NOTICE TO BONDHOLDERS May 2, 2012 Parkway East Public Improvement District, Madison, Mississippi 39110 $27,770,000 Series 2005

Special Assessment Bonds CUSIPS: 701555AF1 701555AG9 701555AH7 3.65% 3.75% 3.5% 701555AJ3 701555AK0 701555AL8 4.25% 4.5% 4.625%

$3,000,000 Series 2008A Special Assessment Completion Bonds 3.85%, privately placed without CUSIP TO ALL OWNERS OF THE ABOVE-REFERENCED BONDS (the Owners) Parkway East Public Improvement District (the District) issued its Special Assessment Bonds Series 2005 (the Series 2005 Bonds) in the principal amount of $27,770,000 pursuant to the terms of that certain Trust Indenture between the District and Hancock Bank, as trustee (the Trustee) dated as of July 1, 2005 (the Trust Indenture). The District issued its Special Assessment Completion Bonds, Series 2008A (Parkway East Completion Project (the Series 2008A Bonds) in the principal amount of $3,000,000 pursuant to the terms of the Trust Indenture, as supplemented by that certain 2008A Supplemental Trust Indenture between the District and the Trustee dated as of May 1, 2008 (the 2008A Supplemental Indenture). Pursuant to the terms of the Trust Indenture and the 2008A Supplemental Indenture, the Series 2008A Bonds were issued on parity with the Series 2005 Bonds. The Trustee hereby gives notice to all Owners that there was a default in the payment of principal on the Series 2008A Bonds on May 1, 2012 as there were insufficient funds available to make a full principal payment on that date. A description of the activity of the District, the collection of Special Assessments, and the financial status of the District can be found on EMMA, included in the last audited financial statements of the District which were posted on March 14, 2012. The Trustee anticipates receiving the current audited financial statements in the near future. In summary, several landowners in the District failed to pay Special Assessments resulting in a substantial shortfall in the Pledged Revenues which secure the Bonds. The Trustee notified the Board of Supervisors of Madison County (the County) of the shortfall in the Pledged Revenues sufficient to pay Interest and Principal on the Series 2005 Bonds on the May 1st Payment Date and requested payment under the Contribution Agreement which provides for the Countys contribution to fulfill any underfunded debt service payment due on the Series 2005 Bonds. The County has provided funds to cover the shortfall on the Series 2005 Bonds. Therefore, the principal default has occurred only on the 2008A Bonds. There is no default on the Series 2005 Bonds. If you have any questions, you may contact Hancock Bank Corporate Trust Department, 601-981-7812 or by email at jacksontrust@hancockbank.com.