights with respect to the Series 2011 Bonds may belimited by state and federal laws, rulings and decisions affecting remedies and by bankruptcy,insolvency or other laws affecting creditors' rights or remedies heretofore or hereafter enacted.Under existing constitutional and statutory law and judicial decisions, including specificallyTitle II of the United States Code (federal bankruptcy code), certain remedies specified by theIndenture or the Loan Agreement may not be readily available or may be limited. Under existinglaw, municipalities must obtain the consent of state government in order to avail themselves offederal bankruptcy protection under Title 11 of the United States Code, however, there iscurrently no State law granting such consent. The various legal opinions to be deliveredconcurrently with the delivery of the Series 20 II Bonds will be qualified as to the enforceabilityof the various legal instruments by limitations imposed by bankruptcy, reorganization,insolvency, moratorium, or other similar laws affecting the rights of creditors generally or as tothe availability ofany particular remedy.

Early Payment Prior to Maturity

The Series 20II Bonds are subject to optional redemption, mandatory sinking fundredemption and extraordinary redemption prior to maturity, see "THE SERIES 2011BONDS - Optional Redemption," "- Mandatory Sinking Fund Redemption" and "- ExtraordinaryRedemption" herein. A prospective investor should consider these redemption rights whenmaking any investment decision. Following a redemption, the owners of the Series 2011 Bondsmay not be able to reinvest their funds at a comparable interest rate.

41

Non-Recourse Obligation

The Series 2011 Bonds are special, limitcd obligations of the Issuer payable solely fromTDZ Revenues and, in the case of thc Scries 2011 Subordinate Bonds, Non·Tax Revenuesappropriated by the City for such payments, Sec "SECURlTY AND SOURCES OF PAYMENTFOR THE SERrES 2011 BONDS" herein. Holders of Senes 2011 Bonds will have no recourseagainst the physical facilities comprising the Project or other assets of the Issuer or the City.Holders of Series 2011 Bonds also will have no recourse against any assets of the Issuer or theCity, except in the case of the Holders of the Series 2011 Subordinate Bonds, who will have aright to payment from Non-Tax Revenues to the extent provided in the ReplenishmentAgreement and the Indenture. Neither the full faith and credit nor the taxing power of the Slate,the City or any other political subdivision arc available to pay debt service on the Series 20 IIBonds. The Issuer has no taxing power.

Achievement of Projections

The primary source of revenues upon which payment of the Series 2011 Bonds will dependis the TDZ Revenues. The receipt of TDZ Revenues in the amounts projected herein (see"MARKET STUDY" herein) is affected by and subject to conditions which may change in thefuture to an extent and with effects that cannot be detennined at this time, including, withoutlimitation:

•

•

•

the failure to complete or a delay in completion of the construction of the PyramidArena Project;

gcneral and local economic conditions that affect the convention industry and/orthe Memphis convention market; and

competition from other convention centers nationally.

Business and leisure travel is subject to a multitude of worldwide economic, political andsocial events, circumstances and influences, and the future perfonnance of the Pyramid ArenaProject in accordance with any forecasts is not assured or guaranteed and is subject to events,circumstances and influences that are nol within the Issuer's or the City's control. As noted underthe caption "[NVESTMENT CONSIDERAnONS - Forward-Looking Statements," anyprojection is subject to uncertainties. Although the City believes that the assumptions andprojections reflected in the "APPENDIX 8 - MARKET STUDY AND IMPACT ANALYSIS"herein are reasonable, there is no assurance that those projections will be achieved. Inevitably,some.assumptions used to develop the forecasts will not be realized, and unanticipated eventsan.d Circumstances m?y.occur. Therefore, the actual results achieved during the forecast periodWill vary, and the vanaUons may be material.

Considerations Relating To TDZ Revenues

The primaI?' s?urce of repayment of the Series 20 II Bonds is from the TDZ Revenues asand to the extent dlstnbuted by the State 10 the City in accordance with the TDZ Statute and aidto the Issuer pursuant to the terms of the Loan Agreement The Series 2011 8 d Pr ·td br· f h . . on s are speCial1011 e a tgatlons 0 t e Issuer payable solely from TDZ Revenues and t'n the .-I'.o.l... ~ • ', caseUI LIIC~enes

42

2011 Subordinate Bonds, Non-Tax Revenues appropriated by the City for such payme~ts. See"SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2011 BONDS II herem.

The receipt of TDZ Revenues is affected by and subject to conditions which may changein the future to an extent and with effects that cannot be detennined at this time. The totalamount of TDZ Revenues received by the City is subject to increase or decrease on account ofincreases or decreases in the dollar volume of taxable sales within the TDZ, which, in turn, issubject to: (a) legislative changes which include or exclude from taxation sales of particulargoods or services or the repeal of underlying sales and use taxes and (b) changes in dollarvolume of purchases within the TDZ, which is affected by changes in population, economicfactors and other conditions which are impossible to predict, including the current economicrecession. See APPENDIX B - MARKET STUDY AND IMPACT ANALYSIS" herein for adiscussion of economic factors and other conditions which may have a bearing on the receipt ofTDZ Revenues. In addition to the Series 2011 Bonds, the TDZ Revenues also serve as a sourceof payment for certain existing obligations of the City on a pari passu basis with the SeniorBonds, all of which are included on the list of Borrower's Obligations identified on a schedule tothe Indenture. See "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2011BONDS - Projected TDZ Revenues and Debt Service Coverage" herein.

In accordance with the TDZ Statute, the City's right to receive continuing distributions ofTDZ Revenues with respect to the Convention Center and its ancillary facilities may betenninated by the State under certain circumstances. However, pursuant to the State's approvalof the City's application, submitted in connection with the issuance of the Series 20II Bonds, theCity is entitled to receive mz Revenues in an amount at least equal to the amount of the debtservice on the Series 2011 Bonds and the existing Borrower's Obligations identified on aschedule to the Indenture. See "SECURITY AND SOURCES OF PAYMENT FOR THESERIES 20II BONDS - TDZ Revenues" herein.

Considerations Relating To Non-Tax Revenues

The payments required to be made by the City pursuant to the Replenishment Agreementare to ~e made solely. from the Non-Tax Revenues to the extent the same is budgeted andappropnated by the City for s~ch. payments. ~e City's obligations under ReplenishmentAgreement are .not general obhg~tlons of the City but rather are subject to appropriation.Al~ou~ the <?ity has ~greed to timely request that the appropriation for any ReplenishmentObhgatlOn be m~lu?ed i~ the budget submitted to the City Council, there can be no assurancethat such appropnation will be made.

~he receipt of Non-Tax Revenues is affected by and subject to conditions which maych~ge 10 the future to an extent and with effects that cannot be detennined at this time. The~eceipt. of Non-Ta:c Revenue~. is subject to economic factors and other conditions which areImpossible to prediCt. In addition to the Replenishment Obligation, the Non-Tax Revenues alsoserve ~ a source of payment for various other obligations of the City, including obligationsotherwise payable from the general fund of the City. See "SECURITY AND SOURCES OFPAYMENT FOR THE SERIES 2011 BONDS - Non-Tax Revenues ll herein.

43

Ratings

There is no assurance that the ratings assigned to the Series 2011 Bonds at the time ofissuance (see "RATINGS" herein) will not be lowered or withdrawn at any time, the effect ofwhich could adversely affect the market price for and marketability of the Series 2011 Bonds.Due to the ongoing uncertainty regarding the economy and debt of the United States of America,including, without limitation, the general economic conditions in the country and developmentsarising from the Budget Control Act of 2011, including the deliberations and results thereof ofthe Joint Select Committee on Deficit Reduction, and other political and economicdevelopments that may affect the fmancial condition of the United States government, the UnitedStates debt limit, and the bond ratings of the United States and its instrumentalities, obligationsissued by state and local governments, such as the Series 2011 Bonds, could be subject to arating downgrade. Additionally, if a significant default or other fmancial crisis should occur inthe affairs of the United States or of any of its agencies or political subdivisions, then such eventcould also adversely affect the market for and ratings, liquidity, and market value of outstandingdebt obligations, including the Series 2011 Bonds.

Limitations On Remedies

The occurrence of an event of default under the Indenture and Loan Agreement will notpermit the acceleration of the maturity of, or allow immediate payment for, the entire outstandingprincipal balance of any series of the Series 2011 Bonds. Due to the fact that payment of theSeries 2011 Bonds is not secured by a mortgage lien or other security interests in the physicalfacilities comprising the Pyramid Arena Project and the Pinch District Project or any other assetsof the Issuer or the City, holders of Series 20IIA Senior Taxable Bonds will be limited toseeking remedies against the TDZ Revenues, and holders of Series 20II Subordinate Bonds willbe limited to seeking remedies against the TDZ Revenues and the Non-Tax Revenues.

Secondary Market Prices

No assurance can be given that a secondary market for any of the Series 2011 Bonds willbe available and no assurance can be given that the initial offering prices for the Series 2011Bonds will continue for any period of time.

The Series 2011 Bonds may not constitute a liquid investment, and there is no assurancethat a liquid secondary market will exist for the Series 2011 Bonds in the event an owner thereofde!ennines to solicit purchasers of the Series 2011 Bonds. Even if a liquid secondary marketeXISts, there can be no assurance as to the price for which the Series 2011 Bonds may be sold.Such price may be lower than that paid by the current owner of the Series 2011 Bondsdepending on existing market conditions and other factors. '

44

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Forward-Looking Statements

The statements contained in this Official Statement, and in any other infonnationprovided by the Issuer and the City, that are not purely historical, are forward-lookingstatements, including certain statements in "APPENDIX B - MARKET STUDY AND IMPACTANALYSIS" and other statements regarding the Issuer's and the City's expectations, hopes,intentions or strategies regarding the future. Readers should not place undue reliance on forwardlooking statements. All forward-looking statements included in this Official Statement are basedon infonnation available to the Issuer and the City on the date hereof and neither the Issuer northe City assumes any obligation to update any such forward-looking statements. It is importantto note that and the actual results could differ materially from those in such forward-lookingstatements.

The forward-looking statements herein are necessarily based on various assumptions andestimates and are inherently subject to various risks and uncertainties, including risks anduncertainties relating to the possible invalidity of the underlying assumptions and estimates andpossible changes or developments in social, economic, business, industry, market, legal andregulatory circumstances and conditions and actions taken or omitted to be taken by third parties,including customers, suppliers, business partners and competitors, and legislative, judicial andother governmental authorities and officials. Assumptions related to the foregoing involvejudgments with respect to, among other things, future economic, competitive and marketconditions and future business decisions, all of which are difficult or impossible to predictaccurately and many of which are beyond the control of the Issuer. Any of such assumptionscould be inaccurate and, therefore, there can be no assurance that the forward-looking statementsincluded in this Official Statement would prove to be accurate.

In considering the matters set forth in this Official Statement, prospective investorsshould carefully review all infonnation included herein (particularly the infonnation under thecaptions "INVESTMENT CONSIDERAnONS" and "SECURITY AND SOURCES OFPAYMENT FOR THE SERIES 2011 BONDS") to identify any investment considerations.Potential investors should be thoroughly familiar with this entire Official Statement and theappendices hereto, and should have accessed whatever additional financial and other infonnationany such investor may deem necessary, prior to making an investment decision with respect tothe Series 2011 Bonds.

LEGAL MATTERS

Certain legal matters relating to the authorization and validity of the Series 2011 Bondswill be subject to the approving opinions of Nixon Peabody LLP and Brittenum Bruce, PLLC,Co-Bond Counsel, which will be furnished upon delivery of the Series 2011 Bonds, insUb.st~ntial~y the .fo~ set forth in Appendix D (collectively, the "Bond Opinion"). The BondOpmlon will be hmlted to matters relating to authorization and validity of the Series 2011 Bondsand to the tax status of interest thereon, as described under "TAX MATTERS" herein. Co-BondCounsel has not been engaged to investigate the financial resources of the Issuer or the City orthe ability of the Issuer or the City to provide for payment of the Series 2011 Bonds and theBond Opinion will make no statement as to such matters or as to the accuracy or completeness of

45

this Official Statement or any other information that may have been relied on by anyone inmaking the decision to purchase Series 20 II Bonds.

Certain legal matters will be passed upon by Adams and Reese, LLP i~ its capacity. ascounsel to the Issuer. Certain legal matters will be passed upon for the CIty by HawkinsDelafield & Wood LLP in its capacity as counsel to the City. Certain legal matters will bepassed upon for the Underwriters by their counsel, Greenberg Traurig, P.A.

All of the legal opinions to be delivered concurrently with the delivery of the Series2011 Bonds express the professional judgment of the attorneys rendering the opinions regardingthe legal issues expressly addressed therein. By rendering a legal opinion, the attorneysproviding such opinion do not become insurers or guarantors of the result indicated by thatexpression of professional judgment, of the transaction on which the opinion is rendered, or ofthe future performance of parties to the transaction nor does the rendering of an opinionguarantee the outcome of any legal dispute that may arise out ofthe transaction.

TAX MATTERS

Series 2011B Subordinate Tax Exempt Bonds

Federal Income Taxes. The Internal Revenue Code of 1986, as amended (the "Code"),imposes certain requirements that must be met subsequent to the issuance and delivery of theSeries 2011 B Subordinate Tax Exempt Bonds for interest thereon to be and remain excludedfrom gross income for federal income tax purposes. Noncompliance with such requirementscould cause the interest on the Series 2011B Subordinate Tax Exempt Bonds to be included ingross income for federal income tax purposes retroactive to the date of issue of the Series 2011BSubordinate Tax Exempt Bonds. Pursuant to the Indenture, the Loan Agreement and the TaxCertificate, the Issuer and the City have covenanted to comply with the applicable requirementsof the Code in order to maintain the exclusion of the interest on the Series 2011 B SubordinateTax Exempt Bonds from gross income for federal income tax purposes pursuant to Section 103of the Code. In addition, the Issuer and the City have made certain representations andcertifications in the Indenture, the Loan Agreement and the Tax Certificate.

In the opinion ofNixon Peabody LLP and Brittenum Bruce, PLLC, Memphis, Tennessee,Co-Bond Counsel, under existing law and assuming compliance with the aforementionedcovenant, and the accuracy of certain representations and certifications made by the Issuer andthe City described above, interest on the Series 2011B Subordinate Tax Exempt Bonds isexcluded from gross income for federal income tax purposes under Section 103 of the Code.Co-Bond Counsel is also of the opinion that such interest is not treated as a preference item incalculating the alternative minimum tax imposed under the Code with respect to individuals andcorporations. Interest on the Series 2011B Subordinate Tax Exempt Bonds is, however, includedin the adjusted current earnings ofcertain corporations for purposes of computing the alternativeminimum tax imposed on such corporations.

State Taxes on the Series 20UB Subordinate Tax Exempt Bonds. Co-Bond Counsel isfurther of the opinion that with respect to the Series 2011 B Subordinate Tax Exempt Bonds,

46

under Tennessee law the Series 20II Subordinate Tax Exempt Bonds and interest thereon are notsubject to income taxation in the State ofTennessee, except for Tennessee franchise taxes.

Original Issue Discount. Co-Bond Counsel is further of the opinion that the differencebetween the principal amount of the Series 2011B Subordinate Tax Exempt Bonds maturing onNovember 1,2025 bearing a coupon of 4.000% and on November I, 2030 bearing a coupon of4.500% (collectively the "Discount Tax Exempt Bonds") and the initial offering price to thepublic (excluding bond houses, brokers or similar persons or organizations acting in the capacityof underwriters or wholesalers) at which price a substantial amount of such Discount TaxExempt Bonds of the same maturity was sold constitutes original issue discount which isexcluded from gross income for federal income tax purposes to the same extent as interest on theSeries 20 II B Subordinate Tax Exempt Bonds. Further, such original issue discount accruesactuarially on a constant interest rate basis over the term of each Discount Tax Exempt Bond andthe basis of each Discount Tax Exempt Bond acquired at such initial offering price by an initialpurchaser thereof will be increased by the amount of such accrued original issue discount. Theaccrual of original issue discount may be taken into account as an increase in the amount of taxexempt income for purposes of determining various other tax consequences of owning theDiscount Tax Exempt Bonds, even though there will not be a corresponding cash payment.Owners of the Discount Tax Exempt Bonds are advised that they should consult with their ownadvisors with respect to the state and local tax consequences of owning such Discount TaxExempt Bonds.

Original Issue Premium. The Series 20 II B Subordinate Tax Exempt Bonds maturing onNovember 1, 2025 bearing a coupon of 5.250% and on November 1,2030 bearing a coupon of5.250% (collectively, the "Premium Tax Exempt Bonds") are being offered at prices in excess oftheir principal amounts. An initial purchaser with an initial adjusted basis in a Premium TaxExempt Bond in excess of its principal amount will have amortizable bond premium which is notdeductible from gross income for federal income tax purposes. The amount of amortizable bondpremium for a taxable year is determined actuarially on a constant interest rate basis over theterm of each Premium Tax Exempt Bond based on the purchaser's yield to maturity (or, in thecase of Premium Tax Exempt Bonds callable prior to their maturity, over the period to the calldate, based on the purchaser's yield to the call date and giving effect to any call premium). Forpurposes of determining gain or loss on the sale or other disposition of a Premium Tax ExemptBond, an initial purchaser who acquires such obligation with an amortizable bond premium isrequired to decrease such purchaser's adjusted basis in such Premium Tax Exempt Bond annuallyby the amount of amortizable bond premium for the taxable year. The amortization of bondpremium may be taken into account as a reduction in the amount of tax exempt income forpurposes of determining various other tax consequences of owning such Series 20 II BSubordinate Tax Exempt Bonds. Owners of the Premium Tax Exempt Bonds are advised thatthey should consult with their own advisors with respect to the state and local tax consequencesofowning such Premium Tax Exempt Bonds.

Ancillary Tax Matters. Ownership of the Series 201lB Subordinate Tax Exempt Bondsmay result in other federal tax consequences to certain taxpayers, including, without limitation,certain S corporations, foreign corporations with branches in the United States, property andcasualty insurance companies, individuals receiving Social Security or Railroad Retirementbenefits, and individuals seeking to claim the earned income credit. Ownership of the Series

47

2011B Subordinate Tax Exempt Bonds may also result in other federal tax consequences totaxpayers who may be deemed to have incurred or continued ind~bte?ness to purchas: or tocarry the Series 2011 B Subordinate Tax Exempt Bonds. ProspectIve Investors are adVised toconsult their own tax advisors regarding these rules.

Commencing with interest paid in 2006, interest paid on tax exempt obligations such asthe Series 2011B Subordinate Tax Exempt Bonds is subject to information reporting to theInternal Revenue Service (the "IRS") in a manner similar to interest paid on taxable obligations.In addition, interest on the Series 2011B Subordinate Tax Exempt Bonds may be subject tobackup withholding if such interest is paid to a registered owner that (a) fails to provide certainidentifying infonnation (such as the registered owner1s taxpayer identification number) in themanner required by the IRS, or (b) has been identified by the IRS as being subject to backupwithholding.

Co-Bond Counsel is not rendering any opinion as to any federal tax matters other thanthose described in the opinions attached as Appendix D. Prospective investors, particularly thosewho may be subject to special rules described above, are advised to consult their own taxadvisors regarding the federal tax consequences of owning and disposing of the Series 2011BSubordinate Tax Exempt Bonds, as well as any tax consequences arising under the laws of anystate or other taxing jurisdiction.

Changes in Law and Post Issuance Events. On September 12, 2011, the Presidentreleased a legislative proposal that would, among other things, subject interest on tax-exemptbonds (including the Series 2011B Subordinate Tax Exempt Bonds) to a federal income tax fortaxpayers with incomes above certain thresholds for tax years beginning after 2012. Theproposal has not yet passed either of the two Houses of Congress and it is not possible to predictwhether this proposal will be enacted into law. If enacted into law, such a proposal could affectthe value or marketability of tax-exempt bonds (including the Series 2011B Subordinate TaxExempt Bonds).

More generally, legislative or administrative actions and court decisions, at either thefederal or state level, could have an adverse impact on the potential benefits of the exclusionfrom gross income of the interest on the Series 20llB Subordinate Tax Exempt Bonds forfederal or state income tax purposes, and thus on the value or marketability of the Series 2011 BSubordinate Tax Exempt Bonds. This could result from changes to federal or state income taxrates, changes in the structure of federal or state income taxes (including replacement withanother type of tax), repeal of the exclusion of the interest on the Series 2011B Subordinate TaxExempt Bonds from gross income for federal or state income tax purposes, or otherwise. It isnot possible to predict whether any legislative or administrative actions or court decisions havingan adverse impact on the federal or state income tax treatment of holders of the Series 2011BSubordinate Tax Exempt Bonds may occur.

Prospective purchasers of the Series 20 lIB Subordinate Tax Exempt Bonds shouldconsult their own tax advisers regarding the impact of any change in law on the Series 20 II BSubordinate Tax Exempt Bonds.

48

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hi.t.l44A. a

Co-Bond Counsel has not undertaken to advise in the future whether any events after thedate of issuance and delivery of the Series 201lB Subordinate Tax Exempt Bonds may affect thetax status of interest on the Series 201lB Subordinate Tax Exempt Bonds. Co-Bond Counselexpresses no opinion as to any federal, state or local tax law consequences with respect to theSeries 201lB Subordinate Tax Exempt Bonds, or the interest thereon, if any action is taken withrespect to the Series 2011B Subordinate Tax Exempt Bonds or the proceeds thereof upon theadvice or approval of other counsel.

Series 2011 Taxable Bonds

The following is a summary of certain anticipated United States federal income taxconsequences of the purchase, ownership and disposition of the Series 2011 Taxable Bonds. Thesummary is based upon the provisions of the Code, the regulations promulgated thereunder andthe judicial and administrative rulings and decisions now in effect, all of which are subject tochange. The summary generally addresses Series 2011 Taxable Bonds held as capital assets anddoes not purport to address all aspects of federal income taxation that may affect particularinvestors in light of their individual circumstances or certain types of investors subject to specialtreatment under the federal income tax laws, including but not limited to fmancial institutions,insurance companies, dealers in securities or currencies, persons holding such Series 20IITaxable Bonds as a hedge against currency risks or as a position in a "straddle" for tax purposes,or persons whose functional currency is not the United States dollar. Potential purchasers of theSeries 20 II Taxable Bonds should consult their own tax advisors in determining the federal,state or local tax consequences to them of the purchase, holding and disposition of the Series2011 Taxable Bonds.

The advice set forth in this section was not intended or written by Co-Bond Counsel to beused and cannot be used by an owner of the Series 2011 Taxable Bonds for the purpose ofavoiding penalties that may be imposed on the owner of the Series 2011 Taxable Bonds. Theadvice set forth herein is written to support the promotion or marketing of the Series 2011Taxable Bonds. Each owner of the Series 2011 Taxable Bonds should seek advice based on itsparticular circumstances from an independent tax advisor.

Generally. In the opinion of Co-Bond Counsel, interest on the Series 2011 TaxableBonds is not excluded from gross income for federal income tax purposes and so will be fullysubject to federal income taxation. Purchasers other than those who purchase Series 20 IITaxable Bonds in the initial offering at their principal amounts will be subject to federal incometax accounting rules affecting the timing and/or characterization of payments received withrespect to such bonds. In general, interest paid on the Series 2011 Taxable Bonds and recoveryof accrued original issue and market discount, if any, will be treated as ordinary income to abondholder and, after adjustment for the foregoing. principal payments will be treated as a returnofcapital.

Original Issue Discount. The following summary is a general discussion of certainfederal income tax consequences of the purchase, ownership and disposition of Series 2011Taxable Bonds issued with original issue discount ("Discount Taxable Bonds"). A Series 2011Taxable Bond will be treated as having been issued at an original issue discount if the excess ofits "stated redemption price at maturity" (defined below) over its issue price (defined as the

49

initial offering price to the public at which a substantial amount of the Series 2011 TaxableBonds of the same maturity have first been sold to the public, excluding bond houses andbrokers) equals or exceeds one quarter of one percent of such Series 2011 Taxable Bond's statedredemption price at maturity multiplied by the number ofcomplete years to its maturity.

A Series 2011 Taxable Bond's "stated redemption price at maturityll is the total of allpayments provided by the Series 2011 Taxable Bond that are not payments of "qualified statedinterest." Generally, the term "qualified stated interestll includes stated interest that isunconditionally payable in cash or property (other than debt instruments of the issuer) at leastannually at a single fixed rate.

In general, the amount of original issue discount includible in income by the initial holderof a Discount Taxable Bond is the sum of the "daily portionsll of original issue discount withrespect to such Series 2011 Taxable Bond for each day during the taxable year in which suchholder held such Series 2011 Taxable Bond. The daily portion of original issue discount on anyDiscount Taxable Bond is determined by allocating to each day in any "accrual period" a ratableportion of the original issue discount allocable to that accrual period.

An accrual period may be of any length, and may vary in length over the term of a Series2011 Taxable Bond, provided that each accrual period is not longer than one year and eachscheduled payment of principal or interest occurs at the end of an accrual period. The amount oforiginal issue discount allocable to each accrual period is equal to the difference between (i) theproduct of the Series 2011 Taxable Bond's adjusted issue price at the beginning of such accrualperiod and its yield to maturity (determined on the basis of compounding at the close of eachaccrual period and appropriately adjusted to take into account the length of the particular accrualperiod) and (ii) the amount of any qualified stated interest payments allocable to such accrualperiod. The "adjusted issue price" of a Discount Taxable Bond at the beginning of any accrualperiod is the sum of the issue price of the Discount Taxable Bond plus the amount of originalissue discount allocable to all prior accrual periods minus the amount of any prior payments onthe Series 2011 Taxable Bond that were not qualified stated interest payments. Under theserules, holders will have to include in income increasingly greater amounts of original issuediscount in successive accrual periods.

Holders utilizing the accrual method of accounting may generally, upon election, includeall interest (including stated interest, acquisition discount, original issue discount, de minimisoriginal issue discount, market discount, de minimis market discount, and unstated interest, asadjusted by any amortizable bond premium or acquisition premium) on the Series 2011 TaxableBond by using the constant yield method applicable to original issue discount, subject to certainlimitations and exceptions.

Market Discount. Any owner who purchases a Series 2011 Taxable Bond at a pricewhich includes market discount in excess of a prescribed de minimis amount (Le., at a purchaseprice that is less than its adjusted issue price in the hands of an original owner) will be requiredto recharacterize all or a portion of the gain as ordinary income upon receipt of each scheduled orunscheduled principal payment or upon other disposition. In particular, such owner willgenerally be required either (a) to allocate each such principal payment to accrued marketdiscount not previously included in income and to recognize ordinary income to that extent and

50

to treat any gain upon sale or other disposition of such a Series 2011 Taxable Bond as ordinaryincome to the extent ofany remaining accrued market discount (under this caption) or (b) to electto include such market discount in income currently as it accrues on all market discountinstruments acquired by such owner on or after the fIrst day of the taxable year to which suchelection applies.

The Code authorizes the United States Department of the Treasury (the "TreasuryDepartment") to issue regulations providing for the method for accruing market discount on debtinstruments the principal of which is payable in more than one installment. Until such time asregulations are issued by the Treasury Department, certain rules described in the legislativehistory of the Tax Reform Act of 1986 will apply. Under those rules, market discount will beincluded in income either (a) on a constant interest basis or (b) in proportion to the accrual ofstated interest.

An owner of a Series 2011 Taxable Bond who acquires such Series 20 II Taxable Bondat a market discount also may be required to defer, until the maturity date of such Series 2011Taxable Bonds or the earlier disposition in a taxable transaction, the deduction of a portion of theamount of interest that the owner paid or accrued during the taxable year on indebtednessincurred or maintained to purchase or carry a Series 2011 Taxable Bond in excess of theaggregate amount of interest (including original issue discount) includable in such owner's grossincome for the taxable year with respect to such Series 2011 Taxable Bond. The amount of suchnet interest expense deferred in a taxable year may not exceed the amount of market discountaccrued on the Series 2011 Taxable Bond for the days during the taxable year on which theowner held the Series 2011 Taxable Bond and, in general, would be deductible when suchmarket discount is includable in income. The amount of any remaining deferred deduction is tobe taken into account in the taxable year in which the Series 2011 Taxable Bond matures or isdisposed of in a taxable transaction. In the case of a disposition in which gain or loss is notrecognized in whole or in part, any remaining deferred deduction will be allowed to the extentgain is recognized on the disposition. This deferral rule does not apply if the bondowner electsto include such market discount in income currently as described above.

Bond Premium. A purchaser of a Series 2011 Taxable Bond who purchases such Series2011 Taxable Bond at a cost greater than its then principal amount (or, in the case of a Series2011 Taxable Bond issued with original issue premium, at a price in excess of its adjusted issueprice) will have amortizable bond premium. If the holder elects to amortize the premium underSection 171 of the Code (which election will apply to all bonds held by the holder on the firstday of the taxable year to which the election applies, and to all bonds thereafter acquired by theholder), such a purchaser must amortize the premium using constant yield principles based onthe purchaser's yield to maturity. Amortizable bond premium is generally treated as an offset tointerest income, and a reduction in basis is required for amortizable bond premium that is appliedto reduce interest payments. Different rules apply to Discount Tax Exempt Bonds that areacquired with "acquisition premiumll (that is, at a price generally in excess of the Series 2011Bond's adjusted issue price). Purchasers of any Series 2011 Taxable Bonds who acquire suchSeries 20 II Bonds at a premium (or with acquisition premium) should consult with their own taxadvisors with respect to the determination and treatment of such premium for federal income taxpurposes and with respect to state and local tax consequences of owning such Series 20I ITaxable Bonds.

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Sale or Redemption ofSeries 2011 Taxable Bonds. A bondowner's tax basis for a Series20II Taxable Bond is the price such owner pays for the Series 20 II Taxable Bond plus theamount of any original issue discount and market discount previously included in income,reduced on account of any payments received (other than "qualified periodic interest" payments)and any amortized bond premium. Gain or loss recognized on a sale, exchange or redemption ofa Series 20 II Taxable Bond, measured by the difference between the amount realized and theSeries 20 II Taxable Bond basis as so adjusted, will generally give rise to capital gain or loss ifthe Series 2011 Taxable Bond is held as a capital asset (except as discussed above under "MarketDiscount"). The defeasance of the Series 2011 Taxable Bonds may result in a deemed sale orexchange of such Series 2011 Taxable Bonds under certain circumstances; owners of such Series20II Taxable Bonds should consult their tax advisors as to the federal income tax consequencesof such an event.

Backup Withholding. A bondowner may, under certain circumstances, be subject to"backup withholding. II Currently, the rate of this withholding tax is 30% (although the rate isscheduled to be reduced over the next few years) with respect to interest or original issuediscount on the Series 20II Taxable Bonds. This withholding generally applies if the owner of aSeries 2011 Taxable Bond (a) fails to furnish the Trustee or other payor with its taxpayeridentification number; (b) furnishes the Trustee or other payor an incorrect taxpayeridentification number; (c) fails to report properly interest, dividends or other "reportablepaymentsII as defined in the Code; or (d) under certain circumstances, fails to provide the Trusteeor other payor with a certified statement, signed under penalty of perjury, that the taxpayeridentification number provided is its correct number and that the holder is not subject to backupwithholding. Backup withholding will not apply, however, with respect to certain paymentsmade to bondowners, including payments to certain exempt recipients (such as certain exemptorganizations) and to certain Nonresidents (as dermed below). Owners of the Series 2011Taxable Bonds should consult their tax advisors as to their qualification for exemption frombackup withholding and the procedure for obtaining the exemption.

The amount of "reportable payments" for each calendar year and the amount of taxwithheld, if any, with respect to payments on the Series 2011 Taxable Bonds will be reported tothe bondowners and to the IRS.

Nonresident Bondowners. Under the Code, interest and original issue discount incomewith respect to Taxable Bonds held by nonresident alien individuals, foreign corporations orother non-United States persons ("Nonresidents") generally will not be subject to the UnitedStates withholding tax (or backup withholding) if the Issuer (or other person who wouldotherwise be required to withhold tax from such payments) is provided with an appropriatestatement that the beneficial owner of the Series 2011 Taxable Bond is a Nonresident.Notwithstanding the foregoing, if any such payments are effectively connected with a UnitedStates trade or business conducted by a Nonresident bondowner, they will be subject to regularUnited States income tax, but will ordinarily be exempt from United States withholding tax.

State Taxes on the Series 2011 Taxable Bonds. Co-Bond Counsel is further of theopinion that with respect to the Series 2011 Taxable Bonds, under Tennessee law the Series 2011Taxable Bonds and interest thereon are not subject to income taxation in the State of Tennessee,except for Tennessee franchise taxes.

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ERISA. The Employees Retirement Income Security Act of 1974, as amended("ERISA"), and the Code generally prohibit certain transactions between a qualified employeebenefit plan under ERISA or tax-qualified retirement plans and individual retirement accountsunder the Code (collectivelYt the "Plans") and persons whot with respect to a Plan, are fiduciariesor other "parties in interest" within the meaning of ERISA or "disqualified persons" within themeaning of the Code. All fiduciaries of Planst in consultation with their advisorst shouldcarefully consider the impact of ERISA and the Code on an investment in any Series 2011Taxable Bonds.

LITIGATION

The Issuer

There is no known pending ort to the knowledge of the Issuert threatened litigationagainst the Issuer which in any way questions or materially affects the validity of the Series 2011Bonds, or any proceedings or transactions relating to their issuancet sale or delivery or whichmay materially affect the acquisitiont completion or operation of the Project.

The City

At the time of delivery of the Series 2011 Bondst the City will deliver, or cause to bedelivere~ a certificate of certain officers of the City stating thatt other than as described in thisOfficial Statementt there is no controversy or litigation of any nature then pending or, to theirknowledget threatened, (a) restraining or enjoining the issuancet sale, execution or delivery ofthe Series 20II Bondst or (b) in any way contesting or affecting the validity of the Series 20IIBondst any proceedings of the City taken with respect to the issuance or sale thereof or thepledge or application of any money or security provided for the payment of the Series 2011Bonds or the corporate existencet boundaries or powers of the City, or the title of its officials totheir respective offices or (c) which may materially affect the acquisitiont completion oroperation of the Project or the City's right to receive distributions of TDZ Revenues or the usethereof to pay debt service on obligations such as the Series 20II Bonds or the pledge thereof forthe benefit of the Holders of the Series 2011 Bonds or (d) which may materially affect the City'sright to collect the Non-Tax Revenues or the use thereof to pay the Replenishment Obligations.Such certificate may make reference to pending litigation involving the annexation by the City ofcertain territory adjacent to the City and to litigation involving the Memphis City School Districtand Shelby County School District.

FINANCIAL ADVISORS

First Southwest Company and ComCap Advisorst a division of Community Capital (the"Co-Financial Advisors") are serving as co-financial advisors to the Issuer. The Co-FinancialAdvisors assisted in matters related to the planning, structuring and issuance of the Series 2011Bonds and provided other advice. The Co-Financial Advisors did not engage in anyunderwriting activities with regard to the issuance and sale ofthe Series 2011 Bonds.

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UNDERWRITING

The Series 20II Bonds are being purchased for reoffering by Morgan Keegan &Company, Inc. (the "Representative"), on behalf of itself and the other underwriters listed in thefront cover page of this Official Statement (collectively, the "Underwriters") at an aggregatepurchase price of $197,132,245.40 which represents the par amount of the Series 2011 Bonds of$196,935,000.00, plus a net original issue premium in the amount of $2,101,158.60 and less anunderwriting discount of $1,903,913.20, pursuant to a Bond Purchase Agreement among theRepresentative, the Issuer and the City (the "Bond Purchase Agreement"). The Bond PurchaseAgreement provides that the obligations of the Underwriters to accept delivery of the Series 2011Bonds are subject to various conditions of the Bond Purchase Agreement, but the Underwriterswill be obligated to purchase all of the Series 2011 Bonds, if any are purchased. TheUnderwriters reserve the right to join with dealers and other underwriters in offering the Series20 II Bonds to the public.

The prices and other terms with respect to the offering and sale of the Series 2011 Bondsmay be changed from time to time by the Underwriters after such Series 20 II Bonds are releasedfor sale, and the Series 20II Bonds may be offered and sold at prices other than the initialoffering prices, including sales to dealers who may sell the Series 2011 Bonds into investmentaccounts.

The Underwriters intend to offer the Series 20 II Bonds initially at the offering pricesshown on the inside cover page hereof, which prices may subsequently change without anyrequirement of prior notice. The Underwriters reserve the right to join with other dealers andunderwriters in offering the Series 20 II Bonds to the public. The Underwriters may offer andsell the Series 2011 Bonds to certain dealers (including dealer banks and dealers depositing theSeries 20II Bonds into investment trusts) and others at prices other than the public offeringprices stated on the inside cover of this Official Statement.

The Representative and its affiliates are full service financial institutions engaged invarious activities, which may include securities trading, commercial and investment banking,financial advisory, investment management, principal investment, hedging, financing andbrokerage activities. The Representative and its affiliates have, from time to time, performed,and may in the future perform, various investment banking services for the Issuer, the City andother parties to this transaction, for which they received or will receive customary fees andexpenses.

Regions Bank, an affiliate of the Representative, is serving as trustee, paying agent, bondregistrar and authenticating agent with respect to the Series 20 II Bonds and will receive anannual fee for providing such services pursuant to the Indenture.

Citigroup Inc., parent company of Citigroup Global Markets Inc., an underwriter of theSeries 2011 Bonds, has entered into a retail brokerage joint venture with Morgan Stanley. Aspart of the joint venture, Citigroup Global Markets Inc. will distribute municipal securities toretail investors through the financial advisor network of a new broker-dealer, Morgan StanleySmith Barney LLC. This distribution arrangement became effective on June 1,2009. As part of

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this arrangement, Citigroup Global Markets Inc. will compensate Morgan Stanley Smith BarneyLLC for its selling efforts with respect to the Series 2011 Bonds.

RATINGS

Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's Financial ServicesLLC, a division of The McGraw-Hill Companies, Inc. ("S&P") have assigned ratings of "AI"and "A/Stable," respectively, to the Series 20llA Senior Taxable Bonds. Moody's and S&P(collectively, the "Rating Agencies") have also assigned ratings of "Aa3" and "AA-/Stable,"respectively, to the Series 2011 Subordinate Bonds in each case without regard to the Policy.Moody's and S&P have assigned the Series 2011 Bonds the ratings of "Aa3" (negative outlook)and "AA+" (negative outlook), respectively, based upon the issuance of the Policy by AGM.

Such ratings express only the views of the Rating Agencies. An explanation of thesignificance of such ratings may be obtained from the Rating Agencies furnishing the same.There is no assurance that either or all of such ratings will be maintained for any given period oftime or that it will not be revised downward or withdrawn entirely by the Rating Agencies if, intheir judgment, circumstances so warrant. Any such downward revision or withdrawal of suchratings or other actions by the Rating Agencies or any of them, may have an adverse effect onthe liquidity and/or market price of the affected Series 2011 Bonds. Neither the City nor theIssuer undertake any responsibility to oppose any such revision or withdrawal.

CONTINUING DISCLOSURE

The Issuer has detennined that no financial or operating data concerning the Issuer ismaterial to any decision to purchase, hold or sell the Series 2011 Bonds and the Issuer has noresponsibility to provide any such information either now or in the future.

The City will agree and undertake, for the benefit of the holders of the Series2011 Bonds, to provide certain financial information and operating data relating to the TDZRevenues, the Non-Tax Revenues and the Series 2011 Bonds in each year (the "Annual Report")and to provide notices of the occurrence ofcertain enumerated events, if material, pursuant to theDisclosure Agreement. The Annual Report will be filed annually by the Trustee, on behalfof theCity, with the centralized information repository developed and operated by the MunicipalSecurities Rulemaking Board (the "MSRB") through the Electronic Municipal Market Accesssystem ('lEMMA"), in an electronic format prescribed by the MSRB. The notices of materialevents will also be filed by the Trustee, on behalf of the City, with EMMA. The specific natureof the information to be contained in the City Annual Report and the notices of material events isdescribed in "APPENDIX C - FORM OF CONTINUING DISCLOSURE AGREEMENT"attached hereto. These undertakings have been made in order to assist the Underwriters incomplying with the Rule, and such undertaking shall only apply so long as the Series 2011Bonds remain Outstanding; provided, however, that the undertaking shall terminate upon thetermination of the continuing disclosure requirements of the Rule by legislative, judicial oradministrative action and may be amended as provided in the Disclosure Agreement.

ss

There have been several instances in the previous five years in which the City has failedto comply in all material respects with previous undertakings entered into pursuant to the Rule.With the exception of the filings for the Fiscal Year 2008 with respect to its Sanitary SewerageSystem Bonds, the City is now in substantial compliance with all of its required filings set forthin the related undertakings. In addition, the City is implementing certain measures andprocedures which it believes will minimize any further instances of non compliance.

CERTAIN REFERENCES

Summaries of certain provisions of the Indenture, the Loan Agreement and theReplenishment Agreement as well as certain definitions used therein can be found in AppendixA attached hereto and incorporated herein by reference. Reference is made to the Indenture, theLoan Agreement and the Replenishment Agreement for a complete recital of their terms.

References herein to the Act and any of the bond documents are brief descriptions ofcertain portions thereof. Such descriptions do not purport to be complete and reference is herebymade to such statute and documents for full and complete statements of the provisions thereof.

MISCELLANEOUS

The references, excerpts and summaries of all documents referred to herein do notpurport to be complete statements of the provisions of such documents and reference is directedto all such documents for full and complete statements of all matters of fact relating to the Series2011 Bonds, the security for and the source for repayment for the Series 2011 Bonds and therights and obligations of the Bondholders. Copies of such documents may be obtained asspecified under the caption "INTRODUCTION" herein.

The information contained in this Official Statement has been compiled from official andother sources deemed to be reliable, and is believed to be correct as of this date.

Use of the words "shall" or "will" in this Official Statement or in summaries ofdocuments to describe future events or continuing obligations is not intended as a representationthat such event or obligation will occur but only that the document contemplates or requires suchevent to occur or obligation to be fulfilled.

Any statements made in this Official Statement involving estimates or matters ofopinion,whether or not so expressly stated, are set forth as such and not as representations of fact, and norepresentation is made that any of the estimates or matters of opinion will be realized. Neitherthis Official Statement nor any statement which may have been made orally or in writing is to beconstrued as a contract with the owners of the Series 2011 Bonds.


S6

The Issuer and City have reviewed the information contained herein which relates tothem and have approved all such information for use in this Official Statement. The execution,delivery and circulation of this Official Statement has been duly authorized by the Issuer and theCity and this Official Statement has been duly approved by the Issuer and the City.

MEMPHIS CENTER CITY REVENUEFINANCE CORPORATION

By: lsi Paul MorrisPaul Morris, President

CITY OF MEMPmS, TENNESSEE

By: lsiA C Wharton. Jr.A C Wharton, Jr., Mayor

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[THIs PAGE INTENTIONALLY LEFI' BLANK]

APPENDIX A

DEFINITIONS OF CERTAIN TERMS AND SUMMARY OF CERTAIN PROVISIONSOF THE INDENTURE, LOAN AGREEMENT AND REPLENISHMENT AGREEMENT

[THIs PAGE lNTENTIONALLY LEFT BLANK]

APPENDIX A

DEFINITIONS OF CERTAIN TERMS AND SUMMARY OF CERTAIN PROVISIONSOF THE INDENTURE,

LOAN AGREEMENT AND REPLENISHMENT AGREEMENT

Definitions

The tenus set forth below have the following meaningst as defined in the Indenture, theLoan Agreement and the Replenishment Agreement.

"Additional Bonds" means the additional bonds issued by the Issuer pursuant to thetenus and conditions of the Indenture.

"Additional Subordinate Bonds" means any Additional Bonds having the same Priorityas the Series 20llB Bonds and the Series 20llC Bonds.

"Authorized Officer" meanst when used in connection with the Cityt the Mayor,Comptroller and Director of Finance and Administration of the City of Memphis, Tennessee orany other officer of the City designated in writing by the Mayor of the City of Memphis,Tennesseet to execute an Officer's Certificate on behalfof the City, and when used in connectionwith the Issuert any officer of the Issuer authorized by its bylaws or by or pursuant to aresolution ofthe Issuer to act on behalfof the Issuer.

"Bond" means one or more of the Series 2011 Bonds and any Additional Bonds.

"Bond Year" means any twelve month period beginning on November I in one calendaryear and ending ont but includingt October 31 of the next calendar year. For the purpose ofcalculating debt service payable on the Bonds in any Bond Year, principal and interest payableon the Bonds on November I of any Bond Year shall be deemed to be payable on October 31 ofthe preceding Bond Year.

"Bondholder. " "Holder" and "owner ofthe Bonds" means any Person in whose name aBond is registered on the Bond Register.

"Bond Register" means the registration books of the Issuer kept by the Trustee toevidence the registration and transfer ofBonds.

"Borrower's Obligations" meanst during any Fiscal Yeart the amount certified by theCity pursuant to the Indenture as required to be paid by it during such Fiscal Year for or onaccount of the obligations identified in a schedule attached to the Indenture.

"Business Day" means any day of the year on which banks located in Memphis,Tennesseet or in the city in which the principal corporate trust office of the Trustee is located, arenot required or authorized by law or executive order to remain closed.

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"City" means the City of Memphis, Tennessee, a municipal corporation organized underthe laws of the State ofTennessee, and the City's successors and assigns.

"Closing" or "Closing Date" means, with respect to any series ofBonds issued pursuantto the Indenture, the date oforiginal issuance of such series of Bonds.

"Code" means the Internal Revenue Code of 1986, as amended from time to time and theregulations promulgated thereunder.

"Construction Fund" means the Construction Fund created by the Indenture.

"Convention Center Act" means Tennessee Code Annotated, Title 7, Chapter 88,commonly known as the Convention Center and Tourism Development Financing Act of 1988.

"Costs ofIssuance Fund" means the Costs of Issuance Fund created by the Indenture.

"Costs ofthe Project" means "costs", as defined by the Act, with respect to the Project.

"Debt Service Fund" means the Debt Service Fund created by the Indenture.

"Debt Service Reserve Fund" means the fund by that name established by the Indenture.

"Deficiency Notice" means a notice given to the City by the Trustee pursuant to theIndenture which sets forth the amount by which the amount on deposit in the Subordinate DebtService Reserve Account on April 30 of a year is less than the then Subordinate Debt ServiceReserve Requirement.

"Escrow Obligations" means

(i) noncallable Government Obligations; or

(ii) if an opinion of Bond Counsel is delivered to the Trustee to the effect that theapplicable law and documents permit the use of such obligations for such advancerefunding and if satisfactory evidence is delivered to the Trustee that after such advancerefunding the indebtedness so advance refunded will be rated in the highest category byeither Moody's or S&P, or, upon the discontinuance of either or both such services, anyother nationally recognized rating service, (a) evidences of a direct ownership in futureinterest or principal payments on obligations issued or guaranteed by the United States ofAmerica, which obligations are held in a custody account by a custodian satisfactory tothe Trustee, pursuant to the terms of a custody agreement or (b) bonds or notes of anystate of the United States of America or any political subdivision thereof which bondsand notes, when issued, were secured by the full faith and credit of such issuer and at thetime of acquisition and at all times thereafter are secured by money or noncallableEscrow Obligations (which may be applied only to the payment of the principal of,interest and premium on such bonds or notes and which are held in an irrevocable escrowby an escrow agent or trustee in trust solely for the benefit of the owners of such bonds ornotes) and which bonds or notes are rated "AAA" by S&P or "Aaa" by Moody's if:

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(I) such bonds or notes are not subject to redemption prior to maturity orthe Trustee has received irrevocable notice as to the date of their call andredemption prior to maturity,

(2) such money and noncallable Escrow Obligations are sufficient at alltimes to pay in full all principal of, interest, and premium, if any, on such bondsand notes which sufficiency has been verified by the report of an independentcertified public accountant (a ttVerification 01Sufficiency") and no replacementof a United States Government Obligation in such escrow shall be permittedexcept with another United States Government Obligation or money and thenonly upon delivery ofa new Verification of Sufficiency,

(3) the Trustee has received an opinion of Independent Counsel (whichcounsel and opinion, including without limitation the form, scope substance andother aspects thereof are acceptable to the Trustee and not objected to by theIssuer) to the effect that such money and Escrow Obligations are not available tosatisfy any other claims, including those by or against the trustee or escrow agentfor such bonds and notes, and

(4) the Trustee has received an unqualified opinion of nationallyrecognized bankruptcy counsel (which counsel and opinion, including withoutlimitation the form, scope, substance and other aspects thereof are acceptable tothe Trustee and not objected to by the Issuer) to the effect that payments made onsuch bonds or notes from such escrow would not be avoidable as preferentialpayments and recoverable under the United States Bankruptcy Code should theissuer or any other person liable on the bonds or notes become a debtor in aproceeding commenced under the United States Bankruptcy Code.

"Expense Fund" means the Expense Fund created by the Indenture.

"Fiscal Year" means any twelve month period beginning on July I of any calendar yearand ending on and including June 30 of the next succeeding calendar year, or such other twelvemonth period selected by the City, from time to time, as its fiscal year.

"General Revenues" means all revenues of the City, other than the TDZ Revenues or advalorem property tax revenues, that may legally be applied to the payments required by theReplenishment Agreement to be made by the City.

"Government Obligations" means (i) direct obligations of the United States of Americafor the full and timely payment of which the full faith and credit of the United States ofAmericais pledged, or (ii) obligations issued by a person controlled or supervised by and acting as aninstrumentality of the United States of America, the full and timely payment of the principal ofand the interest on which is fully and unconditionally guaranteed as a full faith and creditobligation of the United States of America (including any securities described in (i) or (ii) issuedor held in book-entry form on the books of the Department of the Treasury of the United Statesof America), which obligations, in either case, (y) are not subject to redemption or prepayment

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prior to maturity except at the option of the holder of such obligations and (z) may include U.S.Treasury Trust Receipts.

"Independent Architect" means an architect, engineer or firm of architects or engineersselected by the City, not objected to the Trustee and licensed by, or permitted to practice in, thestate where the construction involved is located, which architect, engineer or firm ofarchitects orengineers shall have no interest, direct or indirect, in the City and, in the case of an individual,shall not be a member, director, officer or employee of the City and, in the case of a firm, shallnot have a partner, member, director, officer or employee who is a member, director, officer oremployee of the City; it being understood that an arm's-length contract with the City for theperformance of architectural or engineering services shall not in and of itself be regarded ascreating an interest in or an employee relationship with such entity and that the term IndependentArchitect may include an architect or engineer or firm of architects or engineers who otherwisemeet the requirements of this definition and who also are under contract to construct the facilitieswhich they have designed.

"Insurance Policy" means each Insurance Policy issued at the request of the Issuer or theCity by the Insurer guaranteeing the schedule payment, when due, of the principal of, whether atmaturity or through mandatory Sinking Fund Redemptions, and interest on the Insured Bonds.

"Insured Bonds" means the Series 2011 Bonds.

"Insurer" means Assured Guaranty Municipal Corp., a New York stock insurancecompany, or any successor thereto or assigns thereof.

"Insurer Default" means with respect to any Insurer, any of the following:

(i)

(ii)

there shall occur a failure by the Insurer to make payment underthe Insurance Policy; or

the Insurance Policy shall have been declared null and void orunenforceable in a fmal determination by a court oflaw.

"Interest Payment Date" means, with respect to the Series 2011 Bonds, each May I andNovember I, commencing (i) with respect to any Series 2011 Bonds of a series, on the dates setforth in the Indenture for the Series 2011 Bonds of such series, and (ii) with respect to anyAdditional Bonds, on the date set forth in the Supplemental Indenture authorizing the issuance ofsuch Additional Bonds.

"Issuer" means Memphis Center City Revenue Finance Corporation, a public nonprofitcorporation organized under the laws of the State of Tennessee, and the Issuer's successors andassigns.

"Maximum Annual Debt Service" means, as of any particular date of calculation and withrespect to any Outstanding Bonds, an amount equal to the greatest amount required in the thencurrent or any future Bond Year to pay the principal of and interest on such Bonds payableduring such Bond Year; provided, however, that for purposes of this defmition it shall beassumed that:

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(i) principal and interest payable on November I of a Bond Year is payableon October 31 of the immediately preceding Bond Year; and

(ii) a Bond bearing interest at a variable rate, prior to its conversion to bearinterest at a fixed rate to its maturity, bears interest during any Bond Year at the lesser of:

(I) a fixed rate of interest equal to that rate, as determined by anAuthorized Officer of the City on a Business Day not more than twenty (20) daysprior to the date of initial issuance of such variable rate Bond, which the Bondwould have had to bear to be marketed at par on such date as a fixed rateobligation maturing on the maturity date ofsuch variable rate Bond; and

(2) if the Issuer has, at the direction of the City, in connection withsuch variable rate Bond entered into (A) an interest rate exchange agreementwhich provides that the Issuer is to pay another person an amount determinedbased upon a fixed rate of interest on the Outstanding principal amount of thevariable rate Bond to which such agreement relates and the counterparty to suchagreement pays with respect to a like principal amount a variable rate expected tobe reasonably equivalent to the variable rate of interest on such Bonds, or (8) ahedge agreement in the nature of an interest rate cap or collar, then either thefixed interest rate set forth in or determined in accordance with such interest rateexchange agreement or the maximum rate set forth in such hedge agreement, asapplicable.

"Officer'S Certificate" means a certificate signed (i) in the case of a certificate deliveredon behalf of the City, by an Authorized Officer of the City or, (ii) in case of a certificatedelivered on behalf of any corporation, by the President or any authorized Vice-President ofsuch corporation or any other officer duly authorized by such corporation or, (iii) on behalf ofany other Person, by the chief executive officer, the chief financial officer or any otherauthorized officer of such other Person, in each case whose authority to execute such Certificateshall be evidenced to the satisfaction of the Trustee.

"Operating Expenses" means all costs, fees and expenses of any kind arising out of orincurred by the Issuer, the Trustee, a tender agent, a remarketing agent or any other person inconnection with the administration of the trust estate, or the performance or exercise by suchperson ofany duties, powers and rights under the Indenture or under the Bonds, including but notlimited to the fees and expenses of the Trustee, bond insurance premiums not paid from proceedsof Bonds, and fees and expenses in connection with the tender and remarketing of the Bonds, butshall not include the principal or redemption price of or redemption premium or interest onBonds, in each case to the extent constituting a Cost of the Project. Such costs, fees andexpenses may, at the option of the City, include a reserve for the aforementioned costs, fees andexpenses not to exceed ten percent (l 0%) of the amount certified by the City from time to timeas being the estimated Operating Expenses for the next succeeding twelve calendar months.

"Outstanding" means when used in connection with any Bond, a Bond which has beenduly authenticated and delivered by the Trustee under the Indenture, other than:

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(a) A Bond cancelled after purchase in the open market or because ofpayment at or redemption prior to maturity;

(b) A Bond for the payment or redemption of which money or EscrowObligations shall have been theretofore deposited with the Trustee pursuant to theprovisions of the Indenture (whether upon or prior to the maturity or redemption date ofany such Bonds); provided, however, that if such Bond is to be redeemed prior to thematurity thereof, notice of such redemption shall have been given or arrangementssatisfactory to the Trustee shall have been made therefor, or waiver of such noticesatisfactory in form to the Trustee shall have been filed with the Trustee;

(c) A Bond in lieu of which another Bond has been authenticated under theIndenture; and

(d) For the purpose of any waivers, consents, notices or other actions requiredor permitted by the Indenture to be given or taken, a Bond owned by or on behalf of theIssuer or the City or by or on behalf of any affiliate or subsidiary of, or any other entitycontrolled by, either the Issuer or the City.

"Person" means any natural person, firm, joint venture, association, partnership,business trust, corporation, limited liability company, public body, agency or politicalsubdivision thereof or any other similar entity.

"Plans and Specifications" means all available plans and specifications for any portionof the Project with respect to which an Independent Architect has been retained.

"Priority" means, when used in connection with any Bond, the relative rank or right ofpayment of such Bond out of the Trust Estate; provided, however, that (i) the Series 201lABonds shall rank and have a right of payment superior to the Series 20II B Bonds and the Series201lC Bonds, and (ii) Additional Bonds shall have the rank or right of payment provided in theSupplemental Indenture authorizing their issuance.

"Project" means and consists of:

(a) redevelopment of the public arena and related properties located in thecenter city area of the City comprising approximately 41 acres of land commonly knownas the "Pyramid Arena" for retail and commercial uses;

(b) acquisition for future redevelopment and renovation, certain properties inthe vicinity of the Pyramid Arena and located in the center city area of the Citycommonly known as the "Pinch District" comprising 34 parcels of land aggregatingapproximately II acres of land; and

(c) acquisition by the City of all of the interest of Shelby County, Tennessee,in and to the Memphis Cook Convention Center.

"Redemption Date" means any date on which Bonds are to be redeemed in accordancewith the provisions of the Indenture.

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"Revenue Fund" means the Revenue Fund created by the Indenture.

"Senior Bond" means any Series 2011A Senior Taxable Bond or any Additional Bond ofthe same Priority with the Series 2011A Senior Taxable Bonds.

"Senior Bond Account" means the Senior Bond Account within the Debt Service Fundcreated by the Indenture.

"Senior Bond Capitalized Interest Account" means the Senior Bond Capitalized InterestAccount within the Debt Service Fund created by the Indenture.

"Senior Debt Service Reserve Account" means the Senior Debt Service Reserve Accountwithin the Debt Service Reserve Fund created pursuant to the Indenture.

"Senior Debt Service Reserve Requirement" means, initially at the Closing Date,$4,638,043.50, and, as of any particular date of calculation thereafter, (i) if no Senior Bondsother than the Series 2011A Senior Taxable Bonds are then Outstanding, the lesser of suchamount and the Maximum Annual Debt Service on the then Outstanding Series 2011A SeniorTaxable Bonds, or (ii) such greater amount as shall be set forth in the Supplemental Indentureauthorizing the issuance ofany additional Senior Bonds theretofore issued.

"Sinking Fund Redemption" means, when used in connection with Series 2011 Bonds ofa series and maturity, the mandatory redemption thereof required to be made in accordance withthe Indenture, and, when used in connection with any particular series and maturity of AdditionalBonds, the mandatory redemption thereof required to be made in accordance with theSupplemental Indenture authorizing the issuance thereof.

"Subordinate Bond" means any Series 2011B Subordinate Tax-Exempt Bond, Series2011C Subordinate Taxable Bond or Additional Bond of the same Priority with the Series 2011BSubordinate Tax-Exempt Bonds and Series 2011C Subordinate Taxable Bonds.

"Subordinate Bond Account" means the Subordinate Bond Account within the DebtService Fund created by the Indenture.

"Subordinate Bond Capitalized Interest Account" means the Subordinate BondCapitalized Interest Account within the Debt Service Fund created by the Indenture.

"Subordinate Debt Service Reserve Account" means the account within the Debt ServiceReserve Fund so designated and established by the Indenture.

"Subordinate Debt Service Reserve Requirement" means, initially at the Closing Date,$14,367,912.50, and, as of any particular date of calculation thereafter, (i) if no SubordinateBonds other than the Series 2011B Subordinate Tax-Exempt Bonds or Series 2011C SubordinateTaxable Bonds are then Outstanding, the lesser of such amount and the Maximum Annual DebtService on the then Outstanding Series 2011B Subordinate Tax-Exempt Bonds and Series 2011CSubordinate Taxable Bonds, or (ii) such greater amount as shall be set forth in the SupplementalIndenture authorizing the issuance ofany additional Subordinate Bonds theretofore issued.

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"Supplemental Indenture" means any indenture authorizing the issuance of AdditionalBonds in accordance with the Indenture or amending or supplementing the Indenture or any priorSupplemental Indenture executed and becoming effective in accordance with the terms andprovisions of the Indenture.

"Surplus Fund" means the Surplus Fund created by the Indenture.

"Swap Agreement" means any interest rate exchange agreement entered into by theIssuer shall meet certain conditions and requirements outlined in the Indenture.

"Tax Certificate" means a certificate or certificates of an Authorized Officer of the Issuerand the City, including the appendices, schedules and exhibits thereto, executed in connectionwith the issuance of the federally tax exempt Series 2011 Bonds in which the Issuer and Citymake representations and agreements as to arbitrage compliance with the provisions of Section141 through 150, inclusive, of the Code, or any similar certificate, agreement or other instrumentmade, executed and delivered in lieu of said certificate, in each case as the same may beamended or supplemented.

"Tax Exempt" means, when used in connection with any particular Bond, a Bond theinterest on which is, in the opinion of Bond Counsel delivered at the time of issuance of suchBond, excluded from the gross income of the Holder thereof for purposes of federal incometaxation.

"TDZ Revenues" means a distribution of state and local sales and use taxes, authorizedand allocated pursuant to the Convention Center Act, relating to sales made in the downtowntourism development zone approved by the City and the State with respect to the "qualifiedpublic use facility" (as defined in the Convention Center Act) known as the Cook ConventionCenter (including ancillary structures and facilities and associated developments) during a periodwhich began during the Fiscal Year ended June 30, 2002, the time when such "qualified publicuse facility" commenced operations as a "qualified public use facility, and which will continuefor up to thirty (30) years thereafter, until the Fiscal Year ending June 30, 2030, unless earlierterminated in accordance with the Convention Center Act.

"Trust Estate" means (a) all right, title and interest of the Issuer in and to the LoanAgreement and all amounts payable to the Issuer under the Loan Agreement and all securitytherefor (excluding Unassigned Rights as defmed in the Indenture); (b) all right, title and interestof the Issuer in and to the funds, accounts and subaccounts established pursuant to the Indentureand the assets thereof and income and earnings thereon, except that the Senior Debt ServiceReserve Account of the Debt Service Reserve Fund, each subaccount therein, the assets thereofand the income and earnings thereon shall be for the sole benefit of the Holders of OutstandingSenior Bonds and the Subordinate Debt Service Reserve Account of the Debt Service ReserveFund, each subaccount therein, the assets thereof and the income and earnings thereon shall befor the sole benefit ofthe Holders of Outstanding Subordinate Bonds; (c) solely for the benefit ofthe Holders of Outstanding Subordinate Bonds, all right, title and interest in and to theReplenishment Agreement and all amounts payable to the Issuer thereunder; (d) any and all otherproperty of every kind and nature from time to time, by delivery or by writing of any kind,conveyed, pledged, assigned or transferred as and for additional security under the Indenture by

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the Issuer or the City or by anyone in their behalf to the Trustee, including without limitationfunds of the City held by the Trustee as security for the Bonds; to have and to hold, all andsingular, the properties and the rights and privileges conveyed, assigned and pledged by theIndenture by the Issuer or intended so to be, unto the Trustee and its successors and assignsforever, in trust, nevertheless, with power of sale for the equal and pro rata benefit and securityof each and every Holder of the Bonds ofa Priority (as defmed in the Indenture) issued and to beissued under the Indenture, without preference, priority or distinction as to participation in thebenefit and protection of one Bond of a Priority over or from the other Bonds of such Priority, byreason of priority in the issue or negotiation or maturity thereof, or for any other reasonwhatsoever, except as otherwise expressly provided in the Indenture, so that each and all of theBonds of a Priority shall have the same right, lien and privilege under the Indenture and shall beequally secured with the same effect as if the same had all been made, issued and negotiatedsimultaneously with the delivery of the Indenture and were expressed to mature on one and thesame date; provided, nevertheless, and these presents are upon the express condition that if theIssuer or its successors or assigns shall well and truly payor cause to be paid the principal ofsuch Bonds with interest according to the provisions set forth in the Bonds and each of them orshall provide for the payment or redemption of such Bonds by depositing or causing to bedeposited with the Trustee the entire amount of funds or securities requisite for payment orredemption thereof when and as authorized by the provisions of the Indenture, and shall also payor cause to be paid all other sums payable under the Indenture by the Issuer, then these presentsand the estate and rights granted by the Indenture shall cease, determine and become void, andthereupon the Trustee, on payment of its lawful charges and disbursements then unpaid, ondemand of the Issuer and upon the payment of the cost and expenses thereof, shall duly execute,acknowledge and deliver to the Issuer such instruments of satisfaction or release as may benecessary or proper to discharge the Indenture, including if appropriate any required discharge ofrecord, and if necessary shall grant, reassign and deliver to the Issuer, its successors or assigns,all and singular the property, rights, privileges and interests by it granted, conveyed and assignedby the Indenture, and all substitutes therefor, or any part thereof, not previously disposed of orreleased as provided in the Indenture; otherwise the Indenture shall be and remain in full force.

"Written Request" means with reference to the Issuer, a request in writing signed by thePresident, Chairman, Vice-Chairman, Treasurer, Secretary or Assistant Secretary of the Issuer,and, with reference to the City, means a request in writing signed by any officer of the Cityauthorized to execute an Officer's Certificate on its behalf, as the case may be.

SUMMARY OF THE INDENTURE

The following is a briefsummary ofcertain provisions of the Indenture. Such summarydoes not purport to be complete and reference is made to the Indenture for full and completestatements ofsuch and all provisions. Defined terms used herein shall have the meanings setforth above.

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provided, nevertheless, and these presents are upon the express condition that if the Issueror its successors or assigns shall well and truly payor cause to be paid the principal of suchBonds with interest according to the provisions set forth in the Bonds and each of them or shallprovide for the payment or redemption of such Bonds by depositing or causing to be depositedwith the Trustee the entire amount of funds or securities requisite for payment or redemptionthereof when and as authorized by the provisions of the Indenture, and shall also payor cause tobe paid all other sums payable under the Indenture by the Issuer, then these presents and theestate and rights granted by the Indenture shall cease, determine and become void, and thereuponthe Trustee, on payment of its lawful charges and disbursements then unpaid, on demand of theIssuer and upon the payment of the cost and expenses thereof, shall duly execute, acknowledgeand deliver to the Issuer such instruments of satisfaction or release as may be necessary or properto discharge the Indenture, including if appropriate any required discharge of record, and ifnecessary shall grant, reassign and deliver to the Issuer, its successors or assigns, all and singularthe property, rights, privileges and interests by it granted by the Indenture, conveyed andassigned, and all substitutes therefor, or any part thereof, not previously disposed of or releasedas provided in the Indenture; otherwise the Indenture shall be and remain in full force.

and it is covenanted, declared and agreed by and between the parties to the Indenture thatall Bonds are to be issued, authenticated and delivered, and that all the Trust Estate is to be heldand applied, subject to the further covenants, conditions, releases, uses and trusts set forth in theIndenture, and the Issuer, for itself and its successors, does covenant and agree to and with theTrustee and its respective successors in said trust, for the benefit of those who shall hold theBonds, or any of them, as follows.

Issuance of Additional Bonds

Additional Bonds may be issued by the Issuer for anyone or more of the followingpurposes: (i) paying Costs of the Project, including capitalized interest on such AdditionalBonds, (ii) paying costs associated and incurred in connection with the issuance of suchAdditional Bonds, and (iii) paying or providing for the payment of Outstanding Bonds or anyportion thereof.

The principal amount of such Additional Bonds may include an amount sufficient to paythe costs and expenses of issuance, establish a reserve fund or fund the Debt Service ReserveFund at its requirement after giving effect to the issuance of such Additional Bonds, providecapitalized interest and provide for such other costs as are permitted by the Act. AdditionalBonds may be issued notwithstanding the fact that no additional security is made subject to thelien of the Indenture; provided, however, that the Trustee and the Issuer are authorized to acceptadditional security upon the issuance ofany Additional Bonds.

Prior to the delivery of any Additional Bonds, there shall be filed with the Trustee,among other items, all of the following:

(a) A written statement by an Authorized Officer ofthe City approving (a) theissuance and delivery of such Additional Bonds and acknowledging thatpayments are required to be made under the Loan Agreement in an amountsufficient to pay the principal and interest on such Additional Bonds, when

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due, to the same extent as if such Additional Bonds were included in theissuance of the Series 2011 Bonds and (b) any other matters to be approved bythe City pursuant to the Loan Agreement and the Indenture.

(b) A copy, duly certified by the President, Chainnan or Vice Chainnan orother Authorized Officer of the Issuer, of the resolution theretofore adoptedand approved authorizing the execution and delivery of such supplements tothe Indenture and to the Loan Agreement as may be necessary and authorizingthe issuance ofsuch Additional Bonds.

(c) A copy, duly certified by an Authorized Officer of the City, of theresolutions theretofore adopted and approved authorizing the issuance of theAdditional Bonds and a supplement to the Loan Agreement and furtherapproving such Supplemental Indenture and the issuance and sale of suchAdditional Bonds.

(d) The original executed counterparts of the Supplemental Indentureauthorizing the issuance ofsuch Additional Bonds.

(e) A Written Request and authorization to the Trustee on behalf of the Issuer,signed by its President, Chairman or Vice Chairman or other AuthorizedOfficer, to authenticate and deliver such Additional Bonds (specifically statingthe principal amount to be issued and delivered to the purchasers thereinidentified) upon payment to the Trustee, but for the account of the Issuer, ofasum specified in such request and authorization plus accrued interest, if any,thereon to the date ofdelivery. The Trustee shall out of such proceeds depositto the credit of the Senior Bond Capitalized Interest Account or theSubordinate Bond Capitalized Interest Account, as applicable, the amounts, ifany, set forth in the Supplemental Indenture with respect to such AdditionalBonds, and deposit to the credit of the Costs of Issuance Fund the amount, ifany, set forth in said Supplemental Indenture. If the proceeds received by theTrustee are from the issuance of Additional Bonds for the purpose ofacquiring or constructing additional "projects" as defined in the Act, then theSupplemental Indenture shall provide that after making the deposits set forthabove the balance of such proceeds shall be deposited in the ConstructionFund maintained under the Indenture having such terms and provisions as areacceptable to the Issuer and shall be paid out against such showings as areacceptable to the Issuer.

(f) Executed counterparts of appropriate supplements to the Loan Agreementproviding, among other things, for the City's obligation to make payments onaccount of the principal ofand interest on such Additional Bonds.

(g) In the case of Additional Bonds to be issued as Senior Bonds, other thanRefunding Bonds issued pursuant to the Indenture:

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(1) an Officer's Certificate of the City setting forth the TDZ Revenuescollected during the preceding Fiscal Year;

(2) an independent consultant's report setting forth the projected TDZRevenues for the first full Fiscal Year after projected completion ofthe Facilities constructed with proceeds of the Additional Bonds;

(3) an Officer's Certificate of the City (A) setting forth the MaximumAnnual Debt Service on the Outstanding Senior Bonds after givingeffect to issuance of such Additional Bonds and (B) establishingthat the amount set forth in (I) is at least equal to two times suchMaximum Annual Debt Service set forth in (3)(A); and

(4) an Officer's Certificate of the City (A) setting forth the MaximumAnnual Debt Service on the Outstanding Senior Bonds after givingeffect to issuance of such Additional Bonds, (B) setting forth theMaximum Annual Debt Service on the then OutstandingSubordinate Bonds, and (C) establishing that the amount set forthin (2) is at least equal to the sum of the amounts set forth in (4)(A)and (4)(B).

(h) In the case of Additional Bonds to be issued as Subordinate Bonds, otherthan Refunding Bonds issued pursuant to the Indenture, (A) an independentconsultant's report setting forth the projected TDZ Revenues for the first fullfiscal year after projected completion of the Facilities constructed withproceeds of the Additional Bonds; and (B) an Officer's Certificate of the City:(x) separately setting forth the Maximum Annual Debt Service on the thenOutstanding Senior Bonds and the Maximum Annual Debt Service on theSubordinate Bonds Outstanding after giving effect to the issuance of suchAdditional Bonds; (y) establishing that the amount set forth in (A) is at leastequal to the sum of the amounts set forth in (B)(x) and (y); and (z) stating thatthe Costs of the Project to be financed through the issuance of AdditionalBonds consists of items for which the City may provide aid or assistance to bepaid from revenues specified pursuant to Tennessee Code Annotated Section7-53-315, as amended.

(i) Such other closing documents and opinions of counsel as the Issuer and theTmstee may reasonably specify.

(Section 208)

Source of Payment of Bonds

The Bonds authorized by the Indenture and all payments to be made by the Issuer thereonand into the various funds established under the Indenture are not general obligations of theIssuer but are limited obligations payable solely from the sources described in the Indenture.

(Section 401)

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Revenue Fund

(a) The Issuer shall establish with the Trustee and maintain so long as any of the Bondsare Outstanding a separate fund to be known as the "Revenue Fund - The City of Memphis,Tennessee (Pyramid and Pinch District Redevelopment Project)" (called the "Revenue Fund").All payments made by the City pursuant to the Loan Agreement pledged under the Indenture, asand when received by the Trustee, shall be deposited in the Revenue Fund and shall be heldtherein until disbursed as provided in the Indenture. Pursuant to the assignment and pledge ofpayments under the Loan Agreement set forth in the granting clauses contained in the Indenture,the Issuer will direct the City to make such payments directly to the Trustee when and as thesame become due and payable by the City under the Loan Agreement.

(b) The Trustee, from money on deposit in the Revenue Fund, shall, on or prior to thesecond Business Day next preceding each November I of a Bond Year, make the deposits andpayments set forth below in the order ofpriority set forth below:

(i) Pro rata based upon the ratio each of the amounts required to be paid pursuant to(A) and (B) of this subparagraph (i) bears to the sum of the amounts to be paidpursuant to (A) and (B):

(A) To the Senior Bond Account, an amount which, together with theamount then on deposit in the Senior Bond Account, equals thesum of (1) the principal of Outstanding Senior Bonds payable atmaturity or through mandatory Sinking Fund Redemption on thenext succeeding November 1, plus (2) the interest on OutstandingSenior Bonds payable on the next succeeding November 1 andMay I; and

(B) To the City, the amount which has been certified to the Trustee bythe City as the amount required to be paid during the nextsucceeding twelve (12) calendar months for the Borrower'sObligations; then

(ii) To the Senior Debt Service Reserve Account, an amount which, together with theamount then on deposit in the Senior Debt Service Reserve Account, equals theSenior Debt Service Reserve Requirement; then

(iii) To the Subordinate Bond Account, an amount which, together with the amountthen on deposit in the Subordinate Bond Account, equals the sum of (1) theprincipal of Outstanding Subordinate Bonds payable at maturity or throughmandatory Sinking Fund Redemption on the next succeeding November 1, plus(2) the interest on Outstanding Subordinate Bonds payable on the next succeedingNovember I and May 1; then

(iv) To the Expense Fund the estimated Operating Expenses for the next succeedingtwelve calendar months as certified to the Trustee by the City; then

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(v) To the Subordinate Debt Service Reserve Account, an amount which, togetherwith the amount then on deposit in the Subordinate Debt Service ReserveAccount, equals the Subordinate Debt Service Reserve Requirement; then

(vi) To the City, the lesser of (A) the amount then remaining in the Revenue Fundafter the preceding deposits and payments have been made, and (B) the amounttheretofore paid by the City pursuant to the Replenishment Agreement for whichit has not previously been reimbursed pursuant to this clause (vi); and, then,

(vii) To the Surplus Fund, any amount remaining in the Revenue Fund after thepreceding deposits and payments have been made.

(Section 402)

Debt Service Fund

(a) Establishment ofAccounts. The Issuer shall establish with the Trustee and maintainso long as any of the Bonds are Outstanding a separate fund to be known as the "Debt ServiceFund - The City of Memphis, Tennessee (Pyramid and Pinch District Redevelopment Project)"(called the "Debt Service Fund". Within the Debt Service Fund there shall be four accountsdesignated as:

1. Senior Bond Account;

2. Senior Bond Capitalized Interest Account;

3. Subordinate Bond Account; and

4. Subordinate Bond Capitalized Interest Account.

An initial deposit to the credit of the Senior Bond Capitalized Interest Account and theSubordinate Bond Capitalized Interest Account shall be made in accordance with the provisionsof the Indenture.

(b) Senior Bond Account. The Trustee shall apply the money on deposit in the SeniorBond Account,first, together with the amounts available in the Senior Bond Capitalized InterestAccount, to the payment of interest on Outstanding Senior Bonds, when due, and, then, to thepayment of the principal of Outstanding Senior Bonds, when due either at maturity or throughmandatory Sinking Fund Redemption.

Notwithstanding the foregoing, the Trustee shall, at the request of the City, apply themoney on deposit in the Senior Bond Account, other than income earned thereon which is to betransferred to other funds created under the Indenture, to purchase in the open market an amountof Tax Exempt Senior Bonds of the series and maturity to be redeemed through mandatorySinking Fund Redemption on the next succeeding November 1 at prices not exceeding theprincipal amount of Tax Exempt Senior Bonds being purchased plus accrued interest (whichinterest shall be paid from amounts on deposit in the Senior Bond Account). The Tax ExemptSenior Bonds of such series and maturity so purchased shall be cancelled by the Trustee and the

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principal amount thereof shall be applied against and in reduction of the mandatory Sinking FundRedemption due on such Tax Exempt Senior Bonds on such November 1.

(c) Senior Bond Capitalized Interest Account. Money on deposit in the Senior BondCapitalized Interest Account shall, prior to any transfer to the Senior Bond Account pursuant tosubparagraph (f) under the heading "Debt Service Fund", be transferred to the Senior BondAccount in the amounts and on the dates set forth in Schedule II-A attached to the Indenture.

(d) Subordinate Bond Account. The Trustee shall apply the money on deposit in theSubordinate Bond Account, first, together with the amounts available in the Subordinate BondCapitalized Interest Account, to the payment of interest on Outstanding Subordinate Bonds,when due, and, then, to the payment of the principal of Outstanding Subordinate Bonds, whendue either by maturity or mandatory Sinking Fund Redemption pursuant to the paragraph underthe heading "Mandatory Sinking Fund Redemption".

Notwithstanding the foregoing, the Trustee shall, at the request of the City, apply themoney on deposit in the Subordinate Bond Account, other than income earned thereon which isto be transferred to other funds created under the Indenture, to purchase in the open market anamount of Tax Exempt Subordinate Bonds of the series and maturity to be redeemed throughmandatory Sinking Fund Redemption on the next succeeding November 1 at prices notexceeding the principal amount of the Tax Exempt Subordinate Bonds being purchased plusaccrued interest (which interest shall be paid from amounts on deposit in the Subordinate BondAccount). The Tax Exempt Subordinate Bonds of such series and maturity so purchased shall becancelled by the Trustee and the principal amount thereof shall be applied against and inreduction of the mandatory Sinking Fund Redemption due on such Tax Exempt SubordinateBonds on such November 1.

(e) Subordinate Bond Capitalized Interest Account. Money on deposit in theSubordinate Bond Capitalized Interest Account shall, prior to any transfer to the SubordinateBond Account pursuant to subparagraph (f) under the heading "Debt Service Fund", betransferred to the Subordinate Bond Account in the amounts and on the dates set forth onSchedule II-B attached to the Indenture.

(f) Suro/us Fund and Debt Service Reserve Fund Transfers. If on the Business Dayimmediately prior to the date on which the principal of or interest on Outstanding Senior Bondsor Subordinate Bonds is payable, with respect to principal either at maturity or throughmandatory Sinking Fund Redemption, there is insufficient money in the Senior Bond Account orSubordinate Bond Account, as applicable, to make such payment, the Trustee shall transfer fromthe Surplus Fund, first, to the Senior Bond Account and, then, to the Subordinate Bond Account,an amount equal to the respective deficiencies therein. If on the Business Day immediately priorto the date on which the principal of or interest on Outstanding Senior Bonds or SubordinateBonds is payable there is, after the aforementioned transfers from the Surplus Fund, insufficientmoney in the Senior Bond Account or the Subordinate Bond Account to make such payment, theTrustee shall transfer from the Senior Debt Service Reserve Account to the Senior BondAccount, and from the Subordinate Debt Service Reserve Account to the Subordinate BondAccount, an amount equal to the respective deficiencies therein.

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(g) Partial Redemption or Defeasance. In connection with any partial re~emption ordefeasance prior to maturity of the Bonds, the Trustee may, at the request of the City, use anyamounts on deposit in the Senior Bond Account or the Subordinate Bond Account, as applicable,in excess of the amount needed to pay the interest on the Bonds remaining Outstanding on thefirst interest payment date occurring on or after the date of such redemption or defeasance to paythe principal ofand interest on the Bonds to be redeemed or defeased.

(Section 403)

Debt Service Reserve Fund

(a) Establishment ofFund and Accounts. The Issuer shall establish with the Trustee andmaintain so long as any of the Bonds are Outstanding a separate fund to be known as the "DebtService Reserve Fund - The City of Memphis, Tennessee (Pyramid and Pinch DistrictRedevelopment Project)" (called the "Debt Service Reserve Fund"). Within the Debt ServiceFund there shall be two accounts designated as:

1. Senior Debt Service Reserve Account; and

2. Subordinate Debt Service Reserve Account;

(b) Senior Debt Service Reserve Account. Ifon April 30 ofa Bond Year, after takinginto account any transfer made from the Senior Debt Service Reserve Account to the SeniorBond Account pursuant to subparagraph (f) under the heading "Debt Service Fund" above, theamount in the Senior Debt Service Reserve Account is less than the Senior Debt Service ReserveRequirement, the Trustee shall promptly give, but in no event later than on the next succeedingMay 15th

, written notice thereof to the Issuer and the City.

Money in the Senior Debt Service Reserve Account of the Debt Service Reserve Fundshall be withdrawn by the Trustee and deposited to the credit of the Senior Bond Account of theDebt Service Fund at the times and in the amounts required by the provisions of the paragraphsunder the heading "Debt Service Fund" above.

The income or interest earned on investments held for the credit of the Senior DebtService Reserve Account shall, at the written direction of the City, be withdrawn by the Trusteeand deposited in the Senior Bond Account in accordance with such direction; provided, however,that no withdrawal of such income or interest shall be made if the amount in the Senior DebtService Reserve Account is then or upon such withdrawal will be less than the Senior DebtService Reserve Requirement. Amounts in the Senior Debt Service Reserve Account on April30 of a Bond Year that are in excess of the Senior Debt Service Reserve Requirement shall bewithdrawn therefrom by the Trustee and deposited in the Senior Bond Account.

(c) Subordinate Debt Service Reserve Account. If on April 30 of a Bond Year, aftertaking into account any transfer made from the Subordinate Debt Service Reserve Account to theSubordinate Bond Account pursuant to subparagraph (f) under the heading "Debt Service Fund"above, the amount in the Subordinate Debt Service Reserve Account is less than the SubordinateDebt Service Reserve Requirement, the Trustee shall promptly give, but in no event later than onthe next succeeding May 15th

, written notice thereof to the Issuer and the City. All amounts paid

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by the City in accordance with the Replenishment Agreement on account of a deficiency in theSubordinate Debt Service Reserve Account shall, upon receipt by the Trustee, be deposited to theSubordinate Debt Service Reserve Account to restore such account to the Subordinate DebtService Reserve Requirement.

Money in the Subordinate Debt Service Reserve Account of the Debt Service ReserveFund shall be withdrawn by the Trustee and deposited to the credit of the Subordinate BondAccount of the Debt Service Fund at the times and in the amounts required by the provisions ofthe paragraphs under the heading "Debt Service Fund" above.

The income or interest earned on investments held for the credit of the Subordinate DebtService Reserve Account shall, at the written direction of the City, be withdrawn by the Trusteeand deposited in the Subordinate Bond Account in accordance with such direction; provided,however, that no withdrawal of such income or interest shall be made if the amount in theSubordinate Debt Service Reserve Account is then or upon such withdrawal will be less than theSubordinate Debt Service Reserve Requirement. Amounts in the Subordinate Debt ServiceReserve Account on April 30 of a Bond Year that are in excess of the Subordinate Debt ServiceReserve Requirement shall be withdrawn therefrom by the Trustee and deposited in theSubordinate Bond Account.

(d) Whenever by the paragraphs under the heading "Debt Service Reserve Fund", theamount in the Senior Debt Service Reserve Account or the Subordinate Debt Service ReserveAccount is to be determined, such determination shall be made by the Trustee. PermittedInvestments held in either account shall be valued at the lesser of amortized cost or par, plusaccrued and unpaid interest thereon.

(Section 404)

Expense Fund

The Issuer shall establish with the Trustee and maintain so long as any Bonds areOutstanding a separate account to be known as the "Expense Fund - The City of Memphis,Tennessee (pyramid and Pinch District Redevelopment Project)." Money in the Expense Fundshall be used only for payment of the Operating Expenses or to reimburse the City for OperatingExpenses theretofore paid by it for which it has not previously been reimbursed. Such moneyshall be paid by the Trustee upon receipt of the Written Request of the City to or upon the orderof the City at such times and in such amounts as the City considers necessary to make suchpayments.

(Section 405)

Surplus Fund

The Issuer shall establish with the Trustee and maintain so long as any SubordinateBonds are Outstanding a separate account to be known as the "Surplus Fund - The City ofMemphis, Tennessee (pyramid and Pinch District Redevelopment Project)" (called the "SurplusFund"). Money shall be deposited in the Surplus Fund in accordance with subparagraph (b)under the heading "Revenue Fund" above. The income or interest earned on investments held

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for the credit of the Surplus Fund shall be retained therein until applied in accordance with thisSection.

Money in the Surplus Fund shall be withdrawn by the Trustee and deposited to the creditof the Senior Bond Account and the Subordinate Bond Account of the Debt Service Fund at thetimes and in the amounts required by the provisions of subparagraph (f) under the heading "DebtService Fund" above. Money remaining in the Surplus Fund on June 30 of any Fiscal Year, ifnot then required for transfer to the Debt Service Fund pursuant to the preceding sentence, shallbe applied or paid for anyone or more of the following: (a) paid by the Trustee to the City inaccordance with the Written Request of the City to reimburse it for payments theretofore madepursuant to the Replenishment Agreement for which it has not previously been reimbursed; or(b) applied by the Trustee in accordance with the Written Request of the City to either or both of(i) the optional or extraordinary redemption or purchase of Outstanding Bonds in accordancewith the paragraphs under the heading "Optional Redemption Dates and Prices; Purchases"below with respect to the Series 20 II Bonds or in accordance with the Supplemental Indentureauthorizing the Additional Bonds to be purchased or redeemed and (ii) defeasance ofOutstanding Bonds in accordance with the paragraphs under the heading "Defeasance" below;and (c) applied by the Trustee in accordance with the Written Request of the City to pay Costs ofthe Project or to reimburse the City for Costs of the Project theretofore paid by the City forwhich it has not previously been reimbursed.

Notwithstanding the provisions of the foregoing paragraph, money in the Surplus Fundshall not be applied for any purpose described in clauses (b) or (c) in the foregoing paragraphunless the City has certified to the Trustee and the Issuer that, after application of money, theTDZ Revenues which the City is legally entitled to receive are projected to be sufficient to paythe principal of and interest on the Bonds then Outstanding or that will remain Outstanding afterany application of money in accordance with the aforementioned clauses (b) or (c), together withall obligations then legally authorized to be paid from TDZ Revenues.

(Section 406)

Optional Redemption Fund

The Issuer shall establish with the Trustee and maintain so long as any of the Bonds areOutstanding a separate fund to be known as the "Optional Redemption Fund - The City ofMemphis, Tennessee (Pyramid and Pinch District Redevelopment Project)" (called the"Optional Redemption Fund"). In the event of (i) prepayment by or on behalf of the City ofamounts payable under the Loan Agreement pledged under the Indenture, including prepaymentwith condemnation or insurance proceeds, or (ii) deposit with the Trustee by the City or theIssuer of money from any other source for redeeming Bonds, except as otherwise provided in theIndenture, such money shall be deposited in the Optional Redemption Fund. Money on depositin the Optional Redemption Fund shall be used,jirst, to make up any deficiencies existing in theSenior Bond Account and the Subordinate Bond Account (in the order listed), second, to makeup any deficiency in the Senior Debt Service Reserve Account and, third, for the redemption orpurchase ofBonds in accordance with the provisions of the Indenture.

(Section 407)

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Investment of Funds

(a) Upon a Written Request of the City filed with the Trustee, money in the RevenueFund, Debt Service Fund, Costs of Issuance Fund, Expense Fund, Construction Fund, DebtService Reserve Fund, Surplus Fund and Optional Redemption Fund shall be invested inPermitted Investments. Such investments shall be made so as to mature on or prior to the date ordates that money therefrom is anticipated to be required. The Trustee, when authorized by theCity, may trade with itself in the purchase and sale of securities for such investment. TheTrustee shall not be liable or responsible for any loss resulting from any such investments.

(b) Except as otherwise provided in the Indenture, all income in excess of therequirements of the funds specified in paragraph (a) above derived from the investment ofmoneyon deposit in any such funds shall be deposited in the following funds, in the order listed:

(i) The Senior Bond Account and the Subordinate Bond Account (in thatorder) to the extent of the amounts required to be deposited in each to provide for thepayments due on the next required payment date on the Senior Bonds and SubordinateBonds, respectively, occurring within thirteen months of the date of such deposit;

(ii) The Senior Debt Service Reserve Account and the Subordinate DebtService Reserve Account (in that order) to the extent the amounts therein are then lessthan the Senior Debt Service Reserve Requirement or the Subordinate Debt ServiceReserve Requirement, respectively; and

(iii) The balance, if any, in the Optional Redemption Fund or the SurplusFund, in accordance with the Written Request of the City.

(c) The Trustee will not make any investment of any money in any fund or account heldby it under the Indenture, or sell any investment held in any such fund or account, except on thefollowing terms and conditions:

(i) Each such investment shall be made in the name of the Trustee (in itscapacity as such) or in the name of a nominee for the Trustee under its complete andexclusive control;

(ii) The Trustee shall have sole control over such investment, the incomethereon, and the proceeds thereof;

(iii) Any certificate or instrument evidencing such investment shall bedelivered to the Trustee or its agent or securities depository; and

(iv) The proceeds of each sale of such an investment shall be remitted by thepurchaser thereof directly to the Trustee for deposit in the fund or account to which suchinvestment was credited.

(Section 408)

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Optional Redemption Dates and Prices; Purchase

(a) Optional Redemption of Series 20ll Bonds. The Series 2011A Bonds and Series201lB Bonds maturing on or after November 1,2022 are subject to redemption prior to maturityupon the Written Request of the City on or after November, 2021, out of amounts deposited inthe Optional Redemption Fund, in whole or in part from time to time, on any date, at aredemption price equal to hone hundred percent (100%) of the principal amount of Series 201lABonds or Series 2011B Bonds to be redeemed. plus accrued interest thereon to the date ofredemption.

The Series 2011 C Bonds are not subject to redemption prior to maturity at the option ofthe City other than pursuant to the paragraphs under the heading "Extraordinary Redemption"below.

(b) Purchase in Lieu of Optional Redemption. In lieu of redeeming Series 2011Bonds pursuant to subparagraph (a) above, the City may use such money otherwise availableunder the Indenture for redemption of Series 2011 Bonds to purchase Series 2011 Bonds in theopen market at a price not exceeding the redemption price then applicable under the Indenture,plus accrued interest to the date of purchase, and direct the Trustee to apply such money to thepayment of the purchase price of the Series 2011 Bonds so purchased. The Series 2011 Bonds sopurchased shall be delivered to the Trustee for cancelation and the Issuer shall receive credit forany such Series 2011 Bonds so purchased in the same manner as if such Series 2011 Bonds hadbeen redeemed.

(Section 501)

Mandatory Sinking Fund Redemption

The Series 2011 Bonds of the series and maturities set forth on the inside cover of theOffering Statement shall be subject to mandatory Sinking Fund Redemption prior to maturity, inpart, on November 1 of the respective years and in the respective principal amounts set forth onthe inside cover of the Offering Statement, at a redemption price equal to the principal amount ofSeries 2011 Bonds of such series and maturity to be redeemed, plus accrued interest to the dateof redemption.

Payment or redemption of the Series 2011 Bonds through mandatory Sinking FundRedemption shall be without premium. In the event the Series 20 II Bonds maturing on aspecific date as aforesaid have been fully paid and sufficient money is on deposit in the DebtService Fund to redeem Series 2011 Bonds maturing on that specific maturity date, then suchmoney on deposit in the Debt Service Fund shall be applied to payment of Series 2011 Bondsmaturing on the next succeeding maturity date in the order set forth on the inside cover of theOffering Statement. The Series 2011 Bonds shall be redeemed by the Trustee pursuant to theprovisions of this paragraph without any notice from or direction by the Issuer or the City.

The principal amount of any Series 20 II Bonds of a series and maturity entitled tomandatory Sinking Fund Redemption purchased with money in the Debt Service Fund inaccordance with subparagraph (b) or (d) under the heading "Debt Service Fund" above, as

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applicable, will be credited against and in satisfaction of the mandatory Sinking FundRedemption of the Series 2011 Bonds of such series and maturity payable on the November 1next succeeding the date such Series 2011 Bond were so purchased. In addition, the principalamount of Series 20II Bonds of a series and maturity entitled to mandatory Sinking FundRedemption that are (A) redeemed at the option of the Issuer, (B) purchased by the City or theIssuer and delivered to the Trustee for cancellation or (C) defeased in accordance the Indentureshall be applied in satisfaction, in whole or in part, of one or more Sinking Fund Redemptions asthe City, in its discretion, may direct in a Written Request to the Trustee.

(Section 502)

Extraordinary Redemption

(a) The Series 2011 Bonds are subject to redemption prior to maturity upon theWritten Request of the City at a redemption price equal to one hundred percent (100%) of theprincipal amount of Series 2011 Bonds to be redeemed, plus accrued interest to the date ofredemption:

(i) in whole at any time if, as a result of any changes in the Constitution of theState ofTennessee or the Constitution of the United States of America or oflegislative oradministrative action (whether state or federal) or by final direction, judgment or order ofany court or administrative body (whether state or federal) entered after the contestthereof by the City in good faith, the Loan Agreement or the Indenture shall have becomevoid or unenforceable or impossible of performance in accordance with the intent andpurposes of the parties as expressed in the Loan Agreement or the Indenture; or

(ii) in whole or in part at any time, in any order determined by the City, upon anydamage, destruction or condemnation of the Project or part thereof or a taking of the titleto, or the temporary use of the Project or part thereof, under the power of eminentdomain, in each case from the proceeds of any property insurance, condemnation awardor award for such taking that are not applied to the restoration of the Project.

(b) The Series 20 II Bonds are also subject to redemption prior to maturity upon theWritten Request of the City, in any order determined by the City, at a redemption price equal toone hundred percent (100%) of the principal amount of the Series 2011 Bonds to be redeemed,plus accrued interest to the date of redemption, in whole at any time, if either the Memphis CookConvention Center ceases to qualify as a "qualified public use facility," as defmed under theConvention Center Act, or it is no longer used as a convention and exposition facility.

(Section 503)

Selection of Bonds to be Redeemed

If less than all of the Outstanding Series 20II B Bonds of a maturity are to be redeemedpursuant to the Indenture, the Series 2011 B Bonds of such maturity to be redeemed shall beselected by the Trustee at random in such manner as the Trustee, in its discretion, may deem fairand appropriate.

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If less than all of the Outstanding Series 20 II A Bonds or Series 20II C Bonds of amaturity are to be redeemed pursuant to the paragraphs under the headings "OptionalRedemption Dates and Prices; Purchase," "Mandatory Sinking Fund Redemption" and"Extraordinary Redemption" above, the Series 2011 A Bonds or Series 2011C Bonds of suchmaturity to be redeemed shall be selected as provided below in these paragraphs under theheading "Selection ofBonds to be Redeemed".

Subject to the following paragraph, any redemption of less than all of a maturityof Series 2011 A Bonds or Series 2011C Bonds shall be allocated among the Holders ofsuch Series 20IIA Bonds or Series 20lIC Bonds as nearly as practicable pro rata inproportion to the principal amounts of Series 2011A Bonds or Series 2011C Bondsowned by each Holder, subject to the authorized denominations applicable to the Series2011A Bonds and Series 2011C Bonds. The calculation of such proportion shall bebased on the following formula:

(principal to be redeemed) x (principal owned by a Holder)(principal amount Outstanding)

If the Series 2011A Bonds or Series 2011C Bonds to be redeemed are registered in book-entryform and so long as DTC is the sole registered Holder of the Series 20IIA Bonds or Series201lC Bonds of the maturity to be redeemed, it is the Issuer's intent that the Series 2011ABonds or Series 2011 C Bonds of such maturity or portions thereof to be redeemed shall beselected on a pro rata pass-through distribution of principal basis in accordance with DTCprocedures then in effect with respect to redemptions of less than all of the Outstanding Bonds ofmaturity. However, neither the Issuer nor the City can provide any assurance that DTC, DTC'sdirect and indirect participants or any other intermediary will allocate the redemption of Series2011 A Bonds or Series 2011C Bonds on such basis. If the DTC operational arrangements do notallow for the redemption of the Series 2011A Bonds or Series 2011 C Bonds on a pro rata passthrough distribution of principal basis, then the Series 20IIA Bonds and Series 20IIC Bonds ofa maturity to be redeemed shall be selected, in accordance with DTC procedures, by lot. If, atthe time of redemption of the Series 2011A Bonds or Series 2011C Bonds on a pro rata passthrough distribution ofprincipal basis, the Trustee has failed to notify DTC that the Series 20IIAor Series 20IIC Bonds to be redeemed are to be redeemed pursuant to DTC's pro rata passthrough distribution of principal procedures, or has failed to furnish to DTC the factor to beapplied by it in determining the pro rata allocation of the principal to be redeemed, then theSeries 20IIA Bonds and Series 20IIC Bonds of a maturity to be redeemed may be selected, inaccordance with DTC procedures, by lot.

(Section 504)

Notices of Redemption

(a) Notice to Trustee of Intent to Redeem or Purchase. Series 2011 Bonds shall becalled for redemption or purchased by the Trustee pursuant to the paragraphs under the headings"Optional Redemption Dates and Prices; Purchase" or "Extraordinary Redemption" above, uponreceipt by the Trustee at least sixty days prior to the redemption or purchase date of a WrittenRequest of the City requesting such redemption or purchase; provided, however, that the City

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may give such Written Request at such later time as may be approved by the Trustee, in its solediscretion, but in no event shall such Written Request for the redemption of Series 2011 Bondsbe given less than thirty days prior to the redemption date. Such Written Request shall specifythe series, maturity and principal amount of the Series 2011 Bonds so to be called for redemptionor of the Series 2011 B Bonds so to be purchased, the applicable redemption price or prices andthe provision or provisions above specified pursuant to which such Series 2011 Bonds are to becalled for redemption.

(b) Notice to Bondholders ofRedemption. Notice of the call for any redemption shallstate the following: (a) the name of the Bonds, (b) the CUSIP number and bond certificatenumber (if less than all the Bonds of a particular series are to be redeemed) of the Bonds to beredeemed, (c) the original date of the Bonds, (d) the interest rate and maturity date of the Bondsto be redeemed, (e) the date of the redemption notice, (f) the Redemption Date, (g) theredemption price and (h) the address and telephone number of the principal office of the Trustee.Such notice shall further state that on the Redemption Date for such Bonds there shall becomedue and payable upon each Bond to be redeemed the redemption price thereof, or the redemptionprice of the specified portion of the principal amount thereof in the case of a Bond to beredeemed in part only, with interest accrued and unpaid to such date, and that from and aftersuch date, interest thereon shall cease to accrue and be payable. The redemption notice shall begiven by mailing a copy of such notice of redemption by first class mail, postage prepaid, to theregistered owners of the Bonds to be redeemed to the address shown on the Bond Register notless than thirty or more than sixty days prior to the redemption date; provided, however, thatfailure to give such notice by mailing or a defect in the notice or the mailing as to any Bond willnot affect the validity of any proceedings for redemption as to any other Bond with respect towhich notice was properly given. Except for a mandatory Sinking Fund Redemption pursuant tothe paragraph under the heading "Mandatory Sinking Fund Redemption" above, prior to the datethat the redemption notice is first mailed as aforesaid, funds shall be placed with the Trustee topay the principal of such Bonds, the accrued interest thereon to the redemption date and thepremium, if any, thereon. If a notice of redemption is mailed in accordance with the provisionsof this paragraph, the Bonds, or portions thereof, thus called shall not bear interest after theapplicable Redemption Date, shall no longer be protected by the Indenture and shall not bedeemed to be Outstanding under the provisions of the Indenture. The Trustee shall redeem, inthe manner provided in the Indenture, such an aggregate principal amount of such Bonds at theprincipal amount thereof plus accrued interest to the redemption date and premium, if any, aswill exhaust as nearly as practicable such funds placed on deposit with the Trustee to payprincipal, premium, if any, and interest on such Bonds. At the direction of the City, such fundsmay be invested in United States Government Obligations until needed for redemption payout.

(Section 505)

Payment of Principal, Premium, if any, and Interest

Subject to the limited source ofpayment referred to in the Indenture, the Issuer covenantsthat it will promptly pay the principal of, premium, if any, and interest on every Bond issuedunder the Indenture at the place, on the dates and in the manner provided in the Indenture and insaid Bonds according to the true intent and meaning thereof. Nothing in the Bonds or in theIndenture shall be considered as assigning or pledging any funds or assets of the Issuer (except

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the money and the Loan Agreement (other than Unassigned Rights» pledged under theIndenture.

(Section 60J)

Legal Authorization

The Issuer represents that it is duly authorized under the Constitution and laws of theState to issue the Bonds authorized by the Indenture and to execute the Indenture and to assignthe Loan Agreement and to pledge the payments thereunder and the other rights and assetspledged in the Indenture in the manner and to the extent set forth in the Indenture; that all actionon its part required for the issuance of the Bonds and the execution and delivery of the Indenturehas been duly and effectively taken (or, if Additional Bonds are issued pursuant to the Indenture,will be duly taken as provided therein); and that the Bonds in the hands of the owners thereof areand will be valid and enforceable obligations of the Issuer according to the import thereof. TheIssuer covenants that it will faithfully perform at all times any and all covenants, undertakings,stipulations and provisions contained in the Indenture, in any and every Bond executed,authenticated and delivered under the Indenture and in all proceedings of its members pertainingthereto. However, the Issuer shall not be required to take any action not expressly provided forin the Indenture.

(Section 602)

Rights Under the Loan Agreement

The Issuer agrees that the Trustee in its own name or in the name of the Issuer mayenforce all rights of the Issuer and all obligations of the City under and pursuant to the LoanAgreement for and on behalf of the Bondholders (other than the rights of the Issuer to decline tomake additional loans and to issue Additional Bonds and Unassigned Rights), whether or not theIssuer is in default under the Indenture.

(Section 605)

Tax Exemption; Rebates

In order to maintain the exclusion from gross income for purposes of federal incometaxation of interest on the Tax Exempt Bonds, the Issuer shall comply with the provisions of theCode applicable to the Tax Exempt Bonds, including without limitation the provisions of theCode relating to the computation of the yield on investments of the "gross proceeds" of TaxExempt Bonds, as such term is defined in the Code, and reporting of the earnings on such grossproceeds and rebates of earnings on such gross proceeds to the United States Department of theTreasury. All necessary computations of the yield on investments and of the amount required tobe rebated to the United States Department Treasury shall be made by the City at times and inamounts required by the Code. In furtherance of the foregoing, the Issuer shall comply with theprovisions of the Tax Certificate applicable to each series of Tax Exempt Bonds and with suchwritten instructions as may be provided by Bond Counselor a special tax counsel.

The Issuer shall not take any action or fail to take any action which would cause any TaxExempt Bond to be an "arbitrage bond" within the meaning of Section 148(a) of the Code; nor

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shall any part of the proceeds of any Tax Exempt Bonds or any other funds of the Issuer be useddirectly or indirectly to acquire any securities or obligations the acquisition of which wouldcause any Tax Exempt Bond to be an "arbitrage bond" within the meaning of Section l48(a) ofthe Code.

The Issuer shall make any and all payments required to be made to the United StatesDepartment of the Treasury in connection with the Tax Exempt Bonds pursuant to Section l48(t)of the Code to the extent that funds are made available therefor by the City, pursuant to the LoanAgreement.The Issuer shall make any and all payments required by Section l48(t) of the Code tobe made to the United States Department of the Treasury in connection with the Tax ExemptBonds to the extent that money is made available therefor by the City pursuant to the LoanAgreement. The obligation of the Issuer to comply with the provisions of this paragraph withrespect to the rebate to the Department of the Treasury of the United States of America relatingto Tax Exempt Bonds shall remain in full force and effect so long as the Issuer shall be requiredby the Code to rebate such earnings on the gross proceeds ofTax Exempt Bonds notwithstandingthat the Tax Exempt Bonds are no longer Outstanding.

(Section 607)

Events of Default

Each of the following events is declared an "event ofdefault", that is to say, if:

(a) payment of any installment of interest payable on any of the Bonds shall not bemade when the same shall become due and payable; or

(b) payment of the principal of or the premium, if any, payable on any of the Bondsshall not be made when the same shall become due and payable, either at maturity, byproceedings for redemption, through failure to make any payment to any fund under theIndenture or otherwise; or

(c) any event of default as defined in the Loan Agreement shall occur and becontinuing from and after the date the Issuer is entitled under the Loan Agreement to declare theamount due thereunder to be immediately due and payable; or

(d) the Issuer shall default in the due and punctual performance of any other of thecovenants, conditions, agreements and provisions contained in the Bonds or in the Indenture orany agreement supplemental thereto to be performed on the part of the Issuer, and such defaultshall continue for the period of thirty days after written notice specifying such default andrequiring the same to be remedied shall have been given to the Issuer and the City by the Trustee(or if such default cannot with due diligence and dispatch be wholly cured within thirty days butcan be wholly cured, the Issuer or the City shall fail immediately upon receipt of such notice tocommence with due diligence and dispatch the curing of such default or, having so commencedthe curing of such default, shall thereafter fail to prosecute and complete the same with duediligence and dispatch); the Trustee may give such notice in its discretion and shall give suchnotice at the written request of the Holders of not less than twenty-five percent (25%) inaggregate principal amount of the Bonds then Outstanding under the Indenture; provided,however, that if such default cannot with due diligence and dispatch be wholly cured within

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thirty days but can be wholly cured, the failure of the Issuer to remedy such default within suchthirty day period shall not constitute a default under the Indenture if the Issuer shall immediatelyupon receipt of such notice commence with due diligence and dispatch the curing of such defaultand, having so commenced the curing of such default, shall thereafter prosecute and complete thesame with due diligence and dispatch; or

(e) the default by the City in the performance of its covenant in the Loan Agreementrelating to the discharge, vacating, bonding or stay of any order, writ or warrant of attachment,garnishment, execution, replevin or similar process filed against any part of the funds or accountsheld by the Trustee under the Indenture, such default being an event of default specified in theLoan Agreement.

(Section 701)

Remedies; Rights of Bondholders

Upon the occurrence of any event of default, the Trustee may, subject to its right toindemnification as provided in the Indenture, pursue any available remedy including a suit at lawor in equity to enforce the payment of the principal of, premium, if any, and interest on theBonds then Outstanding under the Indenture or to compel performance under the Indenture or theLoan Agreement or the Replenishment Agreement, or to seek to enjoin any violation under theIndenture or under the Loan Agreement or the Replenishment Agreement, provided, however,that in no event may the principal of any Bonds be declared immediately due and payable uponthe occurrence ofan Event ofDefault under the Indenture.

If an event of default shall have occurred, and if it shall have been requested so to do bythe Holders of not less than twenty-five percent (25%) in aggregate principal amount of Bondsof each Priority then Outstanding and the Trustee shall have been indemnified as provided in theIndenture, the Trustee shall be obligated to exercise such one or more of the rights and powersconferred by this paragraph as the Trustee shall deem most expedient in the interests of theHolders of Bonds; provided, however, that the Trustee shall have the right to decline to complywith any such request if the Trustee shall be advised by counsel (who may be its own counsel)that the action so requested may not lawfully be taken or the Trustee in good faith shalldetermine that such action would be unjustly prejudicial to the Holders of Bonds not parties tosuch request.

No remedy by the terms of the Indenture conferred upon or reserved to the Trustee (or tothe Holders of Bonds) is intended to be exclusive of any other remedy, but each and every suchremedy shall be cumulative and shall be in addition to any other remedy given to the Trustee orto the Holders of Bonds under the Indenture now or hereafter existing at law or in equity or bystatute.

No delay or omission to exercise any right or power accruing upon any default or eventof default shall impair any such right or power or shall be construed to be a waiver of any suchdefault or event of default, or acquiescence therein; and every such right and power may beexercised from time to time and as often as may be deemed expedient.

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No waiver of any default or event ofdefault, under the Indenture, whether by the Trusteeor by the Holders of Bonds, shall extend to or shall affect any subsequent default or event ofdefault or shall impair any rights or remedies consequent thereon.

(Section 702)

Direction of Proceedings by Bondholders

Upon compliance with the provisions in the Indenture, the Holders of a majority inaggregate principal amount of Bonds of each Priority then Outstanding shall have the right, atany time, by an instrument or instruments in writing executed and delivered to the Trustee, todirect the method and place of conducting all proceedings to be taken in connection with theenforcement of the terms and conditions of the Indenture, including the enforcement of the rightsof the Issuer under the Loan Agreement or the appointment of a receiver or any otherproceedings under the Indenture; provided, however, that such direction shall not be otherwisethan in accordance with the provisions oflaw and of the Indenture.

(Section 703)

Application of Money

All money received by the Trustee pursuant to any right given or action taken under theprovisions of Indenture shall, after payment of the cost and expenses of the proceedings resultingin the collection of such money and of the fees, expenses, liabilities and advances incurred ormade by the Trustee, be deposited in the Revenue Fund and together with all money in the fundsmaintained by the Trustee under the Indenture (except money held for the payment of Bondscalled for prepayment or redemption which have become due and payable) shall be applied asfollows:

(a) Unless the principal of all the Outstanding Bonds shall have become or shall havebeen declared due and payable, all such money shall be applied:

First: To the payment to the Persons entitled thereto of allinstallments of interest then due, first, on the Outstanding Series 2011 A Bonds,and, then, on the Outstanding Subordinate Bonds, in the order of the maturity ofthe installments of such interest, and, if the amount available shall not besufficient to pay in full any particular installment, then to the payment in order ofPriority and ratably within a Priority, according to the amounts due on suchinstallment, to the Persons entitled thereto without any discrimination orprivilege; and

Second: To the payment to the Persons entitled thereto of the unpaidprincipal of, first, any of the Outstanding Series 2011A Bonds, and, then, any ofthe Outstanding Subordinate Bonds, which shall have become due (other thanBonds called for redemption for the payment of which money is held pursuant tothe provisions of the Indenture), in the order of their due dates, and, if the amountavailable shall not be sufficient to pay in full Bonds due on any particular date,then to the payment in order ofPriority and ratably within a Priority, according to

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the amount of principal due on such date, to the Persons entitled thereto withoutany discrimination or privilege.

(b) If the principal of all the Outstanding Bonds shall have become due or shall havebeen declared due and payable, all such money shall be applied to the payment of the principaland interest then due and unpaid upon the Bonds, which payment shall, except as otherwiseprovided pursuant to the paragraph under the heading "Extension of Payment; Penalty" belowand other than with respect to Bonds called for redemption for which money is held pursuant tothe provisions of the Indenture, be without preference or priority of principal or interest over theother, or of any installment of interest over any other installment of interest, or of any Bond of aPriority over any other Bond of such Priority, ratably among and within Priorities, according tothe amounts due respectively for principal and interest, to the Persons entitled thereto withoutany discrimination or privilege.

(c) If the principal of all the Outstanding Bonds shall have been declared due andpayable, and if such declaration shall thereafter have been rescinded and annulled under theprovisions of the Indenture, then, subject to the provisions of subparagraph (b) under thisheading "Application of Money" in the event that the principal of all the Bonds shall laterbecome due or be declared due and payable, the money shall be applied in accordance with theprovisions ofsubparagraph (a) of this heading "Application ofMoney".

Notwithstanding the foregoing provisions, any money held in the Senior Bond Accountshall be applied solely to the payment of the principal ofand interest on the Series 201lA Bondsand money held in the Subordinate Bond Account, the Debt Service Reserve Fund and theSurplus Fund shall be applied solely to the payment of the principal of and interest on theSubordinate Bonds.

Whenever money is to be applied by the Trustee pursuant to the provisions of theseparagraphs under the heading "Application of Money", such money shall be applied by it at suchtimes, and from time to time, as the Trustee shall determine, having due regard for the amount ofsuch money available for application and the likelihood of additional money becoming availablefor such application in the future. Whenever the Trustee shall apply such money, it shall fIx thedate (which shall be an interest payment date unless it shall deem another date more suitable, or,with respect to payments ofDefaulted Interest, shall be such date as is required by the Indenture)upon which such application is to be made and upon such date interest on the amounts ofprincipal to be paid on such dates shall cease to accrue. The Trustee shall give such notice as itmay deem appropriate of the deposit with it ofany such money and of the fIxing ofany such dateand of the Special Record Date by mailing a copy of such notice by fIrst class mail to theregistered owners of the Bonds, at least ten days prior to the Special Record Date. The Trusteeshall not be required to make payment to the Holder of any Bond until such Bond shall bepresented to the Trustee for appropriate endorsement or for cancellation if fully paid.

Whenever all Bonds and interest thereon have been paid under the provisions of theseparagraphs under the heading "Application of Money" and all expenses and charges of theTrustee have been paid, any balance remaining shall be paid to the Persons entitled to receive thesame; ifno other Person shall be entitled thereto, then the balance shall be paid to the City.

(Section 705)

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Remedies Vested in Trustee

All rights of action including the right to file proofofclaims under the Indenture or underany of the Bonds may be enforced by the Trustee without the possession of any of the Bonds orthe production thereof in any trial or other proceedings relating thereto and any such suit orproceeding instituted by the Trustee shall be brought in its name as Trustee without the necessityof joining as plaintiffs or defendants any Holders of the Bonds, and any recovery of judgmentshall be, except as otherwise provided under the paragraph under the heading "Extension ofPayment; Penalty", for the equal benefit of the Holders of the Outstanding Bonds.

(Section 706)

Rights and Remedies of Bondholders

No Holder of any Bond shall have any right to institute any suit, action or proceeding inequity or at law for the enforcement of the Indenture or for the execution of any trust or for theappointment of a receiver or any other remedy under the Indenture, unless a default shall havebecome an event of default and the Holders of twenty-five percent (25%) in aggregate principalamount of Bonds of each Priority then Outstanding shall have made written request to theTrustee and shall have offered it reasonable opportunity either to proceed to exercise the powersgranted or to institute such action, suit or proceeding in its own name, and unless also they haveoffered to the Trustee indemnity as provided in the Indenture, and unless the Trustee shallthereafter fail or refuse to exercise the power granted, or to institute such action, suit orproceeding in its own name; and such notification, request and offer of indemnity are declared inevery case at the option of the Trustee to be conditions precedent to the execution of the powersand trusts of the Indenture and to any action or cause of action for the enforcement of theIndenture, or for the appointment of a receiver or for any other remedy under the Indenture; itbeing understood and intended that no one or more Holders of the Bonds shall have any right inany manner whatsoever to affect, disturb or prejudice the lien of the Indenture by any action or toenforce any right under the Indenture except in the manner provided in the Indenture, and that allproceedings at law or in equity shall be instituted, had and maintained in the manner in theIndenture provided and for the equal benefit of the Holders of all Bonds Outstanding. Nothing inthe Indenture contained shall, however, affect or impair the right of any Holder to enforce thepayment of the principal of and interest on any Bond at and after the maturity thereof, or theobligation of the Issuer to pay the principal of and interest on each of the Bonds issued under theIndenture to the respective Holders thereof at the time and place, from the source and in themanner in said Bonds expressed.

(Section 707)

Waiver of Events of Default

The Trustee may in its discretion waive any event of default under the Indenture and itsconsequences and may rescind any declaration of maturity of principal, and shall do so uponwritten request of the Holders of (I) at least a majority in aggregate principal amount of all theOutstanding Bonds of each Priority in respect of which default in the payment ofprincipal and/orinterest exists, or (2) at least a majority in aggregate principal amount of all the OutstandingBonds of each Priority in the case of any other event of default; provided, however, that there

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shall not be waived (a) any event of default in the payment of the principal of any OutstandingBonds when due whether by mandatory Sinking Fund Redemption or at the dates of maturityspecified therein or (b) any default in the payment when due of the interest on any such Bonds,unless prior to such waiver or rescission all arrears of interest, with interest thereon (to the extentpermitted by law) at the rate borne by the Bonds in respect of which such default shall haveoccurred on overdue installments of interest or all arrears of payments of principal when due, asthe case may be, and all expenses of the Trustee and any Paying Agent in connection with suchdefault shall have been paid or provided for, and in case of any such waiver or rescission or incase any proceeding taken by the Trustee on account of any such default shall have beendiscontinued or abandoned or determined adversely, then and in every such case the Issuer, theTrustee and the Bondholders shall, subject to any determination in such proceeding, be restoredto their former positions and rights under the Indenture respectively, but no such waiver orrescission shall extend to any subsequent or other default, or impair any right consequentthereon.

(Section 709)

Extension of Payment; Penalty

In case the time for the payment of principal of or the interest on any Bonds shall beextended, whether or not such extension be by or with the consent of the Issuer, such principal orsuch interest so extended shall not be entitled in case ofdefault under the Indenture to the benefitor security of the Indenture except subject to the prior payment in full of the principal of allBonds then Outstanding and of all interest thereon, the time for the payment of which shall nothave been extended.

(Section 712)

Supplemental Indentures Not Requiring Consent of Bondholders

The Issuer and the Trustee may, without the consent of, or notice to, any of theBondholders, enter into a Supplemental Indenture or Supplemental Indentures, as shall not beinconsistent with the terms and provisions of the Indenture, for anyone or more of the followingpurposes:

(a) to cure any ambiguity or formal defect or omission in the Indenture;

(b) to grant to or confer upon the Trustee for the benefit of the Bondholders anyadditional rights, remedies, powers or authority that may lawfully be granted to or conferredupon the Bondholders and the Trustee, or either of them;

(c)collateral;

to assign and pledge under the Indenture additional revenues, properties or

(d) to evidence the appointment of a separate co-trustee or the succession of a newtrustee under the Indenture;

(e) to modify, amend or supplement the Indenture or any indenture supplemental insuch manner as to permit the qualification of the Indenture under the Indenture Act of 1939, as

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then amended, or any similar federal statute hereafter in effect or to pennit the qualification ofthe Bonds for sale under the securities laws ofany state of the United States of America;

(t) to modify, amend or supplement the Indenture or any indenture supplemental insuch manner as to pennit the issuance of coupon bonds of any series under the Indenture and topennit the exchange of Bonds from registered fonn to coupon fonn and vice versa;

(g) to provide for the refunding or advance refunding of any Bonds including theright to establish and administer an escrow fund and take related action in connection therewith,but solely in the manner and upon satisfaction of the conditions contained in the Indenture;

(h) to provide for the issuance of Additional Bonds to the extent pennitted by theIndenture; and

(i) to make any other change that, in the judgment of the Trustee, does not materiallyadversely affect the rights ofany Bondholders.

The Issuer and the Trustee may not enter into an Supplemental Indenture pursuant tosubparagraph (t) of the preceeding paragraph unless they shall have received an opinion of BondCounsel to the effect that the issuance of coupon Bonds will not adversely affect the validity ofsuch Bonds or the exclusion, if any, of the interest thereon from gross income for purposes offederal income taxation.

(Section 901)

Supplemental Indentures Requiring Consent of Bondholders

In addition to Supplemental Indentures covered by the paragraph under the heading"Supplemental Indentures Not Requiring Consent of Bondholders" above and subject to thetenns and provisions contained in this paragraph, and not otherwise, the Holders of not less thana majority in aggregate principal amount of the Bonds which are Outstanding under theIndenture at the time of the execution of such Supplemental Indenture, or, in the case that lessthan all of the several series of Bonds Outstanding are affected thereby, the Holders of not lessthan a majority in aggregate principal amount of the Bonds of each series so affected which areOutstanding at the time of such execution, shall have the right, from time to time, anythingcontained in the Indenture to the contrary notwithstanding, to consent to and approve theexecution by the Issuer and the Trustee of such Supplemental Indenture or SupplementalIndentures as shall be deemed necessary and desirable by the Issuer for the purpose ofmodifying, altering, amending, adding to or rescinding, in any particular, any of the tenns orprovisions contained in the Indenture or in any Supplemental Indenture; provided, however, thatif such modification, alteration, amendment or addition will, by its tenns, not take effect so longas any Bonds ofa specified series remain Outstanding, the consent of the Holders of such Bondsshall not be required; provided, further, that nothing in this paragraph contained shall pennit, orbe construed as pennitting, a Supplemental Indenture to effect: (a) an extension of the statedmaturity or reduction in the principal amount of, or reduction in the rate or extension of the timeof paying of interest on, or reduction of any premium payable on the redemption of, any Bonds,without the consent of the Holders of such Bonds; (b) a reduction in the amount or extension ofthe time of any payment required to be made to or from the Debt Service Fund or any interest or

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Sinking Fund Redemption applicable to any Additional Bonds without consent of the Holders ofsuch Bonds; (c) the creation of any Lien prior to or on a parity with the lien of the Indenture,without the consent of the Holders of all the Bonds at the time Outstanding; (d) a reduction in theaforesaid aggregate principal amount of Bonds the Holders of which are required to consent toany such Supplemental Indenture or any action permitted by the paragraph under the heading"Waiver of Events of Default" above, without the consent of the Holders of all the Bonds at thetime Outstanding which would be affected by the action to be taken; or (e) a modification of therights, duties or immunities of the Trustee, without the written consent of the Trustee.

If at any time the Issuer shall request the Trustee to enter into any such SupplementalIndenture for any of the purposes of this paragraph, the Trustee shall, upon being satisfactorilyindemnified with respect to expenses, cause notice of the proposed execution of suchSupplemental Indenture to be sent to each Holder of Bonds affected thereby as shown on theBond Register. Such notice shall briefly set forth the nature of the proposed SupplementalIndenture and shall state that copies thereof are on file at the principal corporate trust office ofthe Trustee for inspection by all Bondholders. The Trustee shall not, however, be subject to anyliability to any Bondholder by reason of its failure to give such notice to such Bondholder or adefect in the notice given to such Bondholder, and any such failure or defect as to anyBondholder shall not affect the validity of such Supplemental Indenture when consented to andapproved as provided in this paragraph. If the Holders of the requisite principal amount ofBonds which are Outstanding under the Indenture at the time of the execution of any suchSupplemental Indenture shall have consented to and approved the execution thereof as providedin the Indenture, no Holder of any Bond shall have any right to object to any of the terms andprovisions contained therein, or the operation thereof, or in any manner to question the proprietyof the execution thereof, or to enjoin or restrain the Trustee or the Issuer from executing the sameor from taking any action pursuant to the provisions thereof. Upon the execution of any suchSupplemental Indenture as in permitted and provided in this paragraph, the Indenture shall beand be deemed to be modified and amended in accordance therewith.

(Section 902)

Supplemental Indentures Generally

Anything in the Indenture to the contrary notwithstanding, so long as the City is not indefault under the Loan Agreement, a Supplemental Indenture under the Indenture whichadversely affects the rights of the City under the Loan Agreement shall not become effectiveunless and until the City shall have consented in writing to the execution and delivery of suchSupplemental Indenture. In this regard, the Trustee shall cause notice of the proposed executionand delivery of any such Supplemental Indenture to which the City has not already consented,together with a copy of the proposed Supplemental Indenture and a written consent form to besigned by the City, to be mailed by certified or registered mail to the City at least thirty daysprior to the proposed date of execution and delivery ofany such Supplemental Indenture.

Before the Issuer and the Trustee enter into any supplement to the Indenture, the Issuer orthe Trustee may request that the City deliver to the Trustee and the Issuer an Opinion of BondCounsel to the effect that (i) such supplement is authorized or permitted by the Act and isauthorized under the Indenture, (ii) such supplement to the Indenture will, upon the executionand delivery thereof, be valid, binding and enforceable in accordance with its terms, and (iii)

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such supplement will not adversely affect the exclusion from gross income of the interest on anyTax Exempt Bond for purposes of federal income taxation of the Holder of any Tax ExemptBond.

(Section 903)

Amendments, Etc. Not Requiring Consent

The Issuer, the City and the Trustee may, without the consent of or notice to the Holdersof the Bonds, consent to any amendment, change or modification of the Loan Agreement or theReplenishment Agreement as may be required or permitted (i) by the provisions of the Indenture,the Loan Agreement or the Replenishment Agreement, (ii) for the purpose of curing anyambiguity or formal defect or omission, (iii) to provide for the issuance of Additional Bonds asprovided in the Indenture, or (iv) in connection with any other change therein which, in thejudgment of the Trustee, is not to the prejudice of the Trustee or, in the case ofan amendment tothe Loan Agreement, the Holders of the Outstanding Bonds, or, in the case of an amendment tothe Replenishment Agreement, the Holders of the Outstanding Subordinate Bonds.

(Section 1001)

Amendments, Etc. Requiring Consent of Bondholders

Except for the amendments, changes or modifications as provided in the paragraph aboveunder the heading "Amendments, Etc. Not Requiring Consent", neither the Issuer nor the Trusteeshall consent to any other amendment, change or modification of the Loan Agreement or theReplenishment Agreement without the written approval or consent, given and procured as in theIndenture provided, of (i) in the case of the Loan Agreement, the Holders of not less than amajority in aggregate principal amount of the Bonds of each Priority which are Outstandingunder the Indenture at the time of execution of any such amendment, change or modification, or(ii) in the case of the Replenishment Agreement, the Holders of not less than a majority inaggregate principal amount of the Subordinate Bonds which are Outstanding under the Indentureat the time of execution ofany such amendment, change or modification, or (iii) in case less thanall of the several series of Bonds then Outstanding are affected thereby, the Holders of not lessthan a majority in aggregate principal amount of the Bonds of each series so affected which areOutstanding under the Indenture at the time of execution of any such amendment, change ormodification; provided, however, that if such amendment, change or modification will, by itsterms, not take effect so long as any Bonds of a specified series remain Outstanding, the consentof the Holders of such Bonds shall not be required. If at any time the Issuer and the City shallrequest the consent of the Trustee to any such proposed amendment, change or modification ofthe Loan Agreement or the Replenishment Agreement, the Trustee shall, upon beingsatisfactorily indemnified with respect to expenses, cause notice of such proposed amendment,change or modification to be given in the same manner as provided in the paragraph under theheading "Supplemental Indentures Requiring Consent of Bondholders" above with respect toSupplemental Indentures. Such notice shall briefly set forth the nature of such proposedamendment, change or modification and shall state that copies of the instrument embodying thesame are on file at the principal corporate trust office of the Trustee for inspection by allBondholders. The Trustee shall not, however, be subject to any liability to any Bondholder byreason of its failure to give such notice to such Bondholder or a defect in the notice given to such

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Bondholder, and any such failure or defect as to any Bondholder shall not affect the validity ofsuch amendment, change or modification when consented to and approved as provided in thisparagraph. If the Holders of not less than a majority in aggregate principal amount of, in the casethe Loan Agreement, the Bonds of each Priority Outstanding under the Indenture at the time ofthe execution of any such amendment, change or modification, or, in the case of theReplenishment Agreement, the Bonds of each Priority Outstanding under the Indenture at thetime of the execution of any such amendment, change or modification (or, in either case, theHolders of not less than a majority in aggregate principal amount of the Bonds of each series soaffected then Outstanding, as the case may be) shall have consented to and approved theexecution thereof as provided in the Indenture, no Holder of any Bond shall have any right toobject to any of the terms and provisions contained therein, or the operation thereof, or in anymanner to question the propriety of the execution thereof, or to enjoin or restrain the City, theTrustee or the Issuer from executing the same or from taking any action pursuant to theprovisions thereof.

(Section 1002)

No Amendments May Alter City Payments

Under no circumstances shall any amendment to the Loan Agreement alter the amount ordelay the time of payments required to be made by the City thereunder on account of theprincipal, premium, ifany, and interest on the Bonds without the consent of the Holders ofall theOutstanding Bonds. Under no circumstances shall any amendment to the ReplenishmentAgreement alter the amount or delay the time of payments required to be made by the Citythereunder on account of a deficiency in the Subordinate Debt Service Reserve Account withoutthe consent of the Holders of all of the Outstanding Subordinate Bonds.

(Section 1003)

Defeasance

If the Issuer shall payor provide for the payment of the entire indebtedness on all BondsOutstanding in anyone or more of the following ways:

(a) by paying or causing to be paid the principal of (including redemption premium,if any) and interest on all Bonds Outstanding, as and when the same become due and payable;

(b) by depositing with the Trustee, in trust, at or before maturity, money in an amountsufficient to payor redeem (when redeemable) all Bonds Outstanding (including the payment ofpremium, if any, and interest payable on such Bonds to the maturity or redemption date thereot),provided that such money, if invested, shall be invested in Escrow Obligations in an amount,without consideration of any income or increment to accrue thereon, sufficient to payor redeem(when redeemable) and discharge the indebtedness on all Bonds Outstanding at or before theirrespective maturity dates; it being understood that the investment income on such EscrowObligations may be used by or for the benefit of the City for any other purpose under the Actprovided that the Trustee shall be permitted to rely upon an accountant's verification reportacceptable to the Trustee and the Issuer as conclusive evidence of the sufficiency of the amountof such deposit;

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(c) by delivering to the Trustee, for cancellation by it, all Bonds Outstanding; or

(d) by depositing with the Trustee, in trust, Escrow Obligations in such amount as theTrustee shall determine will, together with the income or increment to accrue thereon, withoutconsideration of any reinvestment thereof, and with any money so deposited which is to remainuninvested, be fully sufficient to payor redeem (when redeemable) and discharge theindebtedness on all Bonds Outstanding at or before their respective maturity dates, provided thatthe Trustee shall be permitted to rely upon an accountant's verification report acceptable to theTrustee and the Issuer as conclusive evidence of the sufficiency ofthe amount ofsuch deposit;

and if the Issuer shall payor cause to be paid all other sums payable under the Indenture by theIssuer, the Indenture and the estate and rights granted under the Indenture shall cease, determine,and become null and void, and thereupon the Trustee shall, upon Written Request of the Issuer,and upon receipt by the Trustee of a City Officer's Certificate and an Opinion of Counsel, eachstating that in the opinion of the signers all conditions precedent to the satisfaction and dischargeof the Indenture have been complied with, forthwith execute proper instruments acknowledgingsatisfaction of and discharging the Indenture and the lien. The satisfaction and discharge of theIndenture shall be without prejudice to the rights of the Trustee to charge and be reimbursed bythe Issuer and the City for any expenditures which it may thereafter incur in connection with theIndenture.

Any money, funds, securities, or other property remaining on deposit in the RevenueFund, Debt Service Fund, Debt Service Reserve Fund, Optional Redemption Fund, ConstructionFund, Surplus Fund, Costs of Issuance Fund, Expense Fund or in any other fund or investmentunder the Indenture (other than said Escrow Obligations or other money deposited in trust asabove provided) shall, upon the full satisfaction of the Indenture, forthwith be transferred, paidover and distributed to the Issuer and the City, as their respective interests may appear.

The Issuer or the City may at any time surrender to the Trustee for cancellation by it anyBonds previously authenticated and delivered, which the Issuer or the City may have acquired inany manner whatsoever, and such Bonds, upon such surrender and cancellation, shall be deemedto be paid and retired.

(Section 1101)

Subrogation

Notwithstanding anything in the Indenture to the contrary, in the event that the principalof or interest on an Insured Bond shall be paid by the Insurer pursuant to the Insurance Policy,such Insured Bond shall remain Outstanding for all purposes, not be deemed paid pursuant to theIndenture or otherwise satisfied and the assignments and pledges made by or pursuant to theIndenture and all covenants, agreements and other obligations of the Issuer to the Holders ofsuch Insured Bond shall continue to exist and shall run to the benefit of the Insurer, and theInsurer shall be subrogated to the rights of such registered owners including, without limitation,any rights that such registered owners may have in respect of securities law violations arisingfrom the offer and sale of the Series 2011 Bonds. To evidence such subrogation (i) in the case ofsubrogation as to claims for past due interest, the Trustee shall note the Insurer's rights assubrogee on the registration books of the Issuer maintained by the Trustee, upon receipt from the

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Insurer of proof of the payment of interest thereon to the registered owner of the Insured Bond;and (ii) in the case of subrogation as to claims for past due principal, the Trustee shall note theInsurer's rights as subrogee on the registration books of the Issuer maintained by the Trustee, ifany, upon surrender of the Insured Bond by the registered owner thereof together with proof ofthe payment of principal thereof.

(Section 1303)

Insurer as Bondholder

Whenever by the terms of the Indenture the Holders of any percentage in principalamount of Outstanding Series 2011 Bonds may exercise any right or power, consent to anamendment, modification or waiver, or request or direct Trustee to take any action, the Insurershall be deemed to be the Holder of the Outstanding Insured Bond for purposes of:

(i) exercising all remedies and directing the Trustee to take actions or for anyother purposes following an event ofdefault under the Indenture; and

(ii) granting any consents or approvals, giving any directions or taking anyaction permitted by or required under the Indenture that the Holders of OutstandingBonds are otherwise entitled to grant, give or take; provided, however, that,notwithstanding the consent given by the Insurer of an Insured Bond, no amendment ormodification may effect:

(a) an extension of the stated maturity or reduction in the principalamount of, or reduction in the rate or extension of the time of paying of intereston, or reduction of any premium payable on the redemption of, any Bonds,without the consent of the Holders of such Bonds and the Insurer;

(b) a reduction in the amount or extension of the time of any interestor Sinking Fund Redemption applicable to any Series 2011 Bonds withoutconsent of the Holders of such Bonds and the Insurer; or

(c) a modification of the rights, duties or immunities of the Trustee,without the written consent of the Trustee and the Insurer.

Notwithstanding any other provision of the Indenture, whenever the Indenture requires that it bedetermined whether an act will adversely affect the Holders of Series 2011 Bonds suchdetermination shall be made as if there were no Insurance Policy for the Series 2011 Bonds.

(Section 1304)

Amendment of Documents; No Contracts that Impair Rights

Any other provision of the Indenture notwithstanding, no amendment, modification orsupplement to, or waiver of any provision of, the Indenture, the Loan Agreement or theReplenishment Agreement that requires the consent of the Holders of any percentage of

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Outstanding Bonds or that adversely affects the rights or interests of the Insurer shall be madewithout the written consent thereto of the Insurer.

Unless consented to in writing by the Insurer, no contract shall be entered into or anyaction taken by which the rights of the Insurer or the security or sources of payment for theInsured Bonds would be impaired or prejudiced in any material respect.

(Section 1305)

Contractual Rights of Insurer

The Issuer and the Trustee acknowledge and agree that:

(a) the rights granted to the Insurer under the Indenture, the Loan Agreementor the Replenishment Agreement to request, consent to or direct any action are rightsgranted to the Insurer in consideration of its issuance of the Insurance Policies;

(b) any exercise by the Insurer of such rights is merely an exercise of theInsurer's contractual rights and shall not be construed or deemed to be taken for thebenefit, or on behalf, of the Bondholders; and

(c) such action does not evidence any position of the Insurer, affirmative ornegative, as to whether the consent of the Holders of the Insured Bonds or any otherperson is required in addition to the consent of the Insurer.

(Section 1309)

Insurer as Third Party Beneficiary

To the extent that the Indenture confers upon or gives or grants to the Insurer any right,remedy or claim under the Indenture, the Insurer is intended to be and is explicitly recognized asbeing a third-party beneficiary of such right, remedy or claim and may enforce any such right,remedy or claim conferred, given or granted under the Indenture.

(Section 1310)

Termination of Insurer's Rights, Etc.

Whenever by the terms of the Indenture any consent, approval, request or direction of theInsurer is required or permitted to be given, alone or together with the Issuer, the City or theHolders of Outstanding Bonds, including consents, approvals, requests or directions required ofthe Holder ofOutstanding Bonds that are permitted to be given by the Insurer in accordance withthe Indenture, such consent, approval, request or direction shall not be required or permitted tobe given by the Insurer if an Insurer Default has occurred and is then continuing, and neither theTrustee, the Issuer nor the City shall be obligated to obtain or follow any such consent, approval,request or direction given by the Insurer. Nothing in the foregoing sentence is intended, andshall not be construed, to preclude the Insurer from being restored to the rights, powers and

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privileges set forth in the Indenture if an Insurer Default shall have been cured and, upon suchcure, whereupon the Insurer shall be restored to such rights, powers and privileges.

(Section 13J7)

SUMMARY OF THE LOAN AGREEMENT

The following is a briefsummary ofcertain provisions ofthe Loan Agreement pertainingto the Bonds and the Project. Such summary does not purport to be complete and reference ismade to the Loan Agreementfor full and complete statements ofsuch and all provisions. Unlessotherwise defined in this Official Statement, defined terms used in this summary have themeanings given to them above in this Appendix A. References herein to "Articles" refer toArticles contained in the Loan Agreement.

Financing Purposes

The proceeds of the 2011 Bonds, together with certain other money, will be used to: (a)finance or reimburse the City for a portion of the costs associated with the acquisition,construction, development, renovation and equipping of the Project; (b) fund capitalized intereston the Series 2011 Bonds, (c) fund a deposit to the Senior Debt Service Reserve Account in anamount equal to the Senior Debt Service Reserve Requirement applicable to the Senior Bonds;(d) fund a deposit to the Subordinate Debt Service Reserve Account in an amount equal to theSubordinate Debt Service Reserve Requirement applicable to the Subordinate Bonds; and (e) paycertain expenses incurred in connection with the issuance of the Series 2011 Bonds. Toaccomplish such purposes, the City will borrow the proceeds of the 2011 Bonds from the Issuerin accordance with the provisions of the Loan Agreement. The rights of the Issuer under theLoan Agreement will be pledged and assigned as security for the 2011 Bonds and any AdditionalBonds issued under the Indenture. Also, pursuant to the Indenture, an amount equal to theprincipal of, premiums, if any, and interest on the Series 2011 Bonds will be payable to theTrustee, solely out of: (i) the payments to be made by the City under the Loan Agreement; and(ii) money on deposit in any of the funds held under the Indenture.

Completion of the Project

The City has agreed to use reasonable efforts to cause the construction, renovation,rehabilitation, remodeling, furnishing and equipping of the Project to be completed withreasonable dispatch and in accordance with the Plans and Specifications. In this regard, themoney on deposit in the Construction Fund shall be disbursed by the Trustee only in accordancewith or as permitted by the provisions of Section 302 of the Indenture.

(Article IV)

Application of Funds Held by the Trustee

The City has agreed that the proceeds of the Series 20 II Bonds being loaned to the Cityunder the Loan Agreement shall be deposited with the Trustee and applied as provided in theIndenture. By the Loan Agreement, the City has assigned to the Issuer, and granted a securityinterest to the Issuer in, all right, title and interest of the City in any funds held by the Trustee

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pursuant to the Indenture, except as otherwise provided in the Indenture. The City has agreedthat the principal of, the redemption premium, if any, and the interest on the Outstanding Bondsshall be made payable in accordance with the provisions of the Indenture and the LoanAgreement and, further, that, except as specifically excluded therein, the Loan Agreement andpayments to be made thereunder shall be assigned and pledged to the Trustee to secure thepayment of the Bonds. As a result of such assignment, the Trustee may exercise, for and onbehalf of the Bondholders, all of the rights, interests, powers, privileges and benefits of the Issueraccrued or vested through the Loan Agreement and the Indenture.

(Article V)

Payments and Prepayments

Under the Loan Agreement, the City is obligated to make payments sufficient to providefor payment ofthe principal of, premium, if any, and the interest on the Outstanding Bonds whendue, which payments will be made in accordance with the provisions of the Indenture and theLoan Agreement. Pursuant to the assignment of the rights of the Issuer under the LoanAgreement, the payments will be deposited directly with the Trustee for the benefit of theBondholders. In order to meet its payment obligation, the City has agreed to pay to the Trustee,immediately upon receipt, all TDZ Revenues received by the City. The City is permitted toprepay its obligations under the Loan Agreement to the extent and in the manner provided by theIndenture for the redemption of the 20II Bonds and, with respect to the redemption of anyAdditional Bonds, by the supplemental indenture authorizing their issuance.

(Article VI)

Covenants of tbe City

The City has made several covenants to the Issuer under the Loan Agreement. In thisregard, the City has agreed that the Loan Agreement, the Replenishment Agreement and anyinstrument delivered to the Issuer to evidence loans made by the Issuer to the City from theproceeds of Additional Bonds shall be assigned and pledged to secure payment of the Bonds.The City has further covenanted that it will, among other things: (i) maintain its existence as amunicipal corporation as long as any of the Bonds remains Outstanding; (ii) take all necessaryaction to maintain and preserve the Loan Agreement, the Bonds and the Indenture so long as anyportion of the indebtedness under the Loan Agreement remains unpaid; (iii) not take any actionor permit any action to be taken which would cause the Project or any other project of the Citywhich is a "qualified public use facility" under the Tennessee Code Annotated, Title 7, Chapter88, as amended, or any ancillary structure or facility associated therewith, to cease to be qualifiedas a "qualified public use facility" or which would otherwise result in the termination of theeligibility of the City to receive the TDZ Revenues; and (iv) comply with the provisions of theCode applicable to the Tax Exempt Bonds in order to maintain the exclusion from gross incomefor purposes of federal income taxation on interest on the Tax Exempt Bonds.

(Article VII)

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Events of Default

The following shall constitute "an event of default" under the Loan Agreement: (a) thefailure of the City to make any payment of any installment of interest, principal or premiumunder the Loan Agreement or any other obligation pledged under the Indenture when suchpayment becomes due and payable, whether upon a scheduled Interest Payment Date, atmaturity, upon any date fixed for prepayment, or purchase in lieu of redemption or otherwise; (b)the failure of the City to comply with or perform any other covenants or conditions of the LoanAgreement and to remedy such default within thirty days after notice from the Issuer or theTrustee to the City, unless such default is such that it is capable of being remedied but cannot beremedied within such thirty day period and corrective action is instituted by the City within suchthirty day period and is diligently pursued until such default is remedied; (c) proof that anyrepresentation or warrant made by the Borrower in the Loan Agreement or in any statement orcertificate provided to the Issuer or Trustee or purchaser of any Bonds in connection with thesale of the Bonds or furnished by the Borrower is untrue in any material respect as of the date ofthe issuance or making thereof and is not made good within thirty days after notice to the City bythe Issuer or Trustee; (d) insolvency or bankruptcy of the City, the inability of the City to pay itsdebts as they mature, the inability of the City to pay is debts as such debts become due, anassignment by the City for the benefit of its creditors, application for, or consent by the City to,the appointment of a trustee, custodian or receiver for the City or for a material part of theProperty of the City; (e) appointment trustee, custodian or receiver for the City or for a materialpart of the Property of the City which is not discharged within thirty days after suchappointment; (f) bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,proceedings under Title 11 of the United State Code, as amended, or other proceedings for reliefunder any bankruptcy law or similar law for the relief ofdebtors instituted by or against the City(other than bankruptcy proceedings instituted by the City against third parties) which, ifinstituted against the City, is allowed, consented to or is not dismissed, stayed or otherwisenullified within thirty days after such institution; (g) failure to pay any installment of interest,principal or premium on any Bond when the same shall become due and payable under theprovisions of the Indenture as a result of any act or failure to act by the City which is not inaccordance with the provisions of the Loan Agreement; (h) failure of the City to comply with orperform its obligations under the Loan Agreement relating to indemnification, as described in theLoan Agreement; and (i) and "Event of Default" under and within the meaning of theReplenishment Agreement has occurred and is continuing.

Remedies Upon Events of Default

Upon the occurrence of any default of the City's obligations under the Loan Agreementand during the continuance thereof, the Issuer shall have the following rights and remedies inaddition to any other remedies in the Loan Agreement or provided by law. The Trustee, onbehalf of the Issuer, with or without entry, personally or by attorney, may, in its discretion,proceed to protect and enforce its rights by pursuing any available remedy, including a suit orsuits in equity or at law, whether for damages, for the specific performance of any obligation,covenant or agreement contained in or related to the Loan Agreement or the Indenture, or in aidof the execution of any power granted in the Loan Agreement. Furthermore, the Trustee, onbehalf of the Issuer, may enforce any other appropriate legal or equitable remedy as the Trusteeshall deem most effectual to collect the payments then due and thereafter to become due under

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the Loan Agreement or any other obligation pledged under the Indenture. Anything to thecontrary in the Loan Agreement notwithstanding, in no event shall any obligation of the Cityunder the Loan Agreement be accelerated upon an event ofdefault thereunder or otherwise.

(Article VIII)

Supplements and Amendments to the Loan Agreement

The City and the Issuer, with the consent of the Trustee, may from time to time enter intosuch supplements and amendments to the Loan Agreement as may seem necessary or desirableto effectuate the purposes or intent of the Loan Agreement, provided that such amendment isadopted in accordance with the terms of the Indenture.

(Article IX)

Defeasance

If the City shall pay and discharge or provide, in a manner permitted by the Indenture, forthe payment and discharge of the whole amount of the principal of, premium, if any, and intereston the Bonds, the Loan Agreement or any other obligation pledged under the Indenture, and shallpayor cause to be paid all other sums payable under the Loan Agreement and the Indenture, orshall make arrangements satisfactory to the Issuer for such payment and discharge, then: (i) allproperty, rights and interest conveyed, assigned or pledged under the Loan Agreement shallrevert back to the City; (ii) the estate, right, title and interest of the Trustee and the Issuer in suchproperty, rights and interest shall be terminated; (iii) the Loan Agreement and the covenants ofthe City contained therein, shall be discharged; (iv) on demand of the City, the Issuer shallexecute and deliver to the City a proper instrument or proper instruments acknowledging thesatisfaction and termination of the Loan Agreement; and (v) the Issuer shall convey, assign,transfer and deliver to the City all property, including money, then held by the Issuer other thanmoney deposited with the Trustee for the payment of the principal of, premium, if any, orinterest on the Bonds or any other obligation pledged under the Loan Agreement or theIndenture.

(Article X)

Insurance Provisions

The Insurer is included as a third party beneficiary to the Loan Agreement. The City andthe Issuer have authorized the Insurer to discuss the affairs, finance and accounts of the Issuer orany information the Insurer may reasonably request regarding the security of the Insured Bondswith appropriate officers of the Issuer. Furthermore, the City and the Issuer will usecommercially reasonable efforts to enable the Insurer to have access to the facilities, books andrecords of the Issuer on any business day upon reasonable prior notice.

In addition, the City has covenanted to payor reimburse the Insurer for any and allcharges, fees, costs and expenses the Insurer may reasonably payor incur in connection with theadministration, enforcement, defense, preservation, amendment, waiver or other action withregard to any rights or security in the Indenture, the Loan Agreement or the ReplenishmentAgreement (collectively, the "Related Documents").

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Any Swap Agreement entered by the City payable from or secured by TDZ Revenuesshall meet the following conditions: (i) the Swap Agreement will be entered into for the purposeof managing the interest costs related to, or hedging against, (a) assets then held, (b) debt thenoutstanding or (c) debt reasonably expected to be issued within the next twelve (12) months; and(ii) the Swap Agreement will not contain any leverage element or multiplier component greaterthan 1.0x unless there is a matching hedge arrangement which effectively offsets the exposurefrom any such element or component. The City shall not terminate a Swap Agreement unless itdemonstrates to the satisfaction of the Insurer prior to the payment of any termination amountthat such payment will not cause the Issuer to be in default under the Indenture, the LoanAgreement or the Replenishment Agreement.

The City has agreed to provide to the Insurer the following information: (i) annualaudited financial statements of the City within 150 days after the end of the City's fiscal year(together with a certification of the Issuer that it is not aware of any default under the Indenture)and the Issuer's annual budget within 30 days after approval thereof with such other informationas the Insurer shall reasonably request from time to time; (ii) notice of any default know to theTrustee or the Issuer within five Business Days after knowledge thereof; (iii) prior notice of theadvance refunding or redemption of any of the Insured Bonds; (iv) notice of the commencementof any proceeding by or against the City commenced under any applicable bankruptcy,insolvency, receivership, rehabilitation or similar law (an "Insolvency Proceeding"); (v) notice ofthe making ofany claim in connection with an Insolvency Proceeding seeking the avoidance as apreferential transfer of any payment of principal of, or interest on, the Insured Bonds; (vi) a fulloriginal transcript of all proceedings relating to the execution of any amendment, supplement orwaiver of the Indenture, the Loan Agreement or the Replenishment Agreement; (vii) all reports,notices and correspondence to be delivered to the Bondholders under the terms of the Indenture,the Loan Agreement or the Replenishment Agreement; (viii) all information furnished pursuantto the continuing disclosure agreement the City will enter with respect to the Insured Bonds; and(iv) such additional information as the Insurer may reasonably request.

(Article Xl)

SUMMARY OF THE REPLENISHMENT AGREEMENT

The following is a briefsummary ofcertain provisions ofthe Replenishment Agreement.Such summary does not purport to be complete and reference is made to the ReplenishmentAgreement for full and complete statements of such and all provisions. Defined terms usedherein shall have the meanings setforth above.

Deficiency Payments

The City, on or before October 15 of any year in which it receives a Deficiency Notice,but in no event more than sixty days after such Deficiency Notice is received, shall pay to theTrustee for deposit in the Subordinate Debt Service Reserve Account, the amount set forth insuch Deficiency Notice as the amount by which the amount on deposit in the Subordinate DebtService Reserve Account on the preceding April 30, after taking into account any transfer made

A-43

from the Subordinate Debt Service Reserve Account to the Subordinate Bond Account pursuantto subparagraph (f) under the heading "SUMMARY OF THE INDENTURE - Debt ServiceFund" above, was less than the Subordinate Debt Service Reserve Requirement on such April 30.The City shall make such payments out of its General Revenues. The failure of the Trustee togive timely notice of such Subordinate Debt Service Reserve Account deficiency in accordancewith the Indenture shall not excuse the City's obligation to make the payment required by theReplenishment Agreement. All payments by the City shall be paid in lawful money of TheUnited States ofAmerica.

(Section 3. J)

No Set-Off

No set-off, counterclaim, reduction or diminution of an obligation, or any defense of anykind or nature (other than perfonnance by the City of its obligations under the ReplenishmentAgreement) which the City has or may have with respect to a claim under the ReplenishmentAgreement shall be available under the Replenishment Agreement to the City against theCorporation or the Trustee.

(Section 3.3)

Appropriations

The City, on or before October 5 ofany year in which it receives a Deficiency Notice, butin no event more than forty-five days after such Deficiency Notice is received, shall appropriatefor payment to the Trustee for deposit in the Subordinate Debt Service Reserve Account theamount set forth in the Deficiency Notice as the amount by which the amount on deposit in theSubordinate Debt Service Reserve Account on the preceding April 30 was less than theSubordinate Debt Service Reserve Requirement on such April 30.

(Section 3.4)

Limitations on Facilities

The City covenants and agrees that the Series 2011 B Bonds and Series 2011C Bonds arebeing, and any Additional Subordinate Bonds will be, issued in connection with projects orfacilities that are public infrastructure, public improvements or other public facilities for whichthe City may aid or provide assistance pursuant to TCA §7-53-3I5, and that it will not consentto or acquiesce in the issuance by the Issuer of any Additional Subordinate Bonds that are notissued in connection with any such project or facility. For purpose of this paragraph, RefundingBonds issued as Subordinate Bonds to payor provide for the payment of OutstandingSubordinate Bonds issued in accordance with the preceding sentence shall be considered to beissued in connection with projects or facilities for which the City may aid or provide assistancepursuant to TCA §7-53-3I5.

(Section 3.5)

A-44

Events of Default

An "Event of Default" shall exist if any of the following occurs and is continuing:

(a) The City fails to perfonn or observe any covenant or agreement containedabove under the heading "Deficiency Payments";

(b) The City fails to comply with any other provision of the ReplenishmentAgreement, and such failure continues for more than thirty (30) days after written noticeof such failure has been given to the City;

(c) Any warranty, representation or other statement by or on behalfofor withrespect to the City contained in the Replenishment Agreement was false in any materialrespect as of the date made; or

(d) The failure by the City generally to pay its debts as they become due; oran assignment by the City for the benefit of creditors is made, a bankruptcy proceeding iscommenced by or against the City, as the debtor, or the commencement by or against theCity, as the debtor, of any proceeding under any other insolvency law; or a trustee,receiver or agent (however named) is appointed or authorized to take control over all orsubstantially all of the property of the City for the purpose of enforcing a lien againstsuch property or for the purpose of general administration of such property for the benefitofcreditors.

(Section 4.1)

Default Remedies

If any Event of Default exists, the Issuer may proceed to enforce the provisions of theReplenishment Agreement and to exercise any other rights, powers and remedies available to it.The Issuer shall have the right to proceed first and directly against the City under theReplenishment Agreement without proceeding against or exhausting any other remedies which itmay have against the Issuer or otherwise and without resorting to any other security held by theIssuer.

(Section 4.2)

Remedies; Waiver and Notice

(a) No remedy conferred upon or reserved to the Issuer in the ReplenishmentAgreement is intended to be exclusive of any other available remedy or remedies, buteach and every such remedy shall be cumulative and shall be in addition to every otherremedy given under the Replenishment Agreement or now or hereafter existing at law orin equity or by statute.

(b) No delay or omission to exercise any right or power accruing upon theoccurrence of any Event of Default under the Replenishment Agreement shall impair any

A-45

such right or power or shall be construed to be a waiver thereof; but any such right orpower may be exercised from time to time and as often as may be deemed expedient.

(c) In order to entitle the Issuer to exercise any remedy reserved to it in theReplenishment Agreement, it shall not be necessary to give any notice to the City orotherwise, other than such notice as may be expressly required in the ReplenishmentAgreement.

(d) In the event any provision contained in the Replenishment Agreementshould be breached by the City and thereafter duly waived by the Issuer so empowered toact, such waiver shall be limited to the particular breach so waived and shall not bedeemed to waive any other breach under the Replenishment Agreement or of any futureperformance by the City under the Replenishment Agreement.

(e) No waiver, amendment, release or modification of the ReplenishmentAgreement shall be established by conduct, custom or course ofdealing.

(Section 4.3)

A-46

APPENDIXB

MARKET STUDY AND IMPACT ANALYSIS

rnns PAGE INTENTIONALLY LEFI' BLANK]

RKGASSOCIATES INC

EconomicPlanning

andReal EstateConsultants

•

Prepared for:

The City of MemphisDivision of Housing and Community

Development (HCD)701 North Main StreetMemphis, TN 38107

- - - - -- - --- -- --

Prepared by:

RKG Associates, Inc.Economic, Planning and Real Estate

Consultants634 Central Avenue

Dover, New Hampshire 03820

Tel: 603-953-0202

Web: www.rkgassociates.com

Market Study and Impact Analysis of the Pyramid/Pinch District Project - Memphis, TN July 13,2011

TABLE OF CONTENTSI. Executive Overview 1

A. Introdudion 11. Development Pions 3

B. Summary Findings 41. Demographic Indicators 42. Tourtsm Indicators 53. Employee Spending 64. Retail Trade Area 75. Retail Demand and Sales 86. Hotel Occupancy and Sales Tax 87. Financial Analysis - Pyramid Development (only) 98. Financial Analysis - Pyramid and Selected Other Downtown Development 10

II. Market Indicators•.•.••..•.•....•...•................•...•.•..•.•.•..•.•.•....•..•.•.....•...•.......•. 13

A. Socioeconomics 131. Population and Age 132. Households and Income 153. Tourism Trends and Spending 164. Office Worker Spending 17

B. Retail Indicators 181. Retail Trade Area 182. Source of Sales 193. PyramId - Retail Sales Estimates 234. Pinch District 23

III. Economic Impacts•................•.•..•.••..••.•.••.•.....•.•.•...•.•.•.•.•..••••.•.•.•..•..•.•..•..• 26

A.l.2.3.4.

Inputs, Assumptions and Findings 26Construction and Short-Term Impacts 26Ongoing Impads 27Hotel Occupancy and Sales Tax 28Sales and Sales Tax 29

IV. Appendix •.•.•..•..•.•...........•.................•....•...•.•..•......•.•.•...........•.•...•......•.... 30

RKG Associates, Inc. Page I

Market Study and Impact Analysis of tfIe Pyramid/Pinch District Project - Memphis, TN July 13,2011

I. EXECUTIVE OVERVIEW

A. Introdudion

RKG Associates, Inc. (RKG) was retained by the City of Memphis, Division of CommunityRousing and Development (RCD), to complete a market study and impact analysis of theredevelopment of the Pyramid and the Pinch District in downtown Memphis (refer to FigureI for an aerial view of the redevelopment area).

An independent market study is required, as a part of the City's bond request, in order toprovide public-sector financial assistance to economic development projects. This marketstudy reviews the City's capacity to absorb additional retaillrestaurantlhotel development,resulting in the creation of jobs, wages and net new sales tax within the existing CentralBusiness Improvement District (CBID)'. The CBID is presented in Figure 3, and referencedin this analysis as the Downtown TDZ (tourism development zone).

This impact analysis also presents an estimate of the retail sales tax, from consumer activityat the Pyramid2 that could be leveraged as new TDZ tax flows. This revenue stream, coupledwith the existing Downtown TDZ surplus, may be applied to the bonding debt for the project.

Figure 1 - Aerial View of the Pyramid/Pinch Distrid Development Site - Memphis, TN

The proposed developments include the Pyramid property (abutting the Mississippi River), of41-acres, and a portion of a six-block, 11± acre-area, with 34 parcels for the adjacent PinchDistrict, which is bounded by North Front Street (west), North Third Street (east), ShadyacAvenue (north) and Jackson Avenue (south). The City of Memphis has formally requested

I The boundaries of the CBm are coincidental with the existing Memphis Cook Convention Center Tourism DevelopmentZone (or TDZ), hereinafter referenced as the Downtown TDZ.2 The Pinch District is a future phase ofdevelopment and an analysis of retail sales and sales tax is premature at this time.

RKG Associates, Inc. Page 1


an Interchange Modification Study from the State of Tennessee for the purpose of gainingdirect northbound access into the Pinch District at Exit I-A of Interstate-4()3. Figure 2presents a conceptual rendering of the proposed Pyramid/Pinch District development, alsohighlighting the St. Jude Children's Research Hospital to the east.

o T MARSHAlL ARCHITECTS

St. Jude Children's Researeh Hospital

Figure 2 - Conceptual Rendering of Pyramid/Pinch Dlstrld Development - Memphis, TN

Figure 3 - Downtown TDZ by Census Trads

The Pyramid and Pinch Districtprojects are part of an existingDowntown TDZ4

• Tennesseehas adopted several alternativefunding mechanisms to assist inthe financing of publicinvestments. Included amongthese is the Convention Centerand Tourism DevelopmentFinancing Act of 1998, whichpermits the incremental newsales tax generated in the TDZ toform the basis of a revenuestream and the "financingmechanism," utilized to retirebonding debt for publicinfrastructure investment in theeconomic development projects.

;

II

A o ... .1-

sa.....p! I',...

) Infonnation compiled by the Tennessee Department ofTransportation indicate daily traffic counts averaging nearly 62,300autos, along this exit ramp, over the 2005 to 2009 period.4 In this analysis the census tracts delineated in Figure 3 represent the geographic boundaries used in tabulating thedemographic indicators and the retail supply and demand analysis.

RKG Assodates, Inc. Page 2

Market Study and Impact Analysis of the Pyramid/Pinch District Prolect - Memphis, TN July 13,2011

In this analysis, a portion of the City's existing incremental sales tax stream, currentlyderived from the Downtown TDZ, is combined with the estimated incremental sales taxrealized from new consumer activity at the Pyramid's Bass Pro Outdoor World facility and80-room hotel. Finally, selected economic and fiscal impacts are presented for several otherprojects and developments underway and/or planned within the Downtown TDZ, including:

• The move to Memphis of the Great American Steamboat Company headquartersoperations, as well as inclusion of Memphis as a port-of-call for ongoing tourism andriverboat travel'. The estimated Downtown TDZ direct employment includes 26positions, leasing an approximate 10,000 SF. The first year ofretail spending impactsfrom this additional downtown employment is assumed to be FY 2013, as are theretail spending impacts associated with new visitors and tourists.

• The relocation of Pinnacle Airlines Corporation headquarters to One CommerceSquare (at 40 South Main), leasing approximately 155,000 square feet (SF) with 650employees. FY 2013 is assumed as the first full year of retail spending contributionsfrom this additional employment.

• The planned expansion of the downtown Marriott hotel at an estimated constructioncost of $75.0 million6

• This expansion includes the addition of 160-rooms; a parkinggarage; and, 80,000 SF of meeting and convention, and an additional 82 employees.The first year of tax base impacts from hotel guests, as well as from retail spendingamong the additional employees, is assumed to be FY 2016.

• The ongoing expansion of the St. Jude's Children's Research Hospital (in the PinchDistrict), has an estimated cost of $190.0 million travel'. This expansion will addapproximately 340,000 SF to the facility and an additional 486 employees. The firstfull year of retail spending impacts from this additional employment is assumed to beFY 2017.

In all of these instances, the estimated downtown spending, and resulting sales tax, of theemployees, is presented. Estimates of visitor count and spending are presented for the GreatAmerican Steamboat Co. as well as their impact in the Downtown TDZ. Unless otherwisenoted, the overall general spending of additional hotel guests and potential conventionattendees is considered as part of the sales per SF estimates for Bass Pro and the PinchDistrict.

1. Development Plans

There are two major components to the proposed development, including the Pyramid with aproposed 300,000 SF (square foot) Bass Pro Outdoor World as an anchor tenant, and withretail space, exhibit/entertainment space and an on-site (interior) restaurant. Additionally, anapproximate 80-room, 41,600 SF hotel will be included as part of the proposed Pyramid

, Much of the economic and fiscal impacts of the Great American Steamboat Co. have been developed by YoungerAssociates (March 20II) with their report included as part of the Appendix. RKG has utilized selected economic and fiscalimpacts, from this report, for inclusion in the analysis of the Downtown TDZ, proper.6 This is an order ofmagnitude estimate and as such, at this time, there is not breakdown for these costs such as constructionwages compared to construction materials or site work and a result, estimates of short-term employment impacts are notincluded in this analysis.'Ibid



Figure 4 - The Pyramid from North Front Street

development. Potential futuredevelopment on the Pyramid site mayinclude a parking garage, and outparcel (along North Front Street)development of assorted retail, serviceand commercial development.

In August of 2010, the Memphis CityCouncil approved a lease agreementwith Bass Pro for an initial 20-yearlease ofthe Pyramid property as a BassPro Outdoor World facility. RKGunderstands that terms of this leaseinclude a potential of seven 5-yearrenewal periods, for a possible totallease term of 55 years.

Presently site plans and interior designs for the Pyramid are being finalized. The secondcomponent is the proposed future redevelopment of the neighboring Pinch District as avalue-oriented lifestyle centerS, inclusive of retail shops, restaurants, parking garages and apossible hotel. The conceptual plan for the Pinch District component includes the City ofMemphis, acting as Master Developer, engaging a nationally recognized firm to develop thePinch District. Although no plans are finalized at this point in time, with respect to theoverall market indicators, it is RKG's opinion that the opportunity for such a value-orientedlifestyle center at this location is strong,given the unique retail offerings/mixand economic synergy with the BassPro Outdoor World development.

B. Summary Findings

The key findings of this market studyare presented next, and in more detailelsewhere in the report. In summary,the demographic, tourism, retailsupply/demand and consumer spendingpotential(s) identified in this analysisindicate that the proposed Pyramid andfuture Pinch District developments areviable for the Memphis market. Figure 5 - Downtown from Pyramid/Pinch Distrid

1. Demographic Indicators

• There has been population growth in the Downtown TDZ since 2000 and this growthis projected to continue through 2015. This is dissimilar to the entire City, where

8 Tenants for the Pinch District are unknown but will likely include national and name-brand retailers, offering quality andvalue products at outlet pricing, with an estimated 24n,OOO SF of retail and 60,000 SF of restaurant space.


Market Study and Impact Analysis of the Pyramid/Pinch District ProJect - Memphis, TN July 13,2011

population has been declining. There has also been population growth in a 100-mileradius of the Pyramid and Pinch District.

• The population of 20 to 34 year olds, those in familylhousehold formation years andyoung professionals, is projected to increase in the Downtown TDZ, between 2010and 2015. This is dissimilar to both the City and the County, and reflects acontinuation of the growth in this cohort (in the Downtown TDZ) since 2000.

• The population aged 35 to 54 years, those in peak earning/spending years, isprojected to decline in the Downtown TDZ however, at a projected 5.8% decline thisis less than that for the City and County.

• The population aged 55 to 64, those with increased discretionary income, is projectedto increase 3.4% in the Downtown TDZ (2010 to 2015).

• In 2015 the number of households in the Downtown TDZ will total nearly 12,600units, representing an increase of nearly 15% over the 11,000 households in 2010.

• Between 1990 and 2000, the average household income in the Downtown TDZincreased from $17,600 to $37,000, or by 111%, by another 47% between 2000 and2010 and is projected to grow through 2015. As a result, in 1990 the averagehousehold income in downtown was 55.2% that of the City, but is projected to be106.6% in 2015.

2. Tourism Indicators

• Since 1998 the averageannual impact of tourism spendingin the ~emphis area economy hasexceeded $2.5 billion and theaverage annual attendance at~emphis area attractions has beennearly 2.9 million persons9

•

• There are more than 60tourist attractions in the ~emphis

area. The majority of the downtowntourism dollars are spent at BealeStreet establishments.

• ~ost, but not all, visitors to~emphis, on average, travel from

within an approximate 250-mile radius and those staying overnight spend nearly threedays in ~emphis.

Figure 6 - Partial Pinch District properties

• The average daily spending of visitors to ~emphis ranges from S60/day for the "daytripper" to over $400/day for the leisure travelers (typically a party of2 to 3 persons).

9 An attendee at a Memphis area attraction and a visitor may not necessarily be the same person, as the local populationoften "attends" an attraction and visitors may not.

RKG Associates, Inc. PageS


• Specifically, for the Great American Steamboat Co., Younger Associates estimatedslightly more than 21,800 visitors annually as passengers on the riverboat withestimated retail spending totaling $1,080,000.

,........."...------~~-----,.,,~..,.....,..,,=

RKG estimates that one-half ofthis visitor retail spendingoccurs in the Downtown TDZ,which includes numerous'restaurant and entertainmentvenues, such as Beale Street,but excludes other majorMemphis area visitordestinations such as Graceland.

The estimated net incrementalsales tax applicable (referbelow) to the TDZ, is spending,is $41,850, with FY 2013 as thefirst year of full impacts. Figure 7 - Pyramid and Pinch Distrid partial view

a) Applicable Sales Tax Rate

The state portion of the sales tax is 6%, reflecting the baseline rate in 2001, when theDowntown TDZ was established. This amount is adjusted by a -0.5% reduction, reflecting aset-aside for education funding. The resulting state tax rate then is 5.5%. The sales tax ratefor the City of Memphis is 2.25%, effectively making the applicable sales tax rate to be7.75%, (as in the preceding example $540,000 X 0.0775% =$41,850).

3. Employee Spending

• Studies by Urban Land Institute (ULI) have indicated that the average office workermay spend nearly $2,900 while at work over the course of a year. The followingTable 1 presents the estimated annual spending from the "new" downtownemployment, reflecting an estimated 65% capture for taxable expenditures in theDowntown TDZ.


Markot Study and Impact Analysis of tho Pyramid/PInch District Project - Memphis, TN July 13,2011

Total

1,243

$128,012$52.368

$180.380

$2.327,484

$1,S23,060$696,256$236,230$236,230$310,829

$99,465$136,765$341,911

$3,S8O,745

Annual Sales Tax • State Portion $66.924 $8.402 $50,009 $2,677

City Portion $27,378 $3.437 $20,458 $1,095NETSalesTaxtoTDZ $94,301 $11,839 $70,467 $3.772

EstImated "New" in 11)Z 65.ocm $1,216,800 $152.755 5257 $48,672

Source: International CCundl of Shoppins centers, Urban Land Institute and RKG Assodates, Inc.

Lunch S 1.225 $796,250 $99,960 $595.000 $31.850Apparel S560 $364.000 $45,696 $2n,ooo $14.560Other Shopper Goods S 190 $123.500 $15,504 $92,286 $4,940Inddentals S 190 $123,500 $15,504 $92,286 $4,940

Other Food Items S250 $162,500 $20,400 $121,429 $6,500Miscellaneous S80 $S2,OOO $6.528 $38,857 $2,080Dinner and Drinks $110 $71,500 $8.976 $53,429 $2,860Other Non-Food $ 275 $178,750 $22,440 $133,571 $7,150

TOTAl $ 2,880 $1,872,000 $235.008 $1,398,857 $74,880

Table 1 - Estimated Annual Downtown TDZ Spending from New Employment at Other ProiectsOffIce Workers EstImated Downtown mz Employment and PurdlasinSEstImated Annual Pinnacle Marriott St. Jude's Steamboat

Spending Demand PorWorker 650 82 486 26

These new sales, of$2.3 million, are then multiplied by the applicable sales tax rate of7.75%to arrive at an approximate $180,400 in new sales tax increment for the Downtown TDZ.

4. Retail Trade Area

• Representatives of Bass Pro have indicated that perhaps 40% to 45% of theircustomers travel 50+ miles to shop their stores. Most retailing venues have muchsmaller or tighter market area geographies, often ranging from 3 to 5-miles for manygrocery store formats to 15 to 20-miles for mass merchandisers lO

•

• Presently there are nocompeting Bass Pro OutdoorWorld facilities within anapproximate 200-mile radius ofthe Pyramidll

, It is also possiblethat the unique design of thisvenue might attract shoppersfrom an even further distance, ormore so than a "typical" BassPro (such as the one currently inMemphis),

• At one time, outlet centerslocated in relatively remoteareas but the more recentlocations, as value-oriented Figure 8 - Pyramid from surface parking area

lifestyle centers, have tied them more with travel and tourism and brought them intomajor metropolitan areas.

10 These vary by size of the shopping center or store, surrounding competition and other factors, but these trade area radii aremore or less typical for most such retail venues.II This excludes the existing, smaller Bass Pro in Memphis, which reportedly will convert to a catalogue outlet store. Thestores in Nashville, TN; Branson, MO; and, Birmingham, AL, are a11200+ miles away.


Market Study and Impact Analysis of tile Pyramid/Pinch District Project - Memphis, TN July 13,2011

• Information compiled by Value Retail News (VRN), a finn specializing in trackingthe outlet industry, indicates that trade areas may range from 60 to 100-miles.

• For this analysis, an approximate 100-mile radius about Memphis is considered areasonable trade area or "drawing power" for the Bass Pro and Pinch Districtdevelopments. This reflects industry average trade areas, avoids competitive overlapwith any other Bass Pro Outdoor World and is a subset of the existing 250-mileradius "tourist drawing power" ofMemphis.

5. Retail Demand and Sales

• The estimated consumer spending demand in 2013, for the one-million plushouseholds within a 100-mile radius of Memphis, is $20,500 per household or morethan $21 billion spent across a broad spectrum of retail lines.

• Within the Downtown TDZ, consumer spending demand among the approximate12,000 households exceeds $218 million or nearly $18,300 per household.

• More narrowly, retail sales at the Bass Pro and Pinch District retailers will likelyreflect consumer spending for sporting goods, apparel and accessories l2 as well asdining and drinking establishments. The cumulative 100-mile radius consumerdemand among these merchandise lines is estimated to be $4.7 billion in 2013.

• The retail sales (2013) for the Bass Pro are estimated to be $350/SF resulting in anestimated $9.7 million in new TDZ sales tax revenue (unadjusted by a factor of8% toaccount for set-asides and other reserves).

6. Hotel Occupancy and Sales Tax

This includes the proposed 80-room hotel as part of the Pyramid development (anticipated toopen in 2013) and the planned 160-room expansion of the downtown Marriott hotel, toinclude a garage and 80,000 SF ofconference and meeting space.

a) Hotel with the Pyramid

The 80-room hotel facility, as part of the Pyramid development, is estimated to be open andoperational in 2013, realizing a 60% occupancy rate and an average room rate of$130. Theestimated occupancy tax in 2013 is $38,700 to the City of Memphis and an additional$113,900 to Shelby County.

The occupancy tax represents an additional source of revenue for the City and County;however, it is not applicable to retiring the TDZ bonding debt. However, the estimated salestax contribution from the hotel is an applicable revenue source.

In 2013 the additional applicable sales tax revenue, from the hotel property, amounts to$176,500.

12 The 2009 Value Retail Directory, published by VRN (http://www.valucrClailnews.comD. indicated that apparel and shoecategories dominate the outlets accounting for nearly 70% of the total outlet stores.



b) Proposed MarrioH Expansion

A proposed $75.0 million expansion ofthe existing downtown Marriott hotel isto include 160-rooms and 80.000 SF of 'meeting and convention space.Construction is likely to start after thePyramid development and once BassPro has begun to establish this portionof the Downtown TDZ as a consumerdestination. In this analysis then, thecompleted Marriott expansion isanticipated to occur in 2015, with FY2016 as the fIrst full-year of estimatedrevenue contributions to the DowntownTDZ. The estimated occupancy rate

for the Marriott is 65%. slightly above Figure 9 - Pyramid and Pinch District partial viewthat for the 80-room Pyramid hotel,reflecting the on-site meeting and convention capacity as part of the Marriott expansion. alater opening and room demand from steamboat/riverboat passengersu. In 2016 applying anaverage room rate of $130 with a 65% occupancy rate, results in estimated room revenue of$4.9 million. This in turn amounts to an estimated occupancy tax in 2016 of $83,900 to theCity of Memphis and an additional $246.700 to Shelby County. The incremental sales taxapplicable to the Downtown TDZ is estimated to be nearly $382,500 in FY 2016.

7. Financial Analysis - Pyramid Development (only)

• The purpose of the fInancial analysis is to assist the City of Memphis in identifyingpotential financing that could be leveraged by the new TDZ revenue from the BassPro/Hotel, coupled with any existing Downtown TDZ surplus that the City ofMemphis may pledge for the project.

• As part of future payments, the City of Memphis is anticipated to pledge slightlymore than $11.9 million annually of the existing Downtown TDZ surplus.

• The new TDZ revenue generated from the Bass Pro/Hotel is assumed to start soonafter the construction is completed when each element is fully operational, which isreported to be in August 2013 at the latest. Therefore, for the fInancial analysis, thefirst fiscal year of new TDZ revenue generated from the Bass Pro/Hotel componentwould be FY 2014 (essentially less the month ofJuly 2013, however, grand openingsales in the early months typically exceed annual expectations). The estimated newTDZ revenue stream from the Bass Pro/Hotel component coupled with the existingDowntown TDZ surplus, are presented in Table 2.

13 In actuality the increased room-night demand and spending represented by the overnight steamboat and riverboatpassengers would likely be spread across numerous downtown hotels. For the ease of the spreadsheet model developed forthis analysis. this impact is estimated as part of the Marriou hotel expansion rather than incrementally across numeroushotels.



• The inputs and assumptions which are the basis of the estimates in this fmancialanalysis are presented in greater detail throughout this report and represent theconsultants' best professional opinions. However, there is no assurance that actualevents will correspond with the assumptions on which such estimates are based.Consequently, no guarantee can be made that the estimated net new TDZ revenueswill correspond with the results actually achieved in the future.

Table 2 - Estimated TDZ Revenue Stream - Bass Pro/Hotel & Existing Downtown TDZ Surplus

NewTDZ Revenue [1] existing TDZ Revenue for

Year July Bass Pro Hotel Subtotal SUI'DIus (2) Debt Service

1 2011 $0 $0 $0 $11,948,423 $11,948,423

2 2012 $0 $0 $0 $11,948,423 $11,948,4233 2013 $0 $0 $0 $11,948,423 $11,948,4234 2014 $8,137,500 $176,514 $8,314,014 $11,948,423 $20,262,4375 2015 $8,259,563 $179,162 $8,438,724 $11,948,423 $20,387,1476 2016 $8,383,456 $181,849 $8,565,305 $11,948,423 $20,513,7287 2017 $8,509,208 $184,5n $8,693,785 $11,948,423 $20,642,2088 2018 $8,636,846 $187,346 $8,824,191 $11,948,423 $20,n2,615

9 2019 $8,766,399 $190,156 $8,956,554 $11,948,423 $20,904,97810 2020 $8,897,895 $193,008 $9,090,903 $11,948,423 $21,039,32611 2021 $9,031,363 $195,903 $9,227,266 $11,948,423 $21,175,68912 2022 $9,166,833 $198,842 $9,365,675 $11,948,423 $21,314,09813 2023 $9,304,336 $201,824 $9,506,160 $11,948,423 $21,454,58414 2024 $9,443,901 $204,852 $9,648,753 $11,948,423 $21,597,17615 2025 $9,585,559 $207,924 $9,793,484 $11,948,423 $21,741,90716 2026 $9,729,343 $211,043 $9,940,386 $11,948,423 $21,888,80917 2027 $9,875,283 $214,209 $10,089,492 $11,948,423 $22,037,91518 2028 $10,023,412 $217,422 $10,240,834 $11,948,423 $22,189,25819 2029 $10,173,763 $220,683 $10,394,447 $11,948,423 $22,342,87020 2030 $10,326,370 $223,994 $10,550,364 $11,948,423 $22,498,78721 2031 $10,481,265 $227354 $10,708,619 $11948,423 $22,657,042

Total $166,732,295 $3,616,662 $170,348,957 $250,916,888 $421,265,845

Annual AveraRe $7,939,633 $172 222 $8,111,855 $11948,423 $20060278Note: An annual inflation factor of 1.S~ was applied to New TDZ revenues after initial year

(1) Projected New TDZ Revenue reflects net applicable sales tax rate of 7.7S~

(2) Existing TDZ surplus figures were provided by the atyof Memphis and Morgan Keegan &Company

Source: atyof Memphis & RKG Assodates, Inc.

8. Financial Analysis - Pyramid and Seleded Other Downtown Development

Table 3 on the following page includes the estimated annual TDZ revenues accruing to theCity of Memphis from the Bass Pro and Hotel development, along with the existing surplus(as shown above in Table 2) and adds the estimated sales tax revenue derived from otherdowntown sources, of projects completed or pending completion. These include the move todowntown of the Great American Steamboat Company headquarters, as well as for PinnacleAirlines Corporation (both FY 2013 impacts); the planned expansion of the downtown


Market Study and Impact Analysis of the Pyramid/PInch District Project - Memphis, TN July 13,2011

Marriott (FY 2016 impact); and, the ongoing expansion of the St. Jude's Children's ResearchHospital (FY 2017 impact).

As indicated in Table 3, these other development and projects contribute an additional $11.3million to the estimated TDZ sales tax revenues over the term. This ranges from $82,200 insales tax from retail spending downtown among the Great American Steamboat Co.employees, to nearly $6.9 million from additional hotel tax from the expanded Marriott. Onaverage, over the term, these additional sources contribute $537,900 annually.


Market Study and Impact Analysis of the Pyramid/Pinch District Pro(ect - Memphis, TN

Table 3 - Estimated TDZ Revenue Stream - Bass Pro/Hotel with Existing Downtown TDZ Surplus and Other Downtown Projeds

July 13, 2011

Poumlal AddItIllnI! SIIesTill Rnenue fnm OdltrSounes GRANDtoTAl Chqe

NlWlDZRevenue fll ExIstllllTDZ Revt~fOl Steamboat Stelln!loal Plnnade Marrlott Marrlm Sttude 'IOTAI RewnuefOl withYtll' Jib IISSPnl HottI SUbIotII 5IlmIld12l DtbtStMct EalpIorHs Tourism &nl:I!oftes EINlIoftes ItDttI ~ forOthtt Dtbt5eMa! OI:tIer

1 2Dll $0 $0 $0 $11.948,423 $1~423 $0 $0 SO SO $0 $0 $0 $11,9U1,.423 SO2 2012 $0 $0 $0 $11,948,423 $11,,.,423 $0 $0 $0 $0 $0 $0 $0 $11,948,423 $03 2013 $0 $0 $0 $11,948,423 $11,948,423 $3.m $41.850 S94,3m $0 $0 $0 $139.924 $12.oaa.347 $139,924~ 201~ $8.137,500 $116,514 $8,314.014 $11.948,423 $2O,2Q,437 $3,129 $42,478 $95,717 $0 $0 $0 $14tQB $2O,4lI4.460 $142,0235 2015 S8.l59.S63 $119,162 $8,438.n4 $11,948,423 $20,387.147 $3.8&6 $43,115 $97,152 $0 $0 $0 $144,153 $20,531.301 $144,153E 2016 $8,383,456 $181,BU $8,565,305 $11,948,423 ~S13,728 $3.9014 $43,762 $98,610 $11,839 $382,447 $0 $S4O,liOl $21,0)4,329 $S4O.601J 2011 $8,.5C8,D $184,S77 $8,.fB3,78S $11,948,423 $20.642.208 $4,~ $44,411 $1lXl,llI9 $12,016 $388,184 $70,467 $6J9,178 $21,261,385 $6J9,I78S 201S sa.~ $187,3C6 S8.82"191 $1~423 $2Q.772.615 $4,tQ $45,004 $~ $12,196 $39t,0Ii $11,524

_465$21,~080 $62a4fi5

S 2019 $8,.766,399 $SI,156 $8,956,SS4 $11,948,423 $20.9lM,918 $4,125 $45,761 51Ql,U4 S12.379 $J99,917 $12,597 $637.892 $2J.S42.87D $637,892

Ie 2020 $8,837,895 $193,0:8 S9.0!l0,!m $11,948,423 $2l,CB9,326 $4,186 $46.447 $104,661 $12,56> $4r6,9lS $73,686 $647.461 $21,686,726 $647,461

11 2021 $9,181,363 $m,903 $9,227.266 $11.948,423 $21175.689 $4,249 $47,144 $106,231 SU.753 $412.00s $14.'192 $657,172 $21,832,8&2 $&S7.m12 2022 S9,U6,8.D $198,142 $9~67S SII,948,423 S2J.314,CGI $4,313 $47,851 $107.B24 $1U1S $41&.184 $75.913 $667,030 $21,981,128 $667,030

13 2023 $9,300,336 $201,824 $9,506,lliO $11,948,423 $21,454.584 $4.378 $48.569 $1lI9.441 $U.139 $424,457 $77,~ $677,1B6 $22,131,619 $677.03614 2024 $9.443,901 $204,852 $9,648,753 $1J.948.423 $21.S97.176 $4.443 $49,297 $111.00 $13,336 $430,824 $78,208 $6B7,191 $22.284.367 $687,191

15 202S $9,S8S,SS9 sm,924 $9,193,~ $11,~423 $21,741,907 $4,510 $50,037 $lU,74!1 $13,53ti $437.286 $79,381 $697,499 $22.439.406 $697,499IE 202fj 59,729,343 $211,043 $9,9f00,J86 $11.948,423 ~ $4.578 $50,787 $114,440 S13,739 $443,1145 sso,sn $707,961 $22.596.m $707,96117 2m7 $9.81S,283 $214,209 $lO,089,.m $11.948,423 $21.m1,91S $4,646 $51,549 $U6,1S7 $13,945 $4SO,503 $81,7&0 $7JB,581 $22.156,. $71B,581

Ul 2Q28 $UUI23,412 $217.422 $10.2-4n,834 $11,948,423 $22.119,258 $4.716 $52,322 $117.899 514,154 $457.lil $83,007 $729.360 $22.918,617 $729,3fiO

15 2029 $~m.763 $220,683 $1G.394.4G7 $11,948,423 $22.342.870 $4,787 $53.107 $119.668 $14,367 $464,119 $84,252 S7-4n,300 $23,m3,I70 $7~

2C 2IJ3( $10,326,370 $223,994 $19,5SO.364 $11.948,423 $22.49&787 $4.859 $53.~ $121,W $14,.582 $471,Q81 $85,516 S7SJ.* $21.250.191 $751.021 2011 $10.4&1265 Stn3S4 $1O.7Ol619 $11948.423 $22.6S7M2 $4.931 SS4.712 S123.28S $14J01 $478.148 sso.799 5762.676 m419718 S7Q67&

Total $1fJ6,73U9S $3.616.662 $171.34&957 S2S0.91&.888 $421,265 1145 $82.219 $912.193 $2.05S.474 ml.:l93 $6.858.181 SII75 S47 $11.295907 S432.56L7S2 $lL295.9CJ7

AMualAve... n93S633 $17'U22 $8,U1.855 S11.9Q.423 $2O,fm,278 $1.915 $41438 S97.aso $lD,US $32&.560 S55.978 SS37.B S20.59U79 S§nBll*:Anlnnulllllfl,tlOIl ,.dOtofU"wu I~ledtoHewroZ_nuflllltrlnjti.I,Ut

lIIhvjemd Nt_TN Rewlluf ,.ntelS MllppliQbl. lIlII tIIltlltOI7.'S"

lZ)bistlll& TDhulpht, filii'" _ ~dtcl by~ Otyof Ut.I, 1M MoIpn rottpn"~1lJ

SoIIICt:Olyo'MtlllllhjIIUJ:&Anoci.~.rn~


Market Study and Impact Analysis of the Pyramid/Pinch District Project - Memphis, TN July 13, 2011

--- - - -- -,

II. MARKET INDICATORSThis chapter presents an overview of selected baseline socioeconomic and retail relatedindicators, utilized in estimating retail sales. These sales in turn fonn the basis for estimatingnet new sales tax revenue that may be used in retiring the public-sector bonding debt.

A. Socioeconomics

This section presents comparative and selected socioeconomic trends and projections forTennessee, Shelby County, the City of Memphis and the Downtown TDZ (as well as anapproximate 100-mile radius about the Pyramid and Pinch District14

). Included among theseare the more typical variables, often reviewed by retailers as part of their site and locationcriteria, such as population, housing and income. A brief overview of the tourism economyand its impacts in Memphis is also presented.

1. Population and Age

Despite some populationlS decline in the Downtown TDZ, between 1990 and 2000, there hasbeen growth since 2000 and growth is projected for 2015 (refer to Table 4). The projectedpopulation growth for the Downtown TDZ is dissimilar to the projected population declinesfor both the City of Memphis and Shelby County. As a result, in 2000, the Downtown TDZpopulation represented approximately 3.2% of the City population, but is projected torepresent 4.1 % in 2015. The projected growth rate for the Downtown TDZ is similar to,albeit slightly higher, than that projected for all of Tennessee. The population within a 100mile radius of the Pyramid/Pinch District has grown since 1990 and is projected to continueto grow resulting in more than 2.6 million persons in 2015.

Table 4: Selected Population Trends

Comparative Downtown City of Shelby lQO.MilePo ulatlon Trends TDZ Mem his Coun Tennessee RadiusTotal Population

1990 22,871 661,838 826,327 4,8n,187 2,263,3862000 20,n8 649,485 897,472 5,689,283 2,491,8842010 22,189 602,458 904,703 6,324,825 2,591,5622015 23,542 575,658 897,660 6,691,279 2,646,403

%change 1990 - 2000 -9.2% -1.9% 8.6% 16.7% 10.1%%change 2000 - 2010 6.8% -7.2% 0.8% 11.2% 4.0%%chan e 2010 - 2015 6.1% -4.4% -0.8% 5.8% 2.1%

Source: DemographicsNow and RKG Assodates.lnc.

In terms of the age distribution (refer to Table 5) within the Downtown TDZ, and ascompared to the City ofMemphis, several observations worth noting include:

14 As discussed elsewhere in this analysis. an approximate IOO-mile radius is considered to be an appropriate retail trade areareflecting the combined conswner drawing power for the Bass Pro and Pinch District value-oriented lifestyle center.IS Reference for much of the population and other demographic data is DemographicsNOW. a leading and national vendor ofsocioeconomic data from the US Census Bureau and inclusive of proprietary estimates and projection modeling. The firmwas founded in 1997. for additional information; please refer 10 their website at hllp://w\\w.dcmogranhicsnow.com/.


Market Study and Impact Analysis of the Pyramid/Pinch District Pro!ect - Memphis, TN July 13,2011

• The population aged 20 to 34 years of age, often considered to be in their family andhousing formation years and young professionals, and is projected to increase in theDowntown TDZ, between 2010 and 2015. This is dissimilar to both the City and theCounty, and reflects a continuation of the growth in this cohort (in the DowntownTDZ) since 2000. This growth is in contrast to the loss for the City and the County.

• The population aged 35 to 54 years, typically those in their peak earning andspending years, is projected to decline across all geographies, including theDowntown TDZ. However, at a projected 5.8% decline, this rate of decline for theDowntown TDZ is less than that for the City and County.

• While the population aged 55 to 64, or that cohort often with increased discretionaryincome, is projected to increase across all areas, the projected 13.4% growth in theDowntown TDZ, for 2010 to 2015, is the highest rate.

Table 5: Seleded Age TrendsCornpantlvo DownlDWn Otyof 5IlolbyABo Distribution lOZ Memphis County TonnollOoPllJIll1atIon <5 Yoan

1990 1.844 53,942 66,543 333.4122000 1.128 50,396 68,427 374.8802010 1.458 50,769 74,957 433,7812015 1.799 53,317 82,099 469,734

%change 1990· 2000 ·38.8% ·6.6% 2.8% 12.4%%change 2000· 2010 29.3% 0.7% 9.5% 15.7%%change 2010· 2015 13.4% 5.03' 9.5% 83%

Popullllan. 5ta 19Y.1tS1990 3,964 143,618 188,359 1.043,0242000 3,202 150,589 21ll,316 1.186,1522010 3,256 129,569 196.470 1.226,9372015 3,342 121,063 191,234 1,281.644

%chango 1990· 2000 -19.2% 4.9l6 11.7% 13.7%%change 2000· 2010 1.7% ·14.03' ·6.6% 3.4%%chango 2010· 2015 2.6% .6.6% ·2.7% 4.5%

Population. 20 to 34 YOIts1990 7.570 1n.4EiO 214,054 1,180,1192000 6,684 152,936 197,014 1,202,2462010 6,182 123,960 173.086 1,245,25521115 6,504 119,083 173.492 1.266,537

"chango 1990· 2000 '11.7% -13.8% -8.03' 1.9l6"chango 2000· 2ll1O -7.5% ,18.9% ·12.1% 3.6%"chango 2010· 2015 5.2% ·3.9% 0.2% 1.7%

Population. 35 to 54YoltS1990 4,581 156,383 207,641 1.261,1782000 5,llO4 1n.845 264,464 1.689,4432010 5,976 157,170 252,056 1.768,5282015 5,631 132,722 220,983 1.767,135

"chango 1990- 2000 26.7% 13.7% 27.4% 33.3%"chango 2000· 2010 3.03' ·11.6% ·4.1% 4.7%

" chango 2010- 2015 ·5.8% ·15.6% ·12.3% ·01%Papullllon· SSta64Yoall

1990 1.566 53,295 63,392 434,5892000 1.691 46,912 61.610 533.2512010 2,858 69.961 109.246 no.63521115 3,242 71.246 115,509 864,572

%chango 1990· 2000 8.1% ·12.03' 6.7% 22.1%%chango 2000· 2010 69.03' 49.1% 61.4% 44.5%%change 2010· 2015 13.4% 1.8% 5.7% 12.2%

Papulation 65+

1990 3.349 n,l42 86.335 618,8192000 2,269 70,807 89,581 703.3112010 2,459 71.026 98,885 879,9122015 3,024 78,230 114,345 1.041814

%change 1990· 2000 -32.2% -8.2% 3.8% 13.7%%change 2000· 2010 8.4% 0.3% 10.4% 25.1%%change 2010· 2015 13.03' 10.1% 15.6% 18.4%

SO"'CIt : O.mo.raphlaNow Ind RIG "nod,wI. Inc.

"* ·$um o' COhOI'U ml,dIH.,'rom total due to ro-undJnl.

RKG Associates, Ine, Page 14


2. Households and Income

By 2015 the projected number of households in the Downtown TDZ will be nearly 12,600units, representing an increase of nearly 15% over the 11,000 households in 2010 (refer toTable 6). This represents the highest projected increase in households among allgeographies, notably above the 1% growth projected for the City as a whole. In 2000, thenumber of households in the Downtown TDZ represented 3.8% of all City households, but isprojected to represent 5.2% in 2015. As also indicated in Table 6, there is continued growthin the number households within a 100-mile radius, as well as an increase in averagehousehold income.

Table 6: Seleded Housing and Income TrendsComparative HH II Downtown Cltvot Shelby 1O().Mlle

Income Trends TDZ Mem his Coun Tennessee RadiusTotal Households

1990 9,897 251,480 303,569 1,853,719 828,7842000 9,628 250,460 338.366 2,232,905 938,8502010 10,965 239,273 349,565 2,49O,4n 1,001,0942015 12,579 241,954 366,446 2,658,282 1,053.139

%change 1990· 2000 ·2.7'l6 ·0.4% 11.5% 20.5% 13.3%%change 2000· 2010 13.9% -4.5% 3.3% 11.5% 6.6%%change 2010· 2015 14.7% U% 4.8% 6.7% 5.2%

Average KK Incomo1990 $17,SSS $31,826 $35,815 $31,854 $29,1682000 $37,013 $45,353 $54,522 $48,688 $45,7832010 $54,397 $54,367 $67,295 $60,511 $56,3552015 $60,917 $57,123 $71,310 $65,119 $60,162

%change 1990· 2000 110.8% 42.5% 52.2% 52.8% 57.0%%change 2000· 2010 47.0% 19.9% 23.4% 24.3% 23.1%%change 2010· 2015 12.0% 5.1% 6.0% 7.6% 6.8%

HH Earning <$35.0001990 8,738 168,955 186,741 1,235,746 587,7012000 6,626 133,155 150,830 1,074,625 483,3522010 6,520 118,524 137,102 1,011,743 444,9852015 6,983 117,094 137,175 1,015,671 442,959

%change 1990· 2000 -24.2% -21.2% -19.2% -13.0% ·17.8%%change 2000· 2010 -1.6% -11.0% -9.1% ·5.9% -7.9%%change 2010· 2015 7.1% -1.2% 0.1% 0.4% -0.5%

KH Earning $35,000 to $100,0001990 1,000 75,135 104,527 569,427 221,5042000 2,282 98,902 148,378 972,417 385,7952010 2,758 93,358 148,S88 1,128,464 425,7482015 3,298 93,862 154,254 1,217,076 451,786

%change 1990·2000 128.2% 3L6% 42.0% 70.8% 74.2%%change 2000· 2010 20.9% ·5.6% 0.1% 16.0% 10.4%%change 2010· 2015 19.6% 0.5% 3.8% 7.9% 6.1%

KK Eamlns $100,000.1990 150 7,339 12,285 48,449 19,5252000 no 18,403 39,158 185,863 69,7092010 1,687 27,390 63,875 350,265 130,3612015 2,298 30,997 75,017 425,535 158,394

% change 1990· 2000 380.0% 150.7% 218.7% 283.6% 257.0%% change 2000· 2010 134.3% 48.8% 63.1% 88.5% 87.0%%chan e 2010· 2015 36.2% 13.2% 17.4% 21.5% 21.5%

Sovne : OomogrophlaNow .nd RKG Auod.le•• lnc.

Between 1900 and 2000, the average household income in the Downtown TDZ increasedfrom $17,600 to $37,000, or by nearly III %. The rate of increase in the average householdincome among Downtown TDZ households continued to increase, by 47% between 2000 and2010, and is projected to increase 12% between 2010 and 2015. This unprecedented growth



when compared with the other three (in Tennessee) areas has also resulted in the averagehousehold income among Downtown TDZ households surpassing that of the City. In 1990,the average household income in the Downtown TDZ was 55.2% that of the City, but isprojected to be 106.6% in 2015. Other observations regarding households and incomeinclude the following:

• Despite overall increases in household income in the Downtown TDZ, there is aprojected 7% increase (2010 to 2015) among households earning less than $35,000.This may partially be explained by the increase in population among those aged 20 to34 years.

• The rate of growth among households in the Downtown TDZ, earning $35,000 to$100,000, exceeds that for all other areas, in all time periods, such as 1990 to 2000;2000 to 2010; and, projected for 2010 to 2015.

• Similarly, the rate of growth for households earning $100,000 or more, in theDowntown TDZ, exceeds that of all other areas. In 1990, the downtown householdsearning more than $100,000 represented less than 2% of all downtown households.This is projected to increase to more than 18% representation by 2015. Thiscompares with a 3% representation among all City households in 1990 to a 13%representation in 2015.

3. Tourism Trends and Spending

Since 1998 the amount of tourism spending in the Memphis area economy has surpassed $2billion and even $3 billion at times as indicated in Table 7. The average over the 1998 to2008 period was slightly more than $2.5 billion annually. In addition, estimates ofvisitors/attendance at area attractions have averaged nearly 2.9 million annually.

Table 7: Tourism Trends - Memphis, TN

Trends In TourismMemphis, TN

Tourism Spending Attendance atIn $mllllons Area Venues (mill)

1998 $2,116.26 3.141999 $2,202.20 2.902000 $2,310.70 2.782001 $2,244.51 3.032002 $2,327.80 3.132003 $2,370.26 2.852004 $2,455.99 2.932005 $2,639.58 2.752006 $2,854.13 2.802007 $3,064.70 2.742008 $3,035.30 2.65

Average $2.511.04 2.88Source: Memphis Convention & Visitors Bureau and RKG Associates, Inc.

According to information presented by the Memphis Convention & Visitors Bureau(MCVB), more than 60 tourist attractions are in the Memphis area. Reportedlyl6 the majorityof the downtown tourism dollars are spent at Beale Street establishments, as it is estimatedthat 4 million persons visit the Beale Street Historic District annually.

16 Downtown Memphis Retail Strategy, June 2008, prepared by Economics Research Associates (ERA), et a1



Table 8 presents a profile of Memphis tourists/visitors, indicating that the average "drawingpower" of Memphis as a tourism destination extends for a 250-mile radius and that theaverage visitor spends almost three days in Memphis.

Table 8: Memphis Visitor ProfileMemphis VIsitor Profile

Awrage Party SizeA\IBl'8ge StayAwrage Market Draw

2.81 persons2.94 days

25O-mile radius

Average Dally VIsitor SpendingConwntlon Delegate $397Corporate Trawler $340Leisure Trawler (party) $427Day-Tripper $60Source: Memphis Convention &Visitors Bureau

ERA and RKG Associates. Inc.

a) Visitor Spending from Great American Steamboat Company Travelers

As noted previously, Younger Associates (March 2011) have prepared an economic andfiscal analysis of impacts associated with the arrival of the Great American Steamboat Co.and new passengers and visitors to Memphis. In that analysis Younger Associates estimatedslightly more than 21,800 visitors to Memphis (annually) as passengers on the riverboat withestimated retail spending totaling $1,080,00017

• RKG estimates that one-half of this visitorretail spending occurs in the Downtown TDZ, which includes numerous restaurant andentertainment venues, such as Beale Street, but excludes other major Memphis area visitordestinations such as Graceland. As a result the estimated applicable sales tax on this retailspending, for the Downtown TDZ is 50% X $1,080,000 X 7.75% = $41,850, with FY 2013estimated to the first year of full impact.

4. Office Worker Spending

Economic activity in the Downtown TDZ is also influenced by the downtown workforcereported by the Memphis City Center Commission to be some 64,000 workers. Studiescompleted by Urban Land Institute and others, indicators that a typical office worker spendsslightly less than $2,900 annually for select merchandise while "at work". While many ofthese 64,000 workers may not be office workers, or may have varying lunch hours or on-sitevenues (such as a company cafeteria), there is still a substantial consumer demand that isgenerated. The following Table 9, presents the estimated new employment in the DowntownTDZ as a result of selected other projects and developments either underway or planned.These estimates are multiplies by the annual spending of among office workers and adjustedto reflect a 65% capture rate at business in the Downtown TDZI8. These sales are thenmultiplied by the applicable sales tax rate, indicating an estimated net sales tax contributionof $180,400 to the Downtown TDZ. In the analysis and spreadsheet model, this is furtheradjusted to reflect the estimated timing and phasing of the new employees into theDowntown TDZ workforce.

17 The Younger Associates report estimated annual hotel spending among these visitors. RKG reflects this hotel spending asftart of the slightly higher occupancy rate for the proposed downtown Marriott hotel expansion.

8 Some purchases are likely to occur on the way to or from work. or otherwise outside of the Downtown TDZ.



Table 9: "New" Office Worker Retail Spending and Applicable Sales Tax - Downtown TDZ

Total

1,243$1,58,060

$696.256$236,230SD6,23O$310,829$99,465

$136,765$341,9U

$3,580,745

lunch S1,225 $796,250 $99,960 $595,000 $31,850Apparel S560 $364,000 $45,696 $272,000 $14,560Other Shopper Goods S 190 $123,500 $15,504 $92,286 $4,940

Inadentals S 190 $123,500 $15,504 $92,286 $4,940

Other Food Items S250 $162,500 $20,400 $121.429 $6,500Miscellaneous S 80 $52,000 $6,528 $38,857 $2,080Dinner and Drinks S 110 $71,500 $8.976 $53,429 $2,860

Other Non·Food S275 $178,750 $22.440 $133,571 $7,150TOTAl $ 2,880 $1,872,000 $235,008 $1,398,857 $74,880

OffIce Workers Estlmated Downtown TOZ Employment and PurdlaslnBEstlmated Annual Pinnacle Marriott St. Jude's Steamboat

SpendlnsDemand Per Worker 650 8Z 486 26

Estlmated "New" In TOZ 65.00'J(, $1,216,800 $1S2.7S5 $909,257 $48.672

Annual Sales Tax· State Portion $66,924 $8,402 $50,009 $2,677City Portion $27,378 $3,437 $20,458 $1,095

NETSalesTaxtomZ S94r3OZ $11,839 $70,467 8 m

$128,012$52,368

$180,380

Source: International Coundl of Shopping Centers, Urban land Institute and RKG Assodates, Inc.

B. Retail Indicators

This section presents an overview of retail and consumer spending indicators, includingsupply and demand where applicable, and used in estimating sales for the Pyramid (BassPro/Hotel) development. At the outset a briefdiscussion ofa retail trade area is warranted.

1. Retail Trade Area

Typically, retail trade areas represent that geographic area from which a retail business drawsthe majority of its customer activity and retail sales. The extent of such a trade area isimpacted by surrounding competition, road patterns and natural barriers, to mention a few.Retail trade areas are often considered in terms ofdistance (in miles) or drive-times (typicallyin minutes). In most instances, retail sales diminish with distance and density. Generally,consumers prefer to shop close to home whenever possible (the distance factor) and thefurther they must travel the more likely there are alternative and competitive shoppingvenues (the density factor). In part for these reasons, the trade areas of grocery stores, drugstores and even many shopping plazas or centers are somewhat limited, often with 75% ormore of the retail sales originating from within a "tight" geography.

However, the extent of a retail trade area for retail shopping and entertainment venues, suchas a Bass Pro or a value-oriented lifestyle/outlet center as is possible for the Pinch District aremuch more expansive, particularly when positioned as, or as a part of, a broader touristdestination. Representatives of Bass Pro have indicated that perhaps 40% to 45% of theircustomers travel 50+ miles to shop their stores.

At one time outlet centers typically located in remote areas, removed from urban centers butstill with good highway access. However, the more recent development of outlet centers,tied to travel and tourism, are locating closer to major metropolitan areas. Informationdeveloped by the International Council of Shopping Centers (ICSC) indicates that outletcenters, often without a major name anchor tenant, are experiencing trades areas extending25 to 75 miles, perhaps further if situated with a major name anchor tenant such as Bass Pro.Information compiled by VRN a firm specializing in tracking the outlet industry indicatesthat trades areas may typically range from 60 to 100-miles.



SWCTInAlllOCAlIONS2S.SO' ..... IClll__

-...w..-

ff llIm"'"'""i--.........---I---.:j 0 GInder I.bIQft

• OlllIIIMP

As indicated in Figure 10 andTable 10, there are presently no ImIBcompeting Bass Pro OutdoorWorld facilities within anapproximate 200-mile radius of the Figure 10- Competing Venues within 100+ Miles

proposed Pyramid site. This specifically excludes the existing, smaller Bass Pro in Memphis,which reportedly will convert to a catalogue outlet store, similar to a facility in Springfield,MO. Also presented in Figure 10, there are numerous outlet centers in the broader region,but only three within an approximate 100-mile radius of Memphis.

Figure 10 presents an overview ofBass Pro Outdoor World locations,as well as those of Cabela's andGander Mountain stores, all threemajor retailers in the hunting,fishing, camping and outdoorsporting goods sector.Additionally, outlet centers arepresented, highlighting a 25, 50and 100-mile radius about theproposed Pyramid and PinchDistrict developments in Memphis.

Table 10: Distance/Drive Times

Approximate Distance and DriveDrlve nmes to Memphis Miles nme

Bass ProBranson, MO 275 4-5hrsPearl, MS 215 3 -4hrsPrattville, AL 315 4-5hrsBirmingham, AL 240 3- 4hrsNashville, TN 215 3 - 4hrs

Gander MountainJackson, TN 90 1-2hrsSherwood,AR 135 2-3hrsSource: RKG Assodues.lnc.

These three outlet centers with an approximate IOO-mile radius of Memphis, include (1) TheFactory Stores at Batesville (MS) with approximately 20-outlet stores; (2) The LakelandFactory Outlet Mall (TN) with 17-outlet stores; and, (3) The Casino Factory Shoppes (MS)with 28-outlet stores. Given these competitive locations and trends in the outlet industry, anapproximate 100-mile radius is considered a reasonable retail trade area for the combinedconsumer drawing power of the Bass Pro and Pinch District projects.

2. Source of Sales

Typically retail sales are derived from three primary sources, including natural growth froman increase in population and households; a re-capturing of sales leakage (whether a market


Market Study and Impact Analysis of the Pyramid/Pinch District ProJect - Memphis, TN July 13, 2011

is a net exporter or net importer of retail sales); and, transferred sales, each discussed in turnin the context of the immediate Memphis market and the broader IOO-mile radius market.

a) Natural Growth

Natural growth reflects a change in households and a change in average purchasing demand(Table 11). The change in households in the Downtown TDZ, coupled with changes inspending demand, result in an estimated S53 million increase in consumer spending demandfrom 2010 to 2015. The estimated natural growth in spending demand for the remainder ofMemphis households is another S249 million. Within the total IOO-mile driving distance, theprojected increase in households is a little more than 5% and spending demand of 3.5%,representing a growth from S20 billion to nearly S22 billion in demand from 2010 to 2015.

Table 11: Estimated Growth in Household Spending Demand 2010- 2015Rttldcn1lal Retlll AnaIysII llownlDWn1IlZ Reftll!nder cI Mempllls, 1N 1»M1le Rldilll

lslIm&ted Household Retall DemaN! 2OlO 2Il15 ChanIt 2OlO 2Il15 ClIent' 2llIO 2Il15 Ching,

Households lD,9&5 u.m IA.'" m,3llI m.m ~ J,OIl2.O!N 1.Cl5!.1!I 5.llIAverap Rttall EJpendJlUttl $1&,9a1 $19,017 Wll6 sm.m $lI,343 .ull $2O,OZ1 $11),714 UlI

MIlar MerdlandJM UneiNAlCScodt) $~ $D9,2I.UQ $S1,014,&IS $4,644&U,Ml $O,I9I5,QI,J&I $24UliU22 ~4 $Z1,8K7W4' $1"m,m,m

MalllrVIhldt and ParIs Dultn-44l $JAS.S4!) ~,714 SIl37.m S8U47.m $&S,44S,4lIO $4,297,m $J5O,9JQ,3Q $183,9S!,Q55 $11.GD.BnFUIIliluN and Itomt f\lmJsItlllp Slom-44Z $5,5&7,- $7.m,.m $1,S85,177 $Ul.59U19 $1JUJ9,013 $6,9Ill.1M ~m $619,JAO.067 ...mS.dnlIlIaand AFplllllce StoteHU $&,1SS6,S48 $8,59O,Ml $1,,9IS,m $1SO,8S4,US su.,1iU19 $7,917,ClM $li51,361,4U $7U,lU" $S7,lS7,9SSIllllIdlnaMaU.w, Glnltn EqulpSlGttI_ $ZUlIl,U4 $29,7!O,OM $6,$99,S6O $QU7I,2G7 $64IJ.4OlIa7 $D.DUllO $Z.I51,w.m suas.m.m $ZJ4,W,5UFood and seve,. SIoIfto4&5 $Jf,SI5,617 $47,587,77& $1D,5CR,QI9 SE.4C7,3M $UIlUlf,735 $5l.m,3SZ $Ul7,152,6SJ $f,GO,2A1,OlII $3Q,GlI,GSHtlllh and Penona! CIte 5tort1"446 $17,455,457 $U,425,M $4,-'916 $4SO.07&,2AI $47.,SlD,8D ~ $1.93U72,661 $UI0381UZS $17J,4Il7,li15CIoIIllnaandaOllt!lt&AaiutGdtI~ $1J,S61,28lI $17,G2,4S7 $1,86I,1S $140,340,616 ~ $II,245,4U $1M7.7ZI.G1I $1,S97,4lll,4S6 $U9,741,411Mtn'l a~lIljnl 5tortl-44811 $6«1,28& $822.566 $w.m $14,453,811 $15.214,366 $7El),SSS SQ,S99,04t S68.UU'9 $U1Ul6We"",n'l a~thlns St~"1-44I12 $2,213,2n $2,843,435 $630,163 SEO,U7,7SC SS,39l.741 $30263,988 SZS8.544,061 $181,399,687 $22,855,&26Children'l,lnfants a~thinlltotel-448l3 SSZ3.1S2 $672.1G1 $148,952 $15,s64,679 $16,739,m $874,719 $67,964,495 573.972,644 $6.00Il,148F~ly aClhlns Stortl-4481. $S,12O,618 $&,S7S,S93 SUS7,gsa $l33,l4S,32S $140,324,198 $7,ln.873 $573,424,0'JI $624,115.514 $5O,Sl.421a~thins AcctSlGri.IStoroS-448!5 $223,760 $287,469 $6l,lIl9 55,716,826 $&,02A,197 $307,371 $24,637,118 $26,815,071 $2,177,9S3OthtrOGlIlins Stortl-4W9 S62O.331 $796.952 $176,E21 $16,429,m $17,318,4G' $8118.432 $70,711.905 $76,962,960 $6.251.026Shot~rel-448Z $1.995,0112 $2.563.W $568,0:0 551.956,797 S54.7Sl877 $2,81».010 S22l.7S2.139 $243.532.114 $19,779,975lew.lry 5t~r.s-44831 $2,077,326 $2,668,782 S591,¢56 539,143,856 $41,U7,2S3 $1.983,437 $17O,SM,706 $1B6,067,m $15,W.615lIIaas. and ....th., GoGelIStotel-~ $147,433 $189,410 $41.977 $3,501.596 $3,687,557 $185,961 $15,133,450 $16,471266 $1,337,116StoonlnIGoods, ltGIIlly,lloclr, MlakSlcm-4S1 $S,759,lD $7,-no $l,Qt,7lM $IJ1.CI5Ul7 $IJ7,95J,30 ~ $5Q,4l8,Slll $617,56U71 $5O,1SII,7&2$pGrIins Goods 5tortl-4SUI $1,983,~ $2,548,175 $564,727 $47,331155 S49,lMS,515 $2,SIS,&Sll $201,530,~ $222,611,3llll $18,oao.762t<obbv, Toys and Gamel Stores-451U $1.257,408 $1,615,417 $358,009 $31,483,647 $33,170,817 $1.687,170 SI3S,m,467 $147,789.076 $12,003,609Stw/N«dI.wcrtrJPiea Goods ltotes-45W $llB,9116 $261.962 $58,S $&,026,(&1 $6.357,151 $331.100 $25,837,213 $28,121,256 $2.284,00"""allnllNmtntand 5ul:/llits5tores-45U4 $lO!l,859 $S26,~ $1I6,Q15 $8,316,647 $8,Slll,Ill4 $432,157 $36,439,871 $39,66Ul2 $3.221.3318clGk 5toros-45I2U $1,246,444 $1,601,331 $354,887 $24,027,068 $15,2SO,898 510mb) $IGI,815,670 $114,081,510 59,265,839News Collen and NtwISbtlds-4Sl2l2 $Ell.892 S7a229 $17,337 $1,43lU89 $1"S06,311 $75,822 $6,1S5,136 $6,71l.910 $546,774Prereccrdtd Til'", COs, Rccetd Stores-45W $S97,Ol9 $767,041 SIfi!l,!l!l2 $12,379,250 S13,019,827 $640,577 $53.816,aJ6 $58,573,410 $4,lS7,~

Goneral MerdlandJso Stons-45Z $37,8U,146 $4S.S7t,101 $1D,7&&,1SS $972,58I,IS8 $I,OZ4,QO,3I8 S52.J4I..WI $4,19O,1M,581 $4,$EO,M,114 $37O,433,S92Mlsceu-- 5lort ReIllltts-45J $7A1G $9,OOO,.9U ~JBa $I&f,m,6SO $177,973,51S $8,997,9&5 $72t,841,171 ~ $64.S1U9JFoodscnlce and IldnIclnsPlacn-722 $ZlI,IIS,Ja $37,au,451 $8,2lIU59 $SO.4SU97 --.au $M,Z2f,7!15 $1,111,1U,6lD ~ $Z8,GIU7IFull·StNIce Reltallrants-n21 $13,038,330 $16,7SO,602 $3,7Iun $291.096,905 $306,382,528 $15,285,623 $1,261,326,028 $Un,ll2I,lI63 $111,502,835Umitod-50rvice Utins Plocel-7222 $11,956,50:0 $1S,3(lO,8:lS $3,~,26S $2n,966,015 $287,3S9.SS2 $14,393,507 $1,W.~291 $10286,1r6,335 $1GI,459,oMSpeciaJ FoocllONlc:os-7223 $2.339,575 $3,005,699 $666,124 SS3.S07.- $56,33O,JI3 $2,822,4lP.i 5231.611648 $2$2.08U91 $20,47c.9QDrinklM Plocel-Alcoholic Bev.mlS-m4 $14l1l.747 S1.9m.34S S4US98 532.887046 534.612,670 51.725.221 5142.533 BI $155.133 789 S12.6OO,156Sova .Olnu. Ind lllGAuocUtlS.IRt.

Changes in retail spending demand are aggregated for major merchandise lines, in thepreceding Table 11, and are presented for selected component categories, such as sportinggoods, apparel and dining and drinking, to which the following is noted:

• The combined estimated change in resident (Downtown TDZ and the remainder ofMemphis, or City of Memphis) consumer demand for sporting goods merchandise,over the next five years, is slightly more than S3 million. Within the 100-rnile radiusthe change in consumer demand for sporting goods merchandise is SI8 million, froma base ofalmost S205 million in 20 IO.



• For apparel and accessory stores, often a primary component of outlet centers, thecombined change (City of Memphis) in consumer demand equates to slightly morethan $22 million, led by family clothes ($8.6 million), women's clothes ($3.9 million)and shoes ($3.4 million). Within the entire 100-mile radius the change in consumerdemand for apparel is nearly $130 million, from a base ofalmost $1.5 billion in 2010.

• The combined (City of Memphis) consumer spending growth for dining and drinkingexceeds $42 million, nearly 45% of which is growth in spending for full-servicerestaurants and an additional 5% for drinking establishments. Within the entire 100mile radius the change in consumer demand for dining and drinking is $249 millionwith more than $111 million in full-service restaurants alone.

To the extent that there is natural growth in consumer demand suggests that future retail salesmay originate from a growing retail market as opposed to "carving" the existing market intosmaller pieces. This is the case for the proposed Bass Pro and value-oriented lifestyle centerfor the Pinch District, where sales are as likely to result from new demand rather than atransfer of existing demand. Realistically there will always be some degree of sales transfer,retail being a consumer choice for where and when to spend their dollars. However, in agrowing market, and in one where "new" retail represents a new concept or venue, suchtransfer is likely negligible over time.

b) Sales Leakage

All consumer markets experience some degree of sales leakage, or the difference betweenlocal consumer demand and local consumer sales. The reasons for sales leakage are manyand include, but are not necessarily limited to, a lack of local stores, perceived advantages(price or selection) or simply shopping elsewhere, perhaps via the Internet, or catalog, orwhen on vacation. Sales leakage reflects how much a local economy exports or importsretail sales. If a market is an exporter, there may be an inadequate retail supply (stores)relative to spending demand. Conversely, ifa market is importing retail sales then local salesactivity exceeds demand, indicating that the retail market is a destination for many types ofgoods and services. As in Table 12, Memphis is an importer of several retail salescategories, notably dining and drinking. This is not unexpected considering the tourismactivity Memphis realizes, as well as the impact of spending among downtown employees.

Estimates of net retail sales, either as an exporter or importer, are presented for majormerchandise lines, in the preceding Table 12, for both the Downtown TDZ and the remainderof the City of Memphisl9

• In the aggregate, the Downtown TDZ is a net importer of retailsales, with sales exceeding local demand by more than $133 million, including nearly $91million for dining and drinking. Considering the impacts of tourism in the local economyand the concentration of dining and drinking establishments in downtown Memphis, this isexpected. Similarly, the remainder of the City of Memphis is a net importer of dining anddrinking sales, by nearly $179.5 million in 2010.

However, for both the Downtown TDZ as well as the remainder of the City of Memphis,there are merchandise lines where local demand is not being met, or where there is sales

19 Limitations of the software modeling and data vendor, Claritas Inc., prohibit analysis of aggregate retail sales and salesleakage for all stores and venues in more than a 30-mile radius. As such, a sales leakage analysis for the lOO-mile marketarea is not available.



leakage. For the Downtown TDZ this amounted to nearly $68 million in total in 2010, andnearly $775 million for the remainder of the City of Memphis, with a focus to the following:

• The combined estimated sales leakage in sporting goods merchandise for all ofMemphis is estimated to be S15.8 million in 2010.

• In terms of apparel, the combined 2010 sales leakage is estimated to be $40.4 millionin shoe stores; $37.5 million in family apparel; and, $14.7 million in women'sapparel.

• As noted previously, Memphis is a net importer of dining and drinking dollars;nonetheless, there is an unmet local demand in the City for more than $28 million insales at drinking establishments.

Table 12: Estimated Sales Exporter or Importer by Merchandise Line - 2010Residential Retail Analysis DowntllWlllDZ· :lO1O Remainder of Memphis, TN - :lO1OfstImated Household Retail Demand Demand sales ExIlClrt/lmP4rt Demand sales bJIort/lmllOrt

Expott or SM..Lootkago only $67,999,51. Export or s.,..Lootkege only $77"'375,289

Milor Merchalldlse Une lNAJCS code) $186,l99,998 $319,229,214 15m.029.216) $4,646,613,146 $4,995,350,119 1$348,736,9731

Motor V.hlde and Puts Dealers-441 $3,469,849 $5,868,936 ($2,399.0811 $81,147,677 $l92,623,501 15111,47S,8241Fuml1ure and Heme Fumlshlnp Stores-442 $S,S67,49ll $11,72B,921 1$6,161,4231 $131,S96,219 $lQ.l99,442 1$10,601,2231Sectronla and Applllllce StoRHU $6,68f,S48 $1,524,174 $S,1Q,J74 $1SO,8S4,185 $138,617,207 $12,236,978Bulldlng Material, Ganten Equip Stores -444 $23,180,184 $4O,474,25S 1517,294,0711 $616,078,207 $S98,QU,789 $..,056,418Food and Bevense Stores-44S $36,88S,687 $16,179,8S0 $20,705,807 $953,447,384 $745,830,646 $2ll7,6l6,7JlIHelltll and Personal care Stom-446 $17,455,457 ~2S,72S 1$28,814,2681 $4SO.076,2A6 $757,061,480 1$3ll6,985.2341C1Cltlllng and aotldns Accessories Stores-448 $13,561,2ll8 $n,lI91,S3O 1520,330,2421 $340,340,616 $298,SZ4,7S1 $41,81S,&SMen's Clothing Stores-44811 $640.284 $10,859.818 ($10,219,532) $14.453.811 $42.710.701 ($28.256,890)

Women's Oothing 5tores-448U $2.213.272 $3.059.687 ($846,415) SEO.I27.754 $44.584.558 $15.543.196Children·s. Infants Oothing Stores-44813 $523.152 $1.388.444 ($863,292) $15.884.679 $9.214.159 $8.650.520Family Oothing Stcres-44814 $5,120.848 $3,697.106 $1.423.542 $133.145.325 $97.073.047 $38.072.278C1cthing Accessories Stores-4481S $223.760 $92.137 $131.623 $5.716.826 $2.652,427 $3.084,399OlIIer Oothlng Stores-44819 sa2O.331 $2.876.176 ($2.255.845) $18,429.972 $21.973,523 ($5,543,551)

Shoe Stores-4482 $1.995.082 $488.310 $1.508,m $51.956.797 $13.1184.877 $38.871.920Jewelry Stores-44831 $2.077.326 $810.454 $1.268.872 $39.143.856 $47.681.348 ($8,737,492

Luggage and Leather Goods Stores·44832 $147,433 $10.623.400 ($10,475,967) $3.501.596 $19.350.113 ($15,848.517)

SIlortins Goods, Hcbby, Book, Music Stores-4S1 $5,79,006 $U,193,m 1$6,434,66S) $131,056,8ll7 $116,747,683 $1A,309.124Sporting Goods Stores-4S111 $1.983.448 $681.487 $1.301.961 $47.333.655 532.831.495 $14.502,160

Hobby. Toys and Games Stores·45112 $1,257.408 $514.783 $742,645 $31.483.647 $20.501,208 $10.982.441Sew/Needlework/Piece Goods 5tores-45113 $203.906 $510,553 ($306,647) $8.026,051 $4.256.893 $1.719.158M.lslcallnstrument and SulJplies Stores-4S114 $409.859 $7.241.368 ($6.831,507) $8.376.847 $12,618.626 ($4,241,979)

Book Stores-4SU11 $1.248.444 $1.973.252 ($726.808) $24.027.068 $38.630.761 ($12.603,693)News Dealers and Newsstands-4512U $60.892 $0 SEO,892 $1.430,489 $104.996 $1.325.493Prereoorded Tapes. COs. Reoord Stores-45122 $597.049 $1.272,250 (S675,201) $12.379,250 $9.603.706 $2.575.544General M.ldlandlse St0res-4S2 $37,813,146 $1D,577,889 $Z7,235,257 $972,S81,8S8 _m,S10 1$11,7S1,65Z)M1scellaneOll$ Store Retlllers-453 $7,006,143 $2O,8llZ,OlI8 1$13,795.865) $U8,97S.650 $17J,4Q,6U 1$2,486,9621FoodseNlce and DrInldng Places-722 $28,81S,192 $119,718,225 ($90.903,033) $6!0,458,297 $8Z9,m,496 15179.469.199)Full-Service Restaurants·7221 $13,038.330 $55.591.137 ($42.552,807) $291.096.905 $356.582.775 ($65.485.870)Umited-Service fatinsPlaces-7222 $11.956.540 $57.968.993 ($46.012,453) $272,966.045 $460.729.624 ($187,763,779)

Special Foodservices·7223 $2.339.575 $4.381.916 ($2,022,341) $53.507,898 $8.620.662 $44.887.238Orinklna Places -Alooholic 8everaaes-7224 $1.480.747 $1.796,179 ($315,432j 532.887,449 $3.994.235 $28.893.214Source: Cantu and RKG Anodar.s, Inc.

To the extent that sales leakage exist from a local economy, either the Downtown TDZ or theremainder of Memphis, indicates an opportunity for re-capturing a portion of these leakedsales either through additional stores and retail offerings for new businesses, expansions ofexisting businesses or improved merchandising, marketing and operations of existing



businesses to increase their market share. As noted with natural growth in consumerdemand, to the extent that existing sales leakage is re-captured by retailing venues may alsodiminish any sales transfer impacts.

c) Sales TransferAs identified previously, there is both natural growth and sales leakage in the DowntownTDZ. In this analysis there is an estimated combined (Downtown TDZ and the remainder ofthe City of Memphis) sales leakage of $15.8 million in sporting goods, as well as salesleakage among many of the apparel and accessory merchandise lines. As such, the projectedtransferred retail sales at the Bass Pro in these categories, is considered negligible. It is netnew sales tax, which generates the revenue stream for retiring bond debt, meaning sales taxthat exclude any potential transfer of existing sales tax. In this analysis, considering thenatural growth and unmet demand, there is no consideration given to potentially transferredsales from within the Downtown TDZ to the Bass Pro.

3. Pyramid - Retail Sales Estimates

The Bass Pro store is estimated to be 300,000 SF, inclusive of indoorentertainment/recreation space, exhibits (to include a man-made cypress swamp and anaviary) and an on-site/in-store restaurant. The entertainment and recreation value of a BassPro store is as important in defining its customer draw as is the merchandise. One report20

indicated that as much as 40% of the floor space of a Bass Pro may be devoted to"experience" rather than retail goods. Estimates of the sales volume on a per SF basis for theBass Pro store reflect a variety of inputs, including infonnation from Hoovers, a Dun &Bradstreet company, and in this analysis an estimated sales volume of $350/SF is utilized.This is applied to the entire 300,000 SF although much of this floor space may be dedicatedto non-retail goods, and as such actual retail sales per SF ofretail space could be higher.

4. Pinch Distrid

As part of this analysis RKG spoke with a variety of professionals active in the outlet centerindustry, including representatives of VRN and leasing agents and brokers of other outletcenter developments and developers. These discussions are summarized as follows:

• Value Retail News - Discussions with the editors at Value Retail News indicatedthat to their knowledge no outlet centers had been built within the last 15-years thatwere "spec" development. Reportedly one outlet developer, Tanger(http://www.tangeroutlet.com/). with 35 outlets and nearly 10 million SF ofdevelopment, requires a 50% to 60% pre-lease commitment before startingconstruction. Typically outlet operators generally prefer to own the land, as opposedto developing on leased land. In a few instances outlet centers have been developedon leased land, but it is considered the exception as opposed to the rule.

• Tbe Shops at Grand River - This outlet center (http://www.shopsofgrandriver.com)in Leeds, Alabama, recently opened (October 2010) one year after startingconstruction. This outlet center is off of Interstate-20 (Exit 140) and adjacent to aBass Pro. Reportedly, the phase one development is 330,000 SF with 60± stores.

20 White Hutchinson Leisure & Learning Group, white paper, 2010.



The center is predominantly leased (about 80%) although some smaller shops areavailable as are some large anchor positions.

• Opry Mills Outlet Mall- This is an 80± store outlet center, with a Bass Pro, locatedin Nashville, TN. Discussions with a representative of the leasing departmentindicated that the facility was perhaps 80% to 90% pre-leased as of opening andachieved 98% stabilization with the fIrst year of operations. However, as acautionary note, the center opened in 2000.

• New England Development - RKG has a long-standing relationship with NewEngland Development, or NED, (http://www.ncdevelopment.com) a major real estatedevelopment and management fIrm in the northeast with nearly 14 million SF ofdevelopment in their portfolio, including retail and hospitality space. Discussionswith representatives of NED indicated that depending on location, tenant mix andanchors, the desired levels of pre-leased stores could vary. Typically, a 70% to 80%pre-leasing is desired, but that this could include 40% actual signed leases andanother 40% as committed to sign leases. In either event, it is important that outletcenters and similar developments have a strong "junior anchor" presence and not relysolely on an adjacent development, such as Bass Pro, for their customer activity.Such ''junior anchors" could include name-brand, nationals retailers occupying15,000 SF to 20,000 SF themselves.

• The Avenue ® Carriage Crossing - Cousins Properties (Carriage Crossing LLC)purchased the 132-acre site in May 2004, and began construction on the 800,000± SFlifestyle center in Collierville, reportedly the largest open-air specialty retail center inTennessee21

• The center opened in October 2005 at 88% occupancy, while pre-leasecommitments were reported at 51% at the end of 2004. The center has two anchordepartment stores, Dillard's and Parisian, the latter which in 2007 became Macy's.Other chains include Barnes & Noble, and Bed Bath and Beyond, as well as upscaleapparel shops such as Talbot's, Chico's, Banana Republic, Ann Taylor, to name afew. In 2008, a 131-room Courtyard Marriott opened as the third anchor tenant at thecenter. From 2006 to 2009, the percentage of leased area at the center rangedbetween 92% and 93%. According to a representative, the viability of this type ofcenter in today's economy is tenuous since anchor and boutique-type tenants areconsolidating, as compared to expanding. Reportedly, the only retail sectorexpanding in today's economy is the outlet-store format.

SpecifIc tenants for the Pinch District are unknown however Table 13 presents the typicalretail tenant/merchandise lines for outlet centers, noting that 70% are apparel shops,suggesting that the retail (non-restaurant) stores at the Pinch District would mirror these.

21 Please refer to http://jwamalls.com/retail properties/property/the avenue carriage crossingand http://www.collsinspropcrties.com/property/retail/avcnue-carriage-crossing for additional information.


Market Study and Impact Analysis of the Pyramid/Pinch District Project - Memphis, TN

Table 13: Average Tenant/Merchandise Line(s) at Outlet Centers

July 13,2011

CAlogal)' atMo.....andl. UnoAccoaorto.AccessorlooJOW8lry

HondbagsILugg(lgoiLealha. Goo<

Apparol and Shoo.APllQI8l • Chllclnln

AJlPIIIIll-Famlly

AJlPIIIIlI-ManAJlPIIIIlI • Man & WomanAJlPIIIIlI • Wom<lI'lAIN8IJe ApparoIIFootwaarISpcxtltUngolIeJUnd8lWOOtfHasIaryS_Homo

Homo Decor/FwnlahlngsHome ImprowmanUHaIdwwoHousewanlslTobI_KItchanwElocuonlcslAjlpllancasUnans/DomaaUcaBaoul)' and HoollI>Booll!y PnxluclslCosmaUcsDlugiHeallh

OthOt

BooksiMuslcIVldooOopwtmanl SloroFood

Gcner8l Man:handlS6Papa< GoodslC4rclslGlftsToysTOTALSSouru ; VRN and RKG Auodatel,ln,

RKG Associates, Inc.

'afCholn.

3811

1312

204

123D12334821

831

3810

1

22

3

2

14122

248374

31

318

1,391484570357

',02lI7'5

1.B702112

1,4051.714

68B324

2,021

BII8

1118

39573

838

771598175

878283131229

49

168'8

12,924

%afSlOro.

10.76%3.59%4.41%2.78%

8'.88%5.53%

14.47%

2.28%10.87%13.28%

5.32%2.51%

15.84%8,64%1.22%0.30%4.43%0.64%0.04%

5.'7%4.81%1.35%

8.77%2.19%1.01%1.77%0.38%1.30%0.12%

11111.DO%

Page 25

Market Study and Impact Analysis of the Pyramid/Pinch District ProJect - Memphis, TN

I' -------- --

l

III. ECONOMIC IMPACTS

July 13,2011

This chapter presents the economic impacts associated with the Pyramid/Pinch Districtprojects, including the short-term direct and indirect ("spin-off') construction employmentand wages, as well as the ongoing direct and indirect employment and wages.

A. Inputs, Assumptions and Findings

RKG has utilized several data sources and input assumptions regarding the estimatedeconomic impacts, including the following:

• Short-term (direct) construction employment, in terms ofjobs and wages, were basedon the construction costs (only) provided by HCD; wage data (as is all wage data inthis analysis) is provided by the Tennessee Office of Labor and WorkforceDevelopment (and expressed in 2010 dollars); and, RKG's estimates thatapproximately 35% ofconstruction costs equate to labor costs.

• Ongoing direct employment and wage data for the proposed development includeretail and restaurant components. The number of employees reflects industryaverages (on a per SF basis) as developed by the Urban Land Institute.

• Estimates of indirect employment and wages as "spin-off' from the short-termconstruction activities, as well as the ongoing activities, once built, reflect anestimated local capture rate of 30% and were estimated using multipliers developedby the US Department of Commerce for the RIMS II modeling.

• Economic estimates regarding employment and wages are presented as if fully-builtout and at stabilized occupancy, net of transfer where applicable.

1. Construdion and Short-Term Impads

Table 14 presents the estimated short-term economic impacts associated with theconstruction activity and incorporates the following:

• The private sector construction investment in the Pyramid development is estimatedto be $75 million and the public sector investment (for construction only) another $50million. The proposed hotel component for the Pyramid adds another $6.5 million inprivate sector construction costs. The Pinch District construction, for conceptualpurposes and considering a 300,000 SF of retaiVrestaurant development, is assumedto include $60 million in private sector funds and $20 million in public sector funds.

• This analysis estimates that 35% of construction costs are associated with labor, apercentage not atypical of other communities and projects where RKG has worked.The remaining construction costs are typically for materials, soft costs and otheradministrative or non-construction labor related expenditures. As result, labor-relatedcosts total an estimated $81 million in this analysis.


Market Study and Impact Analysis of the pyramid/Pinch District Prolect - Memphis, TN July 13,2011

• The labor costs are divided by the average annual wage data (construction industry2010) to develop an estimate of employment. It is reasonable to assume thatconstruction work would be staggered across numerous skill sectors, such asexcavators, plumbers, electricians, carpenters and so on.

• Standard employment and wage multipliers are applied to the estimated constructionemployment and wages, in order to present an estimate of the indirect or spin-offeconomic impacts. These indirect impacts are also considered short-lived, as they arebased on short-term direct impacts, and are further reduced to reflect a 30% localimpact. In RKG's experience much of the indirect impacts are not experiencedlocally, but rather statewide or regionally. As result, indirect impacts from theconstruction of the Pyramid, hotel component and Pinch District are projected toresult in an additional 838 jobs and $34.8 million in wages, locally.

Table 14: Construction and Short-Term Impactslnputsllld PyramId Pyramld PvnmId PIIlCh Pinch Pinch COMBlHm-- AIldlo< Hotel SdfclllI RtstawIn1 ~tall S<Ibtorol row

PROS'fRfY USESquare Feet (SFI af !lov.lapment 300,000 41,600 341.600 tiO,OOO 240,000 JOO,ooo 641.600

Humber'" HGttI Roo... 80 80

SHORrmIMEMPIDYMENTtUldWAGllMPAmConstNdIGll CG1ts (GIlly)EWlNted Private Inveument S75,ooo.ooo $6.soo,ooo $8I.soo.ooo UO,OOO,ooo Sl4I,SOQ.oooEstimated Public Investment sso.ooo,ooo $lO.ooo.ooo S70.000.000 $1Q,OllQ,OOO $9O.OOO.llllOTatalln..ltmlnt $Z3l,soo.ooo

lllttctShcnTerm ImplCtlEWmated Wages 3S.00ll $43.750,000 $9,275,000 $S3,OZ5,GlIll szs.ooo.ooo $8I.ClZS,OOOEstimated Empl0l""tnt 921 195 l.U7 S90 1.706

Indlttcthit Term lml*UEstimated w.aes 3O.00ll SI8.784,500 $3,982.314 $U.7G6,814 Su.azz.oso $34.)81,194Estimated £mel......nt 3O.00ll CS2 96 S48 290 lIS_:ua_1K

2. Ongoing Impacts

Table 15 presents the ongoing economic impacts and incorporates the following:

• Estimates of direct employment are based on the proposed SF of build-out for theanchor retail use as well as possible retaiVrestaurant components of the Pinch District.Each of these, in turn, is divided by the average SF per employee, at 1,000 SF perretail useZ2

, 2,000 SF per hotel employee and 550 SF per restaurant use. This resultsin an approximate 670 employment positions, before any adjustments.

• Potential adjustments include an estimated 5% transfer of sales and employment ofrestaurant activity from elsewhere in the Downtown TDZ, and, an overall allowanceof 8% vacancy for a stabilized Pinch District.

• The resulting estimated direct and ongoing employment amounts to 637 positions,including 300 at the Bass Pro anchor, 21 at the hotel component, 95 at the PinchDistrict restaurants and an additional 221 at the Pinch District retail stores.

22 The 1,000 SF per employee calculation reflects reported industry measures and accounts for the higher than average floorspace in a Bass Pro utilized for non-retail sales and an emphasis on sales volumes and value for a value-oriented lifestylecenter. and less so on personalized service.

RKG Associates, Inc:. Page 27

Market Study and Impact Analysis of the PyramId/PInch District Project - MemphIs, TN July 13,2011

• Wages associated with the net direct employment reflect prevailing wages (2010) andindicate direct wages ofjust under $11.7 million.

• In terms of ongoing and indirect, or spin-off impacts, an additional 101 employees areprojected with an estimated annual wage ofapproximately $2.7 million.

Table 15: Ongoing Employment and Wage ImpactsInpulSllld PynmId PynmId PynmId P1ndl P1ndl Plndl COM8lHED

AIldlot IlG1eI SUIItfllrlI ReSUlml\! Retail SuIJtDIrlI JDTAL

PRO'EHrY liSESquare Fee! (51'1 of Development 300.000 41600 341.600 60.000 240,000 3Q\OOO 6Q,6OO

Number of Hotel Rooms 80 80

ONGOING W'LOYMENTlltld WAGEIMPAmEstimated Direct Em~loymen! 300 21 m 109 240 349 mlLess Estimated Transferred -sOlI (5) (51 151Less Vacancy (Stabilized Oa.u~ancyl -8.0lI (8) (19) (27) (27)

NET Direct Em~loyment 300 21 m 95 221 J16 mIndirect Em~loyment @ Local ca~ure 30.009' 47 4 51 15 35 50 101Total Employment 347 45 m 111 2S6 366 159

Estimated Direct Annual earnings $5,523,084 $716,415 $6.239,499 $1,393,445 $4,064,990 $5,458,435 $U.697,934Indirect Annual WajU @ Local ca~turo 30.009' $116S,647 $2l2,066 $J.377,7U $461927 $857,916 $J,.319,843 $Z,697,556Total W_12OJ/Il $6.688.731 $928.481 $7.617.m $1sss.m $4.922.906 $6.77U78scum :litO ASSOCIATIS,lNC.

3. Hotel Occupancy and Sales Tax

According to information developed by Smith Travel Research (STR), through mid-2010there were approximately 4,300 hotel rooms in downtown Memphis (including Midtown andthe University of Memphis area). Reportedly occupancy among these hotels was nearly62%, up from an approximate 58% a year earlier. During the same period the average roomrate declined marginally from $116/night to $113/night. Table 16 presents the estimatedoccupancy tax and sales tax derived from the proposed new hotel at the Pyramid and theproposed downtown Marriott hotel expansion, noting the following:

• This analysis assumes an initial 60% occupancy rate for the Pyramid hotel, reflectingthe average downtown occupancy and accounting for an estimated August 2013opening. A room rate of S130/night is used in this analysis, reflecting a slightlyhigher rate assumed for a FY 2014 opening year of operations.

• A slightly higher occupancy of 65% is assumed for the Marriott reflecting a later date(FY 2016), the on-site meeting and convention space and spending impacts ofpotential tourists from riverboat travel and overnight stays, resulting from the GreatAmerican Steamboat Company.

• The estimated occupancy taxes reflect an additional revenue stream to the City ofMemphis and to Shelby County, however, not to the revenue steam applicable toretiring TDZ bonding debt.

The estimated room revenue from the 80-room Pyramid hotel is nearly $2.8 million,indicating an occupancy tax of $38,700 (to the City of Memphis) and $113,900 to ShelbyCounty. The total applicable sales tax is estimated to be $176,500, as an additional revenuestream applicable to retiring Downtown TDZ bonding debt.



Similarly, the Marriott expansion results in room revenue of $4.9 million (in 2016). This intum amounts to an estimated occupancy tax in FY 2016 of $83,900 to the City of Memphisand an additional $246,700 to Shelby County. The incremental sales tax revenue(applicable) to the Downtown TDZ is estimated to be nearly $382,500 in FY 2016.

Table 16 - Seleded Hotellmpads from Pyramid Hotel and Planned Marrio" ExpansionInputs and Pyramld Inputs and Marriott TOTAl

Assumlltlons Hotel Assumptions Exllanslon I~

ES1JMATED HOm IMPACTS 8t).rooms 10rooms Z40-roomsEstimated Room Night Demand 29,200 58,400 87,600Estimated Occupancy 60.00% 17,520 65.00% 37,960 55,480Estimated Room Revenue 5130 $2.2n,600 5130 54,934,800 57,212,400

HOTEL OCCUPANCY TAXMemphis, TN 1.71m $38,719 1.71m $83,892 5W.6115helbv County. TN 5.00% 5113 880 5.00% 5246 740 S360620SOURCE: RIG ASSOCIAttS, INC.

HOTEL SALES TAXState Portion (less education and at 2001 tax rate) 5.scm $125,268 5.scm $271,414 $396,682City Portion 2.25% $51,246 2.25% $111,033 $162.279NET $176514 $382.447 $558.961SOURCE: RKG ASSOCIAttS,lNC.

4. Sales and Sales Tax

Table 17 presents the estimated retail sales and sales tax (and hotel sales tax) associated with theeconomic activity at the Bass Pro/Hotel, whereby the Bass Pro/Hotel component are anticipatedto open in August 2013, with FY 2014 essentially as the first year ofoperations.

• Retail sales at Bass Pro, in FY 2014 which is assumed to be the first full year ofretailactivity, are estimated to total $105 million (or $350/SF). No adjustments are madefor either vacancy or transferred sales. A 1.5% inflation factor is applied thereafterand year two sales are estimated to be $106.6 million.

• The first year ofhotel operations are projected to result in $176,500 in applicablesales tax (from slightly less than $2.3 million in sales) and $179,200 in the secondyear (from slightly more than $2.3 million in sales).

Table 17: Sales and Sales Tax Impads for Bass Pro/Hotel (FY 2014 and FY 2015)Inputs and Pyramid Pyramid Pyramid

Assumlltlon Anchor Hotel Subtutul

PROPERTY USESquare Feet (SF) of Development 300,000 41,600 341.600Number of Hotel Rooms 80 80

Year 1· Annual5ales (2013 $) $105,000,000 $2,m,600 $107,277,600Year 2· Annual5ales (Inflated $) $106,575,000 $2,311,764 $108,8ll6,764

EmMATEDSAW TAXREVENUEState Portion (less education and at 2001 tax rate) 5.scm $5,775,000 $125,268 $5,900,268City Portion 2.25% $2,362,500 $51,246 $2,413,746EstImated NETTotaI5ales Tax Year 1 $8.137,500 $176,514 $8,314,014

State Portion (less education and at 2001 tax rate) 5.scm $5,861,625 $127,147 $5,988,rnCity Portion 2.25% $2,397,938 $52,015 $2,449,95ZEstimated NETTotaISales Tax Year 2 5a.2S9,563 $179,162 $8.438,724SOURCE: RKG ASSOQAns, INC.

RKG Associates, Inc, Page 29


IV. APPENDIXVariOllS other reports and research are included in this chapter.


City of Memphis, Shelby County, TennesseeGreat American Steamboat Company

Economic Impact Analysis

Shelby County Summary

Annual Employment

Direct - All Operations

Indirect - All Operations

Indirect - Visitor Spending

Total Jobs Supported

Annual Economic Impact

Impact from All Operations

Visitor Spending (Retail & Hotel)

Total Annual Economic Impact

Annual Local Taxes

local Sales Tax from Employment

Local Sales Tax from Operating Expenditures

Local Sales Tax from Visitor Spending

Local Other Taxes from Employment

Memphis/Shelby County Property Taxes from Employment

Memphis/Shelby County Hotel/Motel Tax from Visitor Room Rental

Total Local Tax Generated Annually

One Time Impacts

Economic Impact

From Refurbishing Ships

Local Tax Revenues

Local Sales Tax from Refurbishing & Impact

Local Other Taxes from Construction

Total One-Time Local Tax Revenues

Younger Associates, March 29, 2011

$

$

$

$

$

$

$

$

$

$

$

$

$

$

268

208

111

587

82,905,431

6,636,846

89,542,277

218,402

736,162

83,250

63,119

485,275

175,540

1,761,748

51,208,700

871,649

128,693

1,000,342

State of TennesseeGreat American Steamboat Company


Tennessee Summary

Annual Employment

Shelby County Direct - All Operations

Shelby County Indirect - All Operations

Shelby County Indirect - Visitor Spending

Outside Shelby County Indirect· Retail Spending

Outside Shelby County Indirect - Hotel Rental

Total Jobs Supported

Annual Economic Impact

Impact from All Operations

Shelby County Visitor Spending (Retail & Hotel)

Outside Shelby County Visitor Spending (Retail &Hotel)

Total Annual Economic Impact

Annual State Taxes

State Sales Tax from Employment - Shelby County

State Sales Tax from Operating Expenditures· Shelby County

State Sales Tax from Visitor Spending (in Memphis)

State Sales Tax from Other TN City Visitor Spending (Retail & Hotel)

State Sales Taxes Generated Annually

One nme Impacts

268

208

111

Sl

16

654

$ 82,905,431

$ 6,636,846

$ 2,797,864

$ 92,340,141

$ 650,351

$ 2,290,282

$ 255,760

$ 122,109

$ 3,318,502

Economic Impact

From Refurbishing Ships

State Sales Tax Revenue

State Sales Tax from Refurbishing & Impact

Younger Associates, March 29, 2011

$

$

51,208,700

2,661,328

2

The Great American Steamboat Company

American Queen & Mississippi Queen Direct & Indirect Job Calculation

Time In FTE- IndirectOperations Impact Jobs Memphis Count Relief Crew DireetJobs Multiplier Selected1 Multiplier Total Jobs Jobs

Management ofHeadquarters 26 100% 26 26 Companies 2.2290 58 32

Maintenance Operation 10 100% 10 10 Facilities Services 2.1639 22 12

Training Facility 6 100% 6 6 Other Ed services 1.6090 10 4

Onboard Marine Crew NQ 14 65% 9.1 150% 14 Water Transportation 3.7369 52 38Accommodations/Food

Onboard Hotel & Guest Services AQ 102 65% 66.3 150% 99 Services/Amusements 1.4289 141 42

Subtotal 158 iSS 283 128Accommodations/Food

Onboard Hotel & Guest Services MQ 102 65% 66.3 150% 99 services/Amusements 1.4289 141 42

Onboard Marine Crew MQ 14 65% 9.1 150% 14 Water Transportation 3.7369 52 38

Total 274 192.8 268 476 208

American Queen & Mississippi Queen Direct Wage Calculation

AnnualAvl American American MississippiAnnual Avg. Wage A Queen Queen Wages 1& Queen Mississippi Queen Total Wages •

Wage Benefits Employees Benefits Employees Wales & Benefits Benefits

Headquarters $ 56,423 $ 73,331 26 $ 1,906,606 $ 1,906,606

Maintenance $ 51,500 $ 66,950 10 $ 669,500 $ 669,500

Training Facility $ 48,333 $ 62,833 6 $ 376,998 $ 376,998

Onboard Marine Crew $ 28,600 $ 37,180 14 $ 520,520 14 $ 520,520 $ 1,041,040

Onboard Guest Services S 19,917 S 25,893 99 $ 2,563,407 99 S 2,563,407 S 5,126,814

Total $ 6,037,031 S 3,083,927 $ 9,120,958

Younger Associates. March 29. 2011 3



American Queen &Annuallmpaet of Operations Headquarters Mississippi Queen Total

Employment, Direct (New full-time equivalent jobs) 155 113 268

Wages & Benefits, Direct $ 6,037,031 $ 3,083,927 $ 9,120,958

Employment Multiplier 1 See Table See Table

Total Employment 283 193 476

Employment, Indirect 128 80 208

Shelby County Annual Average Wage 2 $ 49,297 $ 49,297

Wages, Indirect $ 6,310,016 $ 3,943,760 $ 10,253,776

Total Wages $ 12,347,047 $ 7,027,687 $ 19,374,734

Local Sales Tax Revenue 3 $ 139,182 $ 79,220 $ 218,402

Other Local Tax Revenue 4 $ 40,224 $ 22,895 $ 63,119

Residential/Commercial Property Tax Revenue s $ 280,663 $ 204,612 $ 485,275

Total Local Tax Revenue $ 460,069 $ 306,727 $ 766,796

State Sales Tax Revenue (Avg 6.7%) 6 $ 414,453 $ 235,898 $ 650,351

Younger Associates, March 29. 2011 4



One Time Expansion Impact American Queen Mississippi Queen Total

Total capital Investment (Refurbishing Steamboats) $ 6,900,000 $ 20,000,000 $ 26,900,000

Improvements to Real Property $ 6,500,000 $ 19,000,000 $ 25,500,000

Final Demand Output Multiplier 7 1.9126 1.9126

Economic Impact $ 12,431,900 $ 36,339,400 $ 48,771,300

Equipment Purchase/Set-up - Personal Property $ 400,000 $ 1,000,000 $ 1,400,000

Final Demand Output Multiplier 8 1.7410 1.7410

Economic Impact $ 696,400 $ 1,741,000 $ 2,437,400

Total Economic Impact $ 13,128,300 $ 38,080,400 $ 51,208,700

Local Sales Tax Revenue from Improvements $ 146,250 $ 427,500 $ 573,750

Local Sales Tax Revenue from Impact3 $ 76,805 S 221,094 $ 297,899

Local Other Tax Revenue 4 $ 33,180 S 95,513 $ 128,693

Total Local Tax Revenue S 256,235 S 744,107 S 1,000,342

State Sales Tax From Improvements9 S 455,000 S 1,330,000 S 1,785,000

State Sales Tax Revenue From Impact10 S 224,530 S 651,798 S 876,328

Total State Sales Tax S 679,530 S 1,981,798 S 2,661,328

Younger Associates, March 29, 2011 5



Impact from Operations All Operations

Total Operations Budget $ 49,927,000

Less Hotel Expenditures for Guests $ 5,519,000

Total Non-Hotel Expenditures $ 44,408,000

Marine Operations $ 11,380,000

Final Demand Output Multipierl1 1.9365

Economic Impact $ 22,037,370

Hotel & Guest Services $ 8,936,000

Final Demand Output Multiplier12 1.7985


All Other Business Operations $ 24,092,000

Final Demand Output Multiplier13 1.8594


Total Economic Impact From Expenditures $ 82,905,431

Local Sales Tax Revenue on Expenditures (excluding wages)3 $ 736,162

State Sales Tax Revenue on Expenditures (excluding wages)9 $ 2,290,282


City of Memphis, Shelby County, Tennessee

Great American Steamboat CompanyEconomic Impact Analysis

Visitors To Memphis American Queen Mississippi Queen

Capacity of Steamboat 436 416

Projected Occupancy Rate 80% 80%

Visitors Per Sailing 348.8 332.8

Trips Beginning/Ending in Memphis 33 31

Memphis Visitors 11,510 10,317

Average Spending Per Visitor $ 86.88 $ 77.54

Total Visitor Spending $ 1,000,000 $ 800,000

Younger Associates. March 29. 2011 7



Annual Visitor Spending Impact • Memphis American Queen Mississippi Queen Total

Visitor Spending" Retail $ 600,000 $ 480,000 $ 1,080,000

Economic Impact Multiplier141.7822 1.7822

Economic Impact $ 1,069,320 $ 855,456 $ 1,924,776

Employment Multiplier15 17.8278 17.8278

Jobs Supported 19 15 34

Local Sales Tax from Retail Spending (2.25%) 16 $ 13,500 $ 10,800 $ 24,300

State Sales Tax from Retail Spending (Avg 6.7%)6 $ 40,200 $ 32,160 $ 72,360

Visitor Spending- Hotel $ 400,000 $ 320,000 $ 720,000

Hotel Spending by Company (Memphis) $ 1,000,000 $ 900,000 $ 1,900,000

Total Hotel Spending $ 1,400,000 $ 1,220,000 $ 2,620,000

Final Demand Output Multiplier12 1.7985 1.7985

Economic Impact $ 2,517,900 $ 2,194,170 $ 4,712,070

Employment Multlplier17 16.1864 16.1864

Jobs Supported 41 36 77

Local Sales Tax from Hotel Rental (2.25%) 16 $ 31,500 $ 27,450 $ 58,950

State Sales Tax From Hotel Room Rental (7%) 9 $ 98,000 $ 85,400 $ 183,400

Memphis/Shelby County Hotel Tax (6.7%) 17 $ 93,800 $ 81,740 $ 175,540

Total Visitor Economic Impact $ 3,587,220 $ 3,049,626 $ 6,636,846

Total Jobs Supported by Visitor Spending 60 51 111

Total Local sales Tax $ 45,000 $ 38,250 $ 83,250

Total Memphis/Shelby County Hotel Motel Tax $ 93,800 $ 81,740 $ 175,540

Total Local Taxes $ 138,800 $ 119,990 $ 258,790

Total State Sales Tax $ 138,200 $ 117,560 $ 255,760


State of TennesseeGreat American Steamboat Company


Visitor Spending Outside Shelby County

Visitors to Memphis

Percentage Visiting Another TN City

Tennessee Visitors Outside Memphis

Retail Spending

Average Retail Spending Per Visitor

Total Visitor Spending

Final Demand Output Multiplier18

Economic Impact of Visitor Retail Spending

Local Sales Tax Generated (2.75%)19

State Sales Tax Generated (Average 6.7%)6

State otTN Employment Multiplier 20

Total jobs Supported by Retail Spending

Hotel Spending

Average Hotel Spending Per Visitor

Total Hotel Spending from Visitors

Final Demand Output Multiplier for Accomodations 21

Economic Impact from Hotel Rental


State Sales Tax Generated (7%) 9

Local Hotel/Motel Tax Generated (5% Local Estimate) 22

State of TN Employment Multiplier for Accommodations 23

Total jobs Supported by Hotel Rental

Younger Assodates. March 29, 2011

$$

$

$$

$

$

$$$

American Queen

11,500

20%

2300

145.00

333,500

2.1296

710,222

9,171

22,345

26.1652

19

105

241,500

2.0089

485,149

13,342

33,960

24,257

18.5267

9

9

State of Tennessee

Great American Steamboat CompanyEconomic Impact Analysis

VisitorSpending Outside Shelby County

Total Visitors in Nashville (Embarking & Debarking)Total Visitors in Chattanooga (Embarking & Debarking)Total Visitors

Percentage Staying Overnight in Nashville/Chattanooga

Total Visitors Staying Overnight in Nashville/Chattanooga

Hotel Spending

Average Hotel Spending Per Overnight VisitorTotal Hotel Spending from Visitors

Final Demand Output Multiplier for Accomodations20

Economic Impact from Hotel Rental


State Sales Tax Generated (7%) 9

Local Hotel/Motel Tax Generated (5%) 21

State of TN Employment Multiplier for Accommodations 22

Total jobs Supported by Hotel Rental

Retail Spending

Visitors to Nashville/ChattanoogaAverage Retail Spending Per Visitors to Nashville/ChattanoogaTotal Visitor Spending

Final Demand Output Multiplier for Retail Sales/Eating & DrinkingEconomic Impact of Visitor Retail Spending


State Sales Tax Generated (Average 6.7%) 6

State onN Employment Multiplier for Retail Sales/Eating & Drinking19


Day Visitors to Dover/Savannah/Shiloh/AshportAverage Retail Spending Per Visitors to Nashville/ChattanoogaTotal Visitor Spending

Final Demand Output Multiplier for Retail Sales/Eating & Drinking17

Economic Impact of Visitor Retail Spending


State Sales Tax Generated (Average 6.7%) 6

State of TN Employment Multiplier for Retail Sales/Eating & Drinking 19


Younger Associates. March 29. 2011

$

$

$

$

$

$$

$

$$

$$

$

$$

Mississippi Queen

33002000

5300

25%

1325

150198,750

2.0089399,269

10,980

27,949

19,963

18.52677

5,300

50.00265,000

2.1296564,344

7,288

17,755

26.165215

6,00050.00

300,000

2.1296638,880

8,250

20,100

26.165217

10

Notes for Great American Steamboat Company Economic Impact Analysis:

1. US Bureau of Economic Analysis, RIMS II final demand multiplier for Shelby County, Tennessee forthe specified industry as shown below:

Operations Multiplier Selected

MemphisHQ Management of Companies

Maintenance Facilities Services

Training Facility Other Ed Services

Onboard Marine Crew Water Transportation

Onboard Hotel & Guest Services Accommodations/Food Services/Amusements

2. Based on the State of Tennessee Department of Labor & Workforce Development2009 Annual Average Wage for all industry sectors for Shelby County assuming a 3.5% increase for2010 and 2011.

3. US Department of Labor, "Consumer Expenditure Survey, Southern US" 2009; factor applied todetermine the rate of indirect or "downstream" expenditures on sales taxable goods and services atthe local (Memphis & Shelby County) option tax rate of .0225.

4. Based upon July 2009 - June 2010 collections of Business, Alcohol, Motor Vehicle and other localtaxes as compared to local sales tax revenues in Memphis/Shelby County.

5. Property taxes on new property value created within Shelby County per each new job created in thelocal workforce based upon historical trend. The new property value may be new single familyhomes, new rental property, expansions or improvements to existing residential or commercialproperty. Although commercial property value is included, the residential rate of assessment isused as a conservative measure. The assessment rate of 25% and a combined City of Memphis($3.1957) and Shelby County ($4.02) tax rate of $7.2157 per $100 of assessed value is used.

6. The average State of Tennessee sales tax rate (food and non-food) assessed on food and non-foodsales taxable goods and services in Tennessee, as published by the Tax Foundation: 2009 State SalesTax Burden.

7. US Bureau of Economic Analysis, RIMS II aggregate final demand output multiplier for ShelbyCounty, Tennessee for Construction.

8. US Bureau of Economic Analysis, RIMS II aggregate final demand output multiplier for ShelbyCounty, Tennessee for Wholesale Trade.

9. Calculation based on the State of Tennessee sales tax rate of 7% applied to all retail sales.

10. US Department of Labor, "Consumer Expenditure Survey, Southern US" 2009; factor applied todetermine the rate of indirect or "downstream" expenditures on sales taxable goods and services atthe State of Tennessee sales tax option of 7%.

11. US Bureau of Economic Analysis, RIMS II aggregate final demand output multiplier for ShelbyCounty, Tennessee for Water Transportation.

12. US Bureau of Economic Analysis, RIMS II aggregate final demand output multiplier for ShelbyCounty, Tennessee for Accommodations/Food Services/Amusements.

13. US Bureau of Economic Analysis, RIMS II aggregate final demand output multiplier for ShelbyCounty, Tennessee for Administrative and Support Services.

14. US Bureau of Economic Analysis, RIMS II aggregate final demand multiplier for Shelby County,Tennessee for Retail Trade.

15. US Bureau of Economic Analysis, RIMS II aggregate employment multiplier for Shelby County,Tennessee - number of jobs created per million dollars of output for Retail Trade.

16. Calculation based on the local sales tax option of 2.25 % for Memphis-Shelby County, Tennessee.

17. Calculation based on the current hotel/motel tax rate of 6.7% for Memphis and Shelby County,Tennessee applied to total room revenue generated.

18. US Bureau of Economic Analysis, RIMS II aggregate final demand multiplier for the State ofTennessee for Retail Trade/Eating &Drinking Establishments.

19. calculation based on the maximum or cap for local sales tax option of 2.25 % for municipalities inTennessee assessed to all retail sales.

20. US Bureau of Economic Analysis, RIMS II aggregate employment multiplier for the State ofTennessee - number of indirect jobs created per million dollars of output for Retail Trade/Eating &Drinking Establishments.

21. US Bureau of Economic Analysis, RIMS II aggregate final demand multiplier for the State ofTennessee for Accommodations.

22. Calculation based on an average of local hotel/motel tax assessed by counties/municipalities inTennessee.

23. US Bureau of Economic Analysis, RIMS II aggregate employment multiplier for the State ofTennessee - number of indirect jobs created per million dollars of output for Accommodations.

*AII calculations are in constant 2011 dollars.

APPENDIXC

FORM OF CONTINUING DISCLOSURE AGREEMENT

[1HIs PAGE INTENTIONALLY LEFl' BLANK]

CONTINUING DISCLOSURE AGREEMENT

by and between

CITY OF MEMPHIS, TENNESSEE

and

REGIONS BANK, as trustee

and Disclosure Dissemination Agent

relating to the:

MEMPHIS CENTER CITY REVENUE FINANCE CORPORATION REVENUE BONDSINCLUDING

$40,540,000FEDERALLY TAXABLE SENIOR REVENUE BONDS,

SERIES 2011A (pYRAMID AND PINCH DISTRICT REDEVELOPMENT PROJECT)

$100,245,000TAX EXEMPT SUBORDINATE REVENUE BONDS,

SERIES 2011B (pYRAMID AND PINCH DISTRICT REDEVELOPMENT PROJECT)

AND

$56,150,000FEDERALLY TAXABLE SUBORDINATE REVENUE BONDS,

SERIES 2011C (PYRAMID AND PINCH DISTRICT REDEVELOPMENT PROJECT)

Dated as of September 1, 2011

C-l

This CONTINUING DISCLOSURE AGREEMENT (this "Disclosure Agreement")dated as of September It 2011 t is executed and delivered by the CITY OF MEMPHISt amunicipal corporation duly organized and existing under the laws of the State of Tennessee (the"City") and REGIONS BANK, a state banking corporation duly organized and existing underthe laws of the State ofAlabamat as disclosure dissemination agent and any successor disclosuredissemination agent serving hereunder pursuant to Section 12 hereof ("Disclosure DisseminationAgenttl

) for the benefit of the Beneficial Owners (as defined herein).

RECITALS:

A. Contemporaneously with the execution and delivery of this DisclosureAgreement, the Memphis Center City Revenue Finance Corporation (the "Issuer") authorized theissuance and delivery of those certain $40t540,000 in aggregate principal amount of its FederallyTaxable Senior Revenue Bonds, Series 201lA (Pyramid and Pinch District RedevelopmentProject) (the "Series 201lA Bonds")t $100t245,000 in aggregate principal amount of its TaxExempt Subordinate Revenue Bondst Series 20 II B (Pyramid and Pinch District RedevelopmentProject) (the "Series 2011B Bonds") and $56,150,000 in aggregate principal amount of itsFederally Taxable Subordinate Revenue Bonds, Series 2011C (Pyramid and Pinch DistrictRedevelopment Project) (the "Series 2011C Bonds" and together with the Series 201lA Bondsand the Series 20II B Bonds are referred to as the "Bonds") pursuant to and in accordance with aTrust Indenture dated as of September It 2011 (the "Indenture") between the Issuer and RegionsBan14 as trustee (the "Trustee")t provisions of Tennessee law as more particularly described inthe Indenture and resolutions adopted and approved by the Issuer authorizing the execution anddelivery of the hereinafter described Loan Agreement and the Indenture and the issuance andsale of the Bonds. The Series 201lB Subordinate Tax Exempt Bonds and the Series 201lCSubordinate Taxable Bonds are collectively hereinafter referred to as the "Series 2011Subordinate Bonds."

B. The Issuer will issue the Bonds for the purpose oft among other thingst providingfunds to make a loan (the "Loan") to the City pursuant to a Loan Agreement dated as ofSeptember It 2011 (the "Loan Agreement") between the Issuer and the City. The City will usethe proceeds of the Loan, together with other moniest to (a) fmance or reimburse the City for aportion of the costs associated with the acquisitiont construction, development, renovation andequipping of the Project (as defined in the Indenture), (b) fund capitalized interest on the Bonds,(c) fund a deposit to the Senior Debt Service Reserve Account in an amount equal to the SeniorDebt Service Reserve Requirement applicable to the Series 201lA Senior Taxable Bonds;(d) fund a deposit to the Subordinate Debt Service Reserve Account in an amount equal to theSubordinate Debt Service Reserve Requirement applicable to the Series 20 II SubordinateBonds; and (e) pay certain expenses incurred in connection with the issuance of the Bonds.

C. Pursuant to the Indenturet the Bonds are secured by an assignment and pledge ofthe Trust Estate, as noted therein, which consists primarily of: (a) all right, title and interest ofthe Issuer in and to the Loan Agreement and all amounts payable to the Issuer under the LoanAgreement and all security therefor (excluding Unassigned Rights as defined in the Indenture);(b) all right, title and interest of the Issuer in and to the funds, accounts and subaccountsestablished pursuant to the Indenture and the assets thereof and income and earnings thereon,except that the Senior Debt Service Reserve Account of the Debt Service Reserve Fundt each

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account and subaccount therein, the assets thereof and the income and earnings thereon shall beshall be for the sole benefit of the Holders of Outstanding Senior Bonds and the SubordinateDebt Service Reserve Account of the Debt Service Reserve Fund, each subaccount therein, theassets thereof and the income and earnings thereon shall be for the sole benefit of the Holders ofOutstanding Subordinate Bonds; (c) solely for the benefit of the Holders of OutstandingSubordinate Bonds, all right, title and interest in and to Debt Service Reserve ReplenishmentAgreement, dated as of September I, 20 II, by and between the Issuer and the Borrower, as thesame may be amended, supplemented or restated (the "Replenishment Agreement") and allamounts payable to the Issuer thereunder; and, (d) any and all other property of every kind andnature from time to time thereafter, by delivery or by writing of any kind, conveyed, pledged,assigned or transferred as and for additional security thereunder by the Issuer or the Borrower orby anyone in their behalf to the Bond Trustee, including without limitation funds of the City heldby the Bond Trustee as security for the Bonds.

D. The Issuer and the City have authorized the preparation and distribution of thePreliminary Official Statement dated September 7, 20II with respect to the Bonds (the"Preliminary Official Statement") and, on or before the date of the Preliminary OfficialStatement, the Issuer and the City deemed the Preliminary Official Statement "final" within themeaning of the Rule (as defined herein).

E. Upon the initial sale of the Bonds to the Participating Underwriter (as dermedherein), the Issuer and the City authorized the preparation and distribution of the OfficialStatement dated September 21,2011 with respect to the Bonds (the "Official Statement").

F. As a condition precedent to the initial purchase of the Bonds by the ParticipatingUnderwriter in accordance with the Bond Purchase Agreement dated September 21, 20 II by andbetween the Participating Underwriter and the Issuer, and in compliance with the ParticipatingUnderwriter's obligations under the Rule, the City has agreed to provide for the public disclosureof certain operating data or financial information on an ongoing basis for so long as the Bondsremain outstanding as set forth herein and in the continuing disclosure undertakings of the City.

NOW THEREFORE, in consideration of the purchase of the Bonds by the ParticipatingUnderwriter and the mutual promises and agreements made herein, the receipt and sufficiency ofwhich consideration is hereby mutually acknowledged, the City and the Dissemination Agent dohereby certify and agree as follows:

Section 1. Incorporation of Recitals. The above recitals are true and correct and areincorporated into and made a part hereof.

Section 2. Defmitions.

(a) For the purposes of this Disclosure Agreement, all capitalized terms used, but nototherwise defined herein shall have the meanings ascribed thereto in the Indenture and theOfficial Statement, as applicable.

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(b) In addition to the terms defmed elsewhere herein, the following terms shall havethe following meanings for the purposes of this Disclosure Agreement:

"actual knowledge" as used herein, and for the purposes hereof, a party shall be deemedto have "actual knowledge" of the occurrence ofany event only if and to the extent the individualor individuals employed by such party and directly responsible for the administration of thisDisclosure Agreement on behalf ofsuch party have actual knowledge of or receive written noticeof the occurrence of such event; provided, however, that such individuals and parties shall haveno duty of inquiry or investigation with respect to whether any event shall have occurred.

"Annual Filing" means any annual report provided by the City, pursuant to and asdescribed in Sections 4 and 6 hereof.

"Annual Filing Date" means the date, set forth in Sections 4(a) and 4(e) hereof, bywhich the Annual Filing is to be filed with the MSRB.

"Annual Financial Information" means annual financial information as such term isused in paragraph (b)(5)(i) of the Rule and specified in Section 6(a) hereof.

"Audited Financial Statements" means the basic financial statements (if any) of theCity for the prior Fiscal Year, prepared in accordance with generally accepted accountingprinciples, as in effect from time to time, audited by an independent certified public accountantin conformity with generally accepted auditing standards and/or Government Auditing Principlesissued by the Comptroller General of the United States.

"Beneficial Owner" means any beneficial owner of the Bonds. Beneficial ownership isto be determined consistent with the definition thereof contained in Rule 13d-3 of the SEC, or, inthe event such provisions do not adequately address the situation at hand (in the opinion ofnationally recognized bond counsel), beneficial ownership is to be determined based uponownership for federal income tax purposes.

"Disclosure Representative" means the Director of Finance and Administration or hisor her designee, or such other person as the City shall designate in writing to the DisseminationAgent from time to time as the person responsible for providing Information to theDissemination Agent.

"Dissemination Agent" means Regions B~ acting in its capacity as initialDissemination Agent hereunder, or any successor Dissemination Agent designated in writing bythe City pursuant to Section 12 hereof.

"Filing" means, as applicable, any Annual Filing or Notice Event Filing or any othernotice or report made public under this Disclosure Agreement.

"Fiscal Year" means the fiscal year of the City, which currently is the twelve monthperiod beginning July 1 and ending on June 30 of the following year or any such other twelvemonth period designated by the City, from time to time, to be its fiscal year.

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"Information" means the Annual Financial Infonnation, the Audited FinancialStatements (ifany), the Notice Event Filings, and the Voluntary Reports.

"MSRB" means the Municipal Securities Rulemaking Board established pursuant toSection 15B(b)(I) of the Securities Exchange Act of 1934, as amended. Disclosure is currentlyaccepted and posted through the MSRB's Electronic Municipal Market Access ("EMMA") portalat http://emma.msrb.org.

"Notice Event Filing" shall have the meaning specified in Section 5(a) hereof.

"Notice Event" shall have the meaning specified in Section 5(a) hereof.

"Obligated Person" means the City and any person who is either generally or throughan enterprise, fund, or account of such person committed by contract or other arrangement tosupport payment ofall, or part of the obligations on the Bonds (other than providers of municipalbond insurance, letters of credit, or other liquidity facilities). The City confinns that currently itis an Obligated Person with respect to the Bonds.

"Participating Underwriter" means, collectively, Morgan Keegan & Company, Inc.(the "Representative"), on behalf of itself, Citigroup, Duncan-Williams, Harvestons Securities,Inc. and SunTrust Robinson Humphrey, the original purchasers of the Bonds required to complywith the Rule in connection with the offering of the Bonds.

"Rule" means Rule 15c2-12 of the SEC promulgated pursuant to the SecuritiesExchange Act of 1934, as the same may be amended from time to time.

"SEC" means the United States Securities and Exchange Commission.

"Third-Party Beneficiary" shall have the meaning specified in Section 3(b) hereof.

"Voluntary Report" means the infonnation provided to the Dissemination Agent by theCity pursuant to Section 8 hereof.

Section 3. Scope of this Disclosure Agreement.

(a) The City has agreed to enter into this Disclosure Agreement, undertake thedisclosure obligations hereunder and retain the Dissemination Agent to perfonn the disclosuredissemination tasks set forth herein on its behalf, all at the request of the ParticipatingUnderwriter and as a condition precedent to the Participating Underwriter's original purchase ofthe Bonds in order to assist the Participating Underwriter with compliance with the Rule. Thedisclosure obligations of the City under this Disclosure Agreement relate solely to the Bonds.Such disclosure obligations are not applicable to any other securities issued or to be issued by theIssuer, whether issued for the benefit of the City or otherwise, nor to any other securities issuedby or on behalfof the City.

(b) Neither this Disclosure Agreement, nor the perfonnance by the City or theDissemination Agent of their respective obligations hereunder, shall create any third-partybeneficiary rights, shall be directly enforceable by any third-party, or shall constitute a basis for a

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claim by any person except as expressly provided herein and except as required by law,including, without limitation, the Rule; provided, however, each Beneficial Owner is herebymade a third-party beneficiary hereof (collectively, and each respectively, a "Third-PartyBeneficiary") and shall have the right to enforce the obligations of the parties hereunder pursuantto Section 9 hereof.

(c) This Disclosure Agreement shall terminate upon: (i) the defeasance, redemptionor payment in full of all Bonds, in accordance with the Indenture, or (ii) the delivery by theDisclosure Representative to the Dissemination Agent of an opinion of counsel expert in federalsecurities laws retained by the City to the effect that continuing disclosure is no longer requiredunder the Rule as to the Bonds.

Section 4. Annual Filings.

(a) The City shall provide, annually, an electronic copy of the Annual Filing to theDissemination Agent not later than two (2) business days prior to the Annual Filing Date.Promptly upon receipt of an electronic copy of the Annual Filing, the Dissemination Agent shallprovide the Annual Filing to the MSRB, in an electronic format as prescribed by the MSRB, notlater than 180 days after the end of each Fiscal Year, commencing with the Fiscal Yearbeginning July 1, 2011. Such date and each anniversary thereof is the Annual Filing Date. TheAnnual Filing may be submitted as a single document or as separate documents comprising apackage, and may cross-reference other information as provided in Section 6 hereof.

(b) If on the second (2nd) business day prior to the Annual Filing Date, the

Dissemination Agent has not received a copy of the Annual Filing, the Dissemination Agentshall contact the Disclosure Representative by telephone and in writing (which may be by email)to remind the City of its undertaking to provide the Annual Filing pursuant toSection 4(a) hereof. Upon such reminder, the Disclosure Representative shall either (i) providethe Dissemination Agent with an electronic copy of the Annual Filing no later than 4:00 P.M. onthe Annual Filing Date, or (ii) instruct the Dissemination Agent in writing that the City will notbe able to file the Annual Filing within the time required under this Disclosure Agreement, andstate the date by which the Annual Filing for such year is expected to be provided. If theDissemination Agent has not received the Annual Filing by 12:00 noon on the first Business Dayfollowing the Annual Filing Date, the City irrevocably directs the Dissemination Agent toimmediately send a notice thereof to the MSRB.

(c) IfAudited Financial Statements are not available prior to the Annual Filing Date,the City shall, when the Audited Financial Statements are available, provide in a timely manneran electronic copy to the Dissemination Agent, accompanied by a certificate for the filing withthe MSRB.

(d) The Dissemination Agent shall:

(i) upon receipt, promptly file each Annual Filing received underSection 4(a) hereof with the MSRB;

(ii) upon receipt, promptly file each Audited Financial Statement receivedunder Section 4(c) hereof with the MSRB;

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(iii) upon receipt, promptly file the text of each disclosure to be made with theMSRB; and

(iv) provide the City evidence of the filings ofeach of the above when made.

(e) The City may adjust the Annual Filing Date upon change of its Fiscal Year byproviding written notice of such change and the new Annual Filing Date to the DisseminationAgent and the MSRB, provided that the period between the existing Annual Filing Date and newAnnual Filing Date shall not exceed one year.

(f) Each Annual Filing shall contain the information set forth in Section 6 hereof.

Section 5. Reporting of Notice Events.

(a) To the extent applicable, the occurrence of any of the following events withrespect to the Bonds, shall constitute a Notice Event:

(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 financial difficulties;

(5) Substitution ofcredit or liquidity providers or their failure to perform;

(6) Adverse tax opinions, the issuance by the Internal Revenue Service ofproposed or final determinations of taxability, Notices of Proposed Issue (IRS Form5701-TEB) or other material notices or determinations with respect to the tax status of theBonds, or other material events affecting the tax-exempt status of the Bonds;

(7) Modifications to rights ofholders, ifmaterial;

(8) Bond calls (excluding calls for mandatory sinking fund redemptions) onthe Bonds, 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 City. Thisevent is considered to occur when any of the following occur: the appointment of areceiver, fiscal agent or similar officer for an obligated person in a proceeding under theU.S. Bankruptcy Code or in any other proceeding under state or federal law in which a

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court or governmental authority has assumed jurisdiction over substantially all of theassets or business of the City, or if such jurisdiction has been assumed by leaving the Cityand its officials or officers in possession but subject to the supervision and orders of acourt or governmental authority, or the entry of an order confinning a plan ofreorganization, arrangement or liquidation by a court or governmental authority havingsupervision or jurisdiction over substantially all of the assets or business of the City;

(13) The consummation ofa merger, consolidation, or acquisition involving theCity or the sale of all or substantially all of the assets of the City, other than in theordinary course of business, the entry into a defmitive agreement to undertake such anaction or the termination ofa definitive agreement relating to any such actions, other thanpursuant to its terms, ifmaterial; or

(14) Appointment of a successor or additional trustee or the change of name ofa trustee, if material.

The City shall promptly notify the Dissemination Agent in writing upon having actualknowledge of the occurrence of a Notice Event (and, in all cases in sufficient time for theDissemination Agent to file a notice of any such Notice Event not later than ten business daysafter the occurrence thereof as required under Section 5(c) below); provided, however, to theextent any such Notice Event has been previously and properly disclosed by or on behalf of theCity, the City shall not be required to provide such additional notice of such Notice Event inaccordance with this subsection. Such notice shall instruct the Dissemination Agent to report theoccurrence pursuant to Section 5(c) hereof. Such notice shall be accompanied with the text ofthe disclosure that the City desires to make (each a "Notice Event Filing"), the writtenauthorization of the City for the Dissemination Agent to disseminate such information, and thedate the City desires for the Dissemination Agent to disseminate the information.

(b) The Dissemination Agent is under no obligation to notify the City or theDisclosure Representative of an event that may constitute a Notice Event. In the event theDissemination Agent so notifies the Disclosure Representative, the Disclosure Representativewill, within five business days of receipt of such notice, instruct the Dissemination Agent that(i) a Notice Event has not occurred and no filing is to be made, or (ii) a Notice Event hasoccurred and the Dissemination Agent is to report the occurrence pursuant to Section 5(c) hereof,together with the text of the disclosure that the City desires to make, the written authorization ofthe City for the Dissemination Agent to disseminate such information, and the date the Citydesires for the Dissemination Agent to disseminate the information.

(c) If the Dissemination Agent has been instructed by the City as prescribed insubsection (a) or (b)(ii) of this Section 5 to report the occurrence of a Notice Event, theDissemination Agent shall promptly file a notice of such occurrence with the MSRB in anelectronic format as prescribed by the MSRB and in a timely manner not in excess of tenbusiness days after the occurrence of the Notice Event.

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Section 6. Content of Annual Filings. Each Annual Filing shall contain the following:

(a) Operating data and fmancial information, consisting of, to the extent not includedin the City's Audited Financial Statements, updates of the following infonnation contained in theOfficial Statement:

(i) the chart entitled IISchedule of Historical Collection of TDZRevenues" under the heading IISECURITY AND SOURCES OF PAYMENTFOR THE SERIES 2011 BONDS - Historical and Projected Debt ServiceCoverage;" and

(ii) the chart entitled "Schedule of Historic collection of Non-TaxRevenues" under the heading "SECURITY AND SOURCES OF PAYMENTFOR THE SERIES 20II BONDS - Non-Tax Revenues."

(b) Ifavailable at the time of such filing, the Audited Financial Statements of the Cityfor the prior Fiscal Year. If the Audited Financial Statements are not available by the time theAnnual Filing is required to be filed pursuant to Section 4(a) hereof, the Annual Filing shallcontain unaudited financial statements of the City prepared in accordance with generallyaccepted accounting principles, as in effect from time to time, and the Audited FinancialStatements shall be filed in the same manner as the Annual Filing when they become available.The Audited Financial Statements (if any) will be provided pursuant to Section 4(c) hereof.

(c) The City's Audited Financial Statements for the immediately preceding FiscalYear, to the extent available.

Any or all of the items listed above may be included by specific reference from otherdocuments, including official statements of debt issues with respect to which the City is anObligated Person, which have been previously filed with the MSRB or the SEC. The City willclearly identify each such document so incorporated by reference.

Section 7. Responsibility for Content of Reports and Notices.

(a) The City shall be solely responsible for the content of each Filing (or any portionthereof) provided to the Dissemination Agent pursuant to this Disclosure Agreement. TheDissemination Agent shall not be responsible for reviewing or verifying the accuracy orcompleteness ofany such Filings.

(b) Each Filing distributed by the Dissemination Agent pursuant to Section 4 or 5hereof shall be in a fonn suitable for distributing publicly and shall contain the CUSIP numbersof the Bonds and otherwise shall be as required by the MSRB's Electronic Municipal MarketAccess portal.

(c) Any report, notice or other filing to be made public pursuant to this DisclosureAgreement may consist of a single document or separate documents comprising a package andmay incorporate by reference other clearly identified documents or specified portions thereofpreviously filed with the MSRB or the SEC, provided that any final official statementincorporated by reference must be available from the MSRB.

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(d) Notwithstanding any provision herein to the contrary, nothing in this DisclosureAgreement shall be construed to require the City or the Dissemination Agent to interpret orprovide an opinion concerning information made public pursuant to this Disclosure Agreement.

(e) Notwithstanding any provision herein to the contrary, the City shall not makepublic, or direct the Dissemination Agent to make public, information which is not permitted tobe publicly disclosed under any applicable data confidentiality or privacy law or other legalrequirement.

Section 8. Voluntary Reports.

(a) The City may instruct the Dissemination Agent to file information with theMSRB, from time to time pursuant to a direction of the Disclosure Representative accompanyingsuch information (a "Voluntary Report ll

).

(b) Nothing in this Disclosure Agreement shall be deemed to prevent the City fromdisseminating any other information through the Dissemination Agent using the means ofdissemination set forth in this Disclosure Agreement or including any other information in anyAnnual Filing, Audited Financial Statements, Voluntary Report or Notice Event Filing, inaddition to that required by this Disclosure Agreement. If the City chooses to include anyinformation in any Annual Filing, Audited Financial Statements, Voluntary Report or NoticeEvent Filing in addition to that which is specifically required by this Disclosure Agreement, theCity shall have no obligation under this Disclosure Agreement to update such information orinclude it in any future Annual Filing, Audited Financial Statements, Voluntary Report or NoticeEvent Filing.

(c) Notwithstanding the foregoing provisions of this Section 8, the City is under noobligation to provide any Voluntary Report.

Section 9. Defaults; Remedies.

(a) A party shall be in default of its obligations hereunder if it fails or refuses to carryout or perform its obligations hereunder for a period of five business days following notice ofdefault given in writing to such party by any other party hereto or by any Third Party Beneficiaryhereof, unless such default is cured within such five business day notice period. An extension ofsuch five business day cure period may be granted for good cause (in the reasonable judgment ofthe party granting the extension) by written notice from the party who gave the default notice.

(b) If a default occurs and continues beyond the cure period specified above, anynondefaulting party or any Third-Party Beneficiary may seek specific performance of thedefaulting party's obligations hereunder as the sole and exclusive remedy available upon anysuch default. Each of the parties hereby acknowledges that monetary damages will not be anadequate remedy at law for any default hereunder, and therefore agrees that the exclusive remedyof specific performance shall be available in proceedings to enforce this Disclosure Agreement.

(c) Notwithstanding any provision of this Disclosure Agreement or the Indenture tothe contrary, no default under this Disclosure Agreement shall constitute a default or event ofdefault under the Indenture.

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Section 10. Amendment or Modification.

(a) This Disclosure Agreement shall not be amended or modified except as providedin this Section. No modification, amendment, alteration or termination of all or any part of thisDisclosure Agreement shall be construed to be, or operate as, altering or amending in any waythe provisions of the Indenture.

(b) Notwithstanding any other provision of this Disclosure Agreement, the City mayamend this Disclosure Agreement and any provision of this Disclosure Agreement may bewaived, if: (i) such amendment or waiver is made in connection with a change in circumstancesthat arises from a change in legal requirements, change in law, or change in the identity, nature,or status of the obligor on the Bonds, or type of business conducted by such obligor; (ii) suchamendment or waiver does not materially impair the interests of the beneficial owners of theBonds, as determined either by an unqualified opinion of nationally recognized bond counselfiled with the City or by the approving vote of the owners of the Bonds owning more than twothirds in aggregate principal amount of the Bonds outstanding at the time of such amendment orwaiver and (iii) such amendment or waiver is supported by an opinion of counsel expert infederal securities laws, to the effect that such amendment or waiver would not, in and of itself,cause the undertakings herein to violate the Rule if such amendment or waiver had been effectiveon the date hereof but taking into account any subsequent change in or official interpretation ofthe Rule, as well as any change in circumstances.

(c) If any provision of Section 6 hereof is amended or waived, the first Annual Filingcontaining any amended, or omitting any waived, operating data or financial information shallexplain, in narrative form, the reasons for the amendment or waiver and the impact of the changein the type ofoperating data or financial information being provided.

(d) If the provisions of this Disclosure Agreement specifying the accountingprinciples to be followed in preparing the City's financial statements are amended or waived, theAnnual Filing for the year in which the change is made shall present a comparison between thefinancial statements or information prepared on the basis of the new accounting principles andthose prepared on the basis of the former accounting principles. The comparison shall include aqualitative discussion of the differences in the accounting principles and the impact of the changein the accounting principles on the presentation of the financial information, in order to provideinformation to the beneficial owners of the Bonds to enable them to evaluate the ability of theCity to meet its obligations. To the extent reasonably feasible, the comparison shall also bequantitative. The City will file a notice of the change in the accounting principles with theMSRB on or before the effective date of any such amendment or waiver.

(e) Notwithstanding the foregoing, the Dissemination Agent shall not be obligated toagree to any amendment expanding its duties or obligations hereunder without its consentthereto.

(f) The City shall prepare or cause to be prepared a notice of any such amendment ormodification and shall direct the Dissemination Agent to make such notice public in accordancewith Section 8 hereof.

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Section 11. Reimbursement of Dissemination Agent's Expenses. The DisseminationAgent shall be reimbursed by the City for all out-of-pocket expenses incurred by it inperformance of its duties under this Disclosure Agreement, payable promptly upon writtenrequest. The Dissemination Agent shall have the right to resign and terminate its agencyrelationship and all of its obligations under this Disclosure Agreement upon non-payment of itsexpenses by written notice to the City.

Section 12. Agency Relationship.

(a) The Dissemination Agent agrees to perform such duties, but only such duties, asare specifically set forth in this Disclosure Agreement, and no implied duties or obligations ofany kind shall be read into this Disclosure Agreement with respect to the Dissemination Agent.The Dissemination Agent may conclusively rely, as to the truth, accuracy and completeness ofthe statements set forth therein, upon all notices, reports, certificates or other materials furnishedto the Dissemination Agent pursuant to this Disclosure Agreement, and in the case of notices andreports required to be furnished to the Dissemination Agent pursuant to this DisclosureAgreement, the Dissemination Agent shall have no duty whatsoever to examine the same todetermine whether they conform to the requirements of this Disclosure Agreement.

(b) The Dissemination Agent shall not be liable for any error of judgment made ingood faith by a responsible officer or officers of the Dissemination Agent unless it shall beproven that the Dissemination Agent engaged in negligent conduct or willful misconduct inascertaining the pertinent facts related thereto.

(c) The Dissemination Agent shall perform its rights and duties under this DisclosureAgreement using the same standard of care as a prudent person would exercise under thecircumstances, and the Dissemination Agent shall not be liable for any action taken or failure toact in good faith under this Disclosure Agreement unless it shall be proven that theDissemination Agent was negligent or engaged in willful misconduct.

(d) The Dissemination Agent may perform any of its duties hereunder withreasonable care, by or through attorneys or agents selected by it, and shall be entitled to theadvice of counsel concerning all matters arising hereunder, and may in all cases pay suchreasonable compensation as it may deem proper, and as approved by the City, to all suchattorneys and agents, and the Dissemination Agent shall not be responsible for the acts ornegligence of such attorneys, agents or counsel if selected with reasonable care.

(e) None of the provisions of this Disclosure Agreement or any notice or otherdocument delivered in connection herewith shall require the Dissemination Agent to advance,expend or risk its own funds or otherwise incur financial liability in the performance of any ofthe Dissemination Agent's duties or rights under this Disclosure Agreement.

(t) The Dissemination Agent shall not be required to monitor the compliance of theCity with the provisions of this Disclosure Agreement or to exercise any remedy, institute a suitor take any action ofany kind without indemnification satisfactory to the Dissemination Agent.

(g) The Dissemination Agent may include in any dissemination correspondenceenclosing or furnishing any Notice Event Filings made public by it under this Disclosure

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Agreement the following disclaimer with respect to the source of the information contained in,and the identity of the party responsible for compiling or preparing, such reports or notices:liThe information set forth in the attached notice has been provided by the City ofMemphis (the"City") to Regions Bank in its capacity as disclosure dissemination agent (the " DisseminationAgent") for the City, together with written dissemination directions to the Dissemination Agent.The Dissemination Agent has not prepared or verified, and is not responsible in any way for, thecontent of this notice or the accuracy, timeliness or completeness thereof. Under nocircumstances shall the Dissemination Agent or the City have any obligation or liability to anyperson or entity for (i) any loss, damage, cost, liability or expense in whole or in part caused by,resulting from, or relating to any error (negligent or otherwise) or other circumstances involvedin processing, collecting, compiling or interpreting the data included in this notice, or (ii) for anydirect, indirect, special, consequential, incidental or punitive damages whatsoever arising fromany investment decision or otherwise. This notice has not been reviewed or approved by anystate or federal regulatory body."

(h) The Dissemination Agent may resign at any time by giving at least ninety(90) days prior written notice thereof to the City. The Dissemination Agent may be removed forgood cause at any time by written notice to the Dissemination Agent from the City, provided thatsuch removal shall not become effective until a successor dissemination agent has beenappointed by the City under this Disclosure Agreement.

(i) In the event the Dissemination Agent shall resign, be removed or becomeincapable of acting, or if a vacancy shall occur in the office of the Dissemination Agent for anyreason, the City shall promptly appoint a successor. Notwithstanding any provision to thecontrary in this Disclosure Agreement or elsewhere, the City may appoint itself to serve asDissemination Agent hereunder.

G) Any company or other legal entity into which the Dissemination Agent may bemerged or converted or with which it may be consolidated or any company resulting from anymerger, conversion or consolidation to which the Dissemination Agent may be a party or anycompany to whom the Dissemination Agent may sell or transfer all or substantially all of itsagency business shall be the successor dissemination agent hereunder without the execution orfiling of any paper or the performance of any further act and shall be authorized to perform allrights and duties imposed upon the Dissemination Agent by this Disclosure Agreement, anythingherein to the contrary notwithstanding.

Section 13. Miscellaneous.

(a) Each of the parties hereto represents and warrants to each other party that it has(i) duly authorized the execution and delivery of this Disclosure Agreement by the officers ofsuch party whose signatures appear on the execution pages hereto, (ii) that it has all requisitepower and authority to execute, deliver and perform this Disclosure Agreement under applicablelaw and any resolutions, ordinances, or other actions of such party now in effect, (iii) that theexecution and delivery of this Disclosure Agreement, and performance of the terms hereof, doesnot and will not violate any law, regulation, ruling, decision, order, indenture, decree, agreementor instrument by which such party or its property or assets is bound, and (iv) such party is notaware of any litigation or proceeding pending, or, to the best of such party's knowledge,

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threatened, contesting or questioning its existence, or its power and authority to enter into thisDisclosure Agreement, or its due authorization, execution and delivery of this DisclosureAgreement, or otherwise contesting or questioning the issuance of the Bonds.

(b) This Disclosure Agreement shall be governed by and interpreted in accordancewith the laws ofthe State ofTennessee and applicable federal law.

(c) If any provision hereof shall be held invalid or unenforceable by a court ofcompetent jurisdiction, the remaining provisions hereof shall survive and continue in full forceand effect.

(d) This Disclosure Agreement may be executed in one or more counterparts, eachand all ofwhich shall constitute one and the same instrument.

Section 14. Identifying Information. All documents provided to the MSRB pursuantto this Disclosure Agreement shall be accompanied by identifying infonnation as prescribed bythe MSRB.

Section 15. Severability. In case any part of this Disclosure Agreement is held to beillegal or invalid, such illegality or invalidity shall not affect the remainder or any other sectionof this Disclosure Agreement. This Disclosure Agreement shall be construed or enforced as ifsuch illegal or invalid portion were not contained therein, nor shall such illegality or invalidity ofany application of this Disclosure Agreement affect any legal and valid application.

[SIGNATURE PAGES TO FOLLOW)

C-14

SIGNATURE PAGE TOCONTINUING DISCLOSURE AGREEMENT

MEMPHIS CENTER CITY REVENUE FINANCE CORPORATIONFEDERALLY TAXABLE SENIOR REVENUE BONDS,

SERIES 2011A (pYRAMID AND PINCH DISTRICT REDEVELOPMENT PROJECT)TAX EXEMPT SUBORDINATE REVENUE BONDS,

SERIES 2011B (pYRAMID AND PINCH DISTRICT REDEVELOPMENT PROJECT)AND

FEDERALLY TAXABLE SUBORDINATE REVENUE BONDS,SERIES 2011C (pYRAMID AND PINCH DISTRICT REDEVELOPMENT PROJECT)

IN WITNESS WHEREOF, the City and the Dissemination Agent have each caused thisDisclosure Agreement to be executed, on the date first written above, by their respective officersduly authorized.

CITY OF MEMPHIS, a municipal corporation dulyorganized and existing under the laws of the State ofTennessee

By: _

Director ofFinance and Administration

Date: _

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

C-15

SIGNATURE PAGE TOCONTINUING DISCLOSURE AGREEMENT

MEMPHIS CENTER CITY REVENUE FINANCE CORPORATIONFEDERALLY TAXABLE SENIOR REVENUE BONDS,

SERIES 2011A (pYRAMID AND PINCH DISTRICT REDEVELOPMENT PROJECT)TAX EXEMPT SUBORDINATE REVENUE BONDS,

SERIES 2011B (pYRAMID AND PINCH DISTRICT REDEVELOPMENT PROJECT)AND

FEDERALLY TAXABLE SUBORDINATE REVENUE BONDS,SERIES 20ttC (pYRAMID AND PINCH DISTRICT REDEVELOPMENT PROJECT)

IN WITNESS WHEREOF, the City and the Dissemination Agent have each causedtheir duly authorized officers to execute this Continuing Disclosure Agreement to be effective asof the day and year so specified hereinabove.

REGIONS BANK, as Dissemination Agent

By: _Name: _Title:, _

Date: _

C-16

APPENDIXD

FORM OF OPINIONS OF CO-BOND COUNSEL

[THIS PAGE INTENTIONALLY LEFT BLANK]

[DATED THE DATE OF ISSUANCE)

Memphis Center CityRevenue Finance Corporation

Memphis, Tennessee

Ladies and Gentlemen:

We have examined a record of proceedings relating to the issuance of$40,540,000 aggregate principal amount of Federally Taxable Senior Revenue Bonds, Series2011A (Pyramid and Pinch District Redevelopment Project) (the "Series 2011A Senior Bonds"),by the Memphis Center City Revenue Finance Corporation (the "Corporation"), a public,nonprofit corporation organized under the laws of the State of Tennessee, created and existingunder and pursuant to the Constitution and statutes of the State of Tennessee, including theSections 7-53-101 et. seq., Tennessee Code Annotated, as amended to the date hereof (the"Act"). We have also examined such certificates, documents, records and matters of law as wehave deemed necessary for the purpose of rendering the opinions hereinafter set forth.

The Series 2011A Senior Bonds are issued under and pursuant to the Act and theTrust Indenture, dated as of September 1, 2011 (the "Indenture"), between the Corporation andRegions Bank, as Bond Trustee (the "Trustee") and authorized by a Resolution of the Board ofDirectors of the Corporation, adopted August 23, 2011 (the "Authorizing Resolution"). Unlessotherwise defined herein, capitalized terms used herein have the respective meanings given tothem in the Indenture.

The Series 2011A Senior Bonds are part of an issue of senior and subordinatebonds of the Corporation (the "Bonds") which the Corporation has established and issued underthe terms of the Indenture and is authorized to issue from time to time for the purposesauthorized by the Act and the Indenture, as then in effect, and without limitation as to amount,except as provided in the Indenture or as may be limited by law. The Series 2011A SeniorBonds are being issued for the purposes set forth in the Indenture.

The Corporation is authorized to issue Senior Bonds, in addition to the Series2011A Senior Bonds, only upon the terms and conditions set forth in the Indenture and suchSenior Bonds, when issued, will with the Series 2011 A Senior Bonds be entitled to the equalbenefit, protection and security of the provisions, covenants and agreements of the Indenture.

The Series 2011A Senior Bonds are issuable in the form of fully registered Bondsin the denomination of $5,000 or integral multiples thereof. The Series 2011A Senior Bonds areeach lettered "20l1A R- " and numbered consecutively from one upward in order of issuance.

The Series 2011 A Senior Bonds are dated the date hereof and mature onNovember 1 and bear interest, payable November 1, 2011 and semiannually thereafter on May 1and November 1, in each of the years and at the respective principal amounts and rates perannum set forth below:

0-1

Memphis Center City September ,2011Revenue Finance Corporation Page 2

Maturing Principal Interest Maturing Principal InterestNovember 1 Amount Rate November 1 Amount Rate

2014 $ 790,000 2.040% 2022 $ 2,735,000 4.480 %2015 840,000 2.540 2023 2,890,000 4.6302016 885,000 2.890 2024 3,055,000 4.7302017 935,000 3.190 2025 3,240,000 4.8802018 1,000,000 3.320 2026 3,435,000 5.0302019 1,480,000 3.570 2027 3,645,000 5.1802020 1,565,000 3.870 2030 12,395,000 5.5302021 1,650,000 4.230

The Series 2011A Senior Bonds are subject to redemption prior to maturity asprovided in the Indenture.

The Series 2011 A Senior Bonds are being issued to finance a loan by theCorporation to The City of Memphis, Tennessee (the "City"). The Corporation and the Cityhave entered into a Loan Agreement, dated as of September I, 2011 (the "Loan Agreement"), bywhich the City is required to make payments sufficient to pay, when due, the principal, premium,if any, and interest on the Bonds, including the Series 2011A Senior Bonds. All amountspayable under the Loan Agreement for payment of the principal, premium, if any, or interest onthe Bonds are required to be paid to the Trustee under the Indenture and have been pledged bythe Corporation for the benefit of the Holders of the Bonds, including the Series 2011A SeniorBonds.

We are of the opinion that:

1. The Corporation is a public, nonprofit corporation of the State ofTennessee, with the right and lawful authority and power to adopt the Authorizing Resolution,enter into the Indenture and to issue the Series 2011 A Senior Bonds thereunder.

2. The Authorizing Resolution has been duly and lawfully adopted by theCorporation in accordance with the provisions of the Act.

3. The Indenture has been duly and lawfully authorized, executed anddelivered by the Corporation, is in full force and effect and is a legal, valid and bindingobligation of the Corporation enforceable in accordance with its terms.

4. The Series 20llA Senior Bonds have been duly and validly authorizedand issued in accordance with the Constitution and statutes of the State of Tennessee, includingthe Act, and in accordance with the Authorizing Resolution and the Indenture. The Series20llA Senior Bonds are legal, valid and binding special obligations of the Corporation payableas provided in the Indenture, are enforceable in accordance with their terms and the terms of theIndenture and are entitled, together with all other Senior Bonds issued under the Indenture, to theequal benefits of the Indenture and the Act.

D-2


September , 2011Page 3

5. The Corporation has the right and lawful authority and power to enter intothe Loan Agreement and the Loan Agreement has been duly authorized, executed and deliveredby the Corporation, is in full force and effect and constitutes a legal, valid and binding obligationof the Corporation enforceable in accordance with its terms.

6. Interest on the Series 2011A Senior Bonds is not excluded from grossincome for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986(the "Code") and so will be fully subject to federal income taxation.

7. Under Tennessee law, the Series 2011A Senior Bonds and the interestthereon are exempt from income taxation in the State of Tennessee, except for Tennesseefranchise taxes.

Except as stated in paragraphs 6 and 7 above, we express no opinion as to anyother federal or state tax consequences of the ownership or disposition of the Series 2011ASenior Bonds. Furthermore, we express no opinion as to any federal, state or local tax lawconsequences with respect to the Series 2011 A Senior Bonds, or the interest thereon, if anyaction is taken with respect to the Series 20 II A Senior Bonds or the proceeds thereof upon theadvice or approval of other counsel.

We have examined an executed Series 20 II A Senior Bond and, in our opinion,the form ofsaid Bond and its execution are regular and proper.

The opinions contained in paragraphs 3, 4 and 5 above are qualified to the extentthat the enforceability of the Indenture, the Loan Agreement and the Series 2011 A Senior Bondsmay be limited by bankruptcy, insolvency, moratorium, reorganization or other laws affectingcreditors' rights generally or as to the availability ofany particular remedy.

In connection with the delivery of this opinion, we are not passing upon theauthorization, execution and delivery of the Loan Agreement by the City. We have assumed thedue authorization, execution and delivery of the Loan Agreement by the City.

Very truly yours,

D-3

[DATED THE DATE OF ISSUANCE]


Memphis, Tennessee

Ladies and Gentlemen:

We have examined a record of proceedings relating to the issuance of$100,245,000 aggregate principal amount of Tax Exempt Subordinate Revenue Bonds, Series20llB (pyramid and Pinch District Redevelopment Project) (the "Series 2011B SubordinateBonds") and of $56,150,000 aggregate principal amount of Federally Taxable SubordinateRevenue Bonds, Series 2011C (Pyramid and Pinch District Redevelopment Project) (the "Series2011C Subordinate Bonds" and together with the Series 2011 B Subordinate Bonds, the "Series2011 Subordinate Bonds"), by the Memphis Center City Revenue Finance Corporation (the"Corporation"), a public, nonprofit corporation organized under the laws of the State ofTennessee, created and existing under and pursuant to the Constitution and statutes of the Stateof Tennessee, including the Sections 7-53-101 et. seq., Tennessee Code Annotated, as amendedto the date hereof (the "Act"). We have also examined such certificates, documents, records andmatters of law as we have deemed necessary for the purpose of rendering the opinionshereinafter set forth.

The Series 2011 Subordinate Bonds are issued under and pursuant to the Act andthe Trust Indenture, dated as of September 1, 2011 (the "Indenture"), between the Corporationand Regions Bank, as Bond Trustee (the "Trustee") and authorized by a Resolution of the Boardof Directors of the Corporation, adopted August 23, 2011 (the "Authorizing Resolution").Unless otherwise defined herein, capitalized terms used herein have the respective meaningsgiven to them in the Indenture.

The Series 2011 Subordinate Bonds are part of an issue of senior and subordinatebonds of the Corporation (the "Bonds") which the Corporation has established and issued underthe terms of the Indenture and is authorized to issue from time to time for the purposesauthorized by the Act and the Indenture, as then in effect, and without limitation as to amount,except as provided in the Indenture or as may be limited by law. The Series 2011 SubordinateBonds are being issued for the purposes set forth in the Indenture.

The Corporation is authorized to issue Subordinate Bonds, in addition to theSeries 2011 Subordinate Bonds, only upon the terms and conditions set forth in the Indenture andsuch Subordinate Bonds, when issued, will with the Series 2011 Subordinate Bonds be entitled tothe equal benefit, protection and security of the provisions, covenants and agreements of theIndenture.

The Series 2011 Subordinate Bonds are issuable in the form of fully registeredBonds in the denomination of $5,000 or integral multiples thereof. The Series 20llBSubordinate Bonds are lettered "2011B R- " and numbered consecutively from R- upward in

D-4



order of issuance. The Series 20llC Subordinate Bonds are lettered "20llC R- " andnumbered consecutively from R- upward in order of issuance.

The Series 2011 B Subordinate Bonds are dated the date hereof and mature onNovember 1 and bear interest, payable November 1,2011 and semiannually thereafter on May 1and November I, in each of the years and at the respective principal amounts and rates perannum set forth below:

MaturingNovember 1

20252025

Principal InterestAmount Rate

$29,560,000 4.000 %9,500,000 5.250

MaturingNovember 1

20302030

PrincipalAmount

$21,185,00040,000,000

InterestRate

4.500%5.250

The Series 2011C Subordinate Bonds are dated the date hereof and mature onNovember 1 and bear interest, payable November 1, 2011 and semiannually thereafter on May 1and November 1, in each of the years and at the respective principal amounts and rates perannum set forth below:

Maturing Principal Interest Maturing Principal InterestNovember 1 Amount Rate November 1 Amount Rate

2014 $6,180,000 1.890 % 2018 $7,215,000 3.220 %2015 6,385,000 2.390 2019 7,550,000 3.5202016 6,635,000 2.790 2020 7,920,000 3.8702017 6,915,000 3.090 2021 7,350,000 4.180

The Series 2011 Subordinate Bonds are subject to redemption prior to maturity asprovided in the Indenture.

The Series 2011 Subordinate Bonds are being issued to fmance a loan by theCorporation to The City of Memphis, Tennessee (the "City"). The Corporation and the Cityhave entered into a Loan Agreement, dated as of September 1, 2011 (the "Loan Agreement"), bywhich the City is required to make payments sufficient to pay, when due, the principal, premium,if any, and interest on the Bonds, including the Series 2011 Subordinate Bonds. All amountspayable under the Loan Agreement for payment of the principal, premium, if any, or interest onthe Bonds are required to be paid to the Trustee under the Indenture and have been pledged bythe Corporation for the benefit of the Holders of the Bonds, including the Series 2011Subordinate Bonds.

We are of the opinion that:

1. The Corporation is a public, nonprofit corporation of the State ofTennessee, with the right and lawful authority and power to adopt the Authorizing Resolution,enter into the Indenture and to issue the Series 2011 Subordinate Bonds thereunder.

D-5



2. The Authorizing Resolution has been duly and lawfully adopted by theCorporation in accordance with the provisions ofthe Act.

3. The Indenture has been duly and lawfully authorized, executed anddelivered by the Corporation, is in full force and effect and is a legal, valid and bindingobligation of the Corporation enforceable in accordance with its terms.

4. The Series 2011 Subordinate Bonds have been duly and validly authorizedand issued in accordance with the Constitution and statutes of the State of Tennessee, includingthe Act, and in accordance with the Authorizing Resolution and the Indenture. The Series 2011Subordinate Bonds are legal, valid and binding special obligations of the Corporation payable asprovided in the Indenture, are enforceable in accordance with their terms and the terms of theIndenture and are entitled, together with all other Subordinate Bonds issued under the Indenture,to the equal benefits ofthe Indenture and the Act.

5. The Corporation has the right and lawful authority and power to enter intothe Loan Agreement and the Loan Agreement has been duly authorized, executed and deliveredby the Corporation, is in full force and effect and constitutes a legal, valid and binding obligationof the Corporation enforceable in accordance with its terms.

6. The Internal Revenue Code of 1986, as amended (the "Code") sets forthcertain requirements that must be met subsequent to the issuance and delivery of the Series2011B Subordinate Bonds for interest thereon to be and remain excluded from gross income forfederal income tax purposes. Noncompliance with such requirements could cause the interest onthe Series 2011 B Subordinate Bonds to be included in gross income for federal income taxpurposes retroactive to the date of issue of the Series 2011 B Subordinate Bonds. TheCorporation has covenanted in the Indenture and the Tax Certificate as to Arbitrage and theProvisions of Sections 141-150 of the Internal Revenue Code (the "Tax Certificate") and theCity has covenanted in the Loan Agreement and the Tax Certificate to comply with theapplicable requirements of the Code in order to maintain the exclusion of the interest on theSeries 2011 B Subordinate Bonds from gross income for federal income tax purposes pmsuant toSection 103 of the Code. In addition, the Corporation and the City have made certainrepresentations and certifications in the Tax Certificate. We have not independently verified theaccuracy of those certifications and representations or that opinion.

Under existing law and assuming compliance with the tax covenants describedherein, and the accuracy of the aforementioned representations and certifications, interest on theSeries 2011 B Subordinate Bonds is excluded from gross income for federal income tax purposesunder Section 103 of the Code. We are also of the opinion that such interest is not treated as apreference item in calculating the alternative minimum tax imposed under the Code with respectto individuals and corporations. Interest on the Series 2011 B Subordinate Bonds is, however.included in the adjusted current earnings of certain corporations for purposes of computing thealternative minimum tax imposed on such corporations.

0-6



We are further of the opinion that the difference between the principal amount ofthe Series 2011B Subordinate Bonds maturing on November 1, 2025 bearing a coupon of4.000% and on November 1,2030 bearing a coupon of 4.500% (collectively the "Discount TaxExempt Bondsll

) and the initial offering price to the public (excluding bond houses, brokers orsimilar persons or organizations acting in the capacity of underwriters or wholesalers) at whichprice a substantial amount of such Discount Tax Exempt Bonds of the same maturity was soldconstitutes original issue discount which is excluded from gross income for federal income taxpurposes to the same extent as interest on the Series 2011 B Subordinate Bonds. Further, suchoriginal issue discount accrues actuarially on a constant interest rate basis over the term of eachDiscount Tax Exempt Bond and the basis of each Discount Tax Exempt Bond acquired at suchinitial offering price by an initial purchaser thereof will be increased by the amount of suchaccrued original issue discount. The accrual of original issue discount may be taken into accountas an increase in the amount of tax exempt income for purposes of determining various other taxconsequences of owning the Discount Tax Exempt Bonds, even though there will not be acorresponding cash payment

7. Interest on the Series 2011C Subordinate Bonds is not excluded fromgross income for federal income tax purposes under Section 103 of the Internal Revenue Code of1986 (the "Code") and so will be fully subject to federal income taxation.

8. Under Tennessee law, the Series 2011 Subordinate Bonds and the interestthereon are not subject to income taxation in the State of Tennessee, except for Tennesseefranchise taxes.

Except as stated in paragraphs 6, 7 and 8 above, we express no opinion as to anyother federal or state tax consequences of the ownership or disposition of the Series 2011Subordinate Bonds. Furthermore, we express no opinion as to any federal, state or local tax lawconsequences with respect to the Series 20 II Subordinate Bonds, or the interest thereon, if anyaction is taken with respect to the Series 20 II Subordinate Bonds or the proceeds thereof uponthe advice or approval of other counsel.

We have examined an executed Series 2011 B Subordinate Bond and an executedSeries 2011C Subordinate Bond. In our opinion, the form of said bonds and their execution areregular and proper.

The opinions contained in paragraphs 3, 4 and 5 above are qualified to the extentthat the enforceability of the Indenture, the Loan Agreement and the Series 2011 SubordinateBonds may be limited by bankruptcy, insolvency, moratorium, reorganization or other lawsaffecting creditors' rights generally or as to the availability of any particular remedy.

In connection with the delivery of this opinion, we are not passing upon theauthorization, execution and delivery of the Loan Agreement by the City. We have assumed thedue authorization, execution and delivery of the Loan Agreement by the City.

Very truly yours,

D-7

[THIs PAGE INTENTIONALLY LEFl'BLANK]

APPENDIXE

SPECIMEN MUNICIPAL BOND INSURANCE POLICY

muS PAGE lNTENTIONALLY LEFTBLANK]

~SUREDGUARANTY-

MUNICIPAL

MUNICIPAL BONDINSURANCE POLICY

.dISSUER: ,jI~~CY No: -N

BONDS: $ in aggregate principal amount of Effe~Date:

..:'dg ~g Pre h : $

~~6~tJ~, ~~~~ bkl>

ASSURED GUARANTY MUNICIPAL CORP. ("AGM"), consi~ration ~'Ved' herebyUNCONDITIONALLY AND IRREVOCABLY agrees to pay to the e"T~e") or p . I §gent (the"Paying Agenr) (as set forth in the documentation providing fo_r'SSU of S9cu~g th .Sonds) forthe Bonds, for the benefit of the Owners or, at the election of , dire _. each own~ sti&ject only tothe terms of this Policy (which Includes each endorsement , that ' Iitlgn of th • rincipal of andinterest on the Bonds that shall become Due for Payment buts~ IMnpaid B94~r:O~i Nonpayment bythe Issuer. '~IlQ~ '1qg~~_

On the later of the day on which such d inte t b~_e 15ue for Payment or theBusiness Day next following the Business Da •n whi ve re ed Notice of Nonpayment,AGM will disburse to or for the benefit of ea er of ~ n am nt of principal of and intereston the Bond that is then Due for Paymeqt but I n unpa y rea of Nonpayment by the Issuer, butonly upon receipt by AGM, in a form rMhaably . ctory it, of (a) evidence of the Owner's right toreceive payment of the principal gp~rnfereSt. then for P nt and (b) evidence, including anyappropriate instruments of assign nt, that all of t er's ghts with respect to payment of suchprincipal or interest that is Due for yment shall thereup in AGM. A Notice of Nonpayment will bedeemed received on a given Busi s Day if it is r eiv rior to 1:00 p.m. (New York time) on suchBusiness Day; otherwise.M~i~~1II eemed receiv a the next Business Day. If any Notice ofNonpayment receiv~db UAGM 1s in ete, it shall e deemed not to have been received by AGM forpurposes of the pre .Fng sen ce sh promptly so advise the Trustee, Paying Agent orOwner, as approp' -10m ub ed Notice of Nonpayment. Upon disbursement inrespect of a Bond, AG '.. I m th~wner of the Bond, any appurtenant coupon to the Bond or rightto receipt of p@) p' I of or inte - st on the Bond and shall be fully subrogated to the rights of theOwner, incl Ulg er' t to re payments under the Bond, to the extent of any payment byAGM he~ . Pa nt by to Trustee or Paying Agent for the benefit of the Owners shall, tothe ex~ent th rge the a n of AGM under this Policy.

~!!lll ~~~cePt t xtent expre~slY modified by an endorsement hereto, the following terms shall havemeanings speci JP.r all purposes of this Policy. "Business Day" means any day other than (a) a

a ay a #day on which banking institutions in the State of New York or the Insurer'sori or required by law or executive order to remain closed. "Due for Paymenr'nsf to the principal of a Bond, payable on the stated maturity date thereof or the date

on which the same all have been dUly called for mandatory sinking fund redemption and does not refer toany earlier'~ea Ich payment is due by reason of call for redemption (other than by mandatory sinkingfund redemp, acceleration or other advancement of maturity unless AGM shall elect, in its solediscretion, to p such principal due upon such acceleration together with any accrued interest to the dateof acceleration and (b) when referring to interest on a Bond, payable on the stated date for payment ofinterest. "Nonpayment" means, in respect of a Bond, the failure of the Issuer to have provided sufficientfunds to the Trustee or, if there is no Trustee, to the Paying Agent for payment In full of all principal andinterest that is Due for Payment on such Bond. "Nonpaymenr shall also include, in respect of a Bond, anypayment of principal or interest that is Due for Payment made to an Owner by or on behalf of the Issuerwhich has been recovered from such Owner pursuant to the

E-l

ASSURED GUARANTY MUNICIPAL CORP.

Page 2 of2Policy No.-N

United States Bankruptcy Code by a trustee in bankruptcy in accordance with a final, nonappealable orderof a court having competent jUrisdiction. "Notice" means telephonic or telecopied notice, subsequentlyconfirmed in a signed writing, or written notice by registered or certified mail, from an Owner, the Trustee orthe Paying Agent to AGM which notice shall specify (a) the person or entity making the claim, (b) the PolicyNumber, (c) the claimed amount and (d) the date such claimed amount became Due for Payment. ·Owner"means, in respect of a Bond, the person or entity who, at the time of Nonpayment, is entitled under theterms of such Bond to payment thereof, except that "Owner" shall not include the Issuer ~r any person orentity whose direct or indirect obligation constitutes the underlying security for the Bond~Jl!'~

AGM may appoint a fiscal agent (the "Insurer's Fiscal Agenr) for purposes o~th·s Policy bygiving written notice to the Trustee and the Paying Agent specifying the name nd notice ad ss of theInsurer's Fiscal Agent. From and after the date of receipt of such notice by.j! I nd PayingAgent, (a) copies of all notices required to be delivered to AGM pumuant I besimUltaneously delivered to the Insurer's Fiscal Agent and to AGM and fJ1J!i\,pt be ~edre \!lmtilreceived by both and (b) all payments required to be made by AGM u .' this Policy m e made directlyby AGM or by the Insurer's Fiscal Agent on behalf of AGM. The Ins isca ent is t agent of AGMonly and the Insurer's Fiscal Agent shall in no event be liable to an,y forfftn of the ~h'l'r's FiscalAgent or any failure of AGM to deposit or cause to be depos suffi s t m~ p~ents dueunder this Policy. '~ ~ .JJ8'

To the fullest extent permitted by applicable law, AG, not to. rt ~d hereby waives,only for the benefit of each Owner, all rights (whether by counte al ~Off or" 'se) and defenses(including, without limitation, the defense of fraud.ether a ire sub gation, assignment orotherwise, to the extent that such rights and d tins '.~ .. t.ava . ble ~9.M to avoid payment of itsobligations under this Policy in accordance ~t e expr-" "~lRfthls.,olicy.

This Policy sets forth in full 1l\.e un Ing O}~~M, alb6 hall not be modified, altered oraffected by any other agreement O~in~Miltt, inc , any m~~~ca ion or amendment thereto. Except tothe extent expressly modified by an ndorseil\ent he (a) any mium paid in respect of this Policy isnonrefundable for any reason wha ever, including pa t, or rovision being made for payment, of theBonds prior to maturity and (b) Policy may not be ed or revoked. THIS POLICY IS NOTCOVERED BY THE PRO~.P~~TY/C ~.LTY IN;;1SCE CURITY FUND SPECIFIED IN ARTICLE 76OF THE NEW YORK IN~~~E . _ J

In witnes ereof, ~UR . , Ai . MUNICIPAL CORP. has caused this Policy to beexecuted on its beh 'AUth~~d Offi bH~'

~~ ')''( ~iJ

b;·,i~~~

J

By -:-~_:__":"":'=------Authorized Officer

Form 500NY (5190)

E-2

MEMPIIIS CENTER CITY REVENUE FINANCE CORPORATION • REVENUE BONDs, SERIES 2011A, SERIES 2011B AND SUIES 2011C (PYRAMID AND PINCD DISI'RICT RBDEVELOPMENf PaOJEcr)

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