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Municipal Property Corporation - Resolutions
MPC RESOLUTION RESOLUTION NO. 10-01 RESOLUTION AUTHORIZING AND PROVIDING FOR THE DEFEASANCE AND REDEMPTION OF THE OUTSTANDING TOWN OF ORO VALLEY MUNICIPAL PROPERTY CORPORATION EXCISE TAX REVENUE BONDS, SERIES 2001 AND EXCISE TAX REVENUE REFUNDING BONDS SERIES 2003; RATIFYING THE ACTIONS OF ALL OFFICERS AND AGENTS OF THE CORPORATION AND OTHERS WITH RESPECT TO THE DEFEASANCE AND REDEMPTION. WHEREAS,the Town of Oro Valley Municipal Property Corporation(the "Corporation") has issued its Excise Tax Revenue Bonds, Series 2001 in the original principal amount of$9,010,000 (the "Series 2001 Bonds"); and WHEREAS, the Corporation has issued its Excise Tax Revenue Refunding Bonds, Series 2003 in the original principal amount of$15,750,000 (the "Series 2003 Bonds" and together with the Series 2001 Bonds,the "Bonds"); and WHEREAS, the Bonds were executed and delivered by Wells Fargo Bank, N.A. (as successor to Norwest Bank Arizona, N.A.) (the "Trustee") as trustee under the Trust Indenture dated as of April 1, 1996 (the "1996 Indenture")between the Corporation and the Trustee, as supplemented by the First Supplement to the Trust Indenture dated as of June 1, 1999, the Second Supplement to Trust Indenture, dated as of April 1, 2001 (the "Second Supplement"), the Third Supplement to Trust Indenture, dated as of October 1, 2003 (the "Third Supplement") and the Fourth Supplement to Trust Indenture, dated as of April 1, 2007 (the "Fourth Supplement" and, together with the Trust Indenture, the First Supplement, the Second Supplement and the Third Supplement,the "Indenture"); and WHEREAS, such Bonds are secured by rental payments made by the Town of Oro Valley, Arizona(the "Town")pursuant to the terms of the Lease-Purchase Agreement dated as of April 1, 1996 (the "1996 Lease-Purchase Agreement"), as amended by the First Amendment to Lease-Purchase Agreement, dated as of June 1, 1999 (the "First Amendment"), the Second Amendment to Lease-Purchase Agreement, dated as of April 1, 2001 (the "Second Amendment"), the Third Amendment to the Lease-Purchase Agreement, dated as of October 1, 2003 (the "Third Amendment"), and the Fourth Amendment to the Lease-Purchase Agreement, dated as of April 1, 2007 (the "Fourth Amendment" and, together with the Lease-Purchase Agreement, the First Amendment, the Second Amendment and the Third Amendment, the "Town Lease"); and WHEREAS, the Mayor and Council.of the Town have, pursuant to Section 4.04 of the 1996 Indenture, directed the Corporation to establish an irrevocable trust to pay at maturity or redeem on July 1, 2011 all of the then outstanding Series 2001 Bonds, which mature on July 1 of the years 2010 through 2013, inclusive(the "Series 2001 Bonds Being Defeased"); and WHEREAS, the Mayor and Council of the Town have, pursuant to Section 4.04 of the 1996 Indenture, directed the Corporation to establish an irrevocable trust to pay at maturity or redeem all or a portion of the then outstanding Series 2003 Bonds,which mature or constitute a mandatory redemption on July 1 of the years 2010 through 2019, inclusive (the "Series 2003 Bonds Being Defeased" and together with the Series 2001 Bonds Being Defeased,the "Bonds Being Defeased"); and SWR:pr2 1187749.2 3/5/2010 1 MPC RESOLUTION WHEREAS,the Mayor and Council have authorized the transfer of funds to the Trustee to defease the Bonds Being Defeased,and to pay the costs of the transaction; and WHEREAS,the Corporation wishes to aid the Town in reducing its financial liability. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE TOWN OF ORO VALLEY MUNICIPAL PROPERTY CORPORATION: Section 1. Authorization. The Corporation hereby authorizes and directs the Trustee to accept the transfer from the Town of an amount which is sufficient,together with other amounts held by the Trustee and available therefor, to defease the outstanding Bonds Being Defeased, to pay at maturity or redeem such Bonds Being Defeased on the dates set forth in the Escrow Agreement (as defined hereafter) and to pay the costs and expenses of the transaction. Section 2. Application of Moneys. The proceeds of the transfer of funds, after payment of the costs and expenses of the transaction, shall be applied by the Trustee to create one or more irrevocable trusts for the benefit of the owners of the Bonds Being Defeased. Amounts credited to the trust, other than any beginning cash balance, shall be invested immediately by the Trustee in noncallable, direct obligations issued by or unconditionally guaranteed by the United States of America (hereafter "Government Obligations")the maturing principal of and interest on which, together with any beginning cash balance, will be sufficient to pay the principal of and interest on the Bonds Being Defeased as the same become due or are called for redemption. Any amounts remaining after payment of all amounts due shall be paid over to the City. Section 3. Redemption of Bonds. All of the outstanding Bonds Being Defeased, not paid at maturity, are hereby irrevocably ordered to be called for redemption. Specifically,the Series 2001 Bonds not paid at maturity shall be called for redemption on July 1, 2011 and the Series 2003 Bonds on July 1, 2013. The Trustee will cause notice of redemption to be given as required by the Indenture. Section 4. Escrow Agreement. If required, the Finance Director of the Town, Board President or any member of the Board is hereby authorized and directed to execute one or more irrevocable escrow agreements or depository trust agreements (collectively, the "Escrow Agreement") with the Trustee or a bank authorized to do trust business in the State of Arizona or any successors or assigns, with respect to the safekeeping and handling of the moneys and securities to be held in trust for the payment of the Bonds Being Defeased. The Escrow Agreement shall be in substantially the form on file, with such additions, deletions and modifications as shall be approved by the officer executing and delivering the same on behalf of the Town and such execution and delivery shall constitute conclusive evidence of the approval of such official of any departures from the form on file. If for any reason the Escrow Agreement is cancelled or declared void or illegal or is incapable of being performed due to any impediment of any nature whatsoever, or the Trustee is unable to perform its duties, the Town shall appoint or engage a successor trustee or escrow agent to act in the place of the Trustee, if such successor be ready, willing and able to assume the role of escrow agent under such Escrow Agreement or an agreement similar in form and substance. During any period when no Trustee is in place,the Finance Director shall act as the escrow agent. SWR:pr2 1187749.2 3/5/2010 2 MPC RESOLUTION Section 5. Severability. If any section,paragraph, subdivision, sentence, clause or phrase of this resolution is for any reason held to be illegal or unenforceable, such decision will not affect the validity of the remaining portions of this resolution. The President and Board members hereby declare that this resolution would have been enacted and each and every other section, paragraph, subdivision, sentence, clause or phrase hereof and authorized the transfer of funds and defeasance and redemption of the Bonds Being Defeased pursuant hereto irrespective of the fact that any one or more sections, paragraphs, subdivisions, sentences, clauses or phrases of this resolution may be held illegal, invalid or unenforceable. Section 6. Ratification of Actions. All actions of the officials and agents of the Corporation, the Town and the Trustee which are in conformity with the purposes and intent of this resolution and in furtherance of the defeasance and redemption of the Bonds Being Defeased as contemplated by this resolution shall be and are hereby ratified, confirmed and approved. The proper officials and agents of the Corporation, the Town and the Trustee are hereby authorized and directed to do all such acts and things and to execute and deliver all such documents as may be necessary to carry out the terms and intent of this resolution. SWR:pr2 1187749.2 3/5/2010 3 MPC RESOLUTION PASSED AND ADOPTED by the Board of The Town of Oro Valley Municipal Property Corporation on March 11,2010 _ t ATTEST: President �. :-;.X_ Secre ' APPROVED AS TO FORM: Special Counsel CERTIFICATION Donald G. Tay to the duly appointed and acting Secretary of the Town of Oro Valley Municipal Property Corporation, do hereby certify that the above and foregoing Resolution No. _10-01 was duly passed by the Board of Directors of the Town of Oro Valley Municipal Property Corporation at a regularly scheduled meeting held on March 11, 2010 and the vote was 3 aye's and 0 nay's and 0 absent,that the President and Secretary were present and therat. Secretary, Town of Oro, fey Municipal Property Corporation SWR:pr2 1187749.2 3/5/2010 4 TOWN OF ORO VALLEY, ARIZONA EXCISE TAX REVENUE OBLIGATIONS, SERIES 2000 TOWN OF ORO VALLEY MUNICIPAL PROPERTY CORPORATION EXCISE TAX REVENUE BONDS, SERIES 2001 TOWN OF ORO VALLEY MUNICIPAL PROPERTY CORPORATION EXCISE TAX REVENUE REFUNDING BONDS, SERIES 2003 2010 DEFEASANCE Funded: April 29, 2010 INDEX OF DOCUMENTS 1. Closing letter from Stone & Youngberg, LLC to the Town of Oro Valley regarding the funding of the defeasance of the Bonds Being Defeased. 2. Copy of the resolution adopted at a meeting of the Mayor and Council of the Town of Oro Valley, Arizona (the "Town") held on March 3, 2010,which authorized the transfer of moneys to fund the defeasance of the Bonds Being Defeased. 3. Copy of the resolution adopted at a meeting of the Town of Oro Valley Municipal Property Corporation (the "Corporation") held on March 11, 2010,which authorized the transfer of funds to defease the Bonds Being Defeased. 4. Escrow Agreement between the Town and Wells Fargo Bank,N.A. (the "Escrow Agent"). 5. Tax Certificate of the Finance Director of the Town. 6. Escrow Agent's Receipt and Certificate. 7. Verification Report of Grant Thornton LLP, Certified Public Accountants. 8. Notice of Material Event filed with the Municipal Securities Rulemaking Board. Executed counterparts or copies thereof, as appropriate, of the documents will be distributed to the following parties: Clerk, Town of Oro Valley, Arizona(CD) Finance Director, Town of Oro Valley, Arizona (1 paper, 2 CDs) Wells Fargo Bank,N.A. (paper) Stone& Youngberg, LLC (CD) Gust Rosenfeld P.L.C. (CD) SCS:dlh 1230969.1 4/21/2010 STONE & YOUNGBERG 2555 East Camelback Road,Suite 280 Phoenix,Arizona 85016 (602)794-4000 To: Stacey Lemos, CPA, Interim Assistant Town Manager/Finance Director,Town of Oro Valley Mary Rallis,CPA, Accounting Supervisor,Town of Oro Valley Philip Saletta, P.E., Utilities Director,Town of Oro Valley Shirley Seng, Utility Administrator,Town of Oro Valley Georgina Gomez,Chase Bank(Town of Oro Valley Servicing Bank) Nancy Eatros, Escrow Agent,Wells Fargo Bank,National Association Scott Ruby, Esq., Special Counsel, Gust Rosenfeld P.LC. Sarah Smith, Esq.,Special Counsel,Gust Rosenfeld P.L.C. Joan Hubbert, Paralegal, Gust Rosenfeld P.L.C. Stephanie Seroogy, Manager,Grant Thornton LLP David LaFlamme,Senior Associate, Grant Thornton LLP From: Mark Reader,Stone&Youngberg LLC Sandra Park.Stone&Youngberg LLC Re: Defeasance of Town of Oro Valley,Arizona, Excise Tax Revenue Obligations,Series 2000,Town of Oro Valley Municipal Property Corporation, Excise Tax Revenue Bonds, Series 2001 and Partial Defeasance of Town of Oro Valley Municipal Property Corporation, Excise Tax Revenue Refunding Bonds,Series 2003 Date: April 27,2010 In connection with the.Town of Oro Valley, Arizona and the Town of Oro Valley Municipal Property Corporation (the "Town") Defeasance of the above referenced obligations; the following represents the sources and uses of funds and related wire instructions to close the transaction this Thursday,April 29,2010: Sources of Funds: rr '�'���".tAdrt?"nl l5, •'�+..t;9'%'0 .w t'F 4 t.r o. o." v .,t}t fir, �'o�'+i�f:z��• t,��7�3 �;r�t�1 , [J"' (1'F•;'4.OLIffFC.7.4 JS •:eft� oo:7sC F»-a'1...•.Fbo'a t ...:aw v..W;i.F .. .CZ' F.e5Pi3'i::Rk.'la•,.v.,.:r`.nK.w W t;.. '.''.;iX' �"9.cy., v General Fund Cash $ 248,720.68 $ 68',233.96 $5,367,707.22 $6,305,661.86 Water Enterprise Cash 1,154,804.42 $1,154,804.42 Total Sources of Funds $ 248,720.68 $1,844,038.38 $5,367,707.22 $7,460,466.28 Uses of Funds: i ,„qY•r6v +•...•.1F'',r. ,,i =+y'::1,••.',, +'{h`�' $Y�' ?'i+f F ep✓ t'i t.I_s a. 4,. x. m c .:•` `. ...►+ZiEyapu f•'e4 �, i ,r (x sf Z l L..<v + F.ed. 2 y.�, .3'L. N k::ivr.t v'�ru.� .. Escrow Deposit $ 242,083.18 $I,830,763.38 $5,36 I,069,72 $7,433,916.28 Costs and Expenses 6,637.50 13,275.00 6,637.50 26,550.00 Total Uses of Funds $ 248,720.68 $1,844,038.38 $5,367,707.22 $7,460,466.28 The following represents the wire instructions: Town of Oro Valley,Arizona Wire to Trustee(Wells Fargo Bank,N.A.) On Thursday, April 29th, (before 1:00 p.m. CST), the Town of Oro Valley will wire $6,305,661.86 from the General Fund and $1,154,804.42 from the Water Enterprise Fund for a total of$7,460,466.28 to Wells Fargo Bank (the"Trustee") using the following wire instructions: Wells Fargo Bank, N.A. ABA#I21000248 Trust Clearing Account#00010-38-377 For Credit to:Town of Oro Valley RFD ESC Account Number:82373200 Attention:Ms. Nancy Eatros Once the above wire(s) are received, the Escrow Agent will acquire the United States Treasury Securities—State and Local Government Series (SLGS) as outlined in the Grant Thornton LLP Defeasance Verification Report and will subsequently mail the notice of defeasance and notices of redemption notices as outlined in the escrow agreement. Any moneys held by the Escrow Agent to pay costs and expenses of the transaction if not used for such purpose will be returned to the Town by October 1, 2010. Enclosures TOWN OF ORO VALLEY, ARIZONA 2010 BOND DEFEASANCE (EXCISE TAX SECURED) FINANCING TEAM DISTRIBUTION LIST Borrower Financial Consultants Town of Oro Valley,Arizona Stone&Youngberg LLC 11000 N. La Canada Drive 2555 E. Camelback Road, Suite 280 Oro Valley,AZ 85737-7015 Phoenix,AZ 85016 Fax: (520)297-0428 Fax:(602)794-4046 Stacey Lemos,CPA Interim Asst.Town Mark Reader, Managing Director Manager and Finance Director (602)794-4011 (520) 229-4732 e-mail: mreader( syllc,co m e-mail:slemos@orovalleyaz.,gov Sandra Park,Associate Mary Rallis,CPA Senior Accountant (602)794-4010 (520) 229-4728 e-mail:)park( syllc.com e-mail: mrli(orova1leyaz,gov Karyl Guthery, Closing Coordinator Philip Saletta, P.E.,Water Utility Director (602)794-4051 (520) 229-5010 e-mail: kguthgry(yllc.com e-mail: psalettaaorovalleyaz.gov Verificajlon Agent; Shirley Seng, Utility Administrator Grant Thornton LLP (520)229-5013 500 US Bank Plaza North e-mail: sse g@orova1leyaz,gov 200 South 6'Street, Suite 500 Minneapolis,MN 55402 Bond Counsel: Fax:(612) 332-8984 Gust Rosenfeld P.L.C. 201 E Washington, Suite 800 Stephanie Seroogy, Manager Phoenix,AZ 85004-2327 (612)677-5109 Fax:(602) 340-1538 e-mail: gephanie,seroogy( gt,corn Scott Ruby, Esq. David LaFlamme,Senior Associate (602) 257-7432 (612)677-5464 e-mail: swrgby( gustlaw,com e-mail: david.lafiamme)a,gt,com Sarah Smith, Esq. (602) 257-7458 e-mail:ssmith©gustlaw.com Joan Hubbert,Paralegal (602) 257-7435 e-mail: *thu1212ectaustlaw com Trusted Wells Fargo Bank 100 West Washington,22"d Floor MAC S4101-080 Phoenix,AZ 85003 Fax: (602) 378-2333 Nancy Eatros,Assistant Vice President (602)378-2337 e-mail: nancy.I.eatros( weilsfargo.com Prepared by Stone&Youngberg,April 27, 2010 Town of Oro Valley, Arizona 2010 Bond Defeasance (Excise Tax Secured) Revised Financing Calendar \i,,ii`l.l 1 ‘1,,, 'lila+ Intl• .iiiil 101 NMI 11111 IEN Ell NEB NM 1131 1E11 2 ii S 9 S 12 16 12 19 23 19 26 30 26 •„;s F iY1'.1 171 .2''.•a ...•i'aq j A d .; t. se.: ',.' 4,;..,i L'', k' •t, Taro ,.:),,..�:. :•iY't .,:� ��..-� 'd�igS'..1,�'i” Akr:;;!,,Alq,Riftn,Wit:MAZ"' �qy�S� }�;�,':� �� ..t P� � ff�y�!•v�.'. <,.��",�" �v'�s :uF�`` � �<}.•.•�i,���. ;„��L�`��'���;,i'.�.,t,�.:r.{ ., .�f � '7 ���• �J•:i_". .��. -f 't� �t�tr ^� •i!'^•hy't �f Ci� 7' �.� ,Y�AYrrf..�ak .Y.kf o r1< < S0. �.�Ry�� ,-..r,, .i t . 1 ., ,C, t, t My+ ` ,. I ,�.,, i a,�•r -,,,:'�; d,-i.:;'�"• , - 1'j>t.{:y" r'v''i'..,1,r .` 1'� .►'t� r:P ":..�iri'. - .S�aS'J. 1' ���hF 4.l .+o.�Cc�x ..'�1'tXr„4R+h'`� F'�.. i :4 ,rn<G. •�`tr,:. x., . got': c, ..a,ik�i.'.v�-;,��',.�'��a?.�s..st,r.!!nt:� �.•.+k••.• r»� . rcrtlF;!af�:�t•,•�A $+aL+r�'•,r�9�Ad.• February 24th Bond defeasance study session and recommendation for Town, S&Y approval. March 3rd Council approved Resolution authorizing the defeasance. Town, GR, S&Y March I 1 th MPC Board approved the defeasance of 2001 and 2003 ' MPC Board, Town, bonds (along with 2001 obligations). GR, S&Y Week of April 12th T Escrow verification documents submitted to Grant S&Y Thornton. April 13th Team conference call to discuss updated analyses, draft Town, S&Y, GR, WF closing letter and closing calendar, April 21st Purchase State & Local Government Securities (SLGs). WF, S&Y,Town, GT SLGs subscription forms and escrow verified by Grant Thornton. Draft Verification report forwarded to financing team members for review and comments (4/21 —4/28). April 23rd t Closing letter sent to all financing team participants. S&Y, Town, GR April 28th Final escrow verification report delivered to the Town. GT April 29th Close defeasance. Town wires proceeds from General All Parties Fund and Water Utility Fund to Trustee for deposit into the defeasance escrow and costs of issuance account Week of May 3rd Continuing disclosure update regarding defeasance with Town, GR, S&Y Electronic Municipal Market Access (EMMA). Week of May 3rd Update all records to reflect the defeasance. S&Y Week of May 24th Deliver transcript of proceedings. GR May 27th Early redemption notices sent to 2000 obligation holders'. WF I (no more than 60 or less than 30 days prior to July I, 2010). Notify bond insurance companies of defeasance. .., .1)..-,;',40.,.:::•:--; '+ '� ,' •, t' r:. `r- �e .. e. 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Prepared by:Stone&Youngberg LLC-4/1 3/20 I 0 Page 1 of 1 RESOLUTION NO.(R)10- 13 A RESOLUTION OF TEE TOWN OF ORO VALLEY, ARIZONA, AUTHORIZING AND PROVIDING FOR THE FINANCE DIRECTOR TO TRANSFER TOWN FUNDS TO AN IRREVOCABLE TRUST FUND TO BE USED FOR THE PREPAYMENT OF CERTAIN AMOUNTS DUE UNDER A PURCHASE AGREEMENT AND LEASE-PURCHASE AGREEMENTS WHICH PREPAYMENT AMOUNTS SHALL BE USED TO DEFEASE AND REDEEM A PORTION OF THE OUTSTANDING TOWN OF ORO VALI Y.Y EXCISE TAX REVENUE OBLIGATIONS, SERIES 2000, MUNICIPAL PROPERTY CORPORATION EXCISE TAX REVENUE BONDS, SERIES 2001 AND MUNICIPAL PROPERTY CORPORATION EXCISE TAX REVENUE REFUNDING BONDS, SERIES 2003; AUTHORIZING THE EXECUTION OF ONE OR MORE ESCROW AGREEMENTS FOR THE SAFEKEEPING AND HANDLING OF SECURITIES AND MONEYS TO BE USED TO PAY THE OBLIGATIONS AND BONDS BEING DEFEASED; AND RATIFYING THE ACTIONS OF ALL OFFICERS AND AGENTS OF THE TOWN AND OTHERS WITH RESPECT TO THE TRANSFER, PREPAYMENT, DEFEASANCE AND REDEMPTION. 'WHEREAS,the Town of Oro Valley(the.'Town")has issued its Excise Tax Revenue Obligations, Series 2000 in the original principal amount of$2,580,000(the"Series 2000 Obligations");and WHEREAS, the Town of Oro Valley Municipal Property Corporation (the "Corporation") has issued its Excise Tax Revenue Bonds, Series 2001 in the original principal amount of$9,010,000 (the "Series 2001 Bonds");and WHEREAS, the Corporation has issued its Excise Tax Revenue Refunding Bonds, Series 2003 in the original principal amount of$15,750,000(the"Series 2003 Bonds");and WHEREAS, the Series 2000 Obligations were executed and delivered by Wells Fargo Bank,N.A. (the "Trustee")as trustee under the Trust Agreement dated as of November 1, 2000 (the "2000 Indenture")by and between the Town and the Trustee;and WHEREAS,the Series 2001 Bonds and Series 2003 Bonds were executed and delivered by the Trustee(as successor to Norwest Bank Arizona, N.A.) as trustee under the Trust Indenture dated as of April 1, 1996 (the "1996 Indenture") between die Corporation and the Trustee (as successor trustee to Norwest Bank Arizona,N.A.),as supplemented by the First Supplement to Trust Indenture dated as of June 1, 1999, the Second Supplement to Trust Indenture, dated as of April 1, 2001 (the "Second Supplement"), the Third Supplement to Trust Indenture, dated as of December 1, 2003 (the "Third Supplement") and the Fourth Supplement to Trust Indenture, dated as of April 1,2007 (the "Fourth Supplement"and,together with the Trust Indenture, the First Supplement,the Second Supplement and the Third Supplement,the"Indenture"); and WHEREAS, such Series 2000 Obligations are secured by a lien on the payments made by the Town pursuant to the terms of the Purchase Agreement dated as of November l, 2000 (the "2000 Purchase Agreement")which payments are secured by a lien on the Towns excise taxes,and C\Doo.atmb and OrmolpWcama OftOVALLFY1Locd BctAngirfammary Imam Ftle0OLKA k&S-Tawo of Oro valley Dduawoot Kaon 2010131130C 1 lawn of Oro Valley Atrnrury'r OfbocJca/0301 10 WHEREAS, such Series 2001 Bonds and Series 2003 are secured by rental payments made by the Town pursuant to the terms of the Lease-Purchase Agreement dated as of April 1, 1996(the"1996 Lease-Purchase Agreement"), as amended by the First Amendment to Lease-Purchase Agreement,dated as of June 1, 1999 (the "First Amendment"),the Second Amendment to Lease-Purchase Agreement, dated as of April 1, 2001 (the "Second Amendment"), the Third Amendment to the Lease-Purchase Agreement, dated as of October 1, 2003 (the "Third Amendment"), and the Fourth Amendment to the Lease-Purchase Agreement, dated as or Aprii 1, '2007(the ''Fourth Amendment" and,together with the Lease-Purchase Agreement, the First Amendment, the Second Amendment and the Third Amendment, the "Town Lease") which lease payments are secured by a lien on the Town's excise taxes;and WHEREAS,the Mayor and Council of the Town find that the Town will reduce its financial liability and achieve greater annual cash flow if an amount is transferred from the Town's general fund and the Town's water utility enterprise fund to the Trustee pursuant to the terms of the Escrow Agreement(as defined in Section 5 hereof), which is sufficient to pay at maturity or defease and redeem in advance of maturity or mandatory redemption date, all of a portion of the (1) Series 2000 Obligations maturing on July 1 of the years 2010 and 2011 (the "Series 2000 Obligations Being Defeased"), (ii) Series 2001 Bonds maturing or subject to redemption on July 1 of the years 2010 through and including 2014(collectively the"2001 Bonds Being Defeased") and(iii)Series 2003 Bonds maturing on July l*of the years 2010 through and including 2019(collectively the"Series 2003 Bonds Being Defeased" and together with the Series 2001 Bonds Being Defeased and the Series 2000 Obligations Being Defeased,the"Bonds Being Defeased"). NOW, THEREFORE, BE IT RESOLVED by the Mayor and Council of the Town of Oro Valley, Arizona,that: Section 1. Authorization. Th©Mayor and Council hereby authorize and direct the Finance Director to transfer from the Town's general fund and water utility enterprise fund an aggregate amount not to exceed $8,125,000 to an irrevocable trust fund held by the Trustee, an amount which is sufficient, together with any earnings thereon, to pay, in part or in full, the outstanding Series 2000 Obligations Being Defeased , Series 2001 Bonds Being Defeased and Series 2003 Bonds Being Dcfeased and the costs and expenses of the transaction. Any amounts remaining after payment of all amounts due shall be paid over to the Town. The Town's Finance Director is authorized and directed to determine the amount of each maturity of the Bonds Being Defeased to be defeased and the amounts from the Town's general fund and water utility enterprise fund that shall be transferred to the Trustee for such defeasance. Section 2. Redemption of Certain Series2000 C?bl atior�s. Pursuant to Section 14 of the 2000 Purchase Agreement and Section 3 of the 2000 Indenture, the Finance Director is hereby authorized and directed to cause the redemption of the outstanding Series 2000 Obligations Being Defeased and shall give written notice to thereof to the Trustee and direct the Trustee to take all actions necessary to cause such redemption. Section 3. Redemption of Certain Series 2001 Bond) Series 2003 Bonds. Pursuant to Section 4.04 of the 1996 Indenture,the Corporation is hereby directed to pay or redeem all or that portion of the outstanding Series 2001 Bonds and Series 2003 Bonds that are selected by the Finance Director to constitute the Series 2001 Bonds Being Defeased and Series 2003 Bonds Being Defeased. The Corporation shall adopt a resolution to redeem the Series 2001 Bonds Being Defeased and Series 2003 Bonds Being Defeased and shall give written notice thereof to the Trustee and direct the Trustee to take all actions necessary to cause such redemption. G 1Doe amiu and Shcag,lnlornos OROVALL EY,Loml SabctotTea ponny tnecrnet F�IOLIUIRE3-Tows of Oro lhlky Defausincr kcsaiu n 20I D 13�DOC2 Tvw d Ow Valk7 Anonry'.Of cdcd0)0110 Section 4. Application of Moseys. The proceeds of the transfer of funds, after payment of the costs and expenses of the transaction, shall be applied by the Finance Director to create one or more irrevocable trusts for the benefit of the owners of the Bonds Being Defeased. Amounts credited to the trust, other than any beginning cash balance,shall be invested immediately by the Trustee in noncallable, direct obligations issued by or unconditionally guaranteed by the United States of America(hereafter"Government Obligations")the maturing principal of and interest on which,together with any beginning cash balance, will be sufficient to pay the principal of and interest on the Bonds Being Defeased as the same become due or are called for redemption. The Finance Director is hereby authorized to cause the selection and purchase of the Government Obligations. Section 5. Escrow A2reemert. The Finance Director is hereby authorized and directed to execute one or more irrevocable escrow agreements or depository trust agreements (collectively, the "Escrow Agreement")with the Trustee or a bank authorized to do trust business in the State of Arizona or any successors or assigns,with respect to the safekeeping and handling of the moneys and securities to be held in trust for the payment of the Bonds Being Defeased. The Escrow Agreement shall be in substantially the form on file with the Town Clerk, with such additions, deletions and modifications as shall be approved by the officer executing and delivering the same on behalf of the Town and such execution and delivery shall constitute conclusive evidence of the approval of such official of any departures from the form on file with the Clerk. If for any reason the Escrow Agreement is cancelled or declared void or illegal or is incapable of being performed due to any impediment of any nature whatsoever, or the Trustee is unable to perform its duties,the Town shall appoint or engage a successor trustee or escrow agent to act in the place of the Trustee, if such successor be ready, willing and able to assume the role of escrow agent under such Escrow Agreement or an agreement similar in form and substance. During any period when no Trustee is in place,the Finance Director shall act as the escrow agent. Scctisn 6. Resolution a Contact. This resolution shall constitute a contract between the Town and the Trustee for and the owners of the Bonds Being Defeased and shall not be repealed or amended in any manner which would impair, impede or lessen the rights of the owners of the Bonds Being Defeased then outstanding. Section 7. Federal Tax Law Covenatttt. As authorized by Arizona Revised Statutes,Title 35,Chapter 3,Article 7, and in consideration of retaining the exclusion of interest income on the Bonds Being Defeased from gross income for federal income tax purposes, the Town covenants with the owners from time to time of the Bonds Being Defeased to neither take nor fail to take any action which action or failure to act is within its power and authority and would result in interest income on the Bonds Being Defeased becoming subject to inclusion as gross income for federal income tax purposes under either laws existing on the date of issuance of the Bonds Being Defeased or such laws as they may be modified or amended. The Town agrees that it will comply with such requirement(s) and will take any such action(s) as in the opinion of Gust Rosenfeld P.L.C. ("bond counsel") are necessary to prevent interest income on the Bonds Being Defeased becoming subject to inclusion in gross income for federal income tax purposes. Such requirements may include but are not limited to making further specific covenants; making truthful certifications and representations and giving necessary assurances; complying with all representations, covenants and assurances contained in certificates or agreements to be prepared by bond C taoou o,,b and Sciaawklemas OROV LL0Y1Loc d Srola.plTampasary Immo FAar OL KA\RES-To w+of Oto Valley Delkesm c Radraoo 1010 137 DOC 3 Tawe at Oro Valk,Atiarrey',Ot�dd01UI 10 counsel;to pay to the United States of America any required amounts representing rebates of investment income relating to the Bonds Being Defeased;filing forms,statements and supporting documents as may be required under the federal tax laws; limiting the term of and yield on investments made with moneys relating to the Bonds Being Defeased;and limiting the use of the proceeds of the transfer of funds. Sermon 8. Severability. If any section, paragraph, subdivision, sentence, clause or phrase of this resolution is for any reason held to be illegal or unenforceable, such decision will not affect the validity of the remaining portions of this resolution. The Mayor and Council members hereby declare that this resolution would have been enacted and each and every other section, paragraph, subdivision, sentence,clause or phrase hereof and authorized the transfer of funds and defeasance and redemption of the Bonds Being Defeased pursuant hereto irrespective of the fact that any one or more sections, paragraphs, subdivisions,sentences,clauses or phrases of this resolution may be held illegal,invalid or unenforceable. Section 9. Ratification, of Actions. All actions of the officials and agents of the Town, the Corporation and the Trustee, which are in conformity with the purposes and intent of this resolution and in furtherance of the transfer,prepayment, defeasance and redemption of the Bonds Being Defeased as contemplated by this resolution,shall be and are hereby ratified,confirmed and approved. The proper officials and agents of the Town,the Corporation and the Trustee are hereby authorized and directed to do all such acts and things and to execute and deliver all such documents as may be necessary to carry out the terms and intent of this resolution. PASSED AND ADOPTED by the Council of the Town of Oro Valley,Arizona,on March 3,2010. TOWN OF 0110 VALLEY i‘,70seep. ,0400.2;e_________1 Paul H.Loomis,Mayor ATTEST-t APPROVED AS TO FORM: (t-i.,,,f-<.e.:- _pc.,_____,..< Ka E. Cuvelier, Town Clerk Tobin Rosen,Town Attorney C Owen..bed 8rantelskTr os OR O VAL1'Y1L.o.1 Saaogacmpo*tvy!memo FW&O U ARE S•Tome of Oro Vary Ddcsw't Ramolopoi m 10 h)D&C 4 Taw of Oro Valle,IVav,ur''s Off t/aJ03 0110 CERTIFICATION L Kathryn P. Cuvelier, the duly appointed and acting Town Clerk of the Town of Oro Valley, Arizona do hereby certify that the above and foregoing Resolution No. (R) 10- /3 was duly passed and adopted by the Mayor and the Council of the Town of Oro Valley,Arizona,at a meeting held on the 3rd day of March,2010,and the vote was (n aye's and nay's and that the Mayor and 3 Council members were present thereat. &yn(ri-E.(64-444A.44-4-A-uvelier, Clerk,Town of Oro Palley,Arizona C .,,d SrttnogAlonoe OROVALLEY\l.owJ Se+vgIITemporary Interne,Files3OLL&\LLS-Town of Oro valley Deafmanae R.aolueoan 2010 13)DOC 5 Tom of Oro Valk),Amami,0 fruks,0101 ID Town or Oro Valley,Arizona 2010 Bond Defeasance Calendar :� • •t February 24,2010 Town Council authorization to Town,S&Y move forward with bond defeasance Resolution. March 3,2010 Council approval of Town,GR,S&Y Resolution authorizing the defeasance. Week of March 8t MPC Board meeting to MPC Board,GR,S&Y approve the defeasance of 2001 and 2003 Bonds(along with 2001 Obligations). Open(to be determined) Notify bond insurance Town,GR company of intention to defease. April 29th Close defeasance. Town wires Town,S&T,GR proceeds from General Fund and Water Utility Fund to Trustee for deposit into the Escrow Agreement. Week of May 3"d Trustee mails early 1 Wells Fargo,Town redemption notices to 2000 obligation holders' (no more than 60 or less than 30 days prior to July 1, 2010). Week of May 3rd File continuing disclosure Town,S&Y,GR updates regarding defeasance with Electronic Municipal Market Access(EMMA). I _Week of May l0117th Update all records to reflect S&Y,Town the defeasance. Week of June 1st Deliver transcript to financing GR team participants. - _ _ MPC RESOLUTION RESOLUTION NO. 1.0-01 RESOLUTION AUTHORIZING AND PROVIDING FOR THE DEFEASANCE AND REDEMPTION OF THE OUTSTANDING TOWN OF ORO VALLEY MUNICIPAL PROPERTY CORPORATION EXCISE TAX REVENUE BONDS, SERIES 2001 AND EXCISE TAX REVENUE REFUNDING BONDS SERIES 2003; RATIFYING THE ACTIONS OF ALL OFFICERS AND AGENTS OF THE CORPORATION AND OTHERS WITH RESPECT TO THE DEFEASANCE AND REDEMPTION. WHEREAS,the Town of Oro Valley Municipal Property Corporation (the "Corporation") has issued its Excise Tax Revenue Bonds, Series 2001 in the original principal amount of$9,010,000 (the "Series 2001 Bonds"); and WHEREAS, the Corporation has issued its Excise Tax Revenue Refunding Bonds, Series 2003 in the original principal amount of$15,750,000 (the "Series 2003 Bonds" and together with the Series 2001 Bonds,the"Bonds");and WHEREAS, the Bonds were executed and delivered by Wells Fargo Bank, N.A. (as successor to Norwest Bank Arizona, N.A.) (the "Trustee") as trustee under the Trust Indenture dated as of April 1, 1996 (the "1996 Indenture")between the Corporation and the Trustee, as supplemented by the First Supplement to the Trust Indenture dated as of June 1, 1999, the Second Supplement to Trust Indenture, dated as of April 1, 2001 (the "Second Supplement"),the Third Supplement to Trust Indenture, dated as of October 1, 2003 (the "Third Supplement") and the Fourth Supplement to Trust Indenture, dated as of April 1, 2007 (the "Fourth Supplement" and, together with the Trust Indenture, the First Supplement, the Second Supplement and the Third Supplement,the "Indenture"); and WHEREAS, such Bonds are secured by rental payments made by the Town of Oro Valley, Arizona(the "Town")pursuant to the terms of the Lease-Purchase Agreement dated as of April 1, 1996 (the "1996 Lease-Purchase Agreement"), as amended by the First Amendment to Lease-Purchase Agreement, dated as of June 1, 1999 (the "First Amendment"), the Second Amendment to Lease-Purchase Agreement, _ dated as of April 1, 2001 (the "Second Amendment"), the Third Amendment to the Lease-Purchase Agreement, dated as of October 1, 2003 (the "Third Amendment"), and the Fourth Amendment to the Lease-Purchase Agreement, dated as of April 1, 2007 (the "Fourth Amendment" and, together with the Lease-Purchase Agreement, the First Amendment, the Second Amendment and the Third Amendment, the "Town Lease");and WHEREAS, the Mayor and Council of the Town have, pursuant to Section 4.04 of the 1996 Indenture, directed the Corporation to establish an irrevocable trust to pay at maturity or redeem on July 1, 2011 all of the then outstanding Series 2001 Bonds, which mature on July 1 of the years 2010 through 2013, inclusive(the "Series 2001 Bonds Being Defeased"); and WHEREAS, the Mayor and Council of the Town have, pursuant to Section 4.04 of the 1996 Indenture, directed the Corporation to establish an irrevocable trust to pay at maturity or redeem all or a portion of the then outstanding Series 2003 Bonds,which mature or constitute a mandatory redemption on July 1 of the years 2010 through 2019, inclusive (the "Series 2003 Bonds Being Defeased" and together with the Series 2001 Bonds Being Defeased,the "Bonds Being Defeased"); and SWR:pr2 1187749.2 3/5/2010 1 MPC RESOLUTION WHEREAS,the Mayor and Council have authorized the transfer of funds to the Trustee to defease the Bonds Being Defeased,and to pay the costs of the transaction; and WHEREAS,the Corporation wishes to aid the Town in reducing its financial liability. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE TOWN OF ORO VALLEY MUNICIPAL PROPERTY CORPORATION: Section 1. Authorization. The Corporation hereby authorizes and directs the Trustee to accept the transfer from the Town of an amount which is sufficient,together with other amounts held by the Trustee and available therefor, to defease the outstanding Bonds Being Defeased, to pay at maturity or redeem such Bonds Being Defeased on the dates set forth in the Escrow Agreement (as defined hereafter) and to pay the costs and expenses of the transaction. Section 2. Application of Moneys. The proceeds of the transfer of funds, after payment of the costs and expenses of the transaction, shall be applied by the Trustee to create one or more irrevocable trusts for the benefit of the owners of the Bonds Being Defeased. Amounts credited to the trust, other than any beginning cash balance, shall be invested immediately by the Trustee in noncallable, direct obligations issued by or unconditionally guaranteed by the United States of America (hereafter "Government Obligations") the maturing principal of and interest on which, together with any beginning cash balance, will be sufficient to pay the principal of and interest on the Bonds Being Defeased as the same become due or are called for redemption. Any amounts remaining after payment of all amounts due shall be paid over to the City. Section 3. Redemption of Bonds. All of the outstanding Bonds Being Defeased, not paid at maturity, are hereby irrevocably ordered to be called for redemption. Specifically,the Series 2001 Bonds not paid at maturity shall be called for redemption on July 1, 2011 and the Series 2003 Bonds on July 1, 2013. The Trustee will cause notice of redemption to be given as required by the Indenture. Section 4. Escrow Agreement. If required, the Finance Director of the Town, Board President or any member of the Board is hereby authorized and directed to execute one or more irrevocable escrow agreements or depository trust agreements (collectively, the "Escrow Agreement") with the Trustee or a bank authorized to do trust business in the State of Arizona or any successors or assigns, with respect to the safekeeping and handling of the moneys and securities to be held in trust for the payment of the Bonds Being Defeased. The Escrow Agreement shall be in substantially the form on file, with such additions, deletions and modifications as shall be approved by the officer executing and delivering the same on behalf of the Town and such execution and delivery shall constitute conclusive evidence of the approval of such official of any departures from the form on file. If for any reason the Escrow Agreement is cancelled or declared void or illegal or is incapable of being performed due to any impediment of any nature whatsoever, or the Trustee is unable to perform its duties, the Town shall appoint or engage a successor trustee or escrow agent to act in the place of the Trustee, if such successor be ready, willing and able to assume the role of escrow agent under such Escrow Agreement or an agreement similar in form and substance. During any period when no Trustee is in place, the Finance Director shall act as the escrow agent. SWR;pr2 1187749.2 3/5/2010 2 MPC RESOLUTION Section 5. Severability. If any section, paragraph, subdivision, sentence, clause or phrase of this resolution is for any reason held to be illegal or unenforceable, such decision will not affect the • validity of the remaining portions of this resolution. The President and Board members hereby declare that this resolution would have been enacted and each and every other section, paragraph, subdivision, sentence, clause or phrase hereof and authorized the transfer of funds and defeasance and redemption of the Bonds Being Defeased pursuant hereto irrespective of the fact that any one or more sections, paragraphs, subdivisions, sentences,clauses or phrases of this resolution may be held illegal, invalid or unenforceable. Section 6. Ratification of Actions. All actions of the officials and agents of the Corporation, the Town and the Trustee which are in conformity with the purposes and intent of this resolution and in furtherance of the defeasance and redemption of the Bonds Being Defeased as contemplated by this resolution shall be and are hereby ratified, confirmed and approved. The proper officials and agents of the Corporation, the Town and the Trustee are hereby authorized and directed to do all such acts and things and to execute and deliver all such documents as may be necessary to carry out the terms and intent of this resolution. SWR:pr2 1187749.2 3/5/2010 3 MPC RESOLUTION PASSED AND ADOPTED by the Board of The Town of Oro Valley Municipal Property Corporation on March 11,2010 ATTEST: President Secre,-.' APPROVED AS TO FORM: -LA-3 Special Counsel • CERTIFICATION Donald G. Tay lo,the duly appointed and acting Secretary of the Town of Oro Valley Municipal Property Corporation, do hereby certify that the above and foregoing Resolution No. _10-01 _ was duly passed by the Board of Directors of the Town of Oro Valley Municipal Property Corporation at a regularly scheduled meeting held on March 11, 2010 and the vote was 3 aye's and 0 nay's and 0 absent,that the President and Secretary were present and therat. Secretary,Town of Oro ey Municipal Property Corporation SWR:pr2 1187749.2 3/5/2010 4 ESCROW AGREEMENT This Escrow Agreement, dated April 29, 201.0 (the "Escrow Agreement"), by and between the TOWN OF ORO VALLEY, ARIZONA (the "Town"); and WELLS FARGO BANK, N.A.,a national banking association authorized to do trust business in the State of Arizona,as escrow agent (the "Escrow Agent") and as trustee of certain of the obligations and bonds being defeased; WITNESSETH: WHEREAS, the following Excise Tax Revenue Obligations, Series 2000 of the Town of Oro Valley, Arizona have been issued and are currently outstanding: Sinking Fund Redemption Redemption or Maturity Premium on Maturity Being Principal or Bonds Being Issue Original Defeased or Amount Redemption Defeased (Dated) Name of Issue and Principal Paid at Being Date (%of Date Registrar and Paying Agent Amount Maturity Defeased (July 1) principal) 11/1/00 Excise Tax Revenue Obligations, $2,580,000 2010 $115,000 2010 N/A Series 2000(Wells Fargo Bank, 2011* 120,000 2010 1% N.A.) . I, *mandatory call date of 2014 term bond (collectively the obligations listed above are referred to as the "Town Obligations Being Defeased"); and WHEREAS, the following Excise Tax Revenue Bonds, Series 2001 of the Town of Oro Valley Municipal Property Corporation have been issued and are currently outstanding: Sinking Fund Redemption Redemption or Maturity Premium on Maturity Being Principal or Bonds Being Issue Original Defeased or Amount Redemption Defeased (Dated) Name of Issue and Principal Paid at Being Date (%of Date Registrar and Paying Agent Amount Maturity Defeased (July 1) principal) 04/1/01 Excise Tax Revenue Bonds,Series $9,010,000 2010 $400,000 2010 N/A 2001 (Wells Fargo Bank,N.A.) 2011 425,000 2011 N/A 2012 440,000 2011 1% 2013 465,000 2011 1% (collectively the bonds listed above are referred to as the "Series 2001 MPG Bonds Being Defeased"); and SWR:dth 1189497.7 4/23/2010 1 WHEREAS, the following Excise Tax Revenue Refunding Bonds, Series 2003 of the Town of Oro Valley Municipal Property Corporation have been issued and are currently outstanding: Sinking Fund Redemption Redemption or Maturity Premium on Maturity Being Principal or Bonds Being issue Original Defeased or Amount Redemption Defeased (Dated) Name of Issue and Principal Paid at Being Date (%of Date Registrar and Paying Agent Amount Maturity Defeased (July I) principal) 12/1/03 Excise Tax Revenue Refunding $15,750,000 2010 **$145,000 2010 N/A Bonds,Series 2003(Wells Fargo 2011 **420,000 2011 N/A Bank,N.A.) 2012 **480,000 2012 N/A 2013 **510,000 2013 N/A 2014 **705,000 2013 N/A 2015 **550,000 2013 N/A 2016 **575,000 2013 N/A 2017 **595,000 2013 N/A 2018 **470,000 2013 N/A 2019 **480,000 2013 N/A ** partial amount of maturity allocated (collectively the bonds listed above are referred to as the "Series 2003 MPC Bonds Being Defeased" and together with the Series 2001 MPC Bonds Being Defeased, the "MPG Bonds Being Defeased" and the together with the Town Obligations Being Defeased, the "Bonds Being Defeased"); and WHEREAS, it is proposed that the Bonds Being Defeased be paid at maturity or called for redemption prior to maturity as set forth above; and WHEREAS, on March 3, 2010, the Mayor and Council of the Town adopted a resolution (the "Town Resolution"), authorizing the transfer from the Town's general fund and water utility enterprise fund, to a trust fund to be created, to provide funds to be used to pay at maturity or call for early redemption the Bonds Being Defeased; and WHEREAS, on March 11, 2010, the Municipal Property Corporation of the Town adopted a resolution (the "MPG Resolution"), authorizing the lease prepayments received from the Town to be deposited to a trust fund to be created to provide funds to be used to pay at maturity or call for early redemption the MPC Bonds Being Defeased; and WHEREAS, it has been proposed that the Escrow Agent serve as the escrow agent with respect to managing the trust fund to be created; and WHEREAS, the Escrow Agent is the trustee for the Town Obligations Being Defeased and the MPC Bonds Being Defeased; and WHEREAS, the Town will deposit the transferred funds with the Escrow Agent and the Escrow Agent will be instructed herein to purchase certain obligations of the United States of America which, together with the initial cash deposit, will be used to pay, when due, the principal, interest and redemption premium,if any, on the Bonds Being Defeased; and SWR:dlh 1189497.7 4/23/2010 2 WHEREAS, the Resolution and the MPC Resolution authorizes and directs the execution of an irrevocable escrow agreement with the Escrow Agent with respect to the safekeeping and handling of the moneys and securities to be held in trust for the payment of the Bonds Being Defeased; and WHEREAS, the Escrow Agent agrees to accept and administer the trust created hereby; NOW, THEREFORE, in consideration of the mutual covenants, conditions and agreements hereinafter set forth it is hereby agreed as follows: Section 1. The Town will cause to be deposited with the Escrow Agent the transferred funds in the amount of$7,460,466.28. Section 2. The Escrow Agent shall hold the moneys so deposited, all investments made with such moneys and all earnings from investment and reinvestment of such moneys and all other moneys received by the Escrow Agent from the Town hereunder as a special fund and separate trust account separate from all other funds and investments deposited with the Escrow Agent (the "Trust Account"). All moneys, all investments with such moneys and all earnings from investment of such moneys in each sub-account shall be segregated from each other sub-account and shall be accounted for separately. Notwithstanding the foregoing, the Trust Account shall not include any amounts held to pay the costs and expenses incurred with respect to this transaction. Section 3. Except for the initial cash balance and the amounts held to pay the costs and expenses of this transaction, the moneys deposited shall be immediately invested in direct noncallable obligations issued by the United States of America or which are unconditionally guaranteed by the United States of America("Government Obligations") as follows: (a) Town Obligations Being Defeased Subaccount: $242,083.00 of the amount deposited with the Escrow Agent shall be applied to create a portfolio of Government Obligations as described in Exhibit A-1 hereto. The sum of $0.18 shall be held in trust by the Escrow Agent as an initial cash balance as described in Exhibit A-1 hereto. (b) Series 2001 MPC Bonds Being Defeased Subaccount: $1,830,763.00 of the amount deposited with the Escrow Agent shall be applied to create a portfolio of Government Obligations as described in Exhibit A-2 hereto. The sum of $0.38 shall be held in trust by the Escrow Agent as an initial cash balance as described in Exhibit A-2 hereto. (b) Series 2003 MPC Bonds Being Defeased Subaccount: $5,361,069.00 of the amount deposited with the Escrow Agent shall be applied to create a portfolio of Government Obligations as described in Exhibit A-3 hereto. SWR:dlh 1189497.7 4/23/2010 3 The sum of $0.72 shall be held in trust by the Escrow Agent as an initial cash balance as described in Exhibit A-3 hereto. $26,550.00 will be held by the Escrow Agent and used to pay costs and expenses incurred with respect to this transaction pursuant to Section 16 hereof, and shall not be a portion of the Trust Account. The investment income from the Government Obligations of each sub-account shall be collected and received by the Escrow Agent and credited only to the applicable sub-account of the Trust Account. The Escrow Agent shall keep adequate records of such moneys, Government Obligations and investment earnings so as to permit the portfolio of each sub-account to be accounted for separately. Section 4. The parties recognize that amounts credited to each sub-account of the Trust Account in the respective portfolios set forth in Exhibits A-1, A-2 and A-3 and the initial cash balances are each, at the time of execution and delivery of this Agreement, subject to restrictions as to investment under the Internal Revenue Code of 1986, as amended (the "Code"), in order for the interest income on each series of the Bonds Being Defeased to be and remain excludable from gross income for purposes of federal income taxes. In order to comply with such currently applicable restrictions, and subject to the provisions of Section 5 hereof, the following provisions shall apply with respect to reinvestment of amounts credited to the Trust Account: (a) Amounts received as maturing principal of or interest on the Government Obligations credited to any sub-account portfolio prior to the date such amounts are to be used to pay principal of or interest or redemption premiums on the applicable series of Bonds Being Defeased are not to be reinvested. (b) Yields for each sub-account are to be calculated by means of an actuarial method of yield calculation whereby "yield" means that yield which when used in computing the present value of all payments of principal and interest and fees for qualified guarantees to be paid on the obligation produces an amount equal to the present value using the same discount rate of the aggregate issue price of the transferred funds as of the transfer date. The yield on investments must be computed by the use of semiannual interest compounding. (c) The purchase price of an obligation used in determining its yield must be the market price of the obligation on an established market. This means that a premium may not be paid to adjust the yield and that a lower interest rate than is usually paid may not be accepted. At the time of execution and delivery of this Agreement, if an obligation cannot be purchased on an established market or a bona fide bid price cannot be established at a yield that does not exceed the yield restriction applicable to the moneys to be invested, investments are limited to SLGS which yield zero percent. (d) Notwithstanding the foregoing, any amounts held in any sub-account of the Trust Account may be invested in investments having any yield if the parties hereto receive an opinion in form and substance satisfactory to them of bond counsel experienced in the field of municipal bonds whose opinions are generally accepted by purchasers of municipal bonds to the effect that such investment will not cause the applicable series of the Bonds Being Defeased to become arbitrage bonds within the meaning of Section 148 of the Code, and will not otherwise SWR:dlh 1189497.7 4/23/2010 4 cause the interest on the applicable series of the Bonds Being Defeased to become included as gross income for purposes of calculating federal income taxes. (e) Amounts received from reinvestment of maturing principal of and interest on Government Obligations in any sub-account prior to the date such amounts are to be used to make payments on the applicable series of the Bonds Being Defeased pursuant to this Section 4 to the extent not needed to provide for payments on the applicable series of the Bonds Being Defeased may be withdrawn from the applicable sub-account of the Trust Account and returned to the Finance Director and applied for the benefit of the Town in accordance with applicable law. Section 5. The Escrow Agent may sell or redeem investments held in any sub- account of the Trust Account in advance of their maturity dates and invest the proceeds of such sale or redemption or other moneys credited to the Trust Account in connection with such sale or redemption in Government Obligations only upon receipt of written instructions from the Finance Director to do so, and receipt by the parties hereto of: (a) An opinion in form and substance satisfactory to them of bond counsel experienced in the field of municipal bonds whose opinions are generally accepted by purchasers of municipal bonds to the effect that such action will not cause the interest on the Bonds Being Defeased to become "arbitrage bonds" within the meaning of Section 148 of the Code, and will not adversely affect the right of the Town to issue obligations the interest on which is excluded from gross income for federal income tax purposes; and (b) A report from a nationally recognized certified public accountant or firm of certified public accountants verifying the accuracy of the arithmetic computations of the adequacy of the proceeds from the liquidation together with any other moneys and the maturing principal of and interest on any Government Obligations to be credited to the applicable sub-account of the Trust Account in accordance with the Finance Director's instructions, to pay, when due, the principal of and interest and any redemption premiums on the applicable series of the Bonds Being Defeased as the same become due at maturity or upon prior redemption. Upon any such sale or redemption of investments and reinvestment any amounts not needed in the applicable sub-account of the Trust Account to provide for payment of the applicable series of the Bonds Being Defeased, as shown by the accountant's report discussed above may be withdrawn from the applicable sub-account of the Trust Account and returned to the Finance Director and applied for the benefit of the Town in accordance with applicable law. (c) The parties hereto acknowledge and agree that on the date the funds are transferred to the applicable sub-account of the Trust Account (the "Transfer Date"), the Escrow Agent is to receive the obligations referred to in Exhibits A-1, A-2 and A-3 hereto. If the Escrow Agent shall not receive any of the obligations (the "Failed Escrow Securities"), the Escrow Agent shall accept, as temporary substitutes cash or, at the same purchase price, other Government Obligations ("Substitute Escrow Securities") the payments on which are scheduled to provide, as determined by an independent certified public accountant, along with such cash, at least the same amounts of moneys on or before the same dates as the Failed Escrow Securities for which they are substituted. (The Escrow Agent may rely upon a report of a firm of certified public accountants that the condition in the preceding sentence is satisfied.) If Substitute Escrow Securities are delivered, thereafter, upon delivery to the Escrow Agent of Failed Escrow Securities together with any SWR:dlh 1189497.7 4/23/2010 5 amountsP aid thereon subsequent to the Transfer Date, the Escrow Agent shall return an amount of such cash and Substitute Escrow Securities, and any amount paid thereon subsequent to the Transfer Date, corresponding to the Failed Escrow Securities which the Substitute Escrow Securities replaced. Section 6. Any moneys credited to the Trust Account which are not invested in Government Obligations as provided herein shall be held as a demand deposit and shall be secured as deposits of public moneys. Section 7. The Escrow Agent shall make timely payments from the Trust Account to the Trustee for the Town Obligations Being Defeased, the Series 2001 MPC Bonds Being Defeased and the Series 2003 MPC Bonds Being Defeased in the amounts and on the dates sufficient to permit the payment when due of the principal of(at maturity or prior redemption as provided for herein) and interest and any redemption premiums on the applicable series of the Bonds Being Defeased as the same becomes due and payable. Unless otherwise directed by the Finance Director, in order to determine the amounts and the dates on which principal, interest and applicable premium is due on the applicable series of the Bonds Being Defeased, the Escrow Agent and the applicable Registrar may conclusively rely upon the debt service schedules with respect to the applicable series of.the Bonds Being Defeased as appear in the Verification Report prepared by Grant Thornton, LLP certified public accountants. Section 8. (a) The Escrow Agent shall cause notices of defeasance of the Town Obligations Being Defeased in substantially the form of Exhibit B-1 hereto and shall cause notices in substantially the form set forth in Exhibit C-1 regarding the Town Obligations Being Defeased to be mailed during the time periods set forth on the exhibit to be mailed to the registered owners of the Town Obligations Being Defeased, Wedbush Securities, Inc. (formerly Peacock, Hislop, Staley and Given, Inc.),the original purchaser, and Ambac Assurance Corporation, the bond insurer. (b) The Escrow Agent shall cause notices of defeasance of the Series 2001 MPC Bonds Being Defeased in substantially the form of Exhibit B-1 hereto to be mailed and shall cause notices in substantially the form set forth in Exhibit C-2 regarding the Series 2001 MPC Bonds Being Defeased to be mailed during the time period set forth on the exhibit to the registered owners of the Series 2001 MPC Bonds Being Defeased, Financial Guaranty Insurance Company, the bond insurer, and to two of the services listed on said notices. Additionally, the Escrow Agent shall cause the notices of advance refunding of. the Series 2001 MPC Bonds Being Defeased in substantially the form of Exhibit B-1 hereto to be mailed and shall cause notices in substantially the form set forth in Exhibit C-2 regarding the Series 2001 MPC Bonds Being Defeased to be mailed for receipt no later than the close of business on the second Business Day prior to mailing such notice above to the registered securities depositories listed on such notices. (c) The Escrow Agent shall cause notices of defeasance of the Series 2003 MPC Bonds Being Defeased in substantially the form of Exhibit B-1 hereto to be mailed and shall cause notices in substantially the form set forth in Exhibit C-3 regarding the Series 2003 MPC Bonds Being Defeased to be mailed during the time period set forth on the exhibit to the registered owners of the Series 2003 MPC Bonds Being Defeased, Ambac Assurance Corporation, the bond insurer, and to two of the services listed on said notices. Additionally, the Escrow Agent shall cause the SWR:dlh 1189497,7 4/23/2010 6 notices in substantially the form set forth in Exhibit C-3 regarding the Series 2003 MPC Bonds Being Defeased to be mailed during the time period set forth on the exhibit to the registered owners of the Series 2003 MPC Bonds Being Defeased, Ambac Assurance Corporation, the bond insurer, and to two of the services listed on said notices. Additionally, the Escrow Agent shall cause the notices of advance refunding of the Series 2003 MPC Bonds Being Defeased in substantially the form of Exhibit B-1 hereto to be mailed and shall cause notices in substantially the form set forth in Exhibit C-3 regarding the Series 2003 MPC Bonds Being Defeased to be mailed for receipt no later than the close of business on the second Business Day prior to mailing such notice above to the registered securities depositories listed on such notices. Section 9. If at any time or times there are insufficient funds on hand in the Trust Account for the payment of the principal of and interest and redemption premiums on the Bonds Being Defeased as the same becomes due, or for the payment of the fees and expenses of the Escrow Agent, the Escrow Agent shall promptly notify the Town of such deficiency and the Town shall immediately pay such amount to the Escrow Agent. Moneys in a sub-account shall be used only to pay the principal of and interest and redemption premium on the applicable series of the Bonds Being Defeased for which the sub-account was established. Section 10. On or before each August 15, the Escrow Agent shall submit to the Town a report covering all moneys it has received and all payments it has made under the provisions hereof during the six-month period ending on the preceding July 1 and January 1 (except for the first report which will cover the period from the date on which the transfer was made to January 1, 2011). Each such report shall also list all investments and moneys on deposit with the Escrow Agent hereunder as of the date of the report. Section 11. For services hereunder, the Escrow Agent shall be entitled to the initial fee of $1,550.00, such fees being due upon the initial deposit of moneys with the Escrow Agent. The Escrow Agent will bill the Town prior to April 1, 2011, and prior to each June first thereafter its annual fees for services rendered hereunder pursuant to Exhibit E attached hereto. Except for the amounts shown on Exhibit E, the Escrow Agent shall have no lien or right of setoff on moneys or investments in the Trust Account for payment of its fees and expenses. Section 12. When all amounts payable on each series of the Bonds Being Defeased have become due and the Escrow Agent has on deposit all moneys necessary for the payment of such amounts, and in any event on the business day preceding the date on which the last of the Bonds Being Defeased matures or is to be redeemed, the Escrow Agent shall transfer all moneys and investments credited to the Trust Account and not needed to make payments on the Bonds Being Defeased to the Town. Section 13. The parties recognize that the owners of each applicable series of the Bonds Being Defeased have a beneficial vested interest in the moneys and investments in the applicable sub-account of the Trust Account, and held in trust hereunder and that the transfer shall be made in reliance upon the irrevocable character of the trust created hereby. Except as provided in Section 18 hereof, this Agreement shall not be revoked, and shall not be amended in any mariner which may adversely affect the rights herein sought to be protected, until the provisions of this agreement have been fully carried out. SWR:dIh 1189497.7 4/23/2010 7 Section 14. The Escrow Agent shall be under no obligation to inquire into or be otherwise responsible for the performance or nonperformance by the Town of any of its obligations or to protect any of the rights of the Town under any of the proceedings with respect to the Bonds Being Defeased or the transfer of funds. The Escrow Agent shall not be liable for any act done or step taken or omitted by it or for any mistake of fact or law or for anything which it may do or refrain from doing except for its negligence or its default in the performance of any obligation imposed upon it hereunder. The Escrow Agent shall not be liable or responsible for any loss resulting from any investment made pursuant to this agreement in compliance with the provisions hereof. Section 15. The Town shall have the right to audit the books, records and accounts of the Escrow Agent insofar as they pertain to the trust created hereunder. Section 16. The Escrow Agent is hereby authorized and directed to pay, solely from moneys deposited with the Escrow Agent from the transfer of funds or other moneys lawfully available, the costs and expenses of the transfer and of creating and implementing the trust created hereby as set forth in Exhibit D hereto. Amounts deposited with the Escrow Agent for such purpose shall be held uninvested in a separate account and shall not constitute a part of the Trust Account created with respect to the Bonds Being Defeased. Any moneys held by the Escrow Agent to pay the costs and expenses of the transaction as set forth in Exhibit D attached hereto and not used for such purpose will be returned to the Town on October 1, 2010. Section 17. Neither this Agreement nor the trust created hereunder may be assigned by the Escrow Agent without the prior written consent of the Town unless the Escrow Agent is required by law to divest itself of its interest in its trust department or unless the Escrow Agent sells or otherwise assigns all or substantially all of its trust business in which event the trust shall be continued by the Escrow Agent's successor in interest. Any entity into which Escrow Agent is merged or with which Escrow Agent is consolidated shall assume the duties and obligations of Escrow Agent hereunder without execution of additional documentation or notice to any other party. Section 18. If any section, paragraph, subdivision, sentence, clause or phrase hereof shall for any reason be held illegal or unenforceable, such decision shall not affect the validity of the remaining portions hereof. The parties hereby declare that they would have executed this Agreement and each and every other section, paragraph, subdivision, sentence, clause and phrase hereof, irrespective of the fact that any one or more sections, paragraphs, subdivisions, sentences, clauses or phrases hereof may be held to be illegal, invalid or unenforceable. If any provision hereof contains an ambiguity which may be construed as either valid or invalid, the valid construction shall be adopted. Section 19. This Agreement shall be governed exclusively by the provisions hereof and by the applicable laws of the State of Arizona. This Agreement expresses the entire under- standing and all agreements of the parties hereto with each other with respect to the subject matter hereof and no party hereto has made or shall be bound by any agreement or any representation to any other party which is not expressly set forth in this Agreement. Section 20. This Agreement may be executed in several counterparts, each of which shall be an original, but all of which together shall constitute but one instrument. SWR:dlh 1189497.7 4/23/2010 8 Section 21. The Town hereby gives notice to the Escrow Agent that this Agreement is subject to the provisions of Section 38-511, Arizona Revised Statutes, as amended, to the extent applicable by law. Section 22. To the extent applicable under A.R.S. § 41-4401, the Escrow Agent and its subcontractors warrant compliance with all federal immigration laws and regulations that relate to their employees and compliance with the E-verify requirements under A.R.S. § 23-214(A). The Escrow Agent's, or a subcontractor's, breach of the above-mentioned warranty shall be deemed a material breach of this Contract and may result in the termination of the Contract by the Town. The Town retains the legal right to randomly inspect the papers and records of the Escrow Agent and its subcontractors who works on the Contract to ensure that the Escrow Agent and its subcontractors are complying with the above-mentioned warranty. The Escrow Agent and its subcontractors warrant to keep such papers, information, and . records necessary to verify compliance with the above-mentioned warranty (collectively, the "Information") open for random inspection by the Town during the Escrow Agent's normal business hours. The Escrow Agent and its subcontractors shall reasonably cooperate with the Town's random inspections including granting the Town entry rights onto its property to perform the random inspections, granting the Town access to, and use of, the Information, provided that, the Town agrees that it will use the Information solely for the purpose of verifying compliance with the E-verify requirements and the warranty of this Section 22 and, subject to the requirements of law, including the public records law of the State of Arizona, the Town will preserve the confidentiality of any information, records, or papers the Town views, accesses, or otherwise obtains during any and every such random inspection, including,without limitation, the Information. Section 23. Pursuant to A.R.S. §§ 35-391.06 and 35-393.06, the Escrow Agent certifies that it does not have a scrutinized business operation in Sudan or Iran. For the purpose of this Section the term"scrutinized business operations" shall have the meanings set forth in A.R.S. §§ 35-391 and/or 35-393, as applicable. If the Town determines that the Escrow Agent submitted a false certification, the Town may impose remedies as provided by law including terminating this Contract. SWR:d1h 1189497.7 4/23/2010 9 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. TOWN OF ORO VALLEY, ARIZONA By: Gil i414 'nance Director WELLS FARGO BANK,N.A., as Escrow Agent By: Title: Exhibits: A Lists of Escrowed Securities B Notice of Defeasance C Notices of Redemption D Fees and Expenses of Defeasance E Fees and Expenses of Escrow Agent SWR:dih 1189497.7 4/23/2010 10 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written.. TOWN OF ORO VALLEY,ARIZONA By: Finance Director WELLS FARGO BANK,N.A., as Escrow Agent By. y�r�C�( CA: k _. Title: Vt c.� .._ s �--�-` = . Exhibits: A Lists of Escrowed Securities B Notice of Defeasance C Notices of Redemption D Fees and Expenses of Defeasance E Fees and Expenses of Escrow Agent SWR:dih 1189497.7 4/23/2010 10 EXHIBIT A-1 GOVERNMENT OBLIGATIONS PURCHASED FROM PROCEEDS OF TRANSFER AND INITIAL CASH DEPOSIT FOR PAYMENT OF TOWN OBLIGATIONS BEING DEFEASED Security Type Maturity Date Principal Amount Coupon Rate SLGS — Certificate 7/1/2010 $242,083.00 0.130% Initial Cash Deposit $0.18. SWR:dlh 1189497.7 4/23/2010 A-1 EXHIBIT A-2 GOVERNMENT OBLIGATIONS PURCHASED FROM PROCEEDS OF TRANSFER AND INITIAL CASH DEPOSIT FOR PAYMENT OF SERIES 2001 MPC BONDS BEING DEFEASED Security Type Maturity Date Principal Amount Coupon Rate SLGS — Certificate 7/1/2010 $437,633.00 0.130% SLGS —Certificate 1/1/2011 27,015.00 0.280% SLGS —Note 7/1/2011 1,366,115.00 0.430% Initial Cash Deposit $0.38. SWR:d111 1189497.7 4/23/2010 A-2 EXHIBIT A-3 GOVERNMENT OBLIGATIONS PURCHASED FROM PROCEEDS OF TRANSFER AND INITIAL CASH DEPOSIT FOR PAYMENT OF SERIES 2003 MPC BONDS BEING DEFEASED Security Type Maturity Date Principal Amount Coupon Rate SLGS -- Certificate 7/1/2010 $234,859.00 0.130% SLGS —Certificate 1/1/2011 63,863.00 0.280% SLGS —Note 7/1/2011 483,983.00 0.430% SLGS--Note 1/1/2012 57,674.00 0.740% SLGS —Note 7/1/201.2 537,888.00 1.060% SLGS —Note 1/1/2013 48,738.00 1.340% SLGS —Note 7/1/2013 3,934,064.00 1.620% Initial Cash Deposit $0.72. SWR:dlh 1189497.7 4/23/2010 A-3 EXHIBIT B-1 NOTICE OF DEFEASANCE Redemption Maturities Premium on Being Principal Maturity or Bonds Being Issue Original Refunded Amount Redemption Refunded CUSIP (Dated Principal or paid at Being Date (%of No. Date) Name of Issue Amount Maturity Refunded (July 1) , principal) 68702JAK2 11/1/00 Town of Oro Valley,Arizona $2,580,000 2010 $1 15,000 2010 N/A 68702JAP 1 Excise Tax Revenue 2011* 120,000 2010 1% Obligations,Series 2000 68702LBH3 04/1/01 Town of Oro Valley $9,010,000 2010 $400,000 2010 N/A 68702LBJ9 Municipal Property 2011 425,000 2011 N/A 68702LBK6 Corporation Excise Tax 2012 440,000 2011 1% 68702LBL4 Revenue Bonds,Series 2001 2013 465,000 2011 1% 68702LBV2 12/1/03 Town of Oro Valley $15,750,000 2010 **$145,000 2010 N/A ' 68702LBW0 Municipal Property 2011 **420,000 2011 N/A 68702LBX8 Corporation Excise Tax 2012 **480,000 2012 N/A 68702LBY6 Revenue Refunding Bonds, 2013 **510,000 2013 N/A 68702LBZ3 Series 2003 2014 **705,000 2013 N/A 68702LCA7 2015 **550,000 2013 N/A 68702LCB5 2016 **575,000 2013 N/A 68702LCC3 2017 **595,000 2013 N/A 68702LCD1 2018 **470,000 2013 N/A 68702LCE9 2019 **480,000 2013 N/A *mandatory call dates of term bonds **partial amount of maturity allocated Such bonds and obligations are hereinafter referred to as the"Bonds Being Defeased". Notice is hereby given that the Bonds Being Defeased have been refunded prior to maturity and that an irrevocable trust for each series of the Bonds Being Defeased has been established and funded with obligations issued by or guaranteed by the United States of America in order to provide for the payment of the Bonds Being Defeased. The Bonds Being Defeased will be paid on the dates and in the amounts (plus interest accrued thereon to the redemption date),as set forth above. WELLS FARGO BANK,N.A. By Escrow Agent THIS IS NOT A REDEMPTION NOTICE This notice shall be provided by first class mail to all registered owners of the Bonds Being Defeased, the original purchaser, if applicable, and respective bond insurers and shall also be provided by telecommunication (followed by written notice) to the entities listed below, if applicable. Such notices shall be delivered within thirty (30) days following the transfer of moneys from the Town to the Escrow Agent in an amount sufficient to refund the Bonds Being Defeased. SWR:dlh 1189497.7 4/23/2010 B-1-1 List of Registered Securities Depositories, Services,Bond Insurers and Original Purchaser Registered Securities Depositories: The Depository Trust Company Midwest Securities Trust Company 55 Water Street,25th Floor Capital Structures-Call Notification New York,NY 10041 440 South LaSalle Street Chicago,IL 60605 Philadelphia Depository Trust Company Reorganization Division 1900 Market Street Philadelphia,PA 19103 Bearer bond calls: Financial Information, Inc,'s Financial Daily Called Bond Service Post Office Box 473 Jersey City,NJ 07303 Kenny Information Service's Notification Services 65 Broadway New York,NY 10006 Moody's Municipal and Government 7 World Trade Center New York,NY 10007 Attention: Municipal News Reports Standard&Poor's Called Bond Record 25 Broadway,3rd Floor New York,NY 10004 Bond Insurer: Town Obligations Being Defeased: Ambac Assurance Corporation One State Street Plaza, 15th Floor New York,NY 10004 Series 2001 MPC Bonds Being Defeased: Financial Guaranty Insurance Company 115 Broadway New York,NY 10006 Series 2003 MPC Bonds Being Defeased: Ambac Assurance Corporation One State Street Plaza, 15th Floor New York,NY 10004 Original Purchaser: Town Obligations Being Defeased: Wedbush Securities,Inc, (formerly Peacock,Hislop, Staley&Given,Inc,) 2999 N.44th Street, Suite 100 Phoenix,AZ 85018 SWR:dlh 1189497,7 4/23/2010 B-1-2 ]EXHIBIT C-1 NOTICE OF REDEMPTION of the following obligations: The July 1, 2011 mandatory redemption amount of the Town of Oro Valley, Arizona, Excise Tax Revenue Obligations, Series 2000 dated November 1, 2000,term bond maturing July 1, 2014. Notice is hereby given that the below-described principal amount of the above-referenced obligations outstanding have been called for redemption and will be redeemed on their respective maturity dates or call date as shown below. The maturity dates and amounts of the bonds to be redeemed are as follows: CUSIP Redemption Number Mandatory Call Date Principal Amount Interest Date 68702J (July 1) To Be Redeemed Rate Premium (July 1) AP1 2011 $ 120,000 5.2000% 1% 2010 Owners of the above-described bonds called for redemption are notified to present the same at the corporate trust office of Wells Fargo Bank, N.A., on or after the date set for redemption, where redemption will be made by payment of the face amount of each such bond plus accrued interest to the date set for redemption plus the respective premium set forth above. All bonds so called for redemption must be surrendered and no interest will be paid on the above-described bonds from and after the redemption date. DATED: WELLS FARGO BANK,N.A. By The following is not part of this notice: Not more than sixty nor less than thirty days prior to the date set for redemption, Wells Fargo Bank, N.A. shall cause a notice of any such redemption to be mailed to the registered owner of each bond to be redeemed at the address shown on the registration book maintained by Wells Fargo Bank,N.A., Wedbush Securties, Inc. (formerly Peacock, Hislop, Staley & Given, Inc.), the original purchaser, to the address listed below and Ambac Assurance Corporation,the bond insurer, to the address listed below. SWR:dlh 1189497.7 4/23/2010 C-1-1 Bond Insurer and Original Purchaser Bond Insurer: Ambac Assurance Corporation One State Street Plaza, 15th Floor New York, NY 10004 Original Purchaser: Wedbush Securities, Inc. (formerly Peacock, Hislop, Staley& Given, Inc.) 2999 N. 44th Street, Suite 100 Phoenix, AZ 85018 SWR:dlh 1189497.7 4/23/2010 Ci-2 EXHIBIT C-2 NOTICE OF REDEMPTION of the following obligations: Town of Oro Valley Municipal Property Corporation, Excise Tax Revenue Bonds, Series 2001, dated April 1, 2001,maturing July 1, 2012 and 2013. Notice is hereby given that the below-described principal amount of the above-referenced bonds outstanding have been called for redemption and will be redeemed on their respective maturity dates or call date as shown below. The maturity dates and amounts of the bonds to be redeemed are as follows: CUSIP Redemption Number Maturity Date Principal Amount Interest Date 68702L (July 1) To Be Redeemed Rate Premium (July 1) BK6 2012 $440,000 4.500% 1% 20.11 BL4 2013 465,000 4.625% 1% 2011 Owners of the above-described bonds called for redemption are notified to present the same at the corporate trust office of Wells Fargo Bank, N.A., on or after the date set for redemption, where redemption will be made by payment of the face amount of each such bond plus accrued interest to the date set for redemption plus the respective premium set forth above. All bonds so called for redemption must be surrendered and no interest will be paid on the above-described bonds from and after the redemption date. DATED: WELLS FARGO BANK,N.A. By The following is not part of this notice: Not more than sixty nor less than thirty days prior to the date set for redemption, Wells Fargo Bank, N.A. shall cause a notice of any such redemption to be mailed to the registered owner of each bond to be redeemed at the address shown on the registration book maintained by Wells Fargo Bank, N.A., Financial Guaranty Insurance Company, the bond insurer, .to the address listed below and to two of the services listed below. Additionally, Wells Fargo Bank, N.A. shall cause a notice of any such redemption to be mailed for receipt no later than the close of business on the second business day prior to mailing the notice above to the registered securities depositories listed below. SWR:dlh 1189497.7 4/23/2010 C-2-1 List of Registered Securities Depositories, Services and Bond Insurer Registered Securities Depositories: The Depository Trust Company Midwest Securities Trust Company 55 Water Street,25th Floor Capital Structures-Call Notification New York,NY 10041 440 South LaSalle Street Chicago,IL 60605 Philadelphia Depository Trust Company Reorganization Division 1900 Market Street Philadelphia,PA 19103 Bearer bond calls: Financial Information, Inc.'s Financial Daily Called Bond Service Post Office Box 473 Jersey City,NJ 07303 Kenny Information Service's Notification Services 65 Broadway New York,NY 10006 Moody's Municipal and Government 7 World Trade Center New York,NY 10007 Attention: Municipal News Reports Standard&Poor's Called Bond Record 25 Broadway,3rd Floor New York,NY 10004 Bond Insurer: Financial Guaranty Insurance Company 115 Broadway New York,NY 10006 SWR:dth 1189497.7 4/23/2010 C-2-2 EXHIBIT C-3 NOTICE OF REDEMPTION of the following obligations: Portions of the Town of Oro Valley Municipal Property Corporation, Excise Tax Revenue Refunding Bonds, Series 2003,dated December 1, 2003,maturing July 1,2014 through and including 2019. Notice is hereby given that the below-described principal amount of the above-referenced bonds outstanding have been called for redemption and will be redeemed on their respective maturity dates or call date as shown below. The maturity dates and amounts of the bonds to be redeemed are as follows: CUSIP Redemption Number Maturity Date Principal Amount Interest Date 68702L (July 1) To Be Redeemed Rate Premium (July 1) BZ3 2014 $705,000 3.750% N/A 2013 CA7 2015 550,000 4.000% N/A 2013 CB5 2016 575,000 4.000% N/A 2013 CC3 2017 595,000 4.125% N/A 2013 CD 1 2018 470,000 4.200% N/A 2013 CE9 2019 480,000 • 4.300% N/A 2013 and Owners of the above-described bonds called for redemption are notified to present the same at the corporate trust office of Wells Fargo Bank,N.A., on or after the date set for redemption, where redemption will be made by payment of the face amount of each such bond plus accrued interest to the date set for redemption plus the respective premium set forth above. All bonds so called for redemption must be surrendered and no interest will be paid on the above-described bonds from and after the redemption date. DATED: WELLS FARGO BANK,N.A. By The following is not part of this notice: Not more than sixty nor less than thirty days prior to the date set for redemption, Wells Fargo Bank, N.A. shall cause a notice of any such redemption to be mailed to the registered owner of each bond to be redeemed at the address shown on the registration book maintained by Wells Fargo Bank, N.A., Arnbac Assurance Corporation, the bond insurer, to the address listed below and to two of the services listed below. Additionally, Wells Fargo Bank, N.A. shall cause a notice of any such redemption to be mailed for receipt no later than the close of business on the second business day prior to mailing the notice above to the registered securities depositories listed below. SWR:dlh 1189497.7 4/23/2010 C-3-1 List of Re•'stered Securities De s ositories Services and Bond Insurer Registered Securities Depositories: The Depository Trust Company Midwest Securities Trust Company 55 Water Street,25th Floor Capital Structures-Call Notification New York,NY 10041 440 South LaSalle Street Chicago,IL 60605 Philadelphia Depository Trust Company Reorganization Division 1900 Market Street Philadelphia,PA 19103 Bearer bond calls: Financial Information,Inc.'s Financial Daily Called Bond Service Post Office Box 473 Jersey City,NJ 07303 Kenny Information Service's Notification Services 65 Broadway New York,NY 10006 Moody's Municipal and Government 7 World Trade Center New York,NY 10007 Attention: Municipal News Reports Standard&Poor's Called Bond Record 25 Broadway, 3rd Floor New York,NY 10004 Bond Insurer: Ambac Assurance Corporation One State Street Plaza, 15th Floor New York,NY 10004 SWR:dlh 1189497.7 4/23/2010 C-3-2 EXHIBIT D FEES AND EXPENSES OF DEFEASANCE The following expenses are to be paid by the Escrow Agent from amounts deposited with the Escrow Agent for that purpose: Bond Counsel Fees and Costs (1) $10,000.00 Financial Advisor (2) 12,000.00 CPA Verification (3) 3,000.00 Escrow Agent Fees; initial Paying Agent Fees (4) L550.00 TOTAL $26,550.00 (1) Gust Rosenfeld P.L.C. (2) Stone &Youngberg LLC (3) Grant Thornton, LLP (4) Wells Fargo Bank,N.A. SWR:dlh 1189497.7 4/23/2010 D-1 EXHIBIT E FEES OF ESCROW AGENT SWR:dlh 1189497,7 4/23/2010 E-1 Wells Fargo Corporate Trust Services Fee Schedule for Refunding Escrow Agent for the WELLS Town of Oro Valley, AZ FARGO Refunding Escrow funded o3? Eir about April 2010 Acceptance Fee: $250.00 1 A one-time charge covering review and negotiation of documents with underwriter, issuer and attorneys and account set up. Refunding Escrow Fees: Escrow to Termination Date 7-01-2010 $300.00 Escrow(s) • to Termination Date 7/1/2011-201.3 $500.00 (each) Fee assessed at closing of the refunding escrow. Assumes a funding of the escrow on or about April 1, 2010. Out-of-Pocket Expense: _ At Cost • Wells Fargo reserves the right to bill at cost for out-of-pocket expenses such as express mail, wire charges, and travel expenses, if required, incurred in connection with a closing. Wells Fargo Differentiators: At N o Cost *Never an "indirect" or arbitrary out-of-pocket expense charge .Our Relationship Managers are active participants in your financing and actually READ the documents ®All administrative functions managed at a regional office servicing your relationship ®Active Tickler Reminders for pending events i.e. Mandatory Calls ®ACH option to make debt service payment automatic ®Investing a portion or all bond proceeds through a Wells Fargo Custody relationship may reduce or eliminate fees charged. Note: The transaction underlying this proposal, and all related legal documentation, is subject to review and acceptance by Wells 'Fargo Bank in accordance with industry standards. Should the actual transaction materially differ from the assumptions used herein, Wells Fargo reserves the right to modify this proposal. Fees are subject to periodic review and adjustment. Submitted on: {arch 1, 2010 Page One of One Reference# 7313 5 TOWN OF ORO VALLEY,ARIZONA EXCISE TAX REVENUE OBLIGATIONS, SERIES 2000 TOWN OF ORO VALLEY MUNICIPAL PROPERTY CORPORATION EXCISE TAX REVENUE BONDS, SERIES 2001 TOWN OF ORO VALLEY MUNICIPAL PROPERTY CORPORATION EXCISE TAX REVENUE REFUNDING BONDS, SERIES 2003 2010 DEFEASANCE TAX CERTIFICATE This Tax Certificate ("this Certificate") is executed by the TOWN OF ORO VALLEY ARIZONA, a municipal corporation and a political subdivision of the State of Arizona (the "Town'), and THE TOWN OF ORO VALLEY MUNICIPAL PROPERTY CORPORATION, an Arizona nonprofit corporation (the "Corporation") in connection with the defeasance by the Corporation and the Town of portions of the above-referenced Series 2000 Obligations, Series 2001 Bonds and Series 2003 Bonds (collectively, the Series 2000 Obligations,the Series 2001 Bonds and the Series 2003 Bonds shall be referred to as the "Bonds") set forth in Section 2.1 hereof(the "Bonds Being Defeased"). This Certificate is executed for the purpose of establishing certain facts existing as of the date hereof and the reasonable expectations of the Town and the Corporation as to future events regarding the defeasance of Bonds Being Defeased. The Bonds Being Defeased are being defeased by the Town and the Corporation in order to reduce the Town's annual debt service. This Certificate also sets forth certain terms and conditions relating to the restrictions on the use and investment of funds held in the Escrow Agreement dated April 29, 2010 which will be used to defease the Bonds Being Defeased in order that the interest on the Bonds will continue to be exempt from taxation under the Internal Revenue Code of 1986, as amended (the "Code"). The certifications, covenants and representations contained herein are made on behalf of the Town and Corporation for the benefit of the owners from time to time of the Bonds. We hereby certify, covenant and represent for the Town and Corporation the following: ARTICLE 1. GENERAL Section 1.1 Authorization. The undersigned are the duly authorized officers of the Town and Corporation charged, with others, with the responsibility for executing and delivering this Certificate on the date hereof Section 1.2 Reliance on Other Parties. In making the representations in this Certificate, the Town and Corporation rely on the representations of the respective underwriters and initial purchasers of the Bonds as set forth in the respective Certificate of Underwriter Regarding the Initial Offering Price of the Obligations to the Public and as to Yield for the Series 2000 Obligations, and Certificates of Initial Purchaser Regarding the Initial Offering Price of the Bonds to the Public SCS:dlh 1231046.1 4/23/2010 1 and as to Yield for the Series 2001 Bonds and the Series 2003 Bonds (collectively the "Underwriters' Certificates") and the Verification Report prepared by Grant Thornton LLP (the "Accountant") (the "Verification Report") dated April 29, 2010. The Town and the Corporation are not aware of any facts or circumstances that would cause it to question the accuracy or reasonableness of the representations of the underwriter, initial purchasers or the Accountant. Section 1.3 Escrow Agreement. The term "Escrow Agreement" as used in this Certificate and its attachments means the Escrow Agreement dated April 29, 2010 between the Town and Wells Fargo Bank, N.A. (the "Escrow Trustee") with respect to the defeasance of the Bonds. The term "Escrow Trust" as used in this Certificate and its attachments means the Trust Account established pursuant to the Escrow Agreement. Section 1.4 Bond Counsel. "Bond Counsel" means Gust Rosenfeld P.L.C. or any other nationally recognized firm of attorneys experienced in the field of municipal bonds whose opinions are generally accepted by purchasers of municipal bonds. Section 1.8 Definitions. The definitions and cross-references set forth in Exhibit A, attached hereto, apply to this Certificate and its attachments. The terms used herein and not otherwise defined in this Certificate and its attachments or in the Escrow Agreement shall have the same meanings as defined in Sections 103 and 141 through 150 of the Code and the Treasury Regulations promulgated thereunder. Section 1.9 Reasonable Expectations. To the best of each of the undersigned's knowledge, information and belief, the expectations contained in this Certificate are reasonable. On g the basis of the information contained in this Certificate and its attachments, it is not expected that the Bonds will be "arbitrage bonds" within the meaning of Section 148 of the Code. ARTICLE 2. ISSUE DATA Section 2.1 Defeased Bonds. The Series 2000 Obligations, Series 2001 Bonds and Series 2003 Bonds to be defeased are: SCS:dih 1231046.1 4/23/2010 2 Sinking Fund Redemption Redemption or Premium on Maturity Being Principal Bonds Being Issue Original Defeased or Amount Redemption Defeased (Dated Name of Issue and Principal Paid at Being Date (%of Date) Registrar and Paying Agent Amount Maturity Defeased (July 1) principal) 11/01/00 Town of Oro Valley,Arizona $2,580,000 2010 $115,000 2010 1 N/A Excise Tax Revenue Obligations,Series 2011* 120,000 2011 1% 2010(Wells Fargo Bank,N.A.)(the "Town Obligations Being Defeased") 04/01/01 Town of Oro Valley Municipal 9,010,000 2010 400,000 2010 N/A Property Corporation,Excise Tax 2011 425,000 2011 N/A Revenue Bonds,Series 2001 (Wells 2012 440,000 2011 1% Fargo Bank,N.A.)(the"Series 2001 2013 465,000 2011 1 MPC Bonds Being Defeased") 12/01/03 Town of Oro Valley Municipal 15,750,000 2010 145,000** 2010 N/A Property Corporation,Excise Tax 2011 420,000** 2011 N/A Revenue Bonds,Series 2003(Wells 2012 480,000** 2012 N/A Fargo Bank,N.A.(the Series 2003 2013 510,000 2013 N/A ' MPC Bonds Being Defeased") 2014 705,000** 2013 N/A 2015 550,000** 2013 N/A 2016 575,000** 2013 N/A 2017 595,000** 2013 N/A [ 2018 470,000** 2013 N/A 2019 480,000** 2013 N/A *mandatory call of 2014 term bonds **partial amount of maturity allocated Collectively, the Town Obligations Being Defeased,the Series 2001 MPC Bonds Being Defeased and the Series 2003 MPC Bonds Being Defeased shall be referred to as the "Bonds Being Defeased." Section 2.2 Sources and Uses of Defeasance Funds. The sources and uses of the defeasance funds are as follows: Sources Proceeds from the Town General Fund and Water Fund $7,460,466.28 Total Sources $7,460,466,28 Uses Cost of Escrow Subaccount for Town Obligations Being Defeased: Beginning Cash $ 0.18 U.S. Government Obligations (SLGs) 242,083.00 Cost of Escrow Subaccount for Series 2001 MPC Bonds Being Defeased: Beginning Cash 0.38 U.S. Government Obligations (SLGs) 1,830,763.00 Cost of Escrow Subaccount for Series 2003 MPC Bonds Being Defeased: Beginning Cash 0.72 U.S. Government Obligations(SLGs) 5,361,069.00 Costs of Defeasance 26,550.00 Total Uses $7,460,466.28 SCS:dlh 1231046.1 4/23/2010 3 Section 2.3 Expenditure of Proceeds of the Bonds. All of the proceeds of the Series 2000 Obligations, Series 2001 Bonds and Series 2003 Bonds have been expended prior to the date hereof. ARTICLE 3. ARBITRAGE MATTERS Section 3.1 Defeasance of Bonds -- Escrow Trust. $7,460,466.28 of funds from the Town's General Fund and Water Fund shall be deposited in the respective subaccount of the Escrow Trust. $7,433,915.00 of that amount shall be applied to purchase the United States Treasury Obligations - State and Local Government Series for each subaccount as shown on Exhibit B, attached hereto (the "Investment Obligations"). $26,550.00 will be used to pay costs associated with the defeasance. The balance of the amount deposited in the Escrow Trust ($1.28) will be retained in cash, uninvested and allocated to the subaccounts in the amounts shown on Exhibit B hereto, as the initial cash balance. The General Fund and Water Fund money deposited in the Escrow Trust comes from General Fund and Water Fund revenues and is not the sales proceeds of any bond issue. The Investment Obligations and uninvested cash shall be allocated to separate subaccounts relating to the applicable series of Bonds as set forth in Section 2.2 of this Certificate. (a) The uninvested cash and anticipated receipts from the Investment Obligations on deposit in each subaccount of the Escrow Trust, without regard to any reinvestment thereof, will be used to pay, and will be sufficient to pay, when due, principal, interest and redemption premium, if any, on the applicable series of the Bonds Being Defeased as such become due and to redeem the outstanding principal amount of the Bonds Being Defeased as shown in Section 2.1 of this Certificate. The payment date of each series of the Bonds Being Defeased is the maturity date or the first optional redemption date of such Bonds Being Defeased. The July 1, 2010 and July 1, 2011 maturities of the Town Obligations Being Defeased will be paid on July 1, 2010. The July 1, 2011 mandatory redemption amount of the Town Obligations Being Defeased will be redeemed at a redemption price of 101%. The July 1, 2010 and July 1, 2011 maturities of the Series 2001 MPC Bonds Being Defeased will be paid at maturity on July 1, 2010 and July 1, 2011,respectively. The July 1, 2012 and the July 1, 2013 maturities of the Series 2001 MPC Bonds Being Defeased will be redeemed on July 1,2011 at a redemption price of 101%. The July 1, 2010 through and including the July 1, 2013 maturities of the Series 2003 MPC Bonds Being Defeased will be paid on their respective maturity dates. Portions of the July 1, 2014 through and including the July 1, 2019 maturities of the Series 2003 MPC Bonds Being Defeased will be redeemed on July 1,2013 at par. (b) Any moneys remaining on deposit in any subaccount of the Escrow Trust upon the final disbursement of funds sufficient to pay principal, interest and redemption premium, if any, of the applicable series of Bonds shall be transferred by the Escrow Trustee to the Town to be placed in the Town's General Fund or Water Fund. (c) At no time from and after the date hereof will the proceeds in any subaccount of the Escrow Trust be used to acquire or hold Higher Yielding Investments with respect to the applicable series of Bonds. Section 3.2 No Other Sinking or Pledged Funds. The Town and Corporation have not established and do not expect to establish or use any sinking fund, debt service fund,redemption fund, SCS:dlh 1231046.1 4/23/2010 4 reserve or replacement fund, or similar fund, or any other fund to pay principal or interest on any series of the Bonds other than the applicable subaccount of the Escrow Trust. Section 3.3 No Replacement. Other than the funds in the applicable subaccounts described above, the Town and Corporation have on hand no funds which could legally and practically be used to provide for payment of the applicable series of the Bonds which are not either committed to and necessary for such purpose in addition to the General Fund and Water Fund proceeds to be used in funding each subaccount of the Escrow Trust. Section 3.4 Defeasance Not Contemplated at the Time of the Issuance of the Bonds. At the time of the issuance of each series of the Bonds the establishment of a sinking fund, such as the applicable subaccount of the Escrow Trust, was not contemplated by the Town or the Corporation. At the time of the issuance of each series of the Bonds, the term of the applicable series of the Bonds was not established to facilitate the establishment of a sinking fund, such as the Escrow Trust. The applicable subaccount of the Escrow Trust is being established and funded at this time as a result of higher than expected General Fund and Water Fund revenues of the City since the issuance of the applicable series of the Bonds. Section 3.5 No Abusive Arbitrage Device. The transaction contemplated herein does not represent an exploitation of the difference between taxable and tax-exempt interest rates to obtain a material advantage and does not overburden the tax-exempt bond market in that the Town and Corporation are not issuing more bonds, issuing bonds earlier or allowing bonds to remain outstanding longer than otherwise reasonably necessary to accomplish the governmental purposes of the Bonds. ARTICLE 4. YIELD AND YIELD LIMITATIONS Section 4.1 Yield. For purposes of this Certificate and its attachments, the yield for each series of the Bonds is calculated as set forth in Section 148(h) of the Code and Sections 1.148-4 and 1.148-5 of the Treasury Regulations. Hence, in general, yield means that discount rate that, when used in computing the present value of all unconditionally payable payments of principal and interest to be paid on an obligation and the cost of Qualified Guarantees (if any) paid and to be paid with respect to such obligation, produces an amount equal to the Issue Price of the obligation. At the time of the issuance, the purchaser of the applicable series of the Bonds certified that the Issue Prices of the Bonds as follows: Series 2000 Bonds, $2,569,970.75; Series 2001 Bonds, $8,960,680.85; Series 2003 Bonds, $15,922,001.35, which represent the prices at which each underwriter or initial purchaser of their respective series of Bonds reasonably expected at least ten percent of each maturity of the applicable series of Bonds to be sold to the public (excluding bond houses, brokers and other intermediaries). For purposes thereof, all calculations of yield were made on the basis of semiannual compounding using a 360-day year. At the time of their issuance, the yield on the applicable series of the Bonds as computed by the applicable underwriter or initial purchaser and set forth in the Underwriters' Certificate was at least 5.4162% for the Series 2000 Obligations; 4.8535% for the Series 2001 Bonds and 4.0367% for the Series 2003 Bonds. As shown in the Verification Report, the adjusted yield of each sub-account of the Escrow Trust on the Investment Obligations purchased with the General Fund and Water Fund proceeds deposited into each sub-account is not Materially Higher than the yield on the applicable series of Bonds. For this purpose, the term "Materially Higher" means one-thousandth of one percentage point. For purposes of calculating the yield on the Investment Obligations, such investments shall be deemed purchased at a price equal to their Fair Market Value. SCS:dlh 1231046.1 4/23/2010 5 ARTICLE 5. MISCELLANEOUS Section 5.1 Future Events. The Town and Corporation acknowledge that any changes in facts or expectations from those set forth in this Certificate could give rise to different yield restrictions or rebate requirements from those set forth herein. The Town and Corporation shall promptly contact Bond Counsel if such changes do occur. Section 5.2 Permitted Changes; Opinion of Bond Counsel. The Town and Corporation have covenanted to comply with requirements necessary in order for interest on each series of the Bonds to remain tax exempt for federal income tax purposes under the provisions of the Code. To implement these covenants, the Town and Corporation, certify, represent to and covenant with the owners from time to time of each series of the Bonds comply with the provisions of this Certificate unless and until it receives the opinion of Bond Counsel to the effect that continued compliance with such provision or provisions is not necessary for interest on each series of the Bonds to remain tax exempt under the Code. Section 5.3 Successors and Assigns. The terms, provisions and conditions of this Tax Certificate shall bind and inure to the benefit of the respective successors and assigns of the Town and Corporation. SCS:dth 1 231 046.1 4/23/2010 6 Section 5.4 Headings. The headings of this Tax Certificate are inserted for convenience only and shall not be deemed to constitute a part of this Tax Certificate. DATED: April 29, 2010 TOWN OF ORO VALLEY, a municipal corporation Mayor 's 4% L Finance Director ATTEST: (;) , Town Clerk ATTEST: THE TOWN OF ORO VALLEY MUNICIPAL P ' • ' RTY CORPORATION I I 1'7 L_ �Lr / Vf Secretary/Treasurer President APPROVED AS TO FORM: f ✓_ .W J/ Bond Co s SCS:dlh 1231046,1 4/23/2010 7 EXHIBIT A DEFINITIONS The following terms, as used in this Exhibit A and in the Tax Certificate to which it is attached and in the other Exhibits to the Tax Certificate,have the following meanings: "Code" means the Internal Revenue Code of 1986, as amended. "Fair Market Value"means, in the case of an investment, the price at which a willing buyer would purchase the investment from a willing seller. If the investment is not readily salable,the Fair Market Value shall be determined by taking into account the price at which a willing buyer would purchase the same (or a substantially similar) investment from the issuer of the investment. The price shall not be increased by brokerage commissions, administrative expenses or similar expenses. The price at which a willing buyer would purchase an investment that is traded in an established securities market (within the meaning of Section 15A,453-1(e)(4)(iv) of the Treasury Regulations) shall generally be determined as provided in Section 20.2031-2 of the Treasury Regulations(relating to estate tax). "Governmental Unit" means a state, territory or possession of the United States, the City of Columbia, or any political subdivision thereof referred to as a "state or local governmental unit" in Section 1.104- 1(a) of the Treasury Regulations. "Governmental Unit" does not include the United States or any agency or instrumentality of the United States. "Higher Yielding Investments" means any investment property (as defined in Sections 148(b)(2) and (b)(3) of the Code) that produces a yield that (i) in the case of investment property allocable to Replacement Proceeds of an issue and investment property in a refunding escrow, is more than one thousandth of one percentage point(.00001)higher than the yield on the applicable issue, and(ii) for all other purposes of this Certificate, is more than one-eighth of one percentage point(.00125)higher than the yield on the applicable issue. "Materially Higher"means the yield that produces Higher Yielding Investments. "Replacement Proceeds" means with respect to an issue, amounts (including any investment income but excluding any proceeds of that issue)replaced by proceeds of that issue pursuant to Section 148(a)(2)of the Code. Replacement Proceeds may include amounts held in a sinking fund, pledged fund or reserve or replacement fund for an issue. The terms "bond", "sinking fund" and other terms relating to Code provisions used but not defined in this Certificate shall have the meanings given to them for purposes of Sections 103 and 141 to 150 unless the context indicates another meaning. SCS:dlh 1231046.1 4/23/2010 A-1 EXHIBIT B GOVERNMENT OBLIGATIONS PURCHASED FROM PROCEEDS OF TRANSFER AND INITIAL CASH DEPOSIT TOWN OBLIGATIONS BEING DEFEASED Security Type Maturity Date Principal Amount Coupon Rate SLGS—Certificate 07/01/2010 $242,083.00 0.130% Initial Cash Deposit $0.18 SERIES 2001 MPC BONDS BEING DEFEASED Security Type Maturity Date Principal Amount Coupon Rate SLGS-Certificate 07/01/2010 $437,633.00 0.130% SLGS-Certificate • 01/01/2011 27,015.00 0.280% SLGS-Note 07/01/2011 1,3 66,115.00 0.430% Initial Cash Deposit $0.38 SERIES 2003 MPC BONDS BEING DEFEASED Security Type Maturity Date Principal Amount Coupon Rate SLGS-Certificate 07/01/2010 $234,859.00 0.130% SLGS-Certificate 01/01/2011 63,863.00 0.280% SLGS-Note 07/01/2011 483,983.00 r 0.430% SLGS-Note 01/01/2012 57,674.00 0.740% SLGS-Note 07/01/2012 537,888.00 1.060% SLGS-Note 01/01/2013 48,738.00 1.340% SLGS-Note 07/01/2013 3,934,064.00 1.620% Initial Cash Deposit $0.72 SCS:dlh U31046.1 4/23/2010 B-1 TOWN OF ORO VALLEY, ARIZONA EXCISE TAX REVENUE OBLIGATIONS, SERIES 2000 TOWN OF ORO VALLEY MUNICIPAL PROPERTY CORPORATION EXCISE TAX REVENUE BONDS, SERIES 2001 TOWN OF ORO VALLEY MUNICIPAL PROPERTY CORPORATION EXCISE TAX REVENUE REFUNDING BONDS, SERIES 2003 2010 DEFEASANCE ESCROW AGENT'S RECEIPT AND CERTIFICATE The undersigned,on behalf of Wells Fargo Bank, N.A., as escrow agent (the "Escrow Agent") under that certain Escrow Agreement dated April 29, 2010 (the "Escrow Agreement"), by and between the Town of Oro Valley, Arizona (the "Town") and the Escrow Agent hereby certifies that the Escrow Agent received on the date of this certificate the amount of $7,460,466.28 in connection with the defeasance of certain of: (1) Town of Oro Valley, Arizona Excise Tax Revenue Obligations, Series 2000 (the "Town Obligations Being Defeased"); (2)Town of Oro Valley Municipal Property Corporation Excise Tax Revenue Bonds, Series 2001 (the "Series 2001 MPC Bonds Being Defeased"); and (3) Town of Oro Valley Municipal Property Corporation Excise Tax Revenue Refunding Bonds, Series 2003 (the "Series 2003 MPC Bonds Being Defeased" and together with the Town Obligations Being Defeased, and together with the Series 2001 MPC Bonds Being Defeased, the "Bonds"), which amount was applied to create the following subaccounts with respect to each series of Bonds: Town Obligations Being Defeased: $0.18 has been deposited to the Trust Account(as defined in the Escrow Agreement) as the beginning cash balance; $242,083.00 of the proceeds has been applied to purchase the government obligations described in Exhibit A-1 to the Escrow Agreement; Series 2001 MPC Bonds Being Defeased: $0.38 has been deposited to the Trust Account (as defined in the Escrow Agreement) as the beginning cash balance; $1,830,763.00 of the proceeds has been applied to purchase the government obligations described in Exhibit A-2 to the Escrow Agreement; Series 2003 MPC Bonds Being Defeased: $0.72 has been deposited to the Trust Account(as defined in the Escrow Agreement) as the beginning cash balance; $5,361,069.00 of the proceeds has been applied to purchase the government obligations described in Exhibit A-3 to the Escrow Agreement; SCS:dlh 1231082.1 4/22/2010 1 Costs of Defeasance: $26,550.00 will be held and used to pay expenses as described in Exhibit D to the Escrow Agreement. All excess moneys will be returned to the Town and applied to the debt service account of the Bonds. I further certify receipt of the Obligations and the verification report prepared by Grant Thornton LLP, certified public accountants (the "Verification Report"), in connection with the defeasance of the Bonds. DATED: April 29, 2010 WELLS FARGO BANK,N.A., Escrow Agent •• B y —J • Au horized Representative SCS:dlh 1231082.1 4/22/2010 2 efeasance Verification Report Town of Oro Valley, Arizona Town of Oro Valley Municipal Property Corporation, Arizona April 29, 2010 Contents Letter Exhibit A Schedule of Sources and Uses of Funds Exhibit B 2000 Escrow Account Cash Flow Exhibit B-1 Cash Receipt From and Yield on the SLGS in the 2000 Escrow Account Exhibit B-2 Debt Service Payment on the Defeased 2000 Obligations Exhibit C 2001 Escrow Account Cash Flow Exhibit C-1 Cash Receipts From and Yield on the SLGS in the 2001 Escrow Account Exhibit C-2 Debt Service Payments on the Defeased 2001 Bonds Exhibit D 2003 Escrow Account Cash Flow Exhibit D-1 Cash Receipts From and Yield on the SLGS in the 2003 Escrow Account Exhibit D-2 Debt Service Payments on the Defeased 2003 Bonds Appendix I Applicable schedules provided by Stone &Youngberg LLC •. GrantThornton Audit•Tax•Advisory Grant Thornton LLP 200 S 6th Street,Suite 500 Report of Independent Certified Public Accountants Minneapolis,MN 55402-1459 On Applying Agreed-Upon Procedures T 612.332.0001 F 612.332.8361 Town of Oro Valley www.GrantThornton.com 11000 North La Canada Drive Oro Valley,Arizona Town of Oro Valley Municipal Property Corporation Financial Guaranty Insurance Corporation 11000 North La Canada Drive 115 Broadway Oro Valley,Arizona New York,New York Gust Rosenfeld P.L.C. Ambac Assurance Corporation 201 East Washington,Suite 800 One State Street Plaza, 15th Floor Phoenix,Arizona New York,New York Stone&Youngberg LLC Wells Fargo Bank,National Association 2555 East Camelback Road,Suite 280 100 West Washington,22nd Floor Phoenix,Arizona Phoenix,Arizona We have performed the procedures described in this report,which were agreed to by the Town of Oro Valley,Arizona (the "Town"), the Town of Oro Valley Municipal Property Corporation (the"Corporation") and Stone&Youngberg LLC (the"Financial Consultant"), to verify the mathematical accuracy of certain computations contained in the schedules attached in Appendix I provided by the Financial Consultant. The Financial Consultant is responsible for these schedules. These procedures were performed solely to assist you relating to the Town's Excise Tax Revenue Obligations,Series 2000 (the "2000 Obligations"), the Corporation's Excise Tax Revenue Bonds, Series 2001 (the"2001 Bonds") and the Corporation's Excise Tax Revenue Refunding Bonds,Series 2003 (the "2003 Bonds") and the defeasance of the outstanding 2000 Obligations, the outstanding 2001 Bonds and a portion of the outstanding 2003 Bonds (respectively, the"Defeased 2000 Obligations", the"Defeased 2001 Bonds" and the "Defeased 2003 Bonds",and collectively referred to as the "Defeased Obligations") as summarized on the next page. This engagement was performed in accordance with Statements on Standards for Attestation Engagements established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of the addressees of this report who are the specified parties. Consequently,we make no representation regarding the sufficiency of the procedures described in this report either for the purpose for which this report has been requested or for any other purpose. Gram Thornton ILP U.S.member firm of Grant Thornton International Ltd Page 2 Defeased Bocidi Original principal Principal Maturities Redemption Redemption Series Issued Dated Defeascd Deftase_ci Date Price 2000 7-1-10 and Oblig. $2,580,000 November 1,2000 $235,000** 7-1-14* 7-1-10 101% 2001 7-1-10 to Bonds $9,010,000 April 1,2001 $1,730,000*** 7-1-13 7-1-11 101% 2003 7-1-10 to Bonds $15,750,000 December 1,2003 $4,930,000**** 7-1-19 7-1-13 100% * Represents the July 1,2011 payment of the July 1,2014 term bond as provided by the Financial Consultant. ** Represents 100%of the Defeased 2000 Obligations paid from the Genera] Fund as provided by the Financial Consultant. *** Represents 37% of the Defeased 2001 Bonds paid from the General Fund and 63% paid from the Water Enterprise Fund as provided by the Financial Consultant. ****Represents 35%of the principal amount outstanding of the Defeased 2003 Bonds paid from the General Fund as provided by the Financial Consultant. VERIFICATION OF ESCROW ACCOUNTS CASH FLOW SUFFICIENCY The Financial Consultant provided us with schedules (Appendix I) summarizing future escrow accounts cash receipts and disbursements. These schedules indicate that there will be sufficient cash available (i) in the 2000 Escrow Account to pay the principal,interest and redemption premium on the Defeased 2000 Obligations assuming the Defeased 2000 Obligations maturing on July 1, 2014 will be redeemed on July 1,2010 at 101 percent of par plus accrued interest, (ii) in the 2001 Escrow Account to pay the principal,interest and redemption premium on the Defeased 2001 Bonds assuming the Defeased 2001 Bonds maturing on and after July 1, 2012 will be redeemed on July 1,2011 at 101 percent of par plus accrued interest, and (iii)in the 2003 Escrow Account to pay the principal and interest on the Defeased 2003 Bonds assuming the Defeased 2003 Bonds maturing on and after July 1,2014 will be redeemed on July 1,2013 at 100 percent of par plus accrued interest. The attached Exhibit A (Schedule of Sources and Uses of Funds) was compiled based upon information provided by the Financial Consultant. As part of our engagement to recalculate the schedules attached as Appendix I we prepared schedules attached hereto as Exhibits B through B-2, C through C-2 and D through D-2 independently calculating future escrow accounts cash receipts and disbursements and compared the information used in our calculations to the information listed below contained in applicable pages of the following documents: • Subscription confirmations,dated April 21, 2010,and Schedules of U.S.Treasury Securities provided by Wells Fargo Bank,National Association (the"Trustee")used to acquire certain United States Treasury Securities- State and Local Government Series (the"SLGS")insofar as the SLGS are described as to the principal amounts,interest rates,maturity dates,issuance date and first interest payment date;and • Official Statement and Trust Agreement for the 2000 Obligations,Second Supplement to Trust Indenture and Bond Purchase Agreement for the 2001 Bonds and Official Statement and Third Supplement to Trust Indenture for the 2003 Bonds provided by the Financial Consultant insofar as the Defeased Obligations are described as to the maturity and interest payment dates,principal amounts,interest rates and optional Page 3 redemption dates and prices. The principal amount of the July 1, 2014 term bond of the Defeased 2000 Obligations represents the July 1,2011 sinking fund payment as provided by the Financial Consultant. The principal amounts of the Defeased 2000 Obligations represent 100%paid from the General Fund as provided by the Financial Consultant. The principal amounts of the Defeased 2001 Bonds represent 37%paid from the General Fund and 63%paid from the Water Enterprise Fund as provided by the Financial Consultant. The principal amounts of the Defeased 2003 Bonds represent 35%of the principal amounts outstanding paid from the General Fund as provided by the Financial Consultant. In addition,we compared the interest rates for each maturity of the SLGS, as shown on the Schedules of U.S. Treasury Securities,with the maximum allowable interest rates shown on the Department of Treasury,Bureau of Public Debt,SLGS Table for use on April 21,2010 and found that the interest rates were equal to the maximum allowable interest rates for each maturity. Our procedures, as summarized in Exhibits B through B-2,C through C-2 and D through D-2, prove the mathematical accuracy of the schedules provided by the Financial Consultant summarizing future escrow accounts cash receipts and disbursements. The schedules provided by the Financial Consultant and those prepared by us reflect that(i) the anticipated receipt from the SLGS in the 2000 Escrow Account, together with an initial cash deposit of$0.18 to be deposited into the 2000 Escrow Account on April 29,2010,will be sufficient to pay,when due, the principal,interest and redemption premium related to the Defeased 2000 Obligations assuming the Defeased 2000 Obligations maturing on July 1, 2014 will be redeemed on July 1, 2010 at 101 percent of par plus accrued interest, (ii) the anticipated receipts from the SLGS in the 2001 Escrow Account,together with an initial cash deposit of$0.38 to be deposited into the 2001 Escrow Account on April 29,2010,will be sufficient to pay,when due, the principal, interest and redemption premium related to the Defeased 2001 Bonds assuming the Defeased 2001 Bonds maturing on and after July 1,2012 will be redeemed on July 1,2011 at 101 percent of par plus accrued interest,and (iii) the anticipated receipts from the SLGS in the 2003 Escrow Account, together with an initial cash deposit of$0.72 to be deposited into the 2003 Escrow Account on April 29,2010,will be sufficient to pay,when due, the principal and interest related to the Defeased 2003 Bonds assuming the Defeased 2003 Bonds maturing on and after July 1,2014 will be redeemed on July 1,2013 at 100 percent of par plus accrued interest. VERIFICATION OF YIELDS The Financial Consultant provided us with schedules (Appendix I) which indicate that(i) the yield on the cash receipt from the SLGS in the 2000 Escrow Account is less than the yield on p the 2000 Obligations, (ii) the yield on the cash receipts from the SLGS in the 2001 Escrow Account is less than the yield on the 2001 Bonds,and (iii) the yield on the cash receipts from the SLGS in the 2003 Escrow Account is less than the yield on the 2003 Bonds. These schedules were prepared based on the assumed settlement date of April 29,2010 using a 360- day year with interest compounded semi-annually. The term"yield", as used herein,means that yield which,when used in computing the present value of all payments of principal and interest to be received on an obligation produces an amount equal to,in the case of the cash receipts from the SLGS in the 2000 Escrow Account,the 2001 Escrow Account and the 2003 Escrow Account, the purchase prices. Page 4 As part of our engagement to recalculate the schedules attached as Appendix I we prepared schedules attached hereto as Exhibits B-1, C-1 and D-1 independently calculating the yields on (i) the cash receipt from the SLGS in the 2000 Escrow Account calculated on Exhibit B-1, (ii) the cash receipts from the SLGS in the 2001 Escrow Account calculated on Exhibit C-1,and (ii) the cash receipts from the SLGS in the 2003 Escrow Account calculated on Exhibit D-1. The results of our calculations,based on the aforementioned assumptions,are summarized below: Yield Exhibit • Yield on the cash receipt from the SLGS in the 2000 Escrow Account 0.1303% B-1 • Yield on the 2000 Obligations 5.4162% • Yield on the cash receipts from the SLGS in the 2001 Escrow Account 0.4157% C-1 • Yield on the 2001 Bonds 4.8535% • Yield on the cash receipts from the SLGS in the 2003 Escrow Account 1.5120% D-1 • Yield on the 2003 Bonds 4.0367% * As shown on the respective Forms 8038-G provided by the Financial Consultant from the transcripts of each respective issue. Our procedures,as summarized in Exhibits B-1,C-1 and D-1,prove the mathematical accuracy of the schedules provided by the Financial Consultant summarizing the yields. The schedules provided by the Financial Consultant and those prepared by us reflect that(i) the yield on the cash receipt from the SLGS in the 2000 Escrow Account is less than the yield on the 2000 Obligations, (ii) the yield on the cash receipts from the SLGS in the 2001 Escrow Account is less than the yield on the 2001 Bonds,and(iii) the yield on the cash receipts from the SLGS in the 2003 Escrow Account is less than the yield on the 2003 Bonds. * * * * * * • We were not engaged to,and did not,perform an examination in accordance with Statements on Standards for Attestation Engagements established by the American Institute of Certified Public Accountants, the objective of which would be the expression of an examination opinion on the items referred to above. Accordingly we do not express such an opinion. Had we performed additional procedures,other matters might have come to our attention that would have been reported to you. Page 5 This report is intended solely for the information and use of those to whom this letter is addressed and is not intended to be and should not be used by anyone other than these specified parties. T ft-r Minneapolis,Minnesota April 29, 2010 Exhibit A Town of Oro Valley,Arizona and Town of Oro Valley Municipal Property Corporation,Arizona SCHEDULE OF SOURCES AND USES OF FUNDS April 29, 2010 (1) 2000 Escrow 2001 Escrow 2003 Escrow Account Account Account Total SOURCES: Cash Available for Defeasance $248,720.68 $1,844,038.38 $5,367,707.22 $7,460,466.28 USES: Purchase price of the SLGS $242,083.00 $1,830,763.00 $5,361,069.00 $7,433,915.00 Beginning cash deposit to escrow account 0.18 0.38 0.72 1.28 Costs of defeasance 6,637.50 13,275.00 6,637.50 26,550.00 $248,720.68 $1,844,038.38 $5,367,707.22 $7,460,466.28 (1) 2001 Escrow Account is funded 37%by the General Fund and 63%by the Water Enterprise Fund as provided by the Financial Consultant. Exhibit B Town of Oro Valley,Arizona and Town of Oro Valley Municipal Property Corporation,Arizona 2000 ESCROW ACCOUNT CASH FLOW Cash receipt Debt service from SLGS payment on in the 2000 the Defeased Escrow Account 2000 Obligations Cash Dates (Exhibit B-1) (Exhibit B-2) balance Cash deposit on April 29, 2010 $0.18 07-01-10 $242,137.32 $242,137.50 0.00 $242,137.32 $242,137.50 Exhibit B-1 Town of Oro Valley,Arizona and Town of Oro Valley Municipal Property Corporation,Arizona CASH RECEIPT FROM AND'YIELD ON THE SLGS IN THE 2000 ESCROW ACCOUNT Cash receipt Present value on from SLGS April 29, 2010 Receipt Interest in the 2000 using a yield of date Principal rate Interest Escrow Account 0.1303% 07-01-10 $242,083 0.130% $54.32 $242,137.32 $242,083.00 Purchase price of the SLGS in the 2000 Escrow Account $242,083.00 The present value of the cash receipt from the SLGS in the 2000 Escrow Account on April 29, 2010,using a yield of 0.1303%,is equal to the purchase price of the SLGS in the 2000 Escrow Account. Exhibit B-2 Town of Oro Valley,Arizona and Town of Oro Valley Municipal Property Corporation,Arizona DEBT SERVICE PAYMENT ON THE DEFEASED 2000 OBLIGATIONS Interest Debt service Date Principal rate Interest Premium payment 07-01-10 $235,000 (1) $5,937.50 $1,200.00 $242,137.50 (1) Actual maturity dates,principal amounts and interest rates are as follows: Maturity Principal Interest date amount rate 07-01-10 $115,000 4.900% 07-01-14 120,000 * 5.200% $235,000 * Represents the July 1, 2011 payment of the July 1, 2014 term bond as shown in the Official Statement and Trust Agreement and provided by the Financial Consultant. Exhibit C Town of Oro Valley,Arizona and Town of Oro Valley Municipal Property Corporation,Arizona 2001 ESCROW ACCOUNT CASH FLOW Cash receipts Debt service from SLGS payments on in the 2001 the Defeased Escrow Account 2001 Bonds Cash Dates (Exhibit C-1) (Exhibit C-2) balance Cash deposit on April 29, 2010 $0.38 07-01-10 $438,753.52 $438,753,13 0.77 01-01-11 30,003.34 30,003.13 0.98 07-01-11 1,369,052.15 1,369,053.13 0.00 $1,837,809.01 $1,837,809.39 Exhibit C-1 Town of Oro Valley,Arizona and Town of Oro Valley Municipal Property Corporation,Arizona CASH RECEIPTS FROM AND YIELD ON THE SLGS IN THE 2001 ESCROW ACCOUNT Cash receipts Present value on from SLGS April 29, 2010 Receipt Interest in the 2001 using a yield of date Principal rate Interest Escrow Account 0.4157% 07-01-10 $437,633 0.130% $1,120.52 $438,753.52 $438,439.82 01-01-11 27,015 0.280% 2,988.34 30,003.34 29,919.70 07-01-11 1,366,115 0.430% 2,937.15 1,369,052.15 1,362,403.49 $1,830,763 $7,046.01 $1,837,809.01 $1,830,763.00 Purchase price of the SLGS in the 2001 Escrow Account $1,830,763.00 The sum of the present values of the cash receipts from the SLGS in the 2001 Escrow Account on April 29, 2010, using a yield of 0.4157%, is equal to the purchase price of the SLGS in the 2001 Escrow Account. Exhibit C-2 Town of Oro Valley,Arizona and Town of Oro Valley Municipal Property Corporation, Arizona DEBT SERVICE PAYMENTS ON THE DEFEASED 2001 BONDS Interest Debt service Date Principal rate Interest Premium payments 07-01-10 $400,000 4.375% $38,753.13 $438,753.13 01-01-11 30,003.13 30,003.13 07-01-11 1,330,000 (1) 30,003.13 $9,050.00 1,369,053.13 $1,730,000 $98,759.39 $9,050.00 $1,837,809.39 (1) Actual maturity dates, principal amounts and interest rates are as follows: Maturity Principal Interest date amount rate 07-01-11 $425,000 4.400% 07-01-12 440,000 4.500% 07-01-13 465,000 4.625% $1,330,000 Exhibit D Town of Oro Valley,Arizona and Town of Oro Valley Municipal Property Corporation, Arizona 2003 ESCROW ACCOUNT CASH FLOW Cash receipts Debt service from SLGS payments on in the 2003 the Defeased Escrow Account 2003 Bonds Cash Dates (Exhibit D-1) (Exhibit D-2) balance Cash deposit on April 29, 2010 $0.72 07-01-10 $247,545.55 $247,546.25 0.02 01-01-11 100,281.23 100,280.63 0.62 07-01-11 520,280.22 520,280.63 0.21 01-01-12 92,930.66 92,930.63 0.24 07-01-12 57 2,9 31.27 57 2,9 30.63 0.88 01-01-13 80,930.46 80,930.63 0.71 07-01-13 3,965,929.92 3,965,930.63 0.00 $5,580,829.31 $5,580,830.03 Exhibit D-1 Town of Oro Valley,Arizona and Town of Oro Valley Municipal Property Corporation,Arizona CASH RECEIPTS FROM AND YIELD ON THE SLGS IN THE 2003 ESCROW ACCOUNT Cash receipts Present value on from SLGS April 29, 2010 Receipt Interest in the 2003 using a yield of date Principal rate Interest Escrow Account 1.5120% 07-01-10 $234,859 0.130% $12,686.55 $247,545.55 $246,904.18 01-01-11 63,863 0.280% 36,418.23 100,281.23 99,270.91 07-01-11 483,983 0.430% 36,297.22 520,280.22 511,173.89 01-01-12 57,674 0.740% 35,256.66 92,930.66 90,619.02 07-01-12 537,888 1.060% 35,043.27 572,931.27 554,487.67 01-01-13 48,738 1.340% 32,192.46 80,930.46 77,737.47 07-01-13 3,934,064 1.620% 31,865.92 3,965,929.92 3,780,875.87 $5,361,069 $219,760.31 $5,580,829.31 $5,361,069.00 Purchase price of the SLGS in the 2003 Escrow Account $5,361,069.00 The sum of the present values of the cash receipts from the SLGS in the 2003 Escrow Account on on April 29,2010 using a yield of 1.5120%,is equal to the purchase price of the SLGS in the 2003 Escrow Account. Exhibit D-2 Town of Oro Valley,Arizona and Town of Oro Valley Municipal Property Corporation,Arizona DEBT SERVICE PAYMENTS ON THE DEFEASED 2003 BONDS Interest Debt service Date Principal rate Interest payments 07-01-10 $145,000 * 3.125% $102,546.25 $247,546.25 01-01-11 100,280.63 100,280.63 07-01-11 420,000 * 3.500% 100,280.63 520,280.63 01-01-12 92,930.63 92,930.63 07-01-12 480,000 * 5.000% 92,930.63 572,930.63 01-01-13 80,930.63 80,930.63 07-01-13 3,885,000 (1) 80,930.63 3,965,930.63 $4,930,000 $650,830.03 $5,580,830.03 (1) Actual maturity dates, principal amounts and interest rates are as follows: Maturity Principal Interest date amount rate 07-01-13 $510,000 * 5.000% 07-01-14 705,000 * 3.750% 07-01-15 550,000 * 4.000% 07-01-16 575,000 * 4.000% 07-01-17 595,000 * 4.125% 07-01-18 470,000 * 4.200% 07-01-19 480,000 * 4.300% $3,885,000 * Represents portions of the principal amounts outstanding as provided by the Financial Consultant. APPENDIX I Applicable schedules provided by Stone & Youngberg LLC SOURCES AND USES OF FUNDS Town of Oro Valley,Arizona 2010 Defeasance Analysis Dated Date 04/29/2010 Delivery Date 04/29/2010 2010 Defeasance- 2010 2010 Series 2001 Defeasance- Defeasance- (37%GF and Series 2003REF Series 2000 63%Wtr (35%GF Sources: (All GF) Portions) Portion) Total Other Sources of Funds: Cash to Pay Escrow 248,720.68 1,844,038.38 5,367,707.22 7,460,466.28 248,720.68 1,844,038.38 5,367,707.22 7,460,466.28 2010 Defeasance- 2010 2010 Series 2001 Defeasance- Defeasance- (37%GF and Series 2003 REF Series 2000 63%Wtr (35%GF Uses: (All GF) • Portions) Portion) Total Refunding Escrow Deposits: Cash Deposit 0.18 0.38 0.72 1.28 SI,GS Purchases242,083.00 1,830,763.00 5,361,069.00 7,433,915.00 242,083.18 1,830,763.38 5,361,069.72 7,433,916.28 Delivery Date Expenses: Cost of Issuance 6,637.50 13,275.00 6,637.50 26,550.00 248,720.68 1,844,038.38 5,367,707.22 7,460,466.28 Apr 21,2010 10:03 am Prepared by Stone&Youngberg LLC SERIES 2000(GE)-Page 3 ESCROW SUFFICIENCY Town of Oro Valley,Arizona 2010 Defeasance-Series 2000(All GF) Escrow Net Escrow Excess Excess Date Requirement Receipts Receipts Balance 04/29/2010 0.18 0.18 0.18 07/01/2010 242,137.50 242,137.32 -0.18 242,137.50 242,137.50 0.00 Apr 21,2010 10:03 am Prepared by Stone&Youngberg LLC SERIES 2000(GF)-Page 4 ESCROW CASH FLOW Town of Oro Valley,Arizona 2010 Defeasance-Series 2000(All GF) Present Value Net Escrow PV to 04/29/2010 Date Principal Interest Receipts Factor @ 0.1303164% 07/01/2010 242,083.00 54.32 242,137.32 0.999775664 242,083.00 242,083.00 54.32 242,137.32 242,083.00 Escrow Cost Summary Purchase date 04/29/2010 Purchase cost of securities 242,083.00 Target for yield calculation 242,083.00 Apr 21,2010 10:03 am Prepared by Stone&Youngberg LLC SERIES 2000(GF)-Page 5 ESCROW COST Town of Oro Valley,Arizona 2010 Defeasance.. Series 2000(All GF) Type of Maturity Par Total Security Date Amount Rate Cost SLGS 07/01/2010 242,083 0.130% 242,083.00 242,083 242,083.00 Purchase Cost of Cash Total Date Securities Deposit Escrow Cost Yield 04/29/2010 242,083 0.18 242,083.18 0.130316% 242,083 0.18 242,083.18 Apr 21,2010 10:03 am Prepared by Stone&Youngberg LLC SERIES 2000(GF)-Page 6 ESCROW DESCRIPTIONS Town of Oro Valley,Arizona 2010 Defeasance-Series 2000(All GO Type of Type of Maturity First int Par Max Total Security SLGS Date Pmt Date Amount Rate Rate Cost Apr 29,2010: SLGS Certificate 07/01/2010 07/01/2010 242,083 0.130% 0.130% 242,083.00 242,083 242,083.00 SLGS Summary SLGS Rates File 21 A PR 10 Total Certificates of Indebtedness 242,083.00 Apr 21,2010 10:03 am Prepared by Stone&Youngberg LLC SERIES 2000(GF)-Page 7 PROOF OF COMPOSITE ESCROW YIELD Town of Oro Valley,Arizona 2010 Defeasance-Series 2000(AB GF) All restricted escrows funded by bond proceeds Present Value Security PV to 04/29/2010 Date Receipts Factor @ 0.1303164% 07/01/2010 242,137.32 0.999775664 242,083.00 242,137.32 242,083.00 Escrow Cost Summary Purchase date 04/29/2010 Purchase cost of securities 242,083.00 Target for yield calculation 242,083,00 • Apr 21,2010 10:03 am Prepared by Stone&Youngberg LLC SERIES 2000(GF)-Page 1 ESCROW REQUIREMENTS Town of Oro Valley,Arizona 2010 Defeasance-Series 2000(All GF) Period Principal Redemption Ending Principal Interest Redeemed Premium Total 07/01/2010 115,000.00 5,937.50 120,000.00 1,200.00 242,137.50 115,000.00 5,937.50 120,000.00 1,200.00 242,137.50 Apr 21,2010 10:03 am Prepared by Stone&Youngberg LLC SERIES 2000(GF)-Page 2 SUMMARY OF BONDS REFUNDED Town of Oro Valley,Arizona 2010 Defeasance-Series 2000(All OF) Maturity Interest Par Call Call Bond Date Rate Amount Date Price Excise Tax Revenue Obligations,Series 2000(All GF),2000: GF 07/01/2010 4.900% 115,000.00 07/01/2011 5.200% 120,000.00 07/01/2010 101.000 235,000.00 Apr 21,2010 10:03 am Prepared by Stone&Youngberg LLC SERIES 2001 (GF&WTR)-Page 3 ESCROW SUFFICIENCY Town of Oro Valley,Arizona 2010 Defeasance-Series 2001 (37%GE and 63%Wtr Portions) Escrow Net Escrow Excess Excess Date Requirement Receipts Receipts Balance 04/29/2010 0.38 0.38 0.38 07/01/2010 438,753.13 438,753.52 0.39 0.77 01/01/2011 30,003.13 30,003.34 0.21 0.98 07/01/2011 1,369,053.13 1,369,05 2.15 -0.98 1,837,809.39 1,837,809.39 0.00 Apr 21,2010 10:03 am Prepared by Stone&Youngberg LLC SERIES 2001 (GF&WTR)-Page 4 ESCROW CASH FLOW Town of Oro Valley,Arizona 2010 Defeasance-Series 2001 (37%GF and 63%Vvitr Portions) Present Value Net Escrow PV to 04/29/2010 Date Principal Interest Receipts Factor @ 0.4157308% 07/01/2010 437,633.00 1,120.52 438,753.52 0.999285018 438,439.82 01/01/2011 27,015.00 2,988.34 30,003.34 0.997212159 29,919.70 07/01/2011 1,366,115.00 2,937.15 1,369,052.15 0.995143600 1,362,403.49 1,830,763.00 7,046.01 1,837,809.01 1,830,763.00 Escrow Cost Summary Purchase date 04/29/2010 Purchase cost of securities 1,830,763.00 Target for yield calculation 1,830,763.00 Apr 21,2010 10:03 am Prepared by Stone&Youngberg LLC SERIES 2001 (GF&WTR)-Page 5 ESCROW COST • Town of Oro Valley,Arizona 2010 Defeasance-Series 2001 (37%GF and 63%Wtr Portions) Type of Maturity Par Total Security Date Amount Rate Cost SLGS 07/01/2010 437,633 0.130% 437,633.00 SLGS 01/01/2011 27,015 0.280% 27,015.00 SLGS 07/01/2011 1,366,115 0.430% 1,366,115.00 1,830,763 1,830,763.00 Purchase Cost of Cash Total Date Securities Deposit Escrow Cost Yield 04/29/2010 1,830,763 0.38 1,830,763.38 0.415731% 1,830,763 0.38 1,830,763.38 Apr 21,2010 10:03 am Prepared by Stone&Youngberg LLC SERIES 2001 (GF 8 WTR)-Page 6 ESCROW DESCRIPTIONS Town of Oro Valley,Arizona 2010 Defeasance-Series 2001 (37%GF and 63%Wtr Portions) Type of Type of Maturity First Int Par Max Total Security SLGS Date Pmt Date Amount Rate Rate Cost Apr 29,2010: SLGS Certificate 07/01/2010 07/01/2010 437,633 0.130% 0.130% 437,633.00 SLGS Certificate 01/01/2011 01/01/2011 27,015 0.280% 0.280% 27,015.00 SLGS Note 07/01/2011 07/01/2010 1,366,115 0.430% 0.430% 1,366,115.00 1,830,763 1,830,763.00 SLGS Summary SLGS Rates File 21 APR 10 Total Certificates of Indebtedness 464,648,00 Total Notes 1,366,115.00 Total original SLGS 1,830,763.00 • Apr 21,2010 10:03 am Prepared by Stone&Youngberg LLC SERIES 2001 (GF&WIR)-Page 7 PROOF OF COMPOSITE ESCROW YIELD Town of Oro Valley,Arizona 2010 Defeasance-Series 2001 (37%GF and 63%Wtr Portions) All restricted escrows funded by bond proceeds Present Value Security PV to 04/29/2010 Date Receipts Factor @ 0.4157308% 07/01/2010 438,753.52 0.999285018 438,439.82 01/01/2011 30,003.34 0.997212159 29,919.70 07/01/2011 1,369,052.15 0.995143600 1,362,403.49 1,837,809.01 1,830,763.00 Escrow Cost Summary Purchase date 04/29/2010 Purchase cost of securities 1,830,763.00 Target for yield calculation 1,830,763.00 Apr 21,2010 10:03 am Prepared by Stone&Youngberg LLC SERIES 2001 (GF&VVI-R)-Page 1 ESCROW REQUIREMENTS Town of Oro Valley,Arizona 2010 Defeasance-Series 2001 (37%GF and 63%Wtr Portions) Period Principal Redemption Ending Principal Interest Redeemed Premium Total 07/01/2010 400,000.00 38,753.13 438,753.13 01/01/2011 30,003.13 30,003.13 07/01/2011 425,000.00 30,003.13 905,000.00 9,050.00 1,369,053.13 825,000.00 98,759.39 905,000.00 9,050.00 1,837,809.39 Apr 21,2010 10:03 am Prepared by Stone&Youngberg LLC SERIES 2001 (GF&WTR)-Page 2 SUMMARY OF BONDS REFUNDED Town of Oro Valley,Arizona 2010 Defeasance-Series 2001 (37%CF and 63%Wtr Portions) Maturity Interest Par Call Call Bond Date Rate Amount Date Price MPC Excise Tax Revenue Bonds,Series 200I,2001: GF 07/01/2010 4.375% 150,000.00 07/01/2011 4.400% 160,000.00 07/01/2012 4.500% 165,000.00 07/01/2011 101.000 07/01/2013 4.625% 170,000.00 07/0)/2011 101.000 WTR 07/01/2010 4.375% 250,000.00 07/01/2011 4.400% 265,000.00 07/01/2012 4.500% 275,000.00 0-7/01/2011 101.000 07/01/2013 4.625% 295,000.00 07/01/201 1 101.000 1,730,000.00 Apr 21,2010 10:03 am Prepared by Stone&Youngberg LLC SERIES 2003 REF-Page 3 ESCROW SUFFICIENCY Town of Oro Valley,Arizona 2010 Defeasance-Series 2003REF(35%CF Portion) Escrow Net Escrow Excess Excess Date Requirement Receipts Receipts Balance 04/29/2010 0.72 0.72 0.72 07/01/2010 247,546.25 247,545.55 -0,70 0.02 01/01/2011 100,280.63 100,281.23 0.60 0.62 07/01/2011 520,280.63 520,280.22 -0.4 I 0.21 01/01/2012 92,930.63 92,930.66 0.03 0.24 07/01/2012 572,930.63 572,931.27 0.640.88 01/01/2013 80,930.63 80,930.46 -0.17 0.71 07/01/2013 3,965,930.63 3,965,929.92 -0.71 5,580,830.03 5,580,830.03 0.00 Apr 21,2010 10:03 am Prepared by Stone&Youngberg LLC SERIES 2003 REF-Page 4 ESCROW CASH FLOW Town of Oro Valley,Arizona 2010 Defeasance-Series 2003REF(35%CF Portion) Present Value Net Escrow PV to 04/29/2010 Date Principal Interest Receipts Factor @ 1.5120337% 07/01/2010 234,859.00 12,686.55 247,545.55 0.997409098 246,904.18 01/01/2011 63,863.00 36,418.23 100,281.23 0.989925098 99,270.91 07/01/2011 483,983.00 36,297.22 520,280.22 0.982497253 511,173.89 01/01/2012 57,674.00 35,256.66 92,930.66 0.975125142 90,619.02 07/01/2012 537,888.00 35,043.27 572,931.27 0.967808348 554,487.67 01/01/2013 48,738.00 32,192.46 80,930.46 0.960546455 77,737.47 07/01/2013 3,934,064.00 31,865.92 3,965,929.92 0.953339051 3,780,875.87 5,361,069.00 219,760.31 5,580,829.31 5,361,069.00 Escrow Cost Summary Purchase date 04/29/2010 Purchase cost of securities 5,361,069.00 Target for yield calculation 5,361,069.00 • Apr 21,2010 10:03 am Prepared by Stone&Youngberg LLC SERIES 2003 REF-Page 5 • ESCROW COST Town of Oro Valley,Arizona 2010 Defeasance-Series 2003REF(35%GE Portion) Type of Maturity Par Total Security Date Amount Rate Cost SLGS 07/01/2010 234,859 0.130% 234,859.00 SLGS 01/01/2011 63,863 0.280% 63,863.00 SLGS 07/01/2011 483,983 0.430% 483,983.00 SLGS 01/01/2012 57,674 0.740% 57,674.00 SLGS 07/01/2012 537,888 1.060% 537,888.00 SLGS 01/01/2013 48,738 1.340% 48,738.00 SLGS 07/01/2013 3,934,064 1.620% 3,934,064.00 5,361,069 5,361,069.00 Purchase Cost of Cash Total Date Securities Deposit Escrow Cost Yield 04/29/2010 5,361,069 0.72 5,361,069.72 1.512034% 5,361,069 0.72 5,361,069.72 Apr 21,2010 10:03 am Prepared by Stone&Youngberg LLC SERIES 2003 REF-Page 6 ESCROW DESCRIPTIONS Town of Oro Valley,Arizona 2010 Defeasance-Series 2003REF(35%GF Portion) Type of Type of Maturity First Int Par Max Total Security SLGS Date Pmt Date Amount Rate Rate Cost Apr 29,2010: SLGS Certificate 07/01/2010 07/01/2010 234,859 0.130% 0.130% 234,859.00 SLGS Certificate 01/01/2011 01/01/2011 63,863 0.280% 0.280% 63,863.00 SLGS Note 07/01/2011 07/01/2010 483,983 0.430% 0.430% 483,983.00 SLGS Note 01/01/2012 07/01/2010 57,674 0.740% 0.740% 57,674.00 SLGS Note 07/01/2012 07/01/2010 537,888 1.060% 1.060% 537,888.00 SLGS Note 01/01/2013 07/01/2010 48,738 1.340% 1.340% 48,738.00 SLGS Note 07/01/2013 07/01/2010 3,934,064 1.620% 1.620% 3,934,064.00 5,361,069 5,361,069.00 SLGS Summary SLGS Rates File 21APR10 Total Certificates of indebtedness 298,722.00 Total Notes 5,062,347.00 Total original SLGS 5,361,069.00 Apr 21,2010 10:03 am Prepared by Stone&Youngberg LLC SERIES 2003 REF-Page 7 PROOF OF COMPOSITE ESCROW YIELD Town of Oro Valley,Arizona 2010 Defeasance-Series 2003REF(35%GF Portion) All restricted escrows funded by bond proceeds Present Value Security PV to 04/29/2010 Date Receipts Factor @ 1.5120337% 07/01/2010 247,545.55 0.997409098 246,904.18 01/01/2011 100,281.23 0.989925098 99,270.91 07/01/2011 520,280.22 0.982497253 511,173.89 01/01/2012 92,930.66 0.975125142 90,619.02 07/01/2012 572,93127 0.967808348 554,487.67 01/01/2013 80,930.46 0.960546455 77,737.47 07/01/2013 3,965,929.92 0.953339051 3,780,875.87 5,580,829.31 5,361,069.00 Escrow Cost Summary Purchase date 04/29/2010 Purchase cost of securities 5,361,069.00 Target for yield calculation 5,361,069.00 Apr 21,2010 10:03 am Prepared by Stone&Youngberg LLC SERIES 2003 REF-Page 1 ESCROW REQUIREMENTS Town of Oro Valley,Arizona 2010 Defeasance-Series 2003REF(,35%CF Portion) Period Principal Ending Principal Interest Redeemed Total 07/01/2010 145,000.00 102,546.25 247,546.25 01/01/2011 100,280.63 100,280.63 07/01/2011 420,000.00 100,280.63 520,280.63 01/01/2012 92,930.63 92,930.63 07/01/2012 480,000.00 92,930.63 572,930.63 01/01/2013 80,930.63 80,930.63 07/01/2013 510,000.00 80,930.63 3,375,000.00 3,965,930.63 1,555,000.00 650,830.03 3,375,000.00 5,580,830.03 Apr 21,2010 10:03 am Prepared by Stone&Youngberg LLC SERIES.2003 REF-Page 2 SUMMARY OF BONDS REFUNDED Town of Oro Valley,Arizona 2010 Defeasance-Series 2003REF(35%GF Portion) Maturity Interest Par Call Call Bond Date Rate Amount Date Price MPC Excise Tax Revenue Refunding Bonds,Series 2003(GF Portion),2003: GF 07/01/2010 3.125% 145,000.00 07/01/2011 3.500% 420,000.00 07/01/2012 5.000% 480,000.00 07/01/2013 5.000% 510,000.00 07/01/2014 3.750% 705,000.00 07/01/2013 100.000 07/01/2015 4.000% 550,000.00 07/01/2013 100.000 07/01/2016 4.000% 575,000.00 07/01/2013 100.000 07/01/2017 4.125% 595,000.00 07/01/2013 100.000 07/01/2018 4.200% 470,000.00 07/01/2013 100.000 07/01/2019 4.300% 480,000.00 07/01/2013 100.000 4,930,000.00 Apr 21,2010 10:03 am Prepared by Stone&Youngberg LLC MUNICIPAL SECONDARY MARKET DISCLOSURE INFORMATION COVER SHEET This cover sheet should be sent with all submissions made to the Municipal Securities Rulemaking Board,and any applicable State Information Depository pursuant to Securities and Exchange Commission Rule 15c2-12 or any analogous state statute. Issuer's and/or Other Obligated Person's Name: TOWN OF ORO VALLEY,ARIZONA 0 Base CUSIP Number: 68702J Number of pages of attached information: 1 Description of Material Event Notice/Financial Information(Check One): 1. principal and interest payment delinquencies . 2. non-payment related defaults 3. unscheduled draws on debt service reserves reflecting financial difficulties 4. unscheduled draws on credit enhancements'reflecting financial difficulties 5. substitution of credit or liquidity providers,or their failure to perform 6. adverse tax opinions or events affecting the tax-exempt status of the security 7. modifications to rights of security holders 8. bond calls 9. X defeasances 10. release,substitution,or sale of property securing repayment of the securities 11. rating changes 12. failure to provide annual financial information as required 13. other material event notice(specify) 14. financial information: Please check all appropriate boxes: 0 CAFR: (a) U includes U does not include Annual financial Information (b) Audited? Yes D No El 0 Annual Financial Information: Audited?Yes U No El 0 Operating Data Fiscal Period Covered: ® Financial information should not be filed with the MSRB. I hereby represent that I am authorized by the issuer or its agent to distribute this information publicly: Signature: Name: Stacey Lemos Title: Finance Director Employer: Town of Oro Valley Address: 11000 North LaCanada Drive City, State,Zip Code: Oro Valley,AZ 85737-7016 Voice Telephone Number: (520)229-4732 SWR:dlh 1192966.2 4/23/2010 1 TOWN OF ORO VALLEY, ARIZONA EXCISE TAX REVENUE OBLIGATIONS, SERIES 2000 NOTICE OF DEFEASANCE Redemption Maturities Premium on Being Principal Maturity or Bonds Being Issue Original Refunded Amount Redemption Refunded CUSIP (Dated Principal or paid at Being Date (%of No. Date) Name of Issue Amount Maturity Refunded (July 1) principal) 68702JAK2 11/1/00 Town of Oro Valley,Arizona $2,580,000 2010 $1 15,000 2010 N/A 68702JAP 1 Excise Tax Revenue 2011* 120,000 2010 1% Obligations,Series 2000 1 *mandatory call dates of term bonds Such bonds and obligations are hereinafter referred to as the"Bonds Being Defeased". Notice is hereby given that the Bonds Being Defeased have been refunded prior to maturity and that an irrevocable trust for each series of the Bonds Being Defeased has been established with Wells Fargo Bank, N.A. and funded with obligations issued by or guaranteed by the United States of America in order to provide for the payment of the Bonds Being Defeased. The Bonds Being Defeased will be paid on the dates and in the amounts (plus interest accrued thereon to the redemption date),as set forth above. SWR:dlh 1192966.2 4/23/2010 2 MUNICIPAL SECONDARY MARKET DISCLOSURE INFORMATION COVER SHEET This cover sheet should be sent with all submissions made to the Municipal Securities Rulemaking Board,and any applicable State Information Depository pursuant to Securities and Exchange Commission Rule 15c2-12 or any analogous state statute. Issuer's and/or Other Obligated Person's Name: TOWN OF ORO VALLEY MUNICIPAL PROPERTY CORPORATION 0 Base CUSIP Number: 68702L Number of pages of attached information: 1 Description of Material Event Notice/Financial Information(Check One): 1. principal and interest payment delinquencies 2. non-payment related defaults 3. unscheduled draws on debt service reserves reflecting financial difficulties 4, unscheduled draws on credit enhancements reflecting financial difficulties 5. substitution of credit or liquidity providers, or their failure to perform 6. adverse tax opinions or events affecting the tax-exempt status of the security 7. modifications to rights of security holders 8. bond calls 9. X defeasances 10. release, substitution,or sale of property securing repayment of the securities 11. rating changes 12. failure to provide annual financial information as required 13. other material event notice(specify) 14. financial information: Please check all appropriate boxes: D CAFR: (a) 0 includes 0 does not include Annual financial Information (b) Audited? Yes U No 0 D Annual Financial Information: Audited?Yes 0 No U D Operating Data Fiscal Period Covered: ® Financial information should not be filed with the MSRB. I hereby represent that I am authorized by the issuer or its agent to distribute this information publicly: Signature: Name: Stacey Lemos Title: Finance Director Employer: Town of Oro Valley Address: 11000 North LaCanada Drive City, State,Zip Code: Oro Valley,AZ 85737-7016 Voice Telephone Number: (520)229-4732 SWR:dlh 1192966.2 4/23/2010 3 TOWN OF ORO VALLEY MUNICIPAL PROPERTY CORPORATION EXCISE TAX REVENUE BONDS, SERIES 2001 NOTICE OF DEFEASANCE , Redemption Maturities Premium on Being Principal Maturity or Bonds Being Issue Original Refunded Amount Redemption Refunded CUSIP (Dated Principal or paid at Being Date (%of No. Date) _ Name of Issue Amount Maturity Refunded (July 1) principal) 68702LBH3 04/1/01 Town of Oro Valley $9,010,000 2010 $400,000 2010 N/A 68702LBJ9 Municipal Property 2011 425,000 2011 N/A 68702LBK6 Corporation Excise Tax 2012 440,000 2011 1% 68702LBL4 Revenue Bonds,Series 2001 2013 465,000 2011 1% Such bonds and obligations are hereinafter referred to as the"Bonds Being Defeased". Notice is hereby given that the Bonds Being Defeased have been refunded prior to maturity and that an irrevocable trust for each series of the Bonds Being Defeased has been established with Wells Fargo Bank, N.A. and funded with obligations issued by or guaranteed by the United States of America in order to provide for the payment of the Bonds Being Defeased. The Bonds Being Defeased will be paid on the dates and in the amounts (plus interest accrued thereon to the redemption date),as set forth above. SWR:dlh 1192966.2 4/23/2010 4 TOWN OF ORO VALLEY MUNICIPAL PROPERTY CORPORATION EXCISE TAX REVENUE REFUNDING BONDS, SERIES 2003 NOTICE OF DEFEASANCE Redemption Maturities Premium on Being Principal Maturity or Bonds Being Issue Original Refunded Amount Redemption Refunded CUSIP (Dated Principal or paid at Being Date (%of No. Date) Name of Issue Amount Maturity Refunded principal) _ (July 1) _ 68702LBV2 12/1/03 Town of Oro Valley $15,750,000 201 0 **$145,000 2010 N/A 68702LBW0 Municipal Property 2011 **420,000 2011 N/A 68702LBX8 Corporation Excise Tax 2012 **480,000 2012 N/A 68702LBY6 Revenue Refunding Bonds, 2013 **510,000 2013 N/A 68702LBZ3 Series 2003 2014 **705,000 2013 N/A 68702LCA7 2015 **550,000 2013 N/A 68702LCB5 2016 **575,000 2013 N/A 68702LCC3 2017 **595,000 2013 N/A 68702LCD1 2018 **470,000 2013 N/A 68702LCE9 2019 **480,000 2013 N/A 1 **partial amount of maturity allocated Such bonds and obligations are hereinafter referred to as the"Bonds Being Defeased". Notice is hereby given that the Bonds Being Defeased have been refunded prior to maturity and that an irrevocable trust for each series of the Bonds Being Defeased has been established with Wells Fargo Bank, N.A. and funded with obligations issued by or guaranteed by the United States of America in order to provide for the payment of the Bonds Being Defeased. The Bonds Being Defeased will be paid on the dates and in the amounts (plus interest accrued thereon to the redemption date),as set forth above. SWR:d1h 1192966.2 4/23/2010 5