preliminary remarketing circular dated may … · preliminary remarketing circular dated may ... of...

PRELIMINARY REMARKETING CIRCULAR DATED MAY 10, 2012 REMARKETING - THIS IS NOT A NEW ISSUE RATING: “AA+”; Outlook Stable (See “Rating” herein)

On June 1, 2012 (the “Mandatory Tender Date”), the Variable Rate Demand County Guaranteed Parking Revenue Bonds, Series of 2007 (Taxable) (the “2007 Bonds”) of the Redevelopment Authority of the County of Montgomery (the “Authority”) will be subject to mandatory tender. On the Mandatory Tender Date, (i) the standby bond purchase agreement issued by Royal Bank of Canada will expire by its terms; (ii) the Authority will convert the 2007 Bonds from a Weekly Rate to a Fixed Rate; (iii) all of the 2007 Bonds will be subject to mandatory tender at a purchase price equal to the principal amount thereof, plus accrued interest to, but not including, the Mandatory Tender Date; and (iv) the terms and provisions of the 2007 Bonds will be amended to reflect the terms and provisions described herein. Upon conversion to a Fixed Rate, the 2007 Bonds will no longer be subject to conversion to another interest rate mode.

On June 1, 2007, Saul Ewing LLP, Philadelphia, Pennsylvania, as bond counsel (“Bond Counsel”) delivered its opinion that under the laws of the Commonwealth of Pennsylvania, as presently enacted and construed, the 2007 Bonds, and the interest thereon, are free from taxation for state and local purposes within the Commonwealth of Pennsylvania, but such exemption does not extend to gift, estate, succession or inheritance taxes or any other taxes not levied or assessed directly on the 2007 Bonds, or the interest thereon. See “TAX MATTERS” herein.

$11,885,000 REDEVELOPMENT AUTHORITY OF THE COUNTY OF MONTGOMERY

County Guaranteed Parking Revenue Bonds Series of 2007 (Taxable)

(Fixed Rate)

Dated and accruing interest from: June 1, 2012 Due: June 1, as shown on the inside cover Interest Payable: June 1 and December 1 First Interest Payment: December 1, 2012 The 2007 Bonds were issued under a Trust Indenture dated as of June 1, 2007 (the “Original Indenture”) between the Redevelopment Authority of the County of Montgomery (the “Authority”) and The Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of New York Trust Company, N.A.), as trustee (the “Trustee”). To provide additional security for the 2007 Bonds, the County of Montgomery, Pennsylvania (the “County”) entered into a County Guaranty (the “County Guaranty”) dated as of June 1, 2007, between the County and the Trustee pursuant to which the County unconditionally guaranteed the payment of principal of and interest on the 2007 Bonds. Upon conversion of the 2007 Bonds from a Weekly Rate to a Fixed Rate, the Authority will enter into a First Supplement to the Trust Indenture dated as of June 1, 2012 (the “First Supplemental Indenture,” and together with the Original Indenture, the “Indenture”) between the Authority and the Trustee. The County Guaranty will continue to provide additional security for the 2007 Bonds in the Fixed Rate mode. By purchase and acceptance of the 2007 Bonds, the owners of the 2007 Bonds are deemed to have irrevocably consented to the amendments contained in the First Supplemental Indenture. To evidence the consent of the owners of the 2007 Bonds of each subseries upon their reoffering described herein, the Remarketing Agent for purposes of the Fixed Rate conversion of such 2007 Bonds will deliver its irrevocable consent to the First Supplemental Indenture.

The 2007 Bonds are fully registered bonds, registered in the name of and held by Cede & Co., as nominee for The Depository Trust Company, New York, New York (“DTC”). DTC will continue to act as securities depository for the 2007 Bonds. Purchases of the 2007 Bonds will be made in book-entry-only form and purchasers will not receive certificates representing their interests in the 2007 Bonds. So long as DTC, or its nominee, Cede & Co., or any other nominee of DTC, is the registered owner of the 2007 Bonds, payments of the purchase price of and the principal of, redemption premium, if any, and interest on the 2007 Bonds will be made by the Trustee, directly to Cede & Co. Disbursement of such payments to DTC Participants is the responsibility of DTC, and disbursement of such payments to Beneficial Owners of the 2007 Bonds is the responsibility of DTC Participants and Indirect Participants. See “BOOK-ENTRY-ONLY SYSTEM” herein. The Bonds will be issued and available for purchase in denominations of $5,000 or any integral multiple in excess thereof.

The 2007 Bonds were issued to finance the costs of a capital program consisting of the acquisition of various parcels of land in the Municipality of Norristown (Montgomery County), Pennsylvania, the demolition of existing structures thereon and the construction thereon of an approximately 485-space, multi-level public parking garage, together with approximately 7,500 square feet of retail space and additional related improvements, and, in connection with the foregoing, the acquisition of necessary or suitable furnishings, equipment and machinery, and to pay the costs of issuing and providing liquidity for the 2007 Bonds (collectively, the “Project”). The Project was completed in May of 2008, and has been in service since then.

Upon conversion to the Fixed Rate on June 1, 2012 (the “Fixed Rate Conversion Date”), interest on the 2007 Bonds shall be payable initially on December 1, 2012 and semiannually thereafter on each June 1 and December 1 of each year until the maturity date of such 2007 Bond, or if such 2007 Bond is subject to redemption prior to maturity, until the date fixed for redemption thereof, if payment of the redemption price has been duly made or provided for.

THE 2007 BONDS ARE SUBJECT TO OPTIONAL AND MANDATORY REDEMPTION PRIOR TO MATURITY AS MORE FULLY SET FORTH HEREIN.

THE 2007 BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY, SECURED BY AND PAYABLE FROM THE TRUST ESTATE PLEDGED BY THE AUTHORITY AND FROM PAYMENTS MADE BY THE COUNTY UNDER THE COUNTY GUARANTY. THE COUNTY GUARANTY IS A GENERAL OBLIGATION OF THE COUNTY, SECURED BY THE COUNTY'S FULL FAITH, CREDIT AND TAXING POWER. NEITHER THE FULL FAITH, CREDIT NOR TAXING POWER OF THE COMMONWEALTH OR ANY POLITICAL SUBDIVISION OF THE COMMONWEALTH (OTHER THAN THE COUNTY UNDER THE COUNTY GUARANTY) HAS BEEN OR WILL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON THE 2007 BONDS. THE REMARKETING OF THE 2007 BONDS WILL NOT DIRECTLY, INDIRECTLY OR CONTINGENTLY OBLIGATE THE COMMONWEALTH OR ANY OTHER POLITICAL SUBDIVISION THEREOF (OTHER THAN THE COUNTY UNDER THE COUNTY GUARANTY) TO LEVY OR TO PLEDGE ANY FORM OF TAXATION WHATSOEVER THEREFOR. THE AUTHORITY HAS NO TAXING POWER. This cover page contains certain information for general reference only. It is not intended to be a summary of the security or terms of the 2007 Bonds. Investors must read the entire Remarketing Circular, including the appendices attached hereto, to obtain information essential to the making of an informed investment decision. The Remarketing Agent for purposes of the Fixed Rate conversion of the 2007 Bonds is:

PIPER JAFFRAY & CO. The date of this Remarketing Circular is May ___, 2012 T

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(Fixed Rate)

CUSIP Prefix*: 613645

Year Principal Amount Interest Rate Yield Price CUSIP Suffix*

2017 $ % % 2018 2019 2020 2021 2022 2023 2024 2025 2026

$_________; ___%; Term Bonds due June 1, 20__ - Price ____; Yield ____%; CUSIP 613645 ___*

$_________; ___%; Term Bonds due June 1, 20__ - Price ____; Yield ____%; CUSIP 613645 ___*

* Copyright, American Bankers Association. CUSIP data herein is provided by Standard & Poor’s, CUSIP Service Bureau, a

division of The McGraw Hill Companies, Inc. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Service. CUSIP numbers are provided for convenience of reference only. The Authority, the Trustee and the County do not assume any responsibility for the accuracy of such numbers.



(Fixed Rate)

MEMBERS OF THE AUTHORITY BOARD

Paul Baker Bartle, Esquire Chairman Jay G. Ochroch, Esquire Vice Chairman William G. Hamilton Treasurer Michael J. Becker Secretary Jonathan H. Spergel, Esquire Asst. Secretary/Asst. Treasurer

EXECUTIVE DIRECTOR

John F. Nugent, III

AUTHORITY SOLICITOR

Duffy, North, Wilson, Thomas & Nicholson, LLP Hatboro, Pennsylvania

FINANCIAL ADVISORS TO THE AUTHORITY

Public Financial Management, Inc. Malvern, Pennsylvania

and

Hugh Dougherty Willow Grove, Pennsylvania

GUARANTOR

County of Montgomery, Pennsylvania

TRUSTEE

The Bank of New York Mellon Trust Company, N.A. Philadelphia, Pennsylvania

REMARKETING AGENT FOR FIXED RATE CONVERSION

Piper Jaffray & Company Philadelphia, Pennsylvania

BOND COUNSEL

Saul Ewing LLP Philadelphia, Pennsylvania

THE ORDER AND PLACEMENT OF MATERIALS IN THIS REMARKETING CIRCULAR, INCLUDING THE APPENDICES, ARE NOT TO BE DEEMED TO BE A DETERMINATION OF RELEVANCE, MATERIALITY OR IMPORTANCE, AND THIS REMARKETING CIRCULAR, INCLUDING THE APPENDICES, MUST BE CONSIDERED IN ITS ENTIRETY. THE REMARKETING OF THE 2007 BONDS IS MADE ONLY BY MEANS OF THIS ENTIRE REMARKETING CIRCULAR.

NO DEALER, BROKER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED BY THE AUTHORITY, THE COUNTY OR THE REMARKETING AGENT TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION, OTHER THAN THAT GIVEN OR MADE IN THIS REMARKETING CIRCULAR, AND IF GIVEN OR MADE, ANY SUCH OTHER INFORMATION OR REPRESENTATION MAY NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE AUTHORITY, THE COUNTY OR THE REMARKETING AGENT NAMED ON THE COVER PAGE HEREOF (THE “REMARKETING AGENT”).

THIS REMARKETING CIRCULAR DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF THE 2007 BONDS BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH OFFER, SOLICITATION OR SALE.

THIS REMARKETING CIRCULAR HAS BEEN APPROVED BY THE AUTHORITY AND THE COUNTY, AND, WHILE THE INFORMATION SET FORTH IN THIS REMARKETING CIRCULAR HAS BEEN FURNISHED BY THE AUTHORITY, THE COUNTY AND OTHER SOURCES WHICH ARE BELIEVED TO BE RELIABLE, SUCH INFORMATION IS NOT GUARANTEED AS TO ACCURACY OR COMPLETENESS. THE INFORMATION AND EXPRESSIONS OF OPINION SET FORTH IN THIS REMARKETING CIRCULAR ARE SUBJECT TO CHANGE WITHOUT NOTICE AND NEITHER THE DELIVERY OF THIS REMARKETING CIRCULAR NOR ANY SALE MADE UNDER THIS REMARKETING CIRCULAR SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE AFFAIRS OF THE AUTHORITY OR THE COUNTY HAVE REMAINED UNCHANGED SINCE THE DATE OF THIS REMARKETING CIRCULAR.

THE REMARKETING AGENT HAS PROVIDED THE FOLLOWING SENTENCE FOR INCLUSION IN THIS REMARKETING CIRCULAR: THE REMARKETING AGENT HAS REVIEWED THE INFORMATION IN THIS REMARKETING CIRCULAR IN ACCORDANCE WITH, AND AS PART OF ITS RESPONSIBILITIES TO INVESTORS UNDER THE FEDERAL SECURITIES LAWS AS APPLIED TO THE FACTS AND CIRCUMSTANCES OF THIS REMARKETING, BUT THE REMARKETING AGENT DOES NOT GUARANTEE THE ACCURACY OR COMPLETENESS OF ANY SUCH INFORMATION.

___________________________________________________

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TABLE OF CONTENTS

INTRODUCTION ....................................................................................................................................................... 1

REDEVELOPMENT AUTHORITY OF THE COUNTY OF MONTGOMERY ................................................ 2

THE COUNTY ............................................................................................................................................................ 5

THE 2007 BONDS ....................................................................................................................................................... 6

BOOK-ENTRY ONLY SYSTEM .............................................................................................................................. 8

SECURITY AND SOURCES OF PAYMENT FOR THE 2007 BONDS ............................................................. 10

TAX MATTERS ........................................................................................................................................................ 11

THE REMARKETING AGENT FOR FIXED RATE CONVERSION ............................................................... 13

RATING ..................................................................................................................................................................... 13

THE TRUSTEE ......................................................................................................................................................... 14

FINANCIAL ADVISORS ......................................................................................................................................... 14

CERTAIN LEGAL MATTERS ............................................................................................................................... 14

CONTINUING DISCLOSURE ................................................................................................................................ 14

BONDHOLDERS’ RISKS ........................................................................................................................................ 16

ABSENCE OF MATERIAL LITIGATION ........................................................................................................... 17

MISCELLANEOUS .................................................................................................................................................. 17

Appendix A – Description of the County Appendix B – Annual Financial Report of the County for Fiscal Year ended December 31, 2010 Appendix C – Indenture and County Guaranty Appendix D – Form of Continuing Disclosure Agreement Appendix E – Opinion of Bond Counsel dated June 1, 2007

[ THIS PAGE INTENTIONALLY LEFT BLANK ]

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REMARKETING CIRCULAR



INTRODUCTION

General

This Remarketing Circular, including the cover page and the appendices attached hereto, sets forth information with regard to the remarketing by the Redevelopment Authority of the County of Montgomery (the “Authority”) of its $11,885,000 County Guaranteed Parking Revenue Bonds, Series of 2007 (Taxable) (the “2007 Bonds”). The 2007 Bonds were originally issued pursuant to a Trust Indenture dated June 1, 2007 (the “Original Indenture”), from the Authority to The Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of New York Trust Company, N.A.), as trustee and tender agent (the “Trustee” and “Tender Agent”) and pursuant to a resolution of the Authority adopted on May 9, 2007. The 2007 Bonds are being remarketed pursuant to the Original Indenture, as supplemented by a First Supplemental Indenture dated as of June 1, 2012 between the Authority and the Trustee (the “First Supplemental Indenture”, and together with the Original Indenture, the “Indenture”), and a resolution of the Authority adopted on May 9, 2012.

The 2007 Bonds are limited obligations of the Authority, secured by and payable from the Trust Estate pledged by the Authority, which Trust Estate includes revenues derived from the operation of an approximately 485-space, multi-level public parking garage, together with approximately 7,500 square feet of retail space and related improvements (the “Project Facilities”), located in the Municipality of Norristown (Montgomery County, Pennsylvania). The proceeds from the sale of the 2007 Bonds financed the Project Facilities and the costs associated with issuing the 2007 Bonds (the “Project”).

As additional security for the 2007 Bonds, the County of Montgomery, Pennsylvania (the “County”) entered into a County Guaranty (the “County Guaranty”), dated as of June 1, 2007, between the County and the Trustee, pursuant to which the County unconditionally guaranteed the payment of the 2007 Bonds. The County Guaranty was authorized and approved pursuant to (i) an Ordinance of the Board of County Commissioners of the County, enacted on April 26, 2007 (the “Ordinance”), and (ii) in accordance with the Local Government Unit Debt Act of the Commonwealth of Pennsylvania, Act No. 1996-177, as amended and supplemented (the “Debt Act”). In the Ordinance, the County covenanted with the Trustee that it will include amounts which, together with other funds held by the Trustee and amounts reasonably expected to be received from the Authority and which are available for such purpose, will equal the amount of the principal of and interest on the 2007 Bonds and sinking fund payments becoming due in each fiscal year in its budget for that fiscal year, or will amend its budget in the event it determines that the amounts available under the Indenture will not be sufficient to make the payments on the 2007 Bonds; and, for such budgeting, appropriation and payment, the County has pledged its full faith, credit and taxing power. As provided in the Debt Act, the foregoing covenant is specifically enforceable. The remarketing of the 2007 Bonds and their conversion to a Fixed Rate was approved by the County pursuant to a resolution adopted on May __, 2012 (the “County Resolution”). By purchase and acceptance of the 2007 Bonds, the owners of the 2007 Bonds are deemed to have irrevocably consented to the amendments contained in the First Supplemental Indenture. To evidence the consent of the owners of the 2007 Bonds upon their reoffering described herein, the Remarketing Agent, as defined herein, for purposes of the Fixed Rate conversion of the 2007 Bonds will deliver its irrevocable consent to the First Supplemental Indenture.

Reference is made to Appendix C - “INDENTURE AND COUNTY GUARANTY” for definitions of certain of the capitalized terms used but not defined in this Remarketing Circular. The descriptions and summaries of various documents set forth in this Remarketing Circular do not purport to be comprehensive or definitive and reference should be made to each document for complete details of all terms and conditions. All statements herein are qualified in their entirety by the actual contents of each such document.

2

Redevelopment Authority of the County of Montgomery

The Authority is a body corporate and politic existing under the laws of the Commonwealth of Pennsylvania (the “Commonwealth”) pursuant to the Pennsylvania Urban Redevelopment Law (P.L. 991, approved May 24, 1945, as amended) (the “Act”), having been duly organized by the County. See “REDEVELOPMENT AUTHORITY OF THE COUNTY OF MONTGOMERY” herein.

The County

The County is a county of the Second Class A, a classification established on the basis of population by the General Assembly on October 20, 1967. Counties of the Second Class A have populations between 500,000 and 800,000 people.

The County functions under the Second Class County Code, which delegates various duties to the County Commissioners, including administration of elections and registration of voters; assessment of property for tax purposes; care of prisoners; maintenance of roads and bridges; care of the aged, dependent and indigent ill; planning; civil defense; sewage disposal; and parks and recreation.

The County is governed by three Commissioners elected at-large for four year terms, one of whom is elected to serve as chairman by vote of the three Commissioners. Other elected offices in the County include Controller, Coroner, Clerk of Courts, Jury Commissioners, District Attorney, Prothonotary, Recorder of Deeds, Register of Wills, Sheriff, Treasurer and Common Pleas Judgeships. See “THE COUNTY” and Appendix A - “DESCRIPTION OF THE COUNTY” herein.

Remarketing of the 2007 Bonds

The 2007 Bonds were issued on June 1, 2007, initially, and currently, are bearing interest at the Weekly Rate and supported by a Liquidity Facility that is set to expire by its terms on June 1, 2012. As set forth in this Remarketing Circular, on June 1, 2012 (such date herein referred to as either the “Mandatory Tender Date” or the “Fixed Rate Conversion Date”), the 2007 Bonds will be subject to mandatory tender. On the Mandatory Tender Date, (i) the Liquidity Facility will expire and not be renewed or replaced; (ii) the Authority will convert the 2007 Bonds from a Weekly Rate to a Fixed Rate to maturity; (iii) all of the 2007 Bonds will be subject to mandatory tender at a purchase price equal to the principal amount thereof, plus accrued interest to, but not including, the Mandatory Tender Date; and (iv) the terms and provisions of the 2007 Bonds will be amended to reflect the terms and provisions described herein. Upon conversion to a Fixed Rate, the 2007 Bonds will no longer be subject to conversion to another interest rate mode.

Upon the conversion of the 2007 Bonds to the Fixed Rate, interest (i) shall be payable initially on December 1, 2012 and semiannually thereafter on each June 1 and December 1 and (ii) will be calculated on the basis of a year of 360 days, based upon twelve 30-day months. The 2007 Bonds are stated to mature on the dates shown on the inside cover of this Remarketing Circular. The 2007 Bonds are subject to optional and mandatory redemption prior to maturity as further described herein. See “THE 2007 BONDS” herein.

REDEVELOPMENT AUTHORITY OF THE COUNTY OF MONTGOMERY

General

The Authority is a public instrumentality of the Commonwealth and a body corporate and politic organized and existing under the Act. The Authority was created by action of the Commissioners of the County on November 10, 1958, for the purpose of the elimination of blighted areas through economically and socially sound redevelopment of such areas in conformity with the comprehensive general plan of the respective municipalities for residential, recreational, commercial, industrial or other purposes, and otherwise encouraging the provision of healthful homes, a decent living environment and adequate places of employment. The Authority issued the 2007

3

Bonds to accomplish the public purposes of the Act. The Authority's existence shall continue beyond the final maturity date of the 2007 Bonds.

The governing body of the Authority is a board consisting of five (5) members appointed by the Board of Commissioners of the County for four-year terms. The daily operations and administration of the Authority are managed by John F. Nugent, III, Executive Director. The following persons are the present members and officers of the Authority:

Name Position Paul Baker Bartle, Esquire Chairman Jay G. Ochroch, Esquire Vice Chairman Michael J. Becker Secretary William G. Hamilton Treasurer Jonathan H. Spergel, Esquire Asst. Secretary/Asst. Treasurer

The offices of the Authority are located at 104 West Main Street, Suite 2, Norristown, Pennsylvania 19401,

and the telephone number of the Authority is 610.275.5300.

The Authority has no power to pledge the credit or taxing power of the Commonwealth or any political subdivision thereof, and the 2007 Bonds are not deemed to be the general obligation of the Authority, the County (except with regard to the County Guaranty) or the Commonwealth or any of its political subdivisions, and neither the Commonwealth, any of its political subdivisions, nor the County (except with regard to the County Guaranty), shall be liable for the payment of the principal of, interest on or premium, if any, on the 2007 Bonds. The members, officers or employees of the Authority are not personally liable for the obligations evidenced by the 2007 Bonds.

Project Facilities

The Authority and the County undertook the development and financing of the Project Facilities for the purpose of fostering growth and redevelopment in Norristown, Pennsylvania, the County seat. As demonstrated by the operating financial information provided in the tables below, it is unlikely that the revenues from the Project Facilities will be sufficient to meet debt service requirements on the 2007 Bonds and should not be relied upon by prospective purchasers of the 2007 Bonds as a source of payment of debt service on the 2007 Bonds. Prospective purchasers of the 2007 Bonds should look to the security provided by the County under the County Guaranty as the principal source of payment of debt service on the 2007 Bonds.

The Project Facilities were completed and placed into operation in May of 2008. The following table

summarizes the revenues, expenses and changes in net assets for the parking garage financed with the 2007 Bonds.

Statement of Revenues, Expenses and Changes in Net Assets Year Ended December 31, 2010

Operating Revenues – Parking Fees $ 372,606 Operating Expenses 349,178 Operating Income before Depreciation & Amortization $ 23,428

Depreciation $ 352,579 Amortization of Bond Issuance Costs 3,377

OPERATING INCOME (LOSS) $ (332,528)

Non-Operating Revenue Investment Income $ 403 Interest Expense (46,005)

INCREASE (DECREASE) IN NET ASSETS $ (378,130)

Net Assets Beginning $ 5,026,772 Ending $ 4,648,642

Source: The Authority’s Financial and Compliance Report, December 31, 2010.

4

The following table provides a comparison of the Authority’s proposed 2012 budget against the 2011 budget and 2011 estimated actual for the Project Facilities.

Comparisons of 2012 Proposed Operating Budget with 2011 Budget & Estimated Actual

Adopted 2011 Budget Estimated Actual 2011 Proposed 2012 Budget REVENUES Operating Revenues

Monthly Contract Revenue $ 317,200 $ 268,064 $ 268,100 Transient Revenue 62,800 56,162 57,300 Retail Lease Revenue - - 93,000

Subtotal $ 380,000 $ 324,266 $ 418,400

Transfer from Bond Proceeds - $ 32,904 $ 677,904 Interest Income $ 400 $ 259 $ 300

TOTAL REVENUES $ 380,000 $ 357,389 $ 1,096,604

EXPENSES Employment Expenses

Salaries $ 83,000 $ 71,277 $ 74,000 Salary Expense 26,000 22,109 23,000

Subtotal $ 109,000 $ 93,386 $ 97,000

Management & Administration Expert & RAMC Fees $ 66,000 $ 69,122 $ 67,500 Legal Expenses 500 1,244 1,000 Architectural Fees - 4,125 5,000 Audit Fee 5,000 8,750 5,000 Bank Card Fees 2,600 2,728 2,800 Data Processing Fees - 335 350

Subtotal $ 74,100 $ 86,304 $ 81,650

Operating Expenses Insurance Premiums $ 38,500 $ 38,830 $ 38,500 Real Estate Taxes 11,500 11,377 12,000 Supplies 6,000 4,760 6,000 DSL Service & Telephone 4,600 4,890 4,600 Utilities 36,000 32,062 36,000 Landscape Main./Snow Removal 8,000 8,083 8,000 Retail Leasing & Management Fee - - - Misc. Operating Expenses 34,000 33,606 34,000 Real Estate Leasing Commission - 32,904 32,904 Retail Tenant Fit Out - - 645,000 Repair & Replacement Expense 22,500 25,407 22,500

Subtotal $ 161,100 $ 191,919 $ 839,504

Debt Service (interest only) $ 54,000 $ 35,203 $ 36,000 Repair & Replacement Reserve $ 25,000 $ 25,000 $ 25,000

TOTAL EXPENSES $ 423,200 $ 431,812 $ 1,079,154 NET INCOME $ (43,200) $ (74,423) $ 17,450

___________________________ Source: Redevelopment Authority of the County of Montgomery

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Previous Financings

In furtherance of its statutory purposes, the Authority, from time to time, has issued revenue bonds and notes to finance various housing and economic development projects and otherwise has financed (or assisted in the financing) of such projects using local, state and federal grants and loans it has received for such purposes. To the extent any such funds are repayable, each such repayment obligation is payable solely from receipts and revenues derived by the Authority from the facility financed by such funding source or from special funds established therefor, and is secured separately and distinctly from the obligations for every other facility, including the 2007 Bonds. Accordingly, a default on any other obligations issued by the Authority would not constitute a default on the 2007 Bonds.

The Authority may from time to time enter into further transactions with other entities in connection with projects unrelated to the Project Facilities and such transactions will provide for the issuance of bonds or notes to be secured by separate sources of revenues or other security.

Litigation

There is no litigation of any nature pending or, to the best of the Authority's knowledge, threatened against the Authority as of the date of this Remarketing Circular to restrain or enjoin the remarketing of the 2007 Bonds, or in any way contesting or affecting the validity of the 2007 Bonds or any proceedings of the Authority taken or to be taken with respect to the remarketing thereof, or the pledge or application of any money or security pledged for the payment of the 2007 Bonds, or the existing powers of the Authority.

THE COUNTY

Taxing Authority and Procedures

The County, through its Board of Commissioners, is empowered to levy taxes up to 30 mills on the assessed value of real estate for general County purposes and without limitation as to rate or amount for debt service on its general obligation bonds (Act of July 28, 1953, P.L. 723, as amended). In addition, the County has been empowered to levy taxes on intangible personal property at the rate of up to 4 mills, pursuant to the County Personal Property Tax Act of June 17, 1913, P.L. 507, as amended. Intangible personal property consists of, inter alia, mortgages, accounts bearing interest (except those of banks), public debt of other states and their agencies and subdivisions, and corporate loans for corporations. The County has not levied this tax since 1996.

The County is legally required to adopt its budget and determine the tax rate on or before December 31 prior to the commencement of the budget year (which is the calendar year), and customarily issues real estate tax bills on or about February 1. Funds needed for expenditures before the receipt of tax payments have generally been obtained by temporary loans in anticipation of taxes as authorized by Pennsylvania law, or by use of cash balances carried over from the prior years.

The County's tax assessors maintain all real property assessments in the County and return those assessments, prior to the year of levy, to an assessment board appointed by the Board of Commissioners. The general County tax is levied against these assessments and the revenues from such tax are used for general operations of the County and for payment of principal of and interest on the debt of the County.

See Appendix A - “DESCRIPTION OF THE COUNTY,” for additional information regarding the taxing power of the County.

Litigation

There is no litigation of any nature pending or, to the best of the County's knowledge, threatened against the County as of the date of this Remarketing Circular to restrain or enjoin the remarketing of the 2007 Bonds, or in any way contesting or affecting the validity of the County Guaranty or the Project.

6

THE 2007 BONDS

General Information Relating to the 2007 Bonds

The following is a summary of certain provisions of the 2007 Bonds bearing interest at a Fixed Rate. Reference is made to the 2007 Bonds and to the Indenture for the detailed provisions of the 2007 Bonds.

The 2007 Bonds are in fully registered book-entry-only form, without coupons. The Authorized Denomination for the 2007 Bonds bearing interest at the Fixed Rate is $5,000 and any integral multiple in excess thereof. The 2007 Bonds are made available for purchase only in book-entry form, and purchasers will not receive certificates representing their interests in the 2007 Bonds.

The Interest Payment Date for interest accrued on the 2007 Bonds while bearing interest at the Fixed Rate is first day of June and December in each year and the maturity date thereof. Interest due on the 2007 Bonds on each Interest Payment Date is to be paid, except as described below under “BOOK-ENTRY ONLY SYSTEM,” by check mailed to the persons appearing at the close of business on the regular Record Date as registered owners on the registration books kept by the Trustee; provided, however, that if funds on any Interest Payment Date are insufficient to pay the interest then due, such defaulted interest will cease to be payable to the registered owner as of the regular Record Date but will instead be payable on a special interest payment date established by the Trustee for payment of such defaulted interest when sufficient funds are available, to the registered owner on a special record date to be established in accordance with the provisions of the Indenture.

Piper Jaffray & Co. has been appointed as Remarketing Agent and Purchaser in connection with the Fixed Rate conversion of the 2007 Bonds. The Remarketing Agent is to remarket the 2007 Bonds on the Mandatory Tender Date in connection with the Fixed Rate conversion of the 2007 Bonds pursuant to a First Supplement to the Remarketing Agreement dated May __, 2012 (the “First Supplemental Remarketing Agreement”) among the Remarketing Agent, RBC Capital Markets, the current remarketing agent for the 2007 Bonds while such bonds bear interest at the Weekly Rate (the “Weekly Rate Remarketing Agent”), and the Authority. The First Supplemental Remarketing Agreement supplements that certain Remarketing Agreement dated as of June 1, 2007 (the “Original Remarketing Agreement”) between the Authority and the Weekly Rate Remarketing Agent.

So long as DTC, or its nominee, Cede & Co., is the registered owner of the 2007 Bonds, payments of the principal of, redemption premium, if any, and interest on the 2007 Bonds, when due, are to be made to Cede & Co., and all such payments shall be valid and effective to satisfy fully and to discharge the obligations of the Authority with respect to, and to the extent of, principal, redemption premium, if any, and interest so paid. Disbursements of such payments to the DTC Participants (as hereinafter defined) is the responsibility of DTC. Disbursements of such payments to the owners of beneficial interests in the 2007 Bonds is the responsibility of the DTC Participants and the Indirect Participants (as hereinafter defined). See “BOOK-ENTRY ONLY SYSTEM”.

Interest on the 2007 Bonds

The Authority has elected to have all of the 2007 Bonds converted to bear interest at a Fixed Rate until final maturity or earlier date fixed for redemption.

Commencing on Fixed Rate Conversion Date, the 2007 Bonds shall bear interest at the Fixed Rates set forth on the inside cover of this Remarketing Circular. Interest will be computed on the basis of a year of 360 days, based upon twelve 30-day months.

The Fixed Rate is the interest rate for such Fixed Rate Period determined by the Remarketing Agent not more than thirty (30) days nor later than the last Business Day preceding the Fixed Rate Conversion Date, upon consultation with, and having the consent of, the Authority. The Fixed Rate Conversion Date shall be the last Interest Payment Date on which interest is payable at the particular Variable Rate in effect prior to such conversion for the 2007 Bonds to be converted. The Fixed Rate shall be the lowest rate of interest that, in the judgment of the Remarketing Agent as of the date of determination and under prevailing market conditions, would cause the 2007 Bonds to have a

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market value equal to the principal amount of all, but not less than all, 2007 Bonds. Such determination shall be conclusive and binding upon the Trustee, the Tender Agent, the Authority, the Remarketing Agent and the Holders of the 2007 Bonds.

Remarketing

The Authority, the Remarketing Agent and the Weekly Rate Remarketing Agent are entering into the First Supplemental Remarketing Agreement pursuant to which (i) the Remarketing Agent will remarket the 2007 Bonds in connection with the conversion of such bonds to a Fixed Rate and (ii) the Weekly Rate Remarketing Agent will continue to perform the duties required of it under the Original Remarketing Agreement and the Indenture with respect to 2007 Bonds bearing interest at a Weekly Rate and for so long as such bonds bear interest at a Weekly Rate. On the Fixed Rate Conversion Date, the Weekly Rate Remarketing Agent shall resign as requested by the Authority and the Original Remarketing Agreement shall terminate upon such resignation. The Authority has agreed in the Original Remarketing Agreement to indemnify the Weekly Rate Remarketing Agent against certain liabilities, including certain liabilities under federal securities laws, subject to applicable law. Additionally, on the Fixed Rate Conversion Date, the duties of the Remarketing Agent shall automatically cease, and the First Supplemental Remarketing Agreement shall terminate upon such cessation.

Redemption

Optional Redemption. The 2007 Bonds stated to mature on or after June 1, 20__ are subject to redemption prior to maturity at the option of the Authority, in whole, or, from time to time, in part by lot, at any time on or after June 1, 20__ at a redemption price equal to 100% of the principal amount thereof plus interest accrued to the date fixed for redemption.

Extraordinary Optional Redemption. The 2007 Bonds are subject to extraordinary redemption prior to maturity in whole or in part at any time, at the option of the Authority, following a determination that it is not feasible to restore the Project Facilities, from net insurance proceeds, condemnation awards, the proceeds of conveyance in lieu of condemnation deposited with the Trustee, and other amounts available therefor in such amounts as is determined pursuant to the Indenture as a result of damage to, destruction or condemnation of or taking under the power of eminent domain of, all or a substantial portion of the Project Facilities. Any such redemption shall be made in the order of maturity designated by the Authority, and within any maturity by lot, as selected by the Trustee, upon payment of 100% of the principal amount thereof, together with interest accrued thereon to the date fixed for redemption.

Mandatory Redemption. The 2007 Bonds maturing on June 1, 20__ are subject to mandatory redemption in part, by lot, by operation of a sinking fund to be established by the Authority (to the extent not previously purchased by the Authority) on June 1, at a redemption price equal to par plus interest accrued to the redemption date in the following principal amounts in each of the following years:

Year Principal Amount

20__

$ 20__ 20__ 20__ 20__*

* Final Maturity

Notice of Redemption. Not more than 45 nor less than 30 days before the redemption date of any 2007 Bonds, the Trustee is required to send written notice by first class mail to the Rating Service and all registered owners of 2007 Bonds to be redeemed as a whole or in part (subject to the Book-Entry Only system described herein). Such redemption notice will be given in the name of the Authority and is to set forth the details with respect to the redemption in accordance with the provisions of the Indenture and state that from the date fixed for redemption that interest will cease to accrue on the 2007 Bonds of such series so called for redemption. Failure to

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give such notice by mail to any owner of 2007 Bonds to be redeemed, or any defect therein, will not affect the validity of any proceedings for the redemption of any other 2007 Bonds. If at the time of mailing of any notice of redemption, the Authority shall not have deposited with the Trustee money sufficient to redeem all the 2007 Bonds called for redemption, such notice shall state that it is conditional, that is, subject to the deposit of sufficient money with the Trustee not later than the opening of business on the redemption date and shall be of no effect unless such money is so deposited.

So long as DTC or its nominee is the registered owner of the 2007 Bonds, any failure on the part of DTC or failure on the part of a nominee of a Beneficial Owner (having received notice from a Participant or otherwise) to notify the Beneficial Owner affected by any redemption of such redemption, shall not affect the validity of the redemption. So long as DTC or its nominee is the registered owner of the 2007 Bonds, if less than all of the 2007 Bonds are called for redemption, the particular 2007 Bonds or portions of 2007 Bonds to be redeemed are to be selected by lot by DTC, the Direct Participants and Indirect Participants in such manner as they may determine. See “BOOK-ENTRY ONLY SYSTEM” below.

Transfer and Exchange

Subject to the provisions described below under “BOOK-ENTRY ONLY SYSTEM,” a 2007 Bond may be transferred or exchanged only upon presentation thereof to the Trustee. Such 2007 Bond must be accompanied by an endorsement duly executed by the registered owner. No charge will be imposed in connection with any transfer or exchange, except for taxes or governmental charges related thereto.

BOOK-ENTRY ONLY SYSTEM

DTC, New York, New York, will act as securities depository for the 2007 Bonds. The 2007 Bonds will be issued as fully-registered Bonds registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered certificate will be issued for each interest rate of the maturity of the 2007 Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC.

DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

Purchases of the 2007 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the 2007 Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however,

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expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the 2007 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the 2007 Bonds, except in the event that use of the book-entry system for the 2007 Bonds is discontinued.

To facilitate subsequent transfers, all 2007 Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of 2007 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the 2007 Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such 2007 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of 2007 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the 2007 Bonds, such as redemptions, tenders, defaults and proposed amendments to the bond documents. For example, Beneficial Owners of 2007 Bonds may wish to ascertain that the nominee holding the 2007 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of the notices be provided directly to them.

Redemption notices will be sent to DTC. If less than all of the 2007 Bonds of a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the 2007 Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the 2007 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Payments of principal, premium, if any, and interest on the 2007 Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Authority or the Trustee, on payable dates in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participants and not of DTC, the Trustee, the Authority or its agents, subject to any statutory or regulatory requirements as may be in effect from time to time. Payments of principal, premium, if any, and interest on the 2007 Bonds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Trustee or the Authority or its agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

IT IS THE DUTY OF EACH BENEFICIAL OWNER TO MAKE ARRANGEMENTS WITH THE APPLICABLE DIRECT PARTICIPANT OR INDIRECT PARTICIPANT TO RECEIVE FROM SUCH PARTICIPANT NOTICES OF PAYMENTS OR PRINCIPAL, PREMIUM (IF ANY), AND INTEREST, AND ALL OTHER PAYMENTS AND COMMUNICATIONS WHICH THE DIRECT PARTICIPANT RECEIVES FROM DTC. NEITHER THE AUTHORITY NOR THE TRUSTEE HAS ANY DIRECT OBLIGATION OR RESPONSIBILITY TO DIRECT PARTICIPANTS, INDIRECT PARTICIPANTS OR BENEFICIAL OWNERS FOR SO LONG AS THE AUTHORITY USES THE SYSTEM OF BOOK ENTRY TRANSFERS THROUGH DTC.

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DTC may discontinue providing its services as depository with respect to the 2007 Bonds at any time by giving reasonable notice to the Trustee or the Authority or its agents. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered.

The Authority may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, bond certificates will be printed and delivered to DTC for further distribution.

THE INFORMATION IN THIS SECTION CONCERNING DTC AND DTC'S BOOK-ENTRY SYSTEM HAS BEEN OBTAINED FROM DTC'S WEBSITE AND IS PRESUMED TO BE RELIABLE, BUT NONE OF THE AUTHORITY, THE TRUSTEE OR THE REMARKETING AGENT TAKES ANY RESPONSIBILITY FOR THE ACCURACY THEREOF.

NONE OF THE AUTHORITY, THE TRUSTEE, THE WEEKLY RATE REMARKETING AGENT OR THE REMARKETING AGENT WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO DIRECT PARTICIPANTS, TO INDIRECT PARTICIPANTS OR TO ANY BENEFICIAL OWNER WITH RESPECT TO (i) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC, ANY DIRECT PARTICIPANT, OR ANY INDIRECT PARTICIPANT; (ii) THE PAYMENTS BY DTC, AND DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT WITH RESPECT TO THE PRINCIPAL OF, OR PREMIUM, IF ANY, OR INTEREST ON THE 2007 BONDS; (iii) ANY NOTICE WHICH IS PERMITTED OR REQUIRED TO BE GIVEN TO BONDHOLDERS; (iv) ANY CONSENT GIVEN BY DTC OR OTHER ACTION TAKEN BY DTC AS BONDHOLDER; OR (v) THE SELECTION BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF A PARTIAL REDEMPTION OF THE 2007 BONDS

SECURITY AND SOURCES OF PAYMENT FOR THE 2007 BONDS

The Indenture

The 2007 Bonds are limited obligations of the Authority, secured by and payable from the Trust Estate granted by the Authority and the Trustee under the Indenture, which includes the Pledged Project Revenues, and all monies and Investment Securities held in the funds and accounts established under the Indenture, all investment earnings on monies held in accounts and funds established by the Indenture, any and all proceeds of the foregoing. Pledged Project Revenues means all operating revenues net of Operating Expenses of the Authority derived from the Project; provided, however that Pledged Project Revenues shall be limited to amounts legally available for the purposes such amounts are intended to be used. The 2007 Bonds are also secured by the County Guaranty, which is a general obligation of the County for which the County will pledge its full faith, credit and taxing power.

The Indenture provides that the 2007 Bonds are limited obligations of the Authority, payable solely from and secured by the foregoing sources. See Appendix C - “INDENTURE AND COUNTY GUARANTY.”

Neither the full faith, credit nor taxing power of the Commonwealth or any political subdivision of the Commonwealth (other than the County under the County Guaranty) has been or will be pledged to the payment of the principal of or interest or any premium on (including the purchase price of) the 2007 Bonds or other costs incident thereto. The issuance of the 2007 Bonds will not directly, indirectly or contingently obligate the Commonwealth or any other political subdivision thereof (other than the County under the County Guaranty) to levy or to pledge any form of taxation whatsoever therefore. The Authority has no taxing power.

County Guaranty

The County Guaranty was authorized and approved pursuant to an Ordinance of the Board of County Commissioners of the County, enacted on April 26, 2007 (the “Ordinance”) and in accordance with the Debt Act. In the Ordinance, the County covenanted with the Trustee that it will include amounts which, together with other

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funds held by the Trustee and amounts reasonably expected to be received from the Authority and which are available for such purpose, will equal the amount of the principal of and interest on the 2007 Bonds and sinking fund payments becoming due in each fiscal year in its budget for that fiscal year, or will amend its budget in the event it determines that the amounts available under the Indenture will not be sufficient to make the payments on the 2007 Bonds, and appropriate such amounts to pay such principal and interest at the dates and places and in the manner stated in the 2007 Bonds; and, for such budgeting, appropriation and payment, the County pledges its full faith, credit and taxing power. As provided in the Debt Act, the foregoing covenant shall be specifically enforceable.

The County Guaranty will be pledged solely to the repayment of the 2007 Bonds. See Appendix A hereto for further information concerning the County.

Pursuant to the terms and conditions of a Service Agreement dated as of June 1, 2007 by and between the County and the Authority, the Authority agrees to repay to the County money that may be advanced by the County pursuant to the County Guaranty.

Actions in the Event of Default

Under Pennsylvania law, if a local government unit having outstanding any general obligation bonds or notes or guaranteed revenue bonds or notes or lease rental debt, including a guaranty of authority obligations, fails or refuses to make adequate provision in its budget for any fiscal year for the sums payable in respect of the bonds or notes, lease rental or guaranty in the fiscal year or fails to appropriate or pay the moneys necessary in that fiscal year for the payment of the amount of the lease rental or guaranty, as the case may be, of the maturing principal of and the interest on the bonds or notes or any of them, or any tax anticipation notes, or any sinking fund obligation for the bonds or notes or tax anticipation notes, or guaranty or the lease rental payment coming due in the fiscal year of the budget or for which the appropriations or payments of the local government unit should have been made, then at the suit of the holder of any bond or note of the local government unit or the holder of any authority obligation secured by a lease or guaranty of the local government unit or of any taxpayer of the local government unit, the court of common pleas shall, after a hearing held upon such notice to the local government unit as the court may direct and upon a finding of such failure or neglect, by order of mandamus require the treasurer of the local government unit to pay into the sinking fund for each series of bonds or notes then outstanding, or for each guaranty or lease rental payment, the first tax moneys or other available revenues or moneys thereafter received in the fiscal year by the treasurer, equally and ratably for each series for which provision has not been made in proportion to debt service for the year on each series then outstanding, or the amounts due upon guaranties or as payments with respect to lease rental debt, as the case may be. Any priority on incoming tax moneys accorded to a separate sinking fund for tax anticipation notes under the authority of the Debt Act (relating to security for tax anticipation notes and sinking fund), shall not be affected by this provision until the sum on deposit in each sinking fund equals the moneys that should have been budgeted or appropriated.

In the event the County fails to comply with any provision of the County Guaranty, the Debt Act provides that the holders of 25% in aggregate principal amount of the 2007 Bonds then outstanding may, upon appropriate action, appoint a trustee to represent the registered holders. The trustee may, and, upon request of the registered holders of 25% in principal amount of the 2007 Bonds then outstanding and upon being provided with indemnity satisfactory to it, shall take such action on behalf of the registered holders as is more specifically set forth in the Debt Act. Such representation by the trustee shall be exclusive.

TAX MATTERS

Federal Tax Consequences

The following is a summary of certain anticipated federal income tax consequences of the purchase, ownership and disposition of the 2007 Bonds. The summary is based upon the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), the regulations promulgated thereunder and the judicial and administrative

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rulings and decisions now in effect, all of which are subject to change or possible differing interpretations. This summary does not purport to address all aspects of federal income taxation that may affect particular investors in light of their individual circumstances, nor certain types of investors subject to special treatment under the federal income tax laws. This summary focuses primarily on investors who will hold the 2007 Bonds as “capital assets” (generally, property held for investment within the meaning of Code Section 1221), but much of the discussion is applicable to other investors. Potential purchasers of the 2007 Bonds should consult their own tax advisors in determining the federal, state or local tax consequences to them of the purchase, holding and disposition of the 2007 Bonds.

Taxability of Stated Interest and Principal

In general, interest payable to 2007 Bondholders who are not exempt from federal income tax will be treated as ordinary income in the year paid, in the case of cash basis taxpayers, or the year accrued, in the case of accrual basis taxpayers. Principal payments on the 2007 Bonds, other than those attributable to any market discount, will be treated as a return of capital.

Sale or Redemption of the 2007 Bonds

A 2007 Bondholder's tax basis for a 2007 Bond is the price such holder pays for the 2007 Bond, reduced by (a) payments received other than “qualified periodic interest” and (b) amortized bond premium. Gain or loss recognized on a sale, exchange or redemption of a 2007 Bond, measured by the difference between the amount realized and the 2007 Bond’s basis as so adjusted, will generally give rise to capital gain or loss if the 2007 Bond is held as a capital asset. In the case of a subsequent purchaser, a portion of any gain will generally be treated as ordinary income to the extent of any market discount accrued to the date of disposition which was not previously reported as ordinary income.

Backup Withholding

A 2007 Bondholder may, under certain circumstances, be subject to “backup withholding” at the rate ranging from 28 percent to 31 percent with respect to interest on the 2007 Bonds. This withholding generally applies if the holder of a 2007 Bond (a) fails to furnish the Trustee with its taxpayer identification number (“TIN”); (b) furnishes the Trustee an incorrect TIN; (c) fails to report properly interest, dividends or other “reportable payments” as defined in the Code, or (d) under certain circumstances, fails to provide the Trustee or its securities broker with a certified statement, signed under penalty of perjury, that the TIN provided is his correct number and that the holder is not subject to backup withholding. Backup withholding will not apply, however, with respect to payments made to certain 2007 Bondholders, including payments to certain exempt recipients (such as certain exempt organizations) and to certain Nonresidents (as defined below). Holders of the 2007 Bonds should consult their tax advisors as to their qualification for exemption from backup withholding and the procedure for obtaining the exemption.

The Trustee will report to the 2007 Bondholders and to the IRS for each calendar year the amount of any “reportable payments” during such year and the amount of tax withheld, if any, with respect to payments on the 2007 Bonds.

Foreign Bondholders

Under the Code, interest with respect to 2007 Bonds held by nonresident alien individuals, foreign corporations or other non-United States persons (“Nonresidents”) generally will not be subject to the 30 percent United States withholding tax if the Trustee (or other person who would otherwise be required to withhold tax from such payments), is provided with an appropriate statement that the beneficial owner of a 2007 Bond is a Nonresident. The withholding tax, if applicable, may be reduced or eliminated by an applicable tax treaty. However, interest that is effectively connected with a United States business conducted by a Nonresident 2007 Bondholder will generally be subject to the regular United States income tax.

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INVESTORS WHO ARE NONRESIDENTS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE SPECIFIC TAX CONSEQUENCES TO THEM OWNING OF 2007 BONDS.

Pennsylvania Tax Consequences

Under the laws of the Commonwealth of Pennsylvania as enacted and construed on the date hereof, the 2007 Bonds, and the interest thereon are free from taxation for state and local purposes within the Commonwealth of Pennsylvania, but such exemption does not extend to gift, estate, succession or inheritance taxes or any other taxes not levied or assessed directly on the 2007 Bonds, or the interest thereon. Profits, gains or income derived from the sale, exchange, or other disposition of the 2007 Bonds are subject to state and local taxation within the Commonwealth of Pennsylvania. Specifically, the 2007 Bonds are exempt from personal property taxes in Pennsylvania and interest on the 2007 Bonds is exempt from the Pennsylvania personal income tax and the Pennsylvania corporate net income tax.

THE FOREGOING SUMMARY AS TO 2007 BONDS IS NOT INTENDED AS AN EXHAUSTIVE RECITAL OF THE POTENTIAL TAX CONSEQUENCES OF HOLDING THE 2007 BONDS. PROSPECTIVE PURCHASERS OF THE 2007 BONDS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT OT THE FEDERAL, STATE AND LOCAL TAX CONSEQUENCES OF THE OWNERSHIP OF THE 2007 BONDS. BOND COUNSEL WILL NOT RENDER ANY OPINION WITH RESPECT TO ANY FEDERAL, STATE OR LOCAL TAX CONSEQUENCES.

THE REMARKETING AGENT FOR FIXED RATE CONVERSION

Under the First Supplemental Remarketing Agreement, Piper Jaffray & Co. is the Remarketing Agent solely in connection with the conversion of the 2007 Bonds from the Weekly Rate to the Fixed Rate. RBC Capital Markets will continue to serve as Weekly Rate Remarketing Agent for the 2007 Bonds while such bonds bear interest at the Weekly Rate up to but not including the Fixed Rate Conversion Date.

The 2007 Bonds are being purchased by Remarketing Agent. Pursuant to a Bond Purchase Agreement with the Authority and the County, the Remarketing Agent has agreed to pay a purchase price for the 2007 Bonds in an amount equal to 100% of the principal amount thereof. The Remarketing Agent may offer and sell the 2007 Bonds to certain dealers (including dealers depositing such 2007 Bonds into investment trusts) and others at prices lower than the public offering prices stated on the cover page hereof. The Remarketing Agent will purchase all the 2007 Bonds if any are purchased, and the County will indemnify the Remarketing Agent and the Authority against losses, claims, damages and liabilities arising out of any incorrect statements or the omission of material facts pertaining to the County and or the plan of financing contained in this Remarketing Circular. The public offering prices set forth on the inside cover page hereof may be changed after the initial offering by the Remarketing Agent.

RATING

Fitch, Inc. (“Fitch”) has assigned a long-term rating of “AA+”, Outlook Stable, to the 2007 Bonds. An explanation of the significance of such rating may be obtained from Fitch. A rating is not a recommendation to buy, sell, or hold securities. There is no assurance that such rating will continue for any given period of time or that it will not be revised downward or withdrawn entirely if, in the opinion of the rating agency, circumstances warrant such revision or withdrawal. Any such downward revision or withdrawal could have an adverse effect on the marketability or market price of the Bonds.

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THE TRUSTEE

The obligations and duties of the Trustee are described in the Indenture and the Trustee has undertaken only those obligations and duties which are expressly set out in the Indenture. The Trustee has not independently passed upon the validity of the 2007 Bonds, the security therefore, the adequacy of the provisions of the payment thereof or the state tax-exempt status of the interest on the 2007 Bonds. The Trustee has relied upon the opinion of Bond Counsel dated June 1, 2007 for the matters set out in the opinion of Bond Counsel. The Indenture expressly provides that the Trustee shall not be responsible for any loss or damage resulting from any action or inaction taken in good faith in reliance upon an opinion of counsel.

Under the terms of the Indenture, the Trustee is liable only for those damages caused by its negligence or willful misconduct. Under the Indenture, the Trustee is not required to take notice or be deemed to have notice of any default under the Indenture, unless the Trustee has been specifically notified in writing of such default by the Authority or the owners of at least 25% in aggregate principal amount of the Outstanding 2007 Bonds affected by such default. All notices or other instruments required by the Indenture to be delivered to the Trustee must be delivered at the corporate trust office of the Trustee. In the absence of any such notice, the Trustee may conclusively assume no Event of Default (as defined in the Indenture) exists, except as expressly stated above and in the Indenture. The summary of the Trustee’s rights, duties, obligations and immunities contained herein is not intended to be a complete summary and reference is made to the Indenture for a complete statement of the Trustee’s rights, duties, obligations and immunities.

FINANCIAL ADVISORS

The Authority has retained both Public Financial Management, Malvern, Pennsylvania and Hugh Dougherty, Willow Grove, Pennsylvania to serve as Financial Advisors in connection with the remarketing of the 2007 Bonds. The Financial Advisors have assisted the Authority in matters relating to the planning, structuring and remarketing of the 2007 Bonds.

CERTAIN LEGAL MATTERS

All legal matters incident to the authorization, issuance and sale of the 2007 Bonds were approved by Saul Ewing LLP, Bond Counsel, in the original Bond Counsel Opinion attached hereto as Appendix E to this Remarketing Circular. Certain legal matters will be passed upon for the County by its Solicitor, Raymond McGarry, Esquire, Norristown, Pennsylvania, and for the Authority by its counsel, Duffy North Wilson Thomas & Nicholson, LLP, Hatboro, Pennsylvania.

CONTINUING DISCLOSURE

General. The Authority and the County have covenanted for the benefit of the Holders of the 2007 Bonds in a Continuing Disclosure Agreement dated as of June 1, 2012 (the “Disclosure Agreement”) to (a) provide notices of the occurrence of certain enumerated events; and (b) provide certain financial information and operating data relating to the Authority and the County by not later than the first (1st) day of the ninth (9th) calendar month immediately following the end of the Authority’s and County's fiscal year, e.g., by not later than September 1 of each year, commencing September 1, 2012 (the “Annual Report”). The Annual Report and the notices of significant events, both summarized below, will be filed by the Authority and the County with the Electronic Municipal Market Access System (“EMMA”) maintained by the Municipal Securities Rulemaking Board. The specific nature of the information to be contained in the Annual Report or the notices of significant events is summarized below. These covenants have been made in order to assist the Purchaser in complying with S.E.C. Rule 15c2-12, as amended (the “Rule”).

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Annual Reports. The Authority’s Annual Report filed with EMMA shall contain or incorporate by reference the following information with respect to the relevant fiscal year: the information found in the table under “REDEVELOPMENT AUTHORITY OF THE COUNTY OF MONTGOMERY – Project Facilities – Statement of Revenues, Expenses and Changes in Net Assets” herein. The County's Annual Report filed with EMMA shall contain or incorporate by reference the following information with respect to the relevant fiscal year: the County’s audited Annual Financial Report, including information and data of the type found in Appendix A of this Remarketing Circular. Notices of Significant Events. Upon the occurrence of any of the following notice events, the Authority and the County shall in a timely manner not in excess of ten (10) business days after the occurrence of any of the following events, file with EMMA notice of such occurrence: (1) principal and interest payment delinquencies; (2) non payment-related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions or events affecting the tax status of the bonds, if applicable; (7) modifications to rights of Holder, if material; (8) bond calls (other than mandatory sinking fund redemptions), if material, and tender offers; (9) defeasances of the 2007 Bonds; (10) release, substitution, or sale of property securing repayment of any 2007 Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the Authority or the County; (13) the consummation of a merger, consolidation, or acquisition involving the Authority or the County or the sale of all or substantially all of the assets of the Authority or the County, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement, if material; (14) appointment of a successor or additional trustee or the change of name of a trustee, if material; or (15) failure to provide annual financial information as required. Accounting Standards. The financial statements described above shall be audited in accordance with generally accepted accounting principles applicable in the preparation of financial statements of the Authority and the County as such principles are from time to time promulgated by the Financial Accounting Standards Board, the Governmental Accounting Standards Board, or such other body recognized as authoritative by the American Institute of Certified Public Accountants or any successor body (“GAAP”), and shall also comply with applicable federal and state auditing statutes, regulations, standards and/or guidelines. The Authority and/or the County may from time to time modify its accounting principles to the extent necessary or desirable to comply with changes in either GAAP or applicable federal and state statutes, regulations, standards and/or guidelines. Audited financial statements of the Authority and/or the County not submitted as part of the Annual Report shall be provided to EMMA if and when available to the Authority or the County, respectively, and in any event not more than thirty (30) days after receipt thereof from the Authority’s or County's respective auditors. In the event that audited financial statements are not submitted as part of the Annual Report, the Authority and the County, as the case may be, shall provide in lieu thereof unaudited financial statements meeting the description set forth above. Termination of Reporting Obligation. The Authority’s and the County's obligations under the Disclosure Agreement shall terminate upon (a) the legal defeasance, prior redemption or payment in full of all of the 2007 Bonds or (b) the assumption by a successor Obligated Person of all of the obligations of the prior Obligated Person both under the Disclosure Agreement and under the 2007 Bonds. Amendments. Notwithstanding any other provision of the Disclosure Agreement, the Authority and the County may modify or amend the Disclosure Agreement. Under the current SEC interpretation of the Rule, the following preconditions must be satisfied: (a) the amendment is being made in connection with a change of circumstances that arises from a change in legal requirements, change in law, change in the identity, nature or status of the Authority or the County, or change in the type of business conducted by the Authority or the County; (b) the Disclosure Agreement, as amended, would have complied with the requirements of the Rule as of the date of issuance of the relevant Bonds, after taking into account any amendment or interpretations of the Rule, as well as any change in circumstances; and (c) the amendment does not materially adversely effect the interests of Holders as determined either by a party unaffiliated with the Authority or the County (such as the Trustee or nationally recognized bond counsel) or by an approving vote of a majority of Holders.

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To the extent required by the Rule, the Authority and the County shall disclose in the next Annual Report the amendment and its impact on the information being provided. Defaults. In the event of a failure of the Authority or the County to comply with any provision of the Disclosure Agreement, the Trustee, any Participating Underwriter or any Holder may take such actions as may be necessary and appropriate, including seeking a writ of mandamus or specific performance by court order to cause the Authority and/or the County to comply with its obligations under the Disclosure Agreement. A default under the Disclosure Agreement shall not be deemed an Event of Default under the Indenture or the 2007 Bonds, and the sole remedy under the Disclosure Agreement in the event of any failure of the Authority and/or the County to comply with the Disclosure Agreement shall be an action to compel performance, provided, however, that nothing in the Disclosure Agreement shall limit any Holder's rights under applicable federal securities law. Due to an oversight, the Authority was not in compliance with its obligations under a Continuing Disclosure Agreement (the “2010 Disclosure Agreement”) which it entered into in connection with the issuance of its $6,200,000 Guaranteed Revenue Bonds, Series of 2010 (Johnson & Markley Redevelopment, L.P. Project) (Federally Taxable). Under the 2010 Disclosure Agreement, the Authority agreed to make certain filings with respect to its fiscal year ended December 1, 2010. However, as of the date of this Remarketing Circular, the Authority has supplied the necessary information to EMMA and is now in compliance with the 2010 Disclosure Agreement.

BONDHOLDERS’ RISKS

General

The payment of the principal of and interest on the 2007 Bonds to the registered owners thereof depends upon the Authority’s ability to meet its obligations under the Indenture and the County’s ability to meet its obligation under the County Guaranty. Various factors could adversely affect the Authority’s ability to pay its obligations under the Indenture. The 2007 Bonds are limited obligations of the Authority and are secured by and payable from the Trust Estate, which includes the Pledged Project Revenues and from payments made by the County under the County Guaranty, and from certain funds held by the Trustee pursuant to the Indenture. The obligation of the Authority is limited to the Pledged Project Revenues, and available funds from the Debt Service and Sinking Fund and other funds established under the Indenture, and no representation or assurance can be given that Pledged Project Revenues will be generated in an amount sufficient to pay debt service on the 2007 Bonds. Accordingly, the registered owners of the 2007 Bonds may be required to rely on the County’s ability to make payments of debt service under the County Guaranty.

Limitation on Available Revenues

There can be no assurance that the Pledged Project Revenues received by the Authority in connection with the Project will be sufficient to make required debt service payments on the 2007 Bonds. Moreover, in the event of damage to or destruction of the Project Facilities, revenues from operation of the facility will likely be substantially reduced or terminated and the net proceeds from casualty insurance received by the Authority may not be sufficient to redeem all then Outstanding 2007 Bonds.

Enforceability of Remedies

The remedies available to Bondholders upon an Event of Default under the Indenture are in many respects dependent upon judicial action which is subject to discretion or delay. Under existing law and judicial decisions, including specifically Title 11 of the United States Code, the remedies specified in the Indenture may not be readily available or may be limited. A court may decide not to order specific performance.

The remedies available to Bondholders upon a failure by the County to make payments required to be made under the County Guaranty are limited and are set forth in the Debt Act.

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The various legal opinions delivered concurrently with the original delivery of the 2007 Bonds are qualified as to enforceability of the various legal instruments by limitations imposed by bankruptcy, reorganization, insolvency or other similar laws or legal equitable principles affecting creditors’ rights.

Changes in Federal Law

From time to time, there are presidential proposals, proposals by various federal committees and legislative proposals in Congress that, if enacted, could alter or amend the tax matters referred to herein or adversely affect the marketability or market value of the 2007 Bonds. Further, such proposals may impact the marketability or market value of the 2007 Bonds simply by being proposed. It cannot be predicted whether or in what form any such proposals may be enacted or whether if enacted such proposals would apply to bonds issued prior to enactment. In addition, regulatory or other actions are from time to time announced or proposed which, if implemented or concluded in a particular manner, could adversely affect the market value, marketability or tax status of the 2007 Bonds. It cannot be predicted whether any such regulatory or other actions will be implemented or whether the 2007 Bonds would be impacted thereby. Purchasers of the 2007 Bonds should consult their tax advisors regarding any pending or proposed legislation, regulations or other potential changes in law. The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of issuance and delivery of the 2007 Bonds, and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any proposed or pending legislation, regulations or other potential changes in law.

ABSENCE OF MATERIAL LITIGATION

There is no controversy or litigation of any nature now pending or, to the knowledge of the Authority or the County threatened, that seeks to restrain or enjoin the remarketing of the 2007 Bonds, or in any way contests or affects the validity of the 2007 Bonds, any proceedings of the Authority taken with respect to the remarketing thereof, any security or the pledge or application of any moneys provided for the payment of the 2007 Bonds, the existence or powers of the Authority or the accomplishment of the purposes for which the 2007 Bonds were issued.

MISCELLANEOUS

All information, estimates and assumptions herein have been obtained from officials of the Authority, other governmental bodies, trade and statistical services, and other sources which are believed to be reliable; but no representations whatsoever are made that such estimates or assumptions are correct or will be realized. So far as any statements herein involve matters of opinion, whether or not expressly so stated, they are intended as such and not representations of fact.

The County has reviewed the information contained herein which relates to it and has approved all such information for use within this Remarketing Circular.

The description in this Remarketing Circular (including the Appendices) of provisions of the 2007 Bonds, the Indenture and the County Guaranty and all references to other materials not purporting to be quoted in full, are only brief outlines of some of the provisions thereof and do not purport to summarize or describe all of the provisions thereof. For a complete statement of the provisions of such, reference is made to the documents in their entireties, copies of which are available from the Remarketing Agent prior to the Fixed Rate Conversion Date and thereafter shall be on file at the corporate trust office of the Trustee at 1735 Market Street, 6th Floor, Philadelphia, Pennsylvania.

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The circulation and execution of this Remarketing Circular have been duly authorized by the Authority and the execution, delivery and circulation of this Remarketing Circular has been approved by the County.

REDEVELOPMENT AUTHORITY OF THE COUNTY OF MONTGOMERY By: Chairman

APPENDIX A

DESCRIPTION OF THE COUNTY

APPENDIX A DESCRIPTION OF THE COUNTY

Location and Character

The County of Montgomery (the “County” or “Montgomery County”) is situated in the southeastern corner of the Commonwealth of Pennsylvania (the “Commonwealth”), bounded by Bucks County to the northeast, Lehigh and Berks Counties to the northwest, Chester and Delaware Counties to the southwest and the City of Philadelphia to the southeast. With a land area of 482.4 square miles, the County has 62 political subdivisions, including boroughs, first-class townships, second-class townships and home-rule municipalities. The western section of the County contains significant farmland and rural landscapes with rapid growth occurring in the corridor between King of Prussia/Valley Forge and Pottstown. The remainder of the County is primarily residential, with numerous large employment centers of offices, high-tech, research, light industry and service-oriented firms throughout. The County also contains numerous regional malls and major retail centers.

The County falls within the “Philadelphia Region”, a region defined by the Delaware Valley Planning Commission to include Bucks, Chester, Delaware, Montgomery and Philadelphia Counties, in Pennsylvania, and Burlington, Camden, Gloucester and Mercer Counties in New Jersey. The population of the Philadelphia Region as a whole increased from 5,024,453 in 1980 to 5,182,705 in 1990, to 5,387,407 in 2000, and to 5,626,186 in 2010, as determined by the United States Department of Commerce, Bureau of the Census (“United States Census”).

History of the County

The land which is now known as “Montgomery County” was originally inhabited by the Lenni-Lenape Indians. In the late 17th Century, Welsh and English immigrants became the first Europeans to settle in the region. The area is well known for George Washington’s winter encampment of 1777-78 at Valley Forge, which is now a national park and a nationally known historic site and tourist attraction.

On September 10, 1784, an Act of the Pennsylvania Assembly formally created Montgomery County. The Municipality of Norristown became, and remains today, the county seat.

By the beginning of the 19th century, industry spread rapidly throughout the County, in particular along the Schuylkill River. Steel mills and heavy manufacturing industries eventually became the leading industries in the County. Since the end of World War II, the County has experienced a shift away from heavy industry towards high technology and service industries, including several world-wide pharmaceutical firms. According to the Bureau of Labor Statistics, the County now has about 460,000 jobs. It has a diverse mix of employers, and is a major employment center in the Philadelphia area.

Population

The County’s population has increased from 750,097 in 2000 to 799,874 in 2010, according to the United States Census.

The following tables summarize the population increases in the County, the Philadelphia Region and the Commonwealth, population by age group for the County and the Commonwealth and age characteristics, population density and persons per household for the County, the Philadelphia Region and the Commonwealth.

Population Trends

1980 1990 2000 2010

Montgomery County 643,621 678,111 750,097 799,874 Philadelphia Region(1) 5,024,453 5,182,705 5,387,407 5,626,186 Commonwealth of Pennsylvania 11,863,895 11,881,640 12,281,054 12,702,379

Source: U.S. Department of Commerce, Bureau of Census and PA State Data Center. (1) Includes the nine counties in the Philadelphia Region as defined by the Delaware Valley Regional Planning Commission.

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2010 Population by Age Group (Number of Persons)

Under 18 18-34 35-44 45-64 65+

Montgomery County 183,499 158,501 108,884 228,263 120,727 Commonwealth of Pennsylvania 2,792,155 2,772,500 1,615,669 3,562,748 1,959,307

Source: U.S. Department of Commerce, Bureau of Census.

Birth Rates (per 1,000 Persons)

2001 2002 2003 2004 2005 2006 2007 2008 2009

Montgomery County 12.5 12.2 12.7 12.4 12.1 12.4 12.0 12.2 11.9 Commonwealth of Pennsylvania

11.7 11.5 11.8 11.6 11.7 12.0 12.1 12.0 11.5

Source: Pennsylvania Vital Statistics, Pennsylvania Department of Health, Bureau of Health Statistics and Research and County Officials.

Comparative Age Characteristics (By Percent)

1980 1990 2000 2010

Mont. County

Phila. Region PA

Mont. County

Phila. Region PA

Mont. County

Phila. Region PA

Mont. County

Phila. Region PA

Under 18 25.4% 27.1% 26.3% 22.5% 24.3% 23.5% 24.1% 25.3% 23.8% 22.9% 23.2% 22.0% 18-24 11.9 12.8 12.3 8.9 10.5 10.3 7.1 8.9 8.9 7.7 10.1 9.9 25-34 15.2 15.6 15.1 17.2 17.4 16.1 13.5 13.6 12.7 12.1 12.9 11.9 35-44 11.7 11.1 10.7 15.5 15.0 14.7 17.1 16.4 15.9 13.6 13.2 12.7 45-54 11.8 10.9 10.9 10.9 10.2 10.2 14.2 13.6 13.9 16.0 15.3 15.3 55-64 11.4 10.8 11.3 9.9 9.1 9.8 9.1 8.7 9.2 12.5 11.9 12.8 65+ 12.6 11.7 12.9 15.0 13.5 15.4 14.9 13.5 15.6 15.1 13.3 15.4 Source: United States Department of Commerce, Bureau of the Census 1980, 1990, 2000 and 2010 Census of the Population.

Population Density

Sq. Miles 2010 Population 2010 Density Pop./Sq. Mile

483.4 799,874 1,656 3,722 5,626,186 1,512

44,743 12,702,379 284 Source: U.S. Department of Commerce, Bureau of the Census.

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Persons Per Household

1980 1990 2000 2010

Montgomery County 2.79 2.58 2.54 2.53 Philadelphia Region 2.81 2.66 2.58 2.56 Commonwealth of Pennsylvania 2.74 2.57 2.48 2.45 _______________________ Source: U.S. Department of Commerce, Bureau of the Census.

Income

Based upon the most recent Bureau of Economic Analysis figures (2009), the County is the 21st wealthiest as measured by personal income per capita among the more than 3000 counties in the United States (Bureau of Economic Analysis, Table CA1-3, Regional Economic Information System, April 2011). Excluding counties having a population less than 25,000, the County would rank 16th highest and, if cost-of-living differentials were considered, the County would be ranked even higher. In terms of aggregate local and county real estate tax burden, the County is next to lowest among these 16 counties in tax burden per owner-occupied household (note that these figures are prior to the tax increases for 2012). Tax Foundation, Property Taxes on Owner-Occupied Housing 2005-2009 (five-year average) (May 12, 2011).

Within the five-county Philadelphia area, the County has the highest share of household income on an aggregate basis, exceeding Philadelphia’s aggregate income for the first time. Scott Bomboy, Report Shows Ethnic Shifts in Philly, By the Numbers, MyFoxPhilly.com (June 1, 2011) (citing U.S. Census Bureau, American Fact Finder).

Among Pennsylvania counties, the County has the lowest percentage of residents in poverty, the second highest percentage holding a bachelor’s degree or higher (Chester County is the highest) and the third lowest percentage of residents lacking a high school education (behind Butler and Bucks County). U.S. Census Bureau, 2010 American Community Survey 1-year Estimate.

The following tables indicate that disposable income in the County has increased from $12.8 billion in 1991 to $34.0 billion in 2010. Additionally, disposable income per household has increased from $46,750 in 1991 to $112,103 in 2010.

Montgomery County Effective Buying Income (“EBI”) Per Household

Disposable Personal Income

(EBI) ($000) No. of Households

(Thousands) Per Household

(EBI)

1991 $12,752,342 272.8 $46,750 2000 25,615,158 282.5 90,685 2006 33,735,267 306.5 110,070 2010 34,014,399 300.2 112,103 ____________________________ Source: Editor and Publisher Market Guide.

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Comparative Income Statistics – 2010

Disposable PersonalIncome ($000)

Income Per Capita

Income Per Household

Montgomery County $34,014,399 $43,317 $112,103 Philadelphia Region 193,245,587 32,687 86,332 Commonwealth of Pennsylvania

358,864,616 28,629 72,999

_______________________ Source: Editor and Publisher Market Guide.

Land Use Characteristics

Over the last three decades, the County has transformed from primarily residential in the southeast and rural in the northwest to an area with a mixture of uses. It has stable and growing residential neighborhoods, many new employment centers, numerous malls and shopping centers, and supporting institutional and recreational uses. Overall, it can be characterized as a desirable and dynamic suburban and semi-rural environment. Generalized land use characteristics, as of 2010, are shown in the following table.

Residential 39.4% Industrial 3.2 Commercial 4.3 Transportation 6.9 Institutional 4.2 Recreational 5.4 Woodlands 18.7 Agricultural/Vacant 15.9 Other 2.0

Total 100.0% Source: Montgomery County Planning Commission.

Housing

As of April, 2010, according to the U.S. Census Bureau, there were approximately 325,735 year-round housing units in the County. The following tables illustrate submissions to the Montgomery County Planning Commission for subdivisions throughout the County since 2002.

New Submissions for Subdivisions and Land Development – Number of Units Proposed

Number of Plans Total Submissions

Residential Detached

Residential Attached

Multi-Family

2002 905 2,011 1,070 883 2003 927 1,563 1,753 1,391 2004 958 2,225 1,915 1,534 2005 913 1,372 1,761 3,512 2006 883 754 800 1,530 2007 792 471 1,175 650 2008 668 481 509 344 2009 484 337 75 1007 2010 386 70 84 191 2011 344 141 249 1,534 ____________________________ Source: Montgomery County Planning Commission.

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New Residential Units Constructed

Total Residential

Units

Residential Detached

Residential Attached

Multi-Family

Mobile Homes

2001 3,229 2,259 640 213 117 2002 2,760 1,796 692 120 152 2003 3,106 1,559 593 858 96 2004 2,893 1,490 626 740 37 2005 2,945 1,209 923 784 29 2006 2,814 1,080 962 743 29 2007 2,655 955 584 1,091 25 2008 1,748 768 549 402 29 2009 1,183 494 324 335 30 2010 1389 508 333 526 22 Source: Montgomery County Planning Commission.

2010 Housing Characteristics

Housing in the County is predominantly owner-occupied, as shown in the following table.

Owner Occupied Renter Occupied

Montgomery County, PA 73.1% 26.9% Bucks County, PA 77.1 22.9 Chester County, PA 76.2 23.8 Delaware County, PA 70.5 29.5 Philadelphia County, PA 54.1 45.9 Burlington County, NJ 78.0 22.0 Camden County, NJ 68.3 31.7 Commonwealth of Pennsylvania 69.6 30.4 ____________________________ Source: United States Department of Commerce, Bureau of the Census; numbers may not total due to rounding. Transportation

Highways: The County’s economic position has been bolstered by a network of federal and state highways. All of the major Interstate highways serving the Philadelphia area, with the exception of I-95, intersect in Montgomery County, including the Schuylkill Expressway (I-76), the Pennsylvania Turnpike (I-276) and the Blue Route (I-476). The County is served by five interchanges of the Pennsylvania Turnpike and the Northeast Extension. The Turnpike links the area with Philadelphia, Harrisburg, Allentown and Scranton. Interstate 76 (Schuylkill Expressway) serves as the primary route from the County to the City of Philadelphia. Other U.S. Highways serving the County include U.S. Routes 1, 30, 202 and 422, plus major state routes such as PA 309 and 611. In 1986, Route 422 was opened between King of Prussia and Pottstown. This has spurred significant growth in all types of construction between those two communities.

Trucking: Over 100 motor carriers in the County serve industrial, residential and commercial users throughout the eastern United States.

Railroads: The Main Line, Trenton Cut-off and North Penn branches of Norfolk Southern and CSX, along with many branches of the former Reading Railroad now operated by Norfolk Southern, CSX and CP Rail (Canadian Pacific), provide freight transportation to and from the area. The Southeastern Pennsylvania Transportation Authority (SEPTA) offers commuter rail passenger service into and from the City of Philadelphia. Amtrak also serves the Ardmore Station on its way to the City of Philadelphia.

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Airports: Philadelphia International Airport, located in Delaware and Philadelphia counties, is easily accessible from the County and provides passenger and freight service to all parts of the United States plus international service. The airport is currently served by 18 major domestic and international carriers. Air cargo and helicopter services are also available. The airport has major terminal facilities and sophisticated electronic navigational equipment. In addition to Philadelphia International Airport, there are 25 other airports serving the Philadelphia area, five of which are in Montgomery County.

Utilities

Electric: Three electric distribution companies operate in Montgomery County. The largest portion of the County is served by Exelon Corp. (PECO). A portion of the central part of the County is served by Pennsylvania Power and Light Company (PP&L) and Lansdale buys electricity in bulk from PP&L. General Public Utilities serves portions of eight municipalities in the northwestern region of the County.

Gas: Exelon Corp. (PECO) and U.G.I. Corporation supply gas to the County’s residents.

Telecommunications: The County has a high degree of broadband penetration, nearly 70%, as measured in early 2009, with more than 85% of its households then owning one or more personal computers. Rappoport & Dalbey, Broadband in Pennsylvania: An Essential Service?, Speaker’s Journal, vol. 9.9, at 119 (Spring 2010) (citing survey data from Centris, issued Aug. 2009). By legislation Pennsylvania is the only state to establish a deadline for universal broadband access, with that deadline set for December 31, 2015. Cheskis, 2010 Pennsylvania Broadband Summit: Act 183 of 2004 (Chapter 30) Revisited-The Consumer Perspective (Sept. 21, 2010).

The County maintains an emergency telecommunications network for 9-1-1 calls financed through a state-approved surcharge on local telephone bills. It also maintains a countywide radio system for emergency services providers, including local police and fire services. Pursuant to an order of the Federal Communications Commission, in early 2011 the County agreed to reband this system to replace the 800 MHz band system with the 700MHz band system. The expense of the rebanding is to be borne by Nextel Corp.

Water: There are 17 water companies or authorities currently operating in the County. The five largest, Aqua America, Inc., North Penn Water Authority, North Wales Water Authority, PA American Water Company and Pottstown Water Authority, serve over two-thirds of the County’s land area.

Sewers: Over 88% of the County’s residents have public sanitary sewer service. There are 40 municipalities or municipal sewer authorities operating treatment plants throughout the County. The largest are Philadelphia, Norristown, East Norriton/Plymouth/Whitpain, Pottstown, Ambler, Upper Gwynedd, Towamencin, Lower Perkiomen Valley, Hatfield, Upper Merion and Upper Moreland/Hatboro.

Schools, Colleges and Health Care Institutions

The County is known throughout the Commonwealth for its fine education system. Over 75% of high school graduates go on to some form of higher education. There are 22 public school districts in the County serving approximately 99,000 students. These public school districts have 96 elementary schools, 28 combined schools and 22 secondary schools. In addition, there are approximately 125 parochial and private schools located within the County serving approximately 35,000 students. At the County vocational-technical schools, students under the age of 21 can select from over 125 different programs offered at the high school level. The County also subsidizes special education services to physically handicapped and mentally-challenged residents.

The County’s colleges and universities include Ursinus College, Bryn Mawr College, Rosemont College, Haverford College, Arcadia University, the Ambler Campus of Temple University, The Pennsylvania State University Abington-Ogontz Campus, Gwynedd Mercy College and Montgomery County Community College. Other County institutions of higher education include Temple University (Fort Washington Campus), Harcum College, Manor College, DeSales University (Lansdale Branch), University of Phoenix (Branch) and Strayer University (Branch). The Philadelphia metropolitan area includes over 70 additional degree-granting institutions offering a wide variety of educational choices.

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Montgomery County residents are served by 17 hospitals which operate facilities within the County, including Abington Memorial Hospital, Bryn Mawr Hospital, Lankenau Hospital, Mercy Suburban Hospital, Montgomery Hospital and Pottstown Memorial Hospital. Albert Einstein Medical Center is currently constructing a major new hospital facility in East Norriton, which is expected to be fully operational in the near future. The County owns and operates the Montgomery County Geriatric and Rehabilitation Center, a modern geriatric hospital providing skilled nursing care and related medical, dental, restorative and social services to the County’s indigent citizens. This facility is licensed by the Pennsylvania Department of Health.

Recreation and Culture

There are numerous facilities throughout the County which offer such activities as hiking, biking, hunting, fishing, boating, skiing and golf. There are many parks, historic sites and recreational facilities, the best known being Valley Forge National Park. Within the County, there are two state parks, eight county parks, several regional trails, including the recently expanded Perkiomen Trail, which now connects the County Trail System to Philadelphia and hundreds of municipal parks. In addition, there are historical sites, homes, inns, churches, museums, restaurants and many other attractions dispersed throughout the County and in the nearby City of Philadelphia. All of these facilities help provide a high quality of life for County residents.

Commerce and Industry

The County’s economy is comprised of a diverse mix of manufacturing, high technology, service and retail business. According to the latest state data available, the County’s employment by industry classification is as follows: 53% Service, 10% Manufacturing, 12% Retail, 7% Finance and Insurance, 5% Wholesale, 4% Construction, 3% Information and 6% Other.

The County is home to approximately 1,071 manufacturing establishments providing more than 44,000 jobs. The vast majority of these companies employ fewer than 20 people. However, the County does contain a number of large manufacturing firms that produce goods ranging from food products and automotive electronics, to pharmaceutical products and office furnishings.

Employers

The following table shows the 10 largest employers in the County as of December, 2010.

Company Location Industry

Merck & Company, Inc. West Point Pharmaceuticals Abington Memorial Hospital Abington Health Care State Government Various Government Main Line Hospitals Lower Merion Health Care County of Montgomery Norristown Government SmithKline Beecham Corp. Collegeville Pharmaceuticals Federal Government Various Government Lockheed Martin Corp. Upper Merion Defense Contractor Giant Food Stores, Inc. Various Retail Food Quest Diagnostics Collegeville Health Care Source: Pennsylvania Department of Labor & Industry, 2nd Quarter 2011(Initial Data).

The County’s work force consists of residents employed throughout the Philadelphia Region in virtually every category of employment. The workforce is highly skilled and educated, resulting in an average annual wage of $60,424, approximately 35% above the Commonwealth average of $44,772. (Pennsylvania Department of Labor and Industry, 1st Quarter 2009).

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Comparative Employment Statistics (in thousands)

2005 2007 2009 Feb. 2012(1) Mont.

County PA Mont.

County PA Mont.

County PA Mont.

County PA Civilian Labor Force 423.0 6,248.0 426.3 6,297.0 427.2 6,382.0 429.6 6,389.0 Employment 406.5 5,937.0 411.7 6,023.0 397.2 5,788.0 400.6 5,906.0 Unemployment 16.4 311.0 14.6 274.0 29.9 540.0 29.0 483.0 Unemployment Rate (%) 3.9 5.0 3.4 4.4 7.0 8.5 6.8 7.6

(1) Source: Pennsylvania Department of Labor & Industry, April 2012. Today, the County is a major regional employment center. Development and job growth has concentrated around the Pennsylvania Turnpike interchanges of King of Prussia, Plymouth Meeting, Fort Washington and Willow Grove. In addition, significant new office development has occurred in Conshohocken and West Conshohocken Boroughs at the interchange of I-476 and the Schuylkill Expressway. Major pharmaceutical facilities and new residential construction has occurred along the Route 422 expressway from King of Prussia to Pottstown. The County continues to maintain a diverse economic base, with the primary job growth coming from the expansion of small and mid-sized companies.

Employment(1)

The following table provides information on recent employment trends within the Philadelphia Metropolitan Statistical Area (MSA).

Title 2005 2006 2007 2008 2009 2010 2011

Total Nonfarm 1,890,000 1,906,000 1,919,100 1,922,400 1,862,800 1,862,900 1,873,300 Total Private 1,670,900 1,688,500 1,703,500 1,706,700 1,644,700 1,643,400 1,659,800 Goods Producing 240,600 237,900 233,000 227,400 202,800 196,400 196,400 Service-Providing 1,649,500 1,668,100 1,686,200 1,695,000 1,660,100 1,666,400 1,676,900 Private Service Providing

1,430,300 1,450,600 1,470,500 1,479,300 1,442,000 1,447,000 1,463,500

Mining, Logging and Construction

80,900 82,400 81,700 78,800 66,900 64,200 65,300

Manufacturing 159,700 155,600 151,300 148,600 135,900 132,200 131,100 Durable Goods 81,400 80,500 79,000 77,500 69,200 67,300 67,800 Non-Durable Goods 78,400 75,100 72,300 71,100 66,600 64,900 63,300 Trade 344,200 342,400 342,800 341,800 327,100 327,700 328,400 Wholesale Trade 84,400 84,300 85,200 85,500 81,200 80,600 82,200 Retail Trade 200,000 197,700 197,600 196,100 187,300 188,400 187,000 Transportation 59,900 60,400 60,000 60,100 58,600 58,700 59,200 Information 41,100 41,000 42,300 42,400 40,400 38,800 37,500 Financial Activities 145,600 146,300 145,600 143,700 136,900 132,900 131,300 Professional and Business Services

281,500 293,900 302,600 303,800 288,000 289,300 295,900

Education and Health Services

384,900 392,800 401,000 410,800 417,800 422,500 428,800

Leisure and Hospitality 147,100 149,600 152,200 152,900 149,400 152,800 157,500 Other Services 85,800 84,700 84,100 84,000 82,400 83,000 84,000 Government 219,100 217,400 215,600 215,700 218,100 219,500 213,500 (1) Employment excludes proprietors, self-employed, unpaid family or volunteer workers, farm workers and domestic workers.Source: Bureau of Labor Statistics: Current Employment Statistics Survey.

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Economic Development

The County’s location, network of waterways, highways and abundant natural resources have made it a central point for industrial, commercial and residential development for over 200 years. The County has consistently attracted new residential, industrial and commercial development and investment. Beginning in the decade of the 1980’s and continuing through the beginning of the 21st century, the County’s economic base has shifted from a highly diversified manufacturing economy to a highly diversified service-based and high technology economy.

The largest nonresidential developments currently proposed or under development in the County include the construction of the Albert Einstein Regional Medical Center in East Norriton Township, the expansion to the Lankenau Hospital in Lower Merion Township, the renovation of commercial office space by Johnson & Markley Redevelopment, L.P. in Norristown, Babylon at Park Ridge (industrial development) in Horsham, Saratoga Springs (commercial development) in Limerick Township, the Commerce Center (commercial shopping center) in Upper Pottsgrove Township and the Ambler Boiler House in Ambler Borough (conversion of abandoned factory into new commercial uses).

The County’s economic development efforts focus on the retention, expansion and attraction of business and industry. The Montgomery County Department of Economic and Workforce Development coordinates these functions. This department actively markets and promotes the County’s competitive advantages. A variety of resources are provided, including small business start-up assistance, demographic information, financial assistance and job-placement assistance.

Working in cooperation with the Department of Economic and Workforce Development, the Montgomery County Development Corporation (MCDC) and the Montgomery County Industrial Development Authority (MCIDA) have packaged numerous financial assistance projects that have preserved and created jobs throughout the County. In 2010, the MCDC and MCIDA combined to process approximately $504 million in financial assistance packages (including conduit bond financing) for manufacturing firms, healthcare organizations and non-profit education facilities, compared with $390 million in 2009. The increase in 2010 was due to financing for the Albert Einstein Medical Center and federally subsidized interest payments under the American Recovery and Reinvestment Act.

In 2008, the County initiated several economic development and transportation improvement programs. Those initiatives resulted in the County devoting capital funds to several projects, including a program funding longstanding road improvements unlikely to receive federal or state support, and funding or revenue bond guarantees to initiate or support job creation. Projects include the Lafayette Street Connector, an office building renovation project for Johnson & Markley Redevelopment, L.P., the initial phase of the Norristown Sewer Plant Relocation Project, the Ambler Boiler House rehabilitation (with the participation of the Metropolitan Caucus’ Energy Works), and the Broad Theatre project in Souderton Borough reviving an abandoned movie theatre complex. The County has authorized creation of the Montgomery County Transportation Authority to facilitate these and similar projects, including through the exercise of eminent domain authority.

The County is in the process of opening its new 512-bed Work Release/DUI Facility financed through bonds issued in 2008 and 2010. Its operating costs are anticipated to be completely or substantially matched by the payments made by those persons sentenced to that facility. The facility’s construction was completed within the amount budgeted and, after a dispute over sewage rights was resolved, on time. There remains an outstanding claim by two local sewer authorities that the County is required to acquire additional sewer capacity rights for the existing County Correctional Facility. However, at least in part due to recent conservation measures undertaken by the County, the County believes that this claim has no merit in that water use has now been reduced to the level conceded by all parties to be available under existing capacity rights.

Trends in Assessed and Market Valuations

The County has the third highest market value of real estate in the Commonwealth, only surpassed by Allegheny and Philadelphia Counties. Effective January 1, 1998, the County completed a reassessment of all real property in the County. The County’s trend in real estate market values, assessed valuations and assessed valuations as a percentage of market values for the current year and each of the previous ten years is shown below.

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Year Assessed Valuation(1) Market Valuation(2) Ratio(3)

2001 $52,750,315,929 $ 56,367,175,137 93.6 2002 53,940,385,341 60,403,567,011 89.3 2003 55,073,481,416 65,098,677,796 84.6 2004 55,081,557,218 73,118,066,777 76.7 2005 56,781,117,674 82,650,826,308 68.7 2006 56,649,767,629 93,791,006,008 60.4 2007 57,365,883,813 107,426,748,713 53.4 2008 57,923,445,088 114,247,426,209 50.7 2009 58,303,177,058 114,770,033,578 50.8 2010 58,361,518,718 108,076,886,514 54.0 2011 58,423,518,718 104,142,427,067 56.1 2012 58,292,903,853 100,505,006,643 58.0

(1) Source: County Board of Assessment. (2) Based upon ratio of assessed valuation to market valuation which is supplied by the State Tax Equalization Board. That

ratio is set for the year following the year in which the ratio is calculated. The ratio is calculated based upon sales data from the prior year.

(3) Source: State Tax Equalization Board.

There are in excess of 950 pending assessment appeals, representing an increase of approximately eighteen percent (18%) from the prior year. The County Board of Assessment Appeals does not maintain a schedule of the total amount of assessments subject to appeal, but for properties with current assessments of $20.0 million or more, it has calculated that taxpayers’ appeals place at issue a maximum of $1,005,698,030 of claimed excessive assessed valuation (and, in fact, most involve a substantially smaller amount at issue and are usually resolved for still a lesser amount). They primarily involve one or more years ranging from 2007 at the earliest through 2011. In the aggregate the appeals involve less than 1.7% of the aggregate assessed valuation during that period.

The County has traditionally established reserves for refunds and expenses arising from tax assessment appeals. In recent years, it has increased the budget as needed for this purpose. In 2012, $1.7 million was budgeted to maintain an adequate budget for that purpose.

Ten Largest Taxpayers

The ten largest taxpayers in the County with their assessed valuations as of January, 2012 are shown below:

Taxpayer Assessed Valuation

1) Merck & Co., Inc. $564,672,640 2) King of Prussia Associates 362,940,299 3) Liberty Property – LP 361,830,260 4) Brandywine Operating Partnership 268,153,778 5) John Neilson 189,708,140 6) Wyeth Ayerst Pharmaceuticals 185,804,190 7) GlaxoSmithKline LLC 119,973,103 8) Pulver-Tower Bridge Associates 119,324,090 9) A.C.T.S., Inc. 110,222,360 10) Westover Companies 110,015,750

TOTAL $2,535,300,452 Source: County Board of Assessment Appeals.

The aggregate assessments of the ten largest taxpayers listed above constitute 4.10% of the County’s 2012 assessed valuation of real estate.

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Government

The County is a county of the Second Class A, a classification established on the basis of population by the State Legislature on October 20, 1967. Counties of the Second Class A have populations between 500,000 and 800,000. Bucks County and Lancaster County are the only other Second Class A counties in the Commonwealth.

The County functions under the Second Class County Code which delegates various duties to the County Commissioners, including administration of elections and registration of voters; assessment of property for tax purposes; care of prisoners; maintenance of roads and bridges; care of the aged, dependent and indigent ill; planning; civil defense; sewage disposal; parks and recreation. There are three Commissioners elected at-large for four-year terms, one of whom is elected to be chairman by vote of the three Commissioners. The three current Commissioners were elected for terms that began in January of 2012. Provision is made for minority party representation through statutory requirement that no party may place more than two candidates on the ballot for the three positions. Other elected officers in the County include Controller, Coroner, Clerk of Courts, District Attorney, Jury Commissioners, Prothonotary, Recorder of Deeds, Register of Wills, Sheriff, Treasurer and Court of Common Pleas Judgeships.

County Employees and Labor Relations

As of July 1, 2011, there were 3,148 full-time employees funded or employed by the County. Since 2008, the County has reduced its personnel count by about 2.9% or 94 people.

The County’s self-insured health plan instituted in January 2010 includes an average employee contribution of approximately five percent (5%), on a sliding scale with lower-paid County employees contributing a lesser percentage than higher-paid County employees. That percentage and amount of individual contributions, and the benefit plans, have been substantially unchanged since this plan was instituted, and the costs of the program have remained stable. The County uses the services of CBIZ Benefits and Insurance Services, a national employee benefits firm, to oversee the program. Adoption of a comprehensive three-year wellness program is now under review.

The County presently has collective bargaining relationships with three employee groups, representing less than five percent (5%) of its employees. One group, the County detectives, recently received an arbitration award mandating raises and employee health benefits increases, including post-employment benefits. There are no collective bargaining agreements in place. There have been several union representation elections within the past year. In one of these, a group of court-related employees voted in favor of union representation. That group had previously voted for union representation and then later voted to decertify.

Pension Program

The County has a contributory retirement system for full-time County employees maintained pursuant to the County Pension Act, Act of Aug. 31, 1971, P.L. 398, No. 96. Through all relevant years the Montgomery County Employees’ Retirement Board’s actuary has been Hay Group, a national pension actuarial firm. Hay Group’s disclosures are issued in accordance with Statement No. 25, Statement No. 27 and Statement No. 50 of the Government Accounting Standards Board.

The asset valuation cost method used by Hay Group for the County’s pension fund is the aggregate cost method; the asset valuation method used is the greater of market value and actuarial value. The actuarial assumptions employed by Hay Group include an investment rate of return of 7.5% compounded annually and projected salary increases of 3.5%, with inflation at 3%. Previous to 2010, projected salary increases were assumed to be 4.5%. No other changes in methodology have occurred.

According to Hay Group’s 2011 Actuarial Valuation for the County Employees’ Retirement Fund (the “Fund”), the net assets held in trust for pension benefits as of December 31, 2010 were $438,612,025. As of December 31, 2007, the net assets of the Fund were $481,350,819. After the 2008 stock market decline, as of December 31, 2008, the net assets were $370,808,839. The net asset value recovered to $416,648,025 as of December 31, 2009, and then further recovered to $438,612,025 as of December 31, 2010. On an unaudited basis, as of April 30, 2011, the Fund had a market value of $452,440,746.

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Hay Group’s Schedules of Funding Progress for the Fund for this four-year period have shown the following funded ratios on an actuarial basis:

01/01/2008 116.2% 01/01/2009 99.1 01/01/2010 99.3 01/01/2011 97.6

The Unfunded Actuarial Accrued Liability calculated as of January 1, 2011 is $12,240,535, based upon an actuarial value of the Fund’s assets at $504,064,625. The funded ratio as of January 1, 2011 based upon market value of the Fund assets and actuarial liabilities was 85.0%. As of January 1, 2010, that ratio was 83.9%.

A substantial portion of the County’s annual cost to amortize actuarial accrued liability is due to an early retirement incentive authorized in 2007, effective January 1, 2008. The cost of that incentive over the permitted five-year period (2008 through 2012) is $14,754,935 or $2,950,987 per year. The County is not presently considering any other early retirement incentive.

In the years 2008 through the present Hay Group had calculated the Annual Required Contribution (“ARC”) to be $8,155,676 for 2009, $7,857,028 for 2010, and $9,318,649 for 2011, for an aggregate total of $25,331,353. Although use of a different methodology for calculation of the contributions is permitted under a recently enacted state law (Act 44) in an effort to reduce the immediate impact of market losses and underfunding was considered, these ARC calculations do not utilize that change. Deciding to assess the impact of an anticipated recovery in market values, the County did not make any pension contributions including the ARC during 2009 and 2010 and has not budgeted to make any pension contribution including the ARC for 2011.

In 2008 and in prior years, cost-of-living increases were granted to pensioners pursuant to applicable provisions of the County Pension Act. No cost-of-living increases have been granted thereafter.

Since early 2007, Cornerstone Advisors Asset Management, Inc., of Bethlehem, Pennsylvania, has served as principal advisor for the Fund. Approximately 99% of the Fund is invested in one of 16 managed funds. As of December 31, 2010, the aggregate returns on these managed funds have been in the top one–quarter of comparable public pension funds as measured by the Cullen Associates, Inc.’s CAI Public Fund-Mid (100 m-1 B) for the last three- and five-year periods, but, for 2010, the returns were within the bottom one-quarter of comparable funds.

See Notes H and Note B to Required Supplementary Information in Appendix D – Annual Financial Report for the Fiscal Year Ended December 31, 2010, attached hereto for additional information concerning the County’s pension fund, including annual required contributions and actual contributions for 2008, 2009 and 2010, significant actuarial assumptions used to compute the contribution requirements, the schedule of funding progress and the ratio of the unfunded actuarial accrued liability to covered payroll.

Other Post-Employment Benefits

The Governmental Accounting Standards Board (“GASB”) issued Statement No. 45 (“GASB 45”) which requires state and local governmental entities, including the County, to account for and report their costs and obligations related to post-retirement healthcare and other non-pension benefits (collectively, “other post-employment benefits” or “OPEB”) in the same manner as they account for pension benefits. Although GASB 45 encourages earlier adoption, governmental employers whose annual revenue is greater than $100 million, including the County, were required to implement the requirements of GASB 45 for fiscal years beginning after December 15, 2006.

Although the County is not currently obligated to provide post-retirement healthcare benefits or other OPEB to any of its employees or former employees other than the County Detectives, in the future, if the County does provide post-retirement healthcare benefits or other OPEB, its intention would be to account for these obligations in full compliance with GASB 45. The County Detectives have obtained post-employment benefits through an arbitration award. The impact of those benefits on County finances is de minimis.

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Taxing Authority and Procedures

The County, through its Board of Commissioners is empowered to levy taxes up to 30 mills on the assessed value of real estate for general County purposes and without limitation as to rate or amount for debt service on its general obligation bonds and notes (Act of July 28, 1953, P.L. 723 as amended). In addition, the County is empowered to levy taxes on intangible personal property at the rate of up to 4 mills, pursuant to the County Personal Property Tax Act of June 17, 1913, P.L. 507, as amended. Intangible personal property consists of, inter alia, mortgages, accounts bearing interest (except those of banks), public debt of other states and their agencies and subdivisions, corporate loans for corporations. The County has not levied this tax since 1996.

The County is legally required to adopt its budget and determine the tax rate on or before December 31, prior to the commencement of the budget year (which is the calendar year) and customarily issues real estate tax bills on or about February 1. Funds needed for expenditures before the receipt of tax payments have generally been obtained by temporary loans in anticipation of taxes as authorized by Pennsylvania law, or by use of cash balances carried over from the prior years.

The County’s tax assessors maintain all real property assessments in the County and return those assessments, prior to the year of levy, to an assessment board appointed by the Board of Commissioners. The general County tax is levied against these assessments and the revenues from such tax are used for general operations of the County and for payment of principal of and interest on the debt of the County.

The Board of Commissioners adopted a final budget for 2012 on December 21, 2011. The total County millage, pursuant to this budget, was established at 3.152 mills ($3.152 for each $1,000 of assessed valuation). County officials anticipate that actual results of operations for 2012 (based on the 2012 budget) will enable the County to end the year with a fund balance of $20 million. See “Summary of General Fund Revenues, Expenditures and Changes in Fund Balances” herein.

In April, 2009, the Pennsylvania Supreme Court ruled that base year assessment systems, such as in use in the County, may under certain criteria violate Pennsylvania’s Constitution. No such claim has been asserted as to the County’s system. If such claim were successful, the County would be compelled to expend the funds required for a reassessment but under law it would not result in a material change in revenue.

Real Estate Taxes: Real estate taxes for the County are billed by each of the 62 municipalities in the County. Accounts paid within 60 days of billing are eligible for a 2% discount, those paid during the next 60 days pay in full and all taxes from that point (120 days after billing) to the end of the year are charged a 10% penalty. By January 15 of the following year, lien sheets are filed against all delinquent accounts with the Tax Claim Bureau.

From 2005 through 2011, the Commissioners authorized Xspand, Inc. to collect delinquent property taxes for Montgomery County. During this same time period, Plymouth Park Tax Services, LLC t/a Xspand, purchased certain County liens in return for a payment of a percentage of the value of those claims. Although such an assignment was authorized for 2011, Plymouth Park elected not to pursue the purchase as the relationship with the County would end 12/31/2011. As of this time as most claims have been paid directly to the County, this putative transaction is not anticipated to have a material impact on the County’s receipt of funds during 2011 for tax claims. NorthEast Revenue currently collects the County’s delinquent taxes for 2012. The Treasurer’s Office will present a comprehensive evaluation to the Commissioners in September, 2012. Real Estate Tax Collection Record

The following table shows the County’s tax collection record from 2000 through 2010. As the table indicates, tax collection rates are stable and total collections were 99.4% of the adjusted levy in 2010.

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Year Adjusted

Levy Current Year

Collections Percentage of Adjusted Levy

Prior Year’s Collections

Total Collections

Percentage of Adjusted Levy

2000 $127,840,666 $120,019,635 93.9% $4,673,506 $124,693,141 97.5% 2001 130,866,834 122,915,945 93.9 4,474,500 127,390,445 97.3 2002 155,087,827 146,212,527 94.3 5,005,120 151,217,647 97.5 2003 157,989,539 148,917,132 94.3 5,220,075 154,137,207 97.6 2004 160,754,899 151,841,991 94.5 5,353,185 157,195,176 97.8 2005 163,036,203 155,575,971 95.4 5,426,029 161,002,000 98.8 2006 165,293,705 158,678,503 96.0 5,674,056 164,352,559 99.4 2007 164,125,951 157,343,902 95.9 5,073,116 162,417,018 99.0 2008 157,057,702 150,308,647 95.7 4,692,942 155,001,589 98.7 2009 157,735,700 150,947,149 95.7 6,586,925 157,534,074 99.9 2010 157,900,437 151,400,359 95.9 5,558,755 156,959,114 99.4 Source: County Finance Office.

Residential Real Estate Tax Burden

Within the five county Philadelphia metropolitan area, the County residents’ real estate tax burden based upon family income was below average, with only Bucks County residents bearing a lower burden. Metropolitan Philadelphia Indicators Project, Where We Stand: Community Indicators for Metropolitan Philadelphia (2008). Focusing only on county-imposed real estate property taxes, the County imposes the lowest tax burden among its five neighboring counties (excluding Philadelphia, a consolidation of both city and county governments):

County 2012

Mills(1) 2010 Common Level Ratio(2)

County Property Tax Per $100,000 Market Value(3)

Montgomery 3.152 58.0 $176.82 Chester 3.965 56.0 222.04 Bucks 23.200 11.3 252.88 Delaware 5.304 67.5 340.51 Lehigh 11.900 35.7 424.83 Berks 6.935 73.2 486.14

(1) Rate of real estate property taxation established for 2012 per $1,000 of assessed value. (2) The Common Level Ratio for 2010 was established by the State Tax Equalization Board as a means of

translating disparate county-level assessment practices into a uniform measure of real estate property valuation throughout Pennsylvania during 2011 & 2012.

(3) Mills multiplied by Common Level Ratio. Source: County Solicitor’s Office.

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Outstanding Indebtedness

The total outstanding debt of the County as of May 1, 2012, is set forth in the following table. The County has never defaulted in payment of principal or interest on any of its obligations.

Name of Issue Date of Issue or Approval

Final Maturity

Date

Original Amount of

Issue Amount

Outstanding

General Obligation (Nonelectoral) Series of 2001 Bonds 07/31/01 09/15/22 $ 58,395,000 $7,005,000 Series of 2002 Note 09/24/02 09/25/12 17,000,000 1,954,000 Series A of 2006 Bonds 07/15/06 10/15/31 33,460,000 29,670,000 Series B of 2006 Bonds 07/15/06 10/15/25 38,060,000 29,450,000 Series C of 2006 Bonds 12/15/06 12/15/31 29,645,000 28,895,000 Series D of 2006 Bonds (Taxable) 12/15/06 12/15/16 6,420,000 3,850,000 Series 2008 Bonds 04/15/08 08/15/19 26,420,000 26,405,000 Series A of 2008 Bonds 07/17/08 10/15/12 16,200,000 4,425,000 Series A of 2009 Bonds 05/19/09 12/01/32 43,345,000 43,325,000 Series B of 2009 Bonds (Taxable) 05/19/09 12/01/12 3,090,000 455,000 Series C of 2009 Notes 07/15/09 12/15/24 43,910,000 42,230,000 Series D of 2009 Notes 07/15/09 12/15/18 11,495,000 8,600,000 Series E of 2009 Notes (Taxable) 07/15/09 12/15/14 4,925,000 3,045,000 Series C of 2010 Bonds (BABs) 12/29/10 10/01/30 49,000,000 49,000,000 Series D of 2010 Bonds 12/29/10 10/01/15 11,000,000 11,000,000 Series A of 2011 Notes 09/15/11 03/15/22 27,785,000 27,785,000 Series B of 2011 Notes (Taxable) 09/15/11 03/15/13 6,435,000 3,065,000

Subtotal (Nonelectoral) $426,585,000 $320,159,000

General Obligation (Electoral) Series A of 2004 08/18/04 08/15/24

$60,000,000 $59,965,000

Series A of 2010 Bonds 03/01/10 09/01/17 6,245,000 5,005,000 Series B of 2010 Bonds (BABs) 03/01/10 09/01/39 28,755,000 28,755,000

Subtotal (Electoral) $95,000,000 $93,725,000

Total General Obligation $521,585,000 $413,884,000

Lease Rental: Guarantee of Lower Perkiomen Valley Regional Sewer Authority 04/01/06 12/01/25 $9,420,000 $7,565,000† Guarantee of the Redevelopment Authority of the County of Montgomery 05/23/07 06/01/37 16,885,000 11,885,000 Guarantee of the Redevelopment Authority of the County of Montgomery 11/06/08 11/06/28 1,035,000 906,120†

Guarantee of the Redevelopment Authority of the County of Montgomery (Taxable) 11/23/10 09/01/30 6,200,000 6,200,000

Guarantee of the Redevelopment Authority of the County of Montgomery 11/29/10 02/01/26 1,755,476 1,768,175 Guarantee of the Redevelopment Authority of the County of Montgomery

Approval Pending 04/31 500,000 488,230

Total General Obligation and Lease Rental Debt $557,380,476 $442,696,525 † Self-liquidating debt, not anticipated to be paid from General Fund Revenues.

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The following table illustrates the County’s general obligation debt service and lease rental obligations as of January 1, 2012, for each fiscal year which ends December 31.

Year

Existing General Obligation

Bonds/Notes(1) Redevelopment

Authority Bonds/Notes(2) Total

2012 $ 40,450,739 2013 40,502,604 2014 39,663,125 2015 39,683,615 2016 39,405,387 2017 39,386,695 2018 39,366,624 2019 34,422,588 2020 34,267,029 2021 34,234,420 2022 33,089,874 2023 34,089,480 2024 34,105,700 2025 17,971,572 2026 14,948,779 2027 14,866,921 2028 14,780,081 2029 14,679,754 2030 14,581,701 2031 10,328,466 2032 5,466,969 2033 2,204,731 2034 2,174,583 2035 2,140,816 2036 2,103,432 2037 2,067,429 2038 2,032,507 2039 1,993,364

TOTALS $605,008,982 $ $ ________________ Source: County Finance Office (1) Does not include interest subsidy payments on bonds issued as Build America Bonds. (2) Includes the Redevelopment Authority’s 2007 Bonds, 2010 Bonds, 2010 Note and debt of $500,000 for the Broad Entertainment LLP financing (approval pending). Interest rate on the 2007 Bonds will be fixed as of June 1, 2012. Does not include the Lower Perkiomen Valley Regional Sewer Authority, Guaranteed Sewer Revenue Bond, Series of 2006 and the 2008 Redevelopment Authority Bonds, both of which are considered self-liquidating.

Borrowing Capacity

The County’s borrowing power is governed by the Debt Act. Under the Debt Act, the County has no legal limitation on debt of any classification approved by a majority of its electors in an election. The Debt Act places the following limitations upon that part of the County’s nonelectoral and lease rental debt which is not subsidized or self-liquidating.

(a) Nonelectoral debt – 300% of its borrowing base.

(b) Aggregate lease rental debt and nonelectoral debt – 400% of its borrowing base.

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Borrowing Base

The Borrowing Base of the County as of May 1, 2012 is as shown below.

Fiscal Year Ended December 31

2009 2010 2011 (Unaudited)

Total

Total Revenues Received (all sources) Less:

$542,333,550 $402,462,152 $426,416,328 $1,371,212,030

a. State and Federal subsidies and reimbursements related to a particular project financed by debt

-- -- --

b. Revenues, receipts, assessments, etc., pledged self-liquidating debt

-- -- -- --

c. Interest on Sinking funds -- -- -- --

d. Grants or gifts-in-aid -- -- -- --

e. Non-Recurring Revenues 117,045,802 8,092,300 38,481,040 163,619,142

Total Revenues $425,287,748 $394,369,852 $387,935,288 $1,207,592,888

Borrowing Base-Average Total Revenues for Three-Year Period $ 402,530,963 Borrowing Limit, Nonelectoral Debt (300%) $1,207,592,888 Borrowing Limit, Nonelectoral plus Lease Rental Debt (400%) $1,610,123,852

Remaining Borrowing Capacity

(1) Nonelectoral debt: $ 887,433,888 (2) Aggregate lease rental debt and nonelectoral debt: $ 1,269,623,447(1) Source: County Officials. (1) Does not include the lease rental debt which is self-liquidating.

Summary of Financial Factors

The following tables summarize amounts of County’s net indebtedness, the market value and the assessed valuation for real estate in the County, the population of the County, and ratios of such indebtedness to such market value, assessed valuation and population.

Debt Summary – County Indebtedness (As of May 1, 2012):

Total General Obligation Electoral and Nonelectoral Debt $ 413,884,000(1) (1) Lease rental debt is not included.

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Summary of General Obligation Debt Ratios

Debt Per Capita (1) Ratio of Debt to Market Value Ratio of Debt to Assessed Value(2)

$517 0.40% 0.71% ________________________ (1) The County’s population for 2010 was 799,874. (2) County’s Market Value of Taxable Real Estate, 2012 - $100,505,006,643; County Assessed Valuation of Taxable Real

Estate, 2012 - $58,292,903,853.

Possible Sale of Human Services Center

The County is considering the sale of its Human Services Center, a building it acquired in 1994 through a bankruptcy sale. In excess of $16 million of principal remains due on the bond issues used to purchase and improve that building. There are active negotiations involving a proposed sale of the building that would require both repayment of the principal amount remaining on those bonds and the County to continue to lease a portion of that building for its present needs. Any sale must comply with statutory procedures for sale of county real estate under applicable state law. If there is a sale, the net proceeds would be first used to provide for payment of principal remaining due on these bond issues as determined by tax counsel.

Future Financing

The County does not expect to undertake any capital borrowings until late in 2012 at the earliest.

The County Commissioners are presently considering whether to upgrade or replace the Public Safety Telecommunication system, last upgraded in 2001 and 2002, to satisfy emerging technological standards. The Commissioners are presently surveying the County’s municipalities with police forces to determine whether they are willing to bear the cost of replacing radios and related end user equipment and, through a request for information to equipment providers, obtaining the cost of an upgrade or replacement. After expected municipal contributions are deducted, the County’s share is estimated to be in the $30 million range. In the event that a decision to proceed is made, financing may be obtained either from the equipment provider or a County bond issue.

Accounting Policies

The County’s Financial Statements are prepared in compliance with Governmental Accounting Standards No. 34 (GASB Statement No. 34). However, the County’s budgets continue to be prepared on a cash basis.

The County uses fund accounting where resources for various purposes are classified for accounting and reporting purposes in accordance with specified activities and objectives. The County uses three primary fund types: Governmental, Proprietary and Fiduciary.

The General Fund includes all accounts for the general operations of the County and all transactions which are not accounted for in other funds. It is the General Fund into which the general tax revenues and any other resources used to finance the fundamental operations of the County are included.

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Summary of General Fund Revenues, Expenditures and Changes in Fund Balances

The following table summarizes General Fund revenues, expenditures and changes in fund balances for the years 2008 through 2010 as well as the 2011 and 2012 budgets.

2008 2009 2010 Budget 2011(1)

Budget 2012(1)

Fund Balance Beginning of Year $95,860,851 $71,651,374 $59,417,695 $40,000,000 $20,000,000

REVENUES Real Estate Taxes $155,001,589 $157,534,073 $156,820,851 $157,800,000 $184,000,000 Grants and Entitlements 212,260,693 179,191,618 143,815,581 140,125,000 143,000,000 Geriatric and Rehabilitation 40,582,489 40,368,435 45,592,813 45,200,000 46,420,000 Departmental Earnings 32,518,840 36,841,353 37,219,665 38,815,000 38,238,100 District Justices 3,940,405 4,019,633 3,731,954 3,900,000 3,700,000 Investment Income 2,409,608 771,769 578,512 500,000 100,000 Fines and Forfeits 870,307 773,745 475,660 385,000 0 Other 6,824,239 6,018,765 6,134,816 1,725,000 1,941,900 TOTAL REVENUES FOR OPERATIONS

$454,408,170 $425,519,391 $394,369,852 $388,450,000 $417,400,000

Fund Balance Appropriation 0 0 0 0 0 Operating Transfers In 0 4,000,000 8,000,000 0 0 Proceeds from Refinancing 783,630 897,013 0 0 0 Other Governmental Sources 532,641 231,643 147,303 0 0 Sale of Capital Assets 29,545 4,970 92,300 0 0 TOTAL REVENUES AND FUND BALANCE

$551,614,837 $502,304,391 $462,027150 $428,450,000 $437,400,000

EXPENDITURES General Administration $36,057,888 $33,213,118 $32,286,284 $31,539,000 $30,826,000 Judicial Administration 59,124,956 57,827,999 57,450,147 58,761,000 59,561,400 Corrections 56,467,241 53,785,337 55,402,104 53,775,000 56,914,700 Public Safety 3,478,105 3,336,244 3,182,890 3,389,000 3,367,700 History and Cultural Arts-Recreation 6,067,697 5,826,983 5,256,829 4,898,000 4,900,400 Adult Welfare 69,363,092 69,981,703 65,964,317 65,424,000 66,570,600 Child Welfare 46,215,068 45,184,643 48,463,056 47,889,000 50,034,700 General Welfare 137,502,394 107,184,643 76,596,548 69,624,000 73,077,900 Mass Transportation 5,026,367 5,025,019 4,798,440 4,448,000 4,291,200 Employee Benefits(2) 0 0 1,722,358 0 0 Debt Service 31,726,912 31,676,044 30,044,130 35,100,000 39,400,000 Other 6,033,512 5,309,342 4,148,232 4,609,000 2,307,100 TOTAL EXPENDITURES FOR OPERATIONS

$457,063,232 $418,351,075 $385,315,335 $379,456,000 $391,251,700

Operating Transfers Out 2,192,031 1,974,021 2,117,959 1,111,000 775,000 Note Issuance Costs 0 0 0 0 0 Transfers to Component Units 20,708,200 22,561,600 22,882,900 23,383,000 25,373,300

TOTAL EXPENDITURES $479,963,463 $442,886,696 $410,316,194 $403,950,000 $417,400,000

Fund Balance, End of Year $71,651,374 $59,417,695 $51,710,956 $24,500,000 $20,000,000

_________________ Source: County Controller (1) The budgets are prepared on the cash basis of accounting; the financing statements are on the accrual basis. (2) Employee benefits have been distributed to the various expenditure categories in each of these years.

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Interest Rate Management Plan

General. The County is authorized, under the Debt Act, to enter into “qualified interest rate management agreements,” defined in the Debt Act to be agreements determined in the judgment of the County to be designed to manage interest rate risk of interest cost of the County on any debt which the County is authorized to incur under the Debt Act. Such qualified interest rate management agreements may include swaps, interest rate caps, collars, corridors, ceiling and floor agreements, forward agreements, float agreements and other similar arrangements.

The Debt Act requires that prior to entering into a qualified interest rate management agreement, the County adopt a written interest rate management plan (“Plan”) prepared or reviewed by an independent financial advisor, which includes: (i) schedules of all outstanding debt of the County; (ii) the notional amounts of all previously executed qualified interest rate management agreements; (iii) a schedule of all consulting, advisory, brokerage or similar fees paid or payable by the County in connection with the qualified interest rate management agreement and a schedule of finder’s fees, if any, paid or payable by the other party in connection with qualified interest rate management agreements; (iv) a schedule listing the estimated and maximum periodic payments to be paid and received by the County; (v) an analysis of the interest rate risk, basis risk, termination risk, credit risk, market-access risk and other risks of entering into such agreements and of all previously executed interest rate management agreements; and (vi) the County’s plan to monitor interest rate risk, basis risk, termination risk, credit risk, market-access risk and other risks. Monitoring requires valuation of the market or termination value of all outstanding qualified interest rate management agreements.

The Plan. The County adopted its Plan pursuant to a resolution of the Board of County Commissioners of the County (the “Board”), adopted December 18, 2003, and supplemented from time to time. The Plan, as supplemented, was prepared by PFM Asset Management LLC, the County’s independent financial advisor within the meaning of the Debt Act (“Independent Financial Advisor”).

The Plan states that qualified interest rate management agreements are appropriate interest rate management tools that can help the County meet important financial objectives. Properly used, these instruments can increase the County’s financial flexibility, provide opportunities for interest rate savings or enhanced investment yields, and help the County manage its balance sheet through better matching of assets and liabilities. Swaps may not be used for speculative purposes.

The Plan provides that the County will only utilize qualified interest rate management agreements if it is reasonably determined that the proposed transaction is expected to:

Optimize capital structure, including schedule of debt service payments and/or fixed vs. variable rate allocations; or

(1) Achieve appropriate asset/liability match; or

(2) Reduce risk, including: interest rate risk, tax risk; liquidity renewal risk; or

(3) Provide greater financial flexibility; or

(4) Generate interest rate savings; or

(5) Enhance investment yields; or

(6) Manage exposure to changing markets in advance of anticipated bond insurance (through the use of anticipatory hedging instruments).

The Plan further provides that the County will seek to maximize the benefits and minimize the risks it carries by actively managing its derivative program. This will entail frequent monitoring of market conditions, by County’s Director of Finance and its Independent Financial Advisor, for emergent opportunities and risks. Active management may include:

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Early termination; or

Shortening or lengthening the term; or

Sale or purchase of options; or

Use of basis swaps.

The Plan requires that a written report providing the status of all interest rate swap agreements entered into by the County be provided to the Director of Finance of the County on an annual basis (or other basis, if so directed by the Director of Finance and the Board of Commissioners).

Such reports must include the following:

A description of all outstanding qualified interest rate management agreements, including bond series, type of derivative, rates paid and received by the County, total notional amount, forward start dates, average life of each swap agreement, remaining term of each derivative and option terms.

Description of all material changes to qualified interest rate management agreements or new qualified interest rate management agreements entered into by the County since the last report.

Market value, including termination exposure of each of the County’s qualified interest rate management agreements.

(1) The credit rating of each counterparty and credit enhancer, if any, insuring qualified interest rate management agreement payments.

(2) If applicable, information concerning any default by a counterparty, including but not limited to financial impact to the County, if any.

(3) If applicable, information concerning any default by the County to any counterparty.

(4) A summary of qualified interest rate management agreements that were terminated or that have expired and the financial impact therefrom.

(5) For a qualified interest rate management agreement entered into to generate debt service savings, calculation on an annual basis of the actual debt service requirements compared to the projected debt service on the swap transaction at the original time of execution. The calculation shall include a determination of the cumulative actual savings (or, if applicable, additional payments made by the County) compared to the projected or expected savings at the time the swap was executed.

(6) The status of any collateral related to any swap transaction including type and amount of collateral and the market value of the collateral.

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Swaptions

On June 22, 2005, the County entered into an option to enter into an interest rate exchange agreement (the “2005 Swaption”) in relation to its General Obligation Bonds, Series 2001 (the “Series 2001 Bonds”). The 2005 Swaption was sold to Bear Stearns Financial Products, Inc. (“BSFP”). The successor to BSFP on the 2005 Swaption is now JPMorgan Chase Bank, N.A. In exchange for entering into the 2005 Swaption, the County received approximately $1,598,000 in up-front payments. The 2005 Swaption was exercised by JPMorgan Chase Bank, N.A., on June 20, 2011. The County terminated the 2005 Swaption with a portion of the proceeds of its 2011 Notes.

On November 28, 2007, the County entered into an option to enter into an interest rate exchange agreement (the “2007 Swaption”) in relation to its General Obligation Bonds, Series 2006A (the “Series 2006A Bonds”). The 2007 Swaption was sold to PNC Bank, National Association (“PNC”). In exchange for entering into the 2007 Swaption, the County received approximately $792,500 in an up-front payment. The 2007 Swaption expires on October 15, 2016, if not exercised.

Swaps

On July 14, 2004, in connection with the issuance of the General Obligation Bonds, Series A of 2004, the County entered into an interest rate swap transaction (the “2004 Swap”) with Wachovia Bank, National Association (“Wachovia”), effective August 18, 2004. The successor to Wachovia Bank, National Association on the 2004 Swap is now Wells Fargo Bank N.A. The 2004 Swap’s initial notional amount was $60,000,000. Under the 2004 Swap agreement, the County pays Wells Fargo Bank N.A. a fixed rate of 3.637% and receives a variable rate computed at 61% of one month LIBOR plus .29%. The 2004 Swap expires August 15, 2024.

On July 19, 2006, in connection with the issuance of the General Obligation Bonds, Series B of 2006, the County entered into an interest rate exchange agreement (the “2006 Swap”) with UBS AG effective July 19, 2006. The 2006 Swap’s initial notional amount was $38,060,000. Under the 2006 Swap, the County pays UBS AG a variable rate equal to the SIFMA Swap Index and receives a variable rate computed at 68% of five-year LIBOR plus .055%. The 2006 Swap expires on October 15, 2025.

On June 21, 2007, relative to the Series 2006A Bonds and the General Obligation Bonds, Series C of 2006 (the “Series 2006C Bonds”), the County entered into interest rate swap transactions (the “2007 Swaps”) with PNC Bank, National Association (“PNC”), effective January 1, 2008. The initial notional amounts for the 2007 Swaps were $33,070,000 and $29,645,000, respectively. Under the 2007 Swaps, the County pays PNC the SIFMA Swap Index. Under the 2007 Swaps, the County received up front payments of $529,438 and $531,264 for the Series 2006A and the Series 2006C Bonds, respectively. The County receives 67% on one month LIBOR plus .115% and .13% respectively, for the Series 2006A Bonds and the Series 2006C Bonds. The 2007 Swaps terminate on October 15, 2031 and December 15, 2031, respectively.

Information regarding the Swaptions and the Swaps is set forth in the following chart (other than the 2005 Swaption and 2005 Swap which were terminated as of closing on the 2011 Notes):

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Related County Bonds

2006A (Swaption)

2004A (Swap)

2006A (Swap)

2006B (Swap)

2006C (Swap)

Initial Notional Amount

$24,925,000 $60,000,000 $33,070,000 $38,060,000 $29,645,000

Current Notional Amount

N/A

$59,965,000

$29,670,000

$29,450,000

$28,895,000

Trade Date

11/28/2007

7/15/2004

6/7/2007

6/8/2006

6/7/2007

Effective Date

11/28/2007

8/18/2004

1/1/2008

7/19/2006

1/1/2008

Maturity Date

10/15/2016

8/15/2024

10/15/2031

10/15/2025

12/15/2031

Product

Swaption

Fixed Payor

Swap

Basis Swap

Constant

Maturity Swap

Basis Swap

Rate Paid by Dealer

SIFMA Swap Index + 0.25%

61% of USD-

LIBOR + 0.29%

67% of USD-

LIBOR + 0.115%

68% of 5 Year CMS + 0.055%

67% of USD-

LIBOR + 0.13%

Rate Paid by County

4.803%

3.637%

SIFMA Swap

Index

SIFMA Swap

Index

SIFMA Swap

Index Dealer

PNC Bank,

National Association

Wells Fargo Bank, N.A.

PNC Bank,


UBS AG, Stamford Branch

PNC Bank,


Fair Value (1)

($3,441,030.86) ($10,412,617.37) ($1,019,563.95)

$854,484.27 ($1,077,625.89)

(1) Provided as of April 19, 2012 by the County’s Swap Advisor. Negative values indicate approximate termination cost to the County on such date.

APPENDIX B

ANNUAL FINANCIAL REPORT OF THE COUNTY FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010

APPENDIX C

INDENTURE AND COUNTY GUARANTY

REDEVELOPMENT AUTHORITY OF THE COUNTY OF MONTGOMERY

to

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. (formerly known as The Bank of New York Trust Company, N.A.),

as Trustee

FIRST SUPPLEMENTAL TRUST INDENTURE

Dated as of June 1, 2012

(Supplementing Trust Indenture Dated as of June 1, 2007)

Concerning:

$11,685,000 County Guaranteed Parking Revenue Bonds

Series of 2007 (Taxable) (Fixed Rate)

Saul Ewing LLP 222 Delaware Avenue Wilmington, Delaware

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TABLE OF CONTENTS RECITALS ................................................................................................................................................................. 1

ARTICLE I DEFINITIONS – PRELIMINARY MATTERS ................................................................................. 2

SECTION 1.1. DEFINITIONS. ........................................................................................................................................ 2 SECTION 1.2. PRELIMINARY MATTERS. ..................................................................................................................... 2

ARTICLE II SUPPLEMENT TO ORIGINAL INDENTURE ............................................................................... 3

SECTION 2.1. RESTATEMENT OF SECTION 2.10. ........................................................................................................ 3 SECTION 2.2. AMENDMENT OF SECTION 4.2. ............................................................................................................ 4 SECTION 2.3. RESTATEMENT OF SECTION 5.1. .......................................................................................................... 5 SECTION 2.4. RESTATEMENT OF SECTION 11.7. ........................................................................................................ 6

ARTICLE III MISCELLANEOUS PROVISIONS ................................................................................................. 7

SECTION 3.1. COUNTERPARTS. .................................................................................................................................. 7 SECTION 3.2. NO PERSONAL LIABILITY. .................................................................................................................... 7 SECTION 3.3. CONSENT NOT TO BE UNREASONABLY WITHHELD. .............................................................................. 8 SECTION 3.4. GOVERNING LAW. ................................................................................................................................ 8 SECTION 3.5. AMENDMENTS AND SUPPLEMENTS. ...................................................................................................... 8

Appendix A – Form of Restated 2007 Bonds ............................................................................................................ A-1

THIS FIRST SUPPLEMENTAL TRUST INDENTURE, dated as of June 1, 2012 (the “First Supplement”), to the Trust Indenture dated as of June 1, 2007 (the “Original Indenture,” and together with the First Supplemental Indenture, the “Indenture”) between the REDEVELOPMENT AUTHORITY OF THE COUNTY OF MONTGOMERY, a redevelopment authority organized and existing under the laws of the Commonwealth of Pennsylvania (the “Authority”) and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. (formerly known as The Bank of New York Trust Company, N.A.), a national banking association with trust powers and having a corporate trust office in Philadelphia, Pennsylvania, as Trustee (the “Trustee”); RECITALS WHEREAS, the Authority has heretofore issued its Variable Rate Demand County Guaranteed Parking Revenue Bonds, Series of 2007 (Taxable) in the aggregate principal amount of $16,885,000 (the “2007 Bonds”) pursuant to the Original Indenture; and

WHEREAS, pursuant to the Original Indenture, the 2007 Bonds bear interest determined by reference to a particular interest period in effect from time to time; and

WHEREAS, the 2007 Bonds are currently in a Weekly Rate mode, are subject to

optional tender for purchase upon proper demand by the holders thereof and are subject to mandatory tender for purchase under certain circumstances pursuant to the terms of the Original Indenture; and

WHEREAS, at the time of issuance of the 2007 Bonds, the Authority appointed

RBC Capital Markets, LLC, f/k/a/ RBC Dain Rauscher Inc., (the “Original Remarketing Agent”) to serve as the exclusive remarketing agent for the 2007 Bonds to: (i) remarket the 2007 Bonds upon any optional or mandatory tender for purchase according to the terms and subject to the conditions described in that certain Remarketing Agreement dated June 1, 2007 by and between the Authority and the Original Remarketing Agent, (the “Original Remarketing Agreement”); (ii) determine the interest rate on the 2007 Bonds subject to the conditions of and as provided therein; and (iii) keep books and records required by the Original Indenture; and

WHEREAS, in connection with the issuance of the 2007 Bonds, the Authority,

Royal Bank of Canada (the “Bank”), and the Trustee entered into a Standby Bond Purchase Agreement (the “Liquidity Facility”) dated June 1, 2007, which authorizes the Trustee to draw, to the extent remarketing proceeds are not available for such purpose, the purchase price of the 2007 Bonds required to be purchased by the Trustee pursuant to the terms of the Indenture; and

WHEREAS, the Liquidity Facility by its terms will expire on June 1, 2012; and WHEREAS, pursuant to the Original Indenture, the Authority has notified the

Trustee and Original Remarketing Agent, among others, of its intentions to convert the 2007 Bonds from the Weekly Rate to the Fixed Rate; and

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WHEREAS, on June 1, 2012 (such date being referred to herein either as the “Mandatory Tender Date” or the “Fixed Rate Conversion Date”), (i) the Liquidity Facility will expire by its terms; (ii) the Authority will convert the 2007 Bonds from a Weekly Rate to a Fixed Rate; (iii) all of the 2007 Bonds will be subject to mandatory tender at a purchase price equal to the principal amount thereof, plus accrued interest to, but not including, the Mandatory Tender Date; and (iv) the terms and provisions of the 2007 Bonds will be amended to reflect the specific terms and provisions pertaining to the 2007 Bonds bearing interest at the Fixed Rate; and

WHEREAS, the Authority pursuant to a First Supplement to Remarketing

Agreement dated May 22, 2012 has: (i) appointed Piper Jaffray & Co. (the “Fixed Rate Conversion Remarketing Agent”) to serve as remarketing agent in connection with the conversion of the 2007 Bonds from the Weekly Rate to the Fixed Rate; and (ii) retained the Original Remarketing Agent to continue to serve as remarketing agent while the 2007 Bonds are in the Weekly Rate mode from the date thereof to but not including the Mandatory Tender Date; and WHEREAS, the Authority and the Trustee desire to enter into this First Supplement to finalize the specific terms and provisions of the 2007 Bonds while such Bonds bear interest at the Fixed Rate. NOW, THEREFORE, in consideration of the covenants and agreements herein contained and intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE I DEFINITIONS – PRELIMINARY MATTERS

Section 1.1. Definitions.

(a) Except as the context may otherwise clearly require, terms defined by parenthetical reference shall have the meanings set forth therein. All capitalized terms used herein and not so defined shall have their respective meanings as set forth in the Original Indenture.

Section 1.2. Preliminary Matters. In this First Supplement, unless the context otherwise requires:

(a) The terms “hereby”, “hereof”, “hereto”, “herein”, “hereunder” and any similar terms, as used in this First Supplement, refer to this First Supplement, and the term “hereafter” shall mean after, and the term “heretofore” shall mean before, the date of this First Supplement.

(b) Words of the masculine gender shall mean and include correlative words of the feminine and neuter genders, and words importing the singular number mean and include the plural number and vice versa.

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(c) Any headings preceding the text of the several Articles and Sections of this First Supplement, and any table of contents, shall be solely for convenience of reference and shall not constitute a part of this First Supplement, nor shall they affect its meaning, construction or effect.

Whenever in this First Supplement the Authority or the Trustee is named or referred to, it shall include, and shall be deemed to include, their respective successors and assigns whether so expressed or not. All the covenants, stipulations, obligations and agreements by or on behalf of, and other provisions for the benefit of the Authority or the Trustee contained in this First Supplement shall bind and inure to the benefit of such respective successors and assigns and shall bind and inure to the benefit of any officer, board, commission, authority, agency or instrumentality to whom or to which they shall be transferred by or in accordance with law any right, power or duty of the Authority or of its successors or assigns, the possession of which is necessary or appropriate in order to comply with any such covenants, stipulations, obligations, agreements or other provisions of this First Supplement. If any covenant or agreement provided herein or in the 2007 Bonds to be performed by or on behalf of the Authority shall be illegal or invalid, then such covenant or agreement shall be deemed separate from the remaining covenants or agreements hereof and thereof and shall in no way affect the legality or validity of the other provisions of this First Supplement or of the 2007 Bonds. Nothing in this First Supplement expressed or implied is intended or shall be construed to confer upon, or to give to, any person other than the Authority, the Trustee, and the Owners of the 2007 Bonds, any right, remedy or claim under or by reason of this First Supplement or covenant, condition or stipulation hereof. All the covenants, stipulations, promises and agreements in this First Supplement shall be for the sole benefit of the Authority, the Trustee and the Owners of the 2007 Bonds.

ARTICLE II SUPPLEMENT TO ORIGINAL INDENTURE

Section 2.1. Restatement of Section 2.10. Section 2.10 of the Original Indenture is hereby restated in its entirety to read as follows: Section 2.10. Terms of the 2007 Bonds upon Conversion to the Fixed Rate.

The 2007 Bonds shall be remarketed in the principal amount of $11,885,000 and shall be in the form attached hereto as Appendix A. The 2007 Bonds shall be remarketed in Authorized Denominations, in fully registered book-entry only form, as described in Section 2.13 hereof, shall be dated the Fixed Rate Conversion Date and shall be subject to redemption prior to maturity and optional and mandatory tender for purchase in the manner and subject to the conditions therein and herein stated. The 2007 Bonds must be in the same interest mode, share the same Rate Period and bear interest at the same rate, except as provided in Section 2.14(c) (with respect to the 2007 Bonds bearing interest at a Flexible Rate). For 2007 Bonds bearing interest at the Fixed Rate, the amount of interest so payable for the 2007 Bonds on any Interest Payment Date shall be based on a 360-day

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year consisting of twelve 30-day months. The 2007 Bonds shall bear interest from the Fixed Rate Conversion Date or from the most recent Interest Payment Date to which interest has been paid or provided for on such 2007 Bonds, payable on each Interest Payment Date commencing December 1, 2012, until payment of the principal amount thereof shall have been made or provided for upon redemption or at or after maturity, at the following annual rates of interest and shall mature as follows:

County Guaranteed Parking Revenue Bonds, Series of 2007 (Taxable)

(Fixed Rate)

Year Principal Amount Interest Rate

2017 $ % 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037

Section 2.2. Amendment of Section 4.2. Section 4.2 of the Original Indenture is hereby amended and restated in its entirety to read as follows

Section 4.2. Project Fund.

The Trustee shall establish, maintain and hold in trust a separate fund designated as the “Project Fund.” The Trustee shall establish such accounts in the Project Fund as directed in writing by the Authority, including, but not limited to, accounts for proceeds of the 2007 Bonds. The moneys in the Project Fund shall be withdrawn by the Trustee and paid to the Authority for application to Project Costs.

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Before any payment from the Project Fund shall be made, the Authority shall file or cause to be filed with the Trustee a requisition stating (1) the item number of such payment; (2) the amount of such payment; (3) the particular Project Cost to which such amount is to be applied and the account from which the payment is to be made; (4) that such application is consistent with the Act and therefore is a proper charge against the Project Fund; and (5) such amount has not been paid previously from the Project Fund (each, a “Requisition”). Upon receipt of a Requisition, the Trustee shall pay the amount set forth in such Requisition as directed by the terms thereof out of the Project Fund. The Trustee shall rely fully on any such Requisition delivered pursuant to this Section and shall not be required to make any investigation in connection therewith. When the Project funded with the proceeds of the 2007 Bonds shall have been completed or when the Authority shall have decided not to pay any further Project Costs from the Project Fund, the Authority shall deliver to the Trustee a certificate signed by an authorized officer of the Authority stating such fact and requesting that such account be closed. Upon the receipt of such certificate from the Authority, the Trustee shall, as directed by said certificate, transfer any remaining balance in such account to either, or both, (i) the Debt Service and Sinking Fund and/or (ii) the Bond Redemption and Improvement Fund for use as set forth in Sections 4.5 and 4.7 herein, respectively, and as further specified in such Authority’s authorized officer certificate. Upon such transfer, such account shall be closed.

Section 2.3. Restatement of Section 5.1. Section 5.1 of the Original Indenture is hereby restated in its entirety to read as follows:

Section 5.1 Bonds Subject to Redemption.

(a) Optional Redemption. The 2007 Bonds stated to mature on or after June 1, 20__ are subject to redemption prior to maturity at the option of the Authority, in whole, or, from time to time, in part by lot, at any time on or after June 1, 20__ at a redemption price equal to 100% of the principal amount thereof plus interest accrued to the date fixed for redemption.

(b) Extraordinary Optional Redemption. The 2007 Bonds are subject to extraordinary redemption prior to maturity in whole or in part at any time, at the option of the Authority, following a determination that it is not feasible to restore the Project Facilities, from net insurance proceeds, condemnation awards, the proceeds of conveyance in lieu of condemnation deposited with the Trustee, and other amounts available therefor in such amounts as is determined pursuant to the Indenture as a result of damage to, destruction or condemnation of or taking under the power of eminent domain of, all or a substantial portion of the Project Facilities. Any such redemption shall be made in the order of maturity designated in writing by the Authority, and within any maturity by lot, as selected by the Trustee, upon payment of 100% of the principal amount thereof, together with interest accrued thereon to the date fixed for redemption.

(c) Mandatory Redemption. The 2007 Bonds maturing on June 1, 20__ are subject to mandatory redemption in part, by lot, by operation of a sinking fund to be established by the Authority (to the extent not previously purchased by the Authority) on June 1, at a

6

redemption price equal to par plus interest accrued to the redemption date in the following principal amounts in each of the following years:


20__ $

20__ 20__ 20__ 20__*

* Final Maturity

(d) If less than an entire maturity of 2007 Bonds is to be redeemed, unless otherwise directed by the Authority in writing, the 2007 Bonds to be redeemed within such maturity will be selected by the Trustee by lot or in any customary manner determined in the sole discretion of the Trustee. The Trustee shall only call 2007 Bonds of a series for optional redemption if it holds money in the Debt Service and Sinking Fund available for payment of such 2007 Bonds to be redeemed and it receives written direction from the Authority to redeem such 2007 Bonds as described in Section 5.2.

(e) Whenever 2007 Bonds are redeemed (other than pursuant to mandatory sinking fund redemption) or are delivered by the Authority to the Trustee for cancellation, the amount of 2007 Bonds so redeemed shall be credited against the Sinking Fund Requirements in any order, in whole or in part, at the option of the Authority; provided, however, that if any 2007 Bond so delivered to the Trustee for cancellation has already been selected by the Trustee for mandatory sinking fund redemption on a particular Sinking Fund Redemption Date, credit shall be given against the Sinking Fund Requirement for the redemption date upon which such 2007 Bonds were to be so redeemed.

Section 2.4. Restatement of Section 11.7. Section 11.7 of the Original Indenture is hereby restated in its entirety to read as follows:

Section 11.7 Notices.

Any notice to or demand upon any party may be made, and shall be deemed to have been sufficiently given, if served or presented at or sent by registered or certified United States mail, fax, hand delivery or overnight courier addressed as follows (or in each case to such other addresses as may be filed in writing with the Trustee):

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(i) To the Trustee:

The Bank of New York Mellon Trust Company, N.A. 1735 Market Street, 6th Floor AIM #193-0650 Philadelphia, PA 19103 Attn: Global Corporate Trust Tel: (215) 553-6940 Fax: (215) 553-6915

(ii) To the Authority:

Redevelopment Authority of the County of Montgomery 104 W. Main Street, Suite 2 Norristown, PA 19401 Attn: John F. Nugent, III, Executive Director Tel: (610) 275-5300

Fax: (610) 275-5145

(iii) To the Rating Service:

Fitch Ratings One State Street Plaza New York, NY 10004 Attn: Monica Aiello

Tel: (212) 908-0512 Fax: (212) 480-4421

ARTICLE III MISCELLANEOUS PROVISIONS

Section 3.1. Counterparts. This First Supplement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but such counterparts shall together constitute but one and the same instrument.

Section 3.2. No Personal Liability. Liability of the Authority hereunder is limited to the same extent as under the Original Indenture. No recourse under or upon any obligation, covenant or agreement contained in this First Supplement, or under any judgment obtained against the Authority or by the enforcement of any assessment or by any legal or equitable proceeding by virtue of any constitution or statute or otherwise, or under any circumstances, under or independent of this First Supplement, shall be had against any official, officer or employee, as such, past, present or future, of the Authority for the payment for or to the Authority or any receiver thereof, or for or to the Registered Owners of any 2007 Bonds issued under the Original Indenture, of any sum that may be due and unpaid by the Authority upon any such 2007 Bond. Any and all personal liability of every nature, whether at common law or in equity, or by statute or constitution or otherwise, of any such official, officer or employee of the Authority as such, to respond by reason of any act or omission on his part or

8

otherwise, for the payment for or to the Registered Owner of any 2007 Bond issued under the Original Indenture or otherwise, of any sum which may remain due and unpaid upon the 2007 Bonds hereby secured or any of them, is hereby expressly waived and released as a condition of and consideration for the execution of this First Supplement.

Section 3.3. Consent not to be Unreasonably Withheld. Whenever the consent of any party to this First Supplement is required hereunder, the same shall not be unreasonably withheld.

Section 3.4. Governing Law. This First Supplement shall be governed exclusively by the provisions hereof and by the applicable laws of the Commonwealth of Pennsylvania.

Section 3.5. Amendments and Supplements. This First Supplement shall not be amended or supplemented by the parties hereto unless such amendment or supplement does not materially adversely affect the rights of the Registered Owners of the 2007 Bonds.

IN WITNESS WHEREOF, the REDEVELOPMENT AUTHORITY OF THE COUNTY OF MONTGOMERY has caused this First Supplement to be executed by its Chairman or Vice Chairman and its corporate seal to be hereunto affixed, attested by its Secretary or Assistant Secretary, and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee, has caused this First Supplement to be executed by one of its authorized officers and its seal to be hereunto affixed and attested by one of its authorized signatories, all as of the day and year first above written. REDEVELOPMENT AUTHORITY OF (SEAL) THE COUNTY OF MONTGOMERY Attest: By: (Assistant) Secretary (Vice) Chairman THE BANK OF NEW YORK MELLON (SEAL) TRUST COMPANY, N.A., as Trustee Attest: By: Authorized Signatory Authorized Officer

APPENDIX A

[FORM OF RESTATED 2007 BONDS]

No. R-A-1

Amended and Restated Redevelopment Authority of the County of Montgomery

(Montgomery County, Pennsylvania) County Guaranteed Parking Revenue Bonds,

Series of 2007 (Taxable)

Interest Rate Maturity Date Fixed Rate Conversion Date CUSIP _____% June 1, 20__ June 1, 2012 613645 ___

REGISTERED OWNER: CEDE & CO., AS NOMINEE OF THE DEPOSITORY TRUST COMPANY, NEW YORK, NEW YORK PRINCIPAL AMOUNT: _________________ DOLLARS ($_________) Pursuant to a Trust Indenture, dated as of June 1, 2007 (the “Original Indenture”), as supplemented by a First Supplemental Trust Indenture dated as of June 1, 2012 (the “First Supplemental Indenture,” and together with the Original Indenture, the “Indenture”), between the Redevelopment Authority of the County of Montgomery (the “Authority”) and The Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of New York Trust Company, N.A.), as trustee (the “Trustee”), the Authority has elected to convert the 2007 Bonds from the Weekly Rate to the Fixed Rate on the Fixed Rate Conversion Date. THIS BOND IS BEING AMENDED AND RESTATED TO REFLECT THE SPECIFIC TERMS AND PROVISIONS PERTAINING TO THE FIXED RATE MODE. The Authority, a public body corporate and politic exercising public powers of the Commonwealth of Pennsylvania (the “Commonwealth”) as an agency thereof, is organized under the Pennsylvania Urban Redevelopment Law (P.L. 991, approved May 24, 1945, as amended) (the “Act”), for value received, hereby promises to pay to the Registered Owner hereof, but only from the revenues and moneys hereinafter specified, on the Maturity Date set forth above, unless this Bond shall have been duly called for prior redemption and payment of the redemption price shall have been made or provided for, the Principal Amount set forth above and to pay interest thereon, from the Fixed Rate Conversion Date or from the most recent Interest Payment Date (defined below) to which interest on the Bonds has been paid or provided for commencing on December 1, 2012 and semi-annually thereafter on each June 1 and December 1 (each, an “Interest Payment Date”), until maturity or redemption prior to maturity as provided herein, at the Interest Rate per annum, determined as set forth below. “Business Day”

means any day (excluding Saturday and Sunday) on which banking institutions located in the city in which the Trustee’s corporate trust offices (initially, Philadelphia, Pennsylvania) are located, are not authorized or obligated by law or administrative order to close and on which the New York Stock Exchange is not closed. The 2007 Bonds shall bear interest as herein provided from the Fixed Rate Conversion Date until paid in full. Interest accrued on the Bonds shall be paid on each Interest Payment Date at the annual rate specified above, calculated on the basis of a 360-day year of twelve 30-day months until the principal amount is paid or has been provided for. The interest payable on the 2007 Bonds shall be payable by check mailed on the applicable Interest Payment Date to the Registered Owner of the Bond at the close of business on the regular Record Date for such Interest Payment Date. Payment of interest on any 2007 Bond shall be made, if requested in writing by an owner of $1,000,000 or more in principal amount of the 2007 Bonds, by wire transfer to a designated bank account in the continental United States if such written request is received not less than ten (10) days prior to the first payment of interest to which it relates. The principal amount of each 2007 Bond and any redemption premium shall be paid to the Registered Owner thereof upon the surrender of the 2007 Bond at the corporate trust agency office of the Trustee in East Syracuse, New York. The principal of and interest on the 2007 Bonds and the redemption premium, if any, payable thereon in case of redemption shall be payable only out of the Pledged Project Revenues applied by the Authority to make the payments required under the Indenture, and any payments made pursuant to the County Guaranty. This amended and restated Bond is one of a duly authorized issue of $11,885,000 County Guaranteed Parking Revenue Bonds, Series of 2007 (Taxable) of the Authority (the “2007 Bonds”) which has been remarketed upon conversion to a Fixed Rate pursuant to the Indenture. The 2007 Bonds are herein referred to as the “2007 Bonds” or the “Bonds”. The Bonds are equally and ratably secured under the Indenture by an assignment to the Trustee of Pledged Project Revenues, amounts maintained in the funds and accounts under the Indenture, and by a guaranty of payment by Montgomery County, Pennsylvania (the “County”) of the principal of and interest on the 2007 Bonds, for which the County has irrevocably pledged its full faith, credit and taxing power (the “County Guaranty”). The 2007 Bonds were previously issued to provide funds to finance a capital program of the Authority consisting of the acquisition of various parcels of land in the Municipality of Norristown (Montgomery County), Pennsylvania, the demolition of existing structures thereon and the construction of an approximately 485-space, multi-level public parking garage, together with approximately 7,500 square feet of retail space and additional related improvements (the “Project”), and were issued by the Authority under the Act, to accomplish the public purposes of the Act. This 2007 Bond is a special limited obligation of the Authority payable as to principal or redemption price, interest and all other obligations hereunder solely from, and enforceable only against, amounts payable by or on behalf of the Authority and certain other money available therefor as provided in the Indenture, and there shall be no recourse against the Authority or any other property now or hereafter owned by it. The County has unconditionally guaranteed the full payment of the 2007 Bonds issued under the Indenture pursuant to the County Guaranty. The

County has pledged its full faith, credit and taxing power to secure its obligations under the County Guaranty. Reference is hereby made to the Indenture, and to all amendments and supplements thereto, executed copies of which are on file at the corporate trust office of the Trustee in Philadelphia, Pennsylvania, for a description of the particular revenues of the Authority pledged for the payment of the Bonds, the nature, extent and manner of enforcement of the security, the terms and conditions under which the Indenture may be amended or modified, the rights of the Registered Owners of the Bonds and of the Trustee in respect to such security, the terms and conditions under which the Bonds are issued and the default provisions and the duties, rights and obligations of the Authority and the Trustee. If an Event of Default, as defined in the Indenture, shall occur, the principal of all 2007 Bonds issued under the Indenture may be declared due and payable upon the conditions and in the manner and with the effect provided in the Indenture. Optional Redemption

The 2007 Bonds stated to mature on or after June 1, 20__ are subject to redemption prior

to maturity at the option of the Authority, in whole, or, from time to time, in part by lot, at any time on or after June 1, 20__ at a redemption price equal to 100% of the principal amount thereof plus interest accrued to the date fixed for redemption. Extraordinary Optional Redemption The 2007 Bonds are subject to extraordinary redemption prior to maturity in whole or in part at any time, at the option of the Authority, following a determination that it is not feasible to restore the Project Facilities, from net insurance proceeds, condemnation awards, the proceeds of conveyance in lieu of condemnation deposited with the Trustee, and other amounts available therefor in such amounts as is determined pursuant to the Indenture as a result of damage to, destruction or condemnation of or taking under the power of eminent domain of, all or a substantial portion of the Project Facilities. Any such redemption shall be made in the order of maturity designated in writing by the Authority, and within any maturity by lot, as selected by the Trustee, upon payment of 100% of the principal amount thereof, together with interest accrued thereon to the date fixed for redemption. Mandatory Sinking Fund Redemption The 2007 Bonds maturing on June 1, 20__ are subject to mandatory redemption in part, by lot, by operation of a sinking fund to be established by the Authority (to the extent not previously purchased by the Authority) on June 1, at a redemption price equal to par plus interest accrued to the redemption date in the following principal amounts in each of the following years:


20__ $

20__ 20__ 20__ 20__*

* Final Maturity Each such redemption shall be made as provided in the Indenture upon not more than forty-five (45) nor less than thirty (30) days’ written notice by first class mail to the Trustee, each Rating Service then rating the Bonds and the Registered Owner of each Bond called for redemption. Notice having been so given and provision having been made for redemption from funds on deposit with the Trustee, all interest on the 2007 Bonds or portions thereof called for redemption accruing after the date fixed for redemption shall cease. The Authority, pursuant to recommendations promulgated by the Committee on Uniform Security Identification Procedures, has caused CUSIP numbers to be printed on the Bonds and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Registered Owners. No representation is made as to the accuracy of such numbers either as printed on the Bonds or as contained in any notice of redemption and reliance may be placed only on the identification number printed hereon. If less than an entire maturity of Bonds is to be redeemed, unless otherwise directed by the Authority in writing, the Bonds to be redeemed within such maturity will be selected by the Trustee by lot or in any customary manner determined in the sole discretion of the Trustee. The Trustee shall only call the Bonds for optional redemption if it holds money in the Debt Service and Sinking Fund available for payment of such Bonds to be redeemed and it receives written direction from the Authority to redeem such Bonds. The pledge of the Trust Estate under the Indenture may be discharged at or prior to the maturity or redemption of the Bonds upon the making of provision for the payment of the principal of and interest on the Bonds in accordance with the terms and conditions set forth in the Indenture. If the Authority deposits with the Trustee funds sufficient to pay the principal or redemption price of any Bonds becoming due at maturity, by call for redemption, or otherwise, together with interest accrued to the due date, interest on such Bonds will cease to accrue on the due date, and thereafter the Registered Owners will be restricted to the funds so deposited as provided in the Indenture. No recourse shall be had for the payment of the principal or redemption price of or the interest on this 2007 Bond or for any claim based hereon or on the Indenture, against any past, present or future member, officer or employee, as such, of the Authority, either directly or through the Authority or otherwise, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty, or otherwise, all such liability being by the acceptance hereof and, as a material part of the consideration for the issue hereof, expressly waived and released.

This 2007 Bond is transferable and exchangeable for 2007 Bonds in fully registered book-entry only form and in Authorized Denominations by the Registered Owner hereof in the manner, subject to the limitations and upon payment of the charges provided in the Indenture and upon surrender and cancellation of this 2007 Bond. “Authorized Denominations” means integral multiples of $5,000. The Authority and the Trustee may treat the Registered Owner of this 2007 Bond as the absolute owner of this 2007 Bond for all purposes whether or not this 2007 Bond shall be overdue, and neither the Authority nor the Trustee shall be affected by any notice to the contrary. Under the laws of the Commonwealth, this 2007 Bond and interest thereon shall at all times be free from taxation within the Commonwealth, but this exemption does not extend to gift, estate, succession or inheritance taxes, or any other taxes not levied or assessed directly on this 2007 Bond, or the income therefrom. Profits, gains or income derived from the sale, exchange, or other disposition of this 2007 Bond are subject to state and local taxation. It is hereby certified that the approval of the Department of Community and Economic Development of the Commonwealth for the County to become bound under the County Guaranty and to guarantee the debt evidenced by this 2007 Bond has been duly given pursuant to the Local Government Unit Debt Act of the Commonwealth, that the 2007 Bonds and the obligations of the County under the County Guaranty are within every debt and other limit prescribed by the Constitution and statutes of the Commonwealth, and that all acts, conditions and things required by laws of the Commonwealth to exist, to have happened or to have been performed, precedent to or in the issuance of this 2007 Bond or in the creation of the debt of which this 2007 Bond is evidence, exist, have happened and have been performed in regular and due form and manner as required by law. THIS 2007 BOND SHALL NOT BE IN ANY WAY A DEBT OR LIABILITY OF THE COMMONWEALTH, THE COUNTY (EXCEPT UNDER THE COUNTY GUARANTY) OR ANY POLITICAL SUBDIVISION THEREOF, BUT THIS 2007 BOND SHALL BE PAYABLE SOLELY FROM THE FUNDS PROVIDED THEREFOR AS SET FORTH HEREIN AND IN THE INDENTURE. NEITHER THE GENERAL CREDIT OF THE AUTHORITY NOR THE GENERAL CREDIT OR TAXING POWER OF THE COMMONWEALTH, THE MUNICIPALITY OF NORRISTOWN, THE COUNTY (EXCEPT UNDER THE COUNTY GUARANTY) OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR THE INTEREST OR ANY PREMIUM ON (INCLUDING THE PURCHASE PRICE OF) OR OTHER COSTS INCIDENT THERETO, EXCEPT AS PROVIDED BY THE COUNTY GUARANTY. It is hereby certified and recited that all conditions, acts and things required by law to exist, to have happened and to have been performed precedent to and in the issuance of this 2007 Bond, exist, have happened and have been performed, and that the issuance of this 2007 Bond is within every debt and other limit prescribed by the laws of the Commonwealth.

This 2007 Bond shall not be entitled to any benefit under the Indenture or be valid or become obligatory for any purpose until this 2007 Bond shall have been authenticated by the execution by the Trustee of the certificate of authentication endorsed hereon. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Indenture.

IN WITNESS WHEREOF, the Redevelopment Authority of the County of Montgomery has caused this amended and restated Bond to be signed by the signature of its Chairman or Vice Chairman and its seal to be affixed hereon and attested by the signature of its Secretary or Assistant Secretary.

Redevelopment Authority of the County of Montgomery (Seal) By: (Vice) Chairman Attest: (Assistant) Secretary

TRUSTEE'S AUTHENTICATION CERTIFICATE This Bond is one of the 2007 Bonds described in the within mentioned Indenture. Attached hereto is the complete text of the opinion of Saul Ewing LLP, Philadelphia, Pennsylvania, Bond Counsel, which was dated and delivered on the date of initial issuance and delivery of the 2007 Bonds and is on file with the undersigned. THE BANK OF NEW YORK MELLON TRUST

COMPANY, N.A., as Trustee By: Authorized Representative Date of Authentication: June 1, 2012

[FORM OF ASSIGNMENT]

Assignment

For value received, the undersigned sells, assigns and transfers unto

____________________ the within 2007 Bond and irrevocably constitutes and appoints ____________________ attorney to transfer that 2007 Bond on the books kept for registration thereof, with full power of substitution in the premises. Assignor's Signature: ________________________________________________ Dated: ________________________________________________ Signature Guaranteed: ________________________________________________ Social Security Number or Other Identifying Number of Assignee: ________________________________________________ Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within bond in every particular, without alteration or any change whatever.

[Form of Abbreviations] The following abbreviations, when used in the inscription on the face of the within 2007 Bond, shall be construed as though they were written out in full according to applicable laws or regulations. TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with the right of survivorship and not as tenants in common UNIFORM TRANS MIN ACT - ____________________ Custodian ______________________ (Cust) (Minor)

under Uniform Transfers to Minors Act _______________________________

(State) Additional abbreviations may also be used though not in the above list.

[END OF BOND FORM]

APPENDIX D

FORM OF CONTINUING DISCLOSURE AGREEMENT



(Conversion to Fixed Rate: June 1, 2012)

CONTINUING DISCLOSURE AGREEMENT This Continuing Disclosure Agreement dated as of June 1, 2012 (including any amendments or supplements hereto, the “Disclosure Agreement”) is executed and delivered by the Redevelopment Authority of the County of Montgomery (the “Authority”) and the County of Montgomery, Pennsylvania (the “County”) in connection with the remarketing of the above-captioned bonds (the “2007 Bonds”). The Authority and the County, intending to be legally bound, hereby covenant and agree as follows:

Section 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Authority and the County for the benefit of the Holder from time-to-time of the Bonds (as defined below) and in order to assist the Participating Underwriters in complying with S.E.C. Rule 15c2-12(b)(5).

Section 2. Definitions. Unless the context clearly requires otherwise, the following capitalized terms shall have the meanings set forth below:

“Additional Bonds” shall mean any indebtedness of the Authority issued subsequent to the 2007 Bonds which the Authority and the County have declared in writing to be covered by this Disclosure Agreement. No such written declaration shall be considered an amendment to this Disclosure Agreement for purposes of Section 9 hereof. “Annual Filing Date” shall mean the first (1st) day of the ninth (9th) calendar month immediately following the end of the Authority’s and County’s fiscal year. “Annual Financial Information” shall mean with respect to the Authority, the audited Financial and Compliance Report for the most recently completed fiscal year showing the updated financial information and operating data provided under the section of the Remarketing Circular for the 2007 Bonds titled “REDEVELOPMENT AUTHORITY OF THE COUNTY OF MONTGOMERY – Project Facilities – Statement of Revenues, Expenses and Changes in Net Assets” (p.3); and shall mean with respect to the County, its Comprehensive Annual Financial Report which shall contain the audited financial statements for the most recently completed fiscal year and annual updates of the financial information and operating data provided in Appendix A of the Remarketing Circular for the 2007 Bonds. “Annual Report” shall mean any Annual Report provided by the Authority and the County pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. “Bonds” shall mean the 2007 Bonds and Additional Bonds, if any.

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“Dissemination Agent” shall mean any agent of the Authority or the County designated in writing by the Authority or the County which has filed with the Authority or the County a written acceptance of such designation. “EMMA” shall mean the Electronic Municipal Market Access System maintained by the MSRB at http://emma.msrb.org/, which serves as the sole nationally recognized municipal securities information repository under the Rule. “Holder” means any person (a) having the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries) or (b) treated as the owner of any Bonds for federal income tax purposes. “MSRB” shall mean the Municipal Securities Rulemaking Board, or any successor organization. “Notice Event” shall mean any of the events listed in Section 5(a) of this Disclosure Agreement. “Obligated Person” shall have the meaning set forth in the Rule, provided that the sole objective criteria used to select the Obligated Person shall be the entity obligated to repay all debt service with respect to the relevant Bonds. “Official Statement” shall mean with respect to a Series of Additional Bonds, the final Official Statement relating such specific Series of Additional Bonds. “Participating Underwriter” shall mean any of the original underwriters of any Series of Bonds required to comply with the Rule in connection with offering of such Bonds. “Remarketing Circular” shall mean the final Remarketing Circular relating to the remarketing of the 2007 Bonds. “Repository” shall mean each nationally recognized municipal securities information repository under the Rule. As of the date hereof, the Securities and Exchange Commission has appointed the MSRB through EMMA to act as the sole Repository. Any information filed in connection with this Disclosure Agreement shall be filed with EMMA at http://emma.msrb.org/, any State Repository and any future Repository as may be required under the Rule. “Rule” shall mean Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as heretofore amended, and as such Rule may be hereafter amended from time-to-time. “State Repository” shall mean any public or private repository or entity designated by the Commonwealth of Pennsylvania as a state information repository for the purpose of the Rule

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and with which the Authority and the County are legally required to file the Annual Report. Currently, there is no State Repository. The list of state information repositories maintained by the United States Securities and Exchange Commission shall be conclusive as to the existence of a State Repository. “Trustee” shall mean The Bank of New York Trust Company, N.A., as trustee of the 2007 Bonds, or any successor or assignee thereof. “2007 Bonds” shall mean the Authority’s $11,885,000 aggregate principal amount of County Guaranteed Parking Revenue Bonds, Series of 2007 (Taxable), dated June 1, 2007 and remarketed on June 1, 2012 upon a conversion from a variable rate mode to a fixed rate mode to maturity.

Section 3. Provision of Annual Reports.

(a) The Authority and the County shall, or shall cause the Dissemination Agent to, not later than the Annual Filing Date, provide to the MSRB via EMMA an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. Not later than fifteen (15) business days prior to said date, the Authority shall provide the Annual Report to the Dissemination Agent, if any. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Agreement; provided however that the audited financial statements of the Authority and the County may be submitted separately from the balance of the Annual Report.

(b) If the Authority or the County is unable to provide the Annual Report to the Repository by the date required in subsection (a), a Notice Event pursuant to Section 5(a)(15) shall be deemed to have occurred and the party failing to provide the Annual Report shall report to the Repository electronically in accordance with the provisions of Section 5(b) hereof.

(c) The Dissemination Agent, if any, shall: (i) determine each year prior to the Annual Filing Date the name and address of each Repository; and (ii) file a report with the Authority and the County certifying that the Annual Report has been provided pursuant to this Disclosure Agreement, stating the date it was provided and listing each Repository to which it was provided.

(d) If required by Section 4 herein, audited financial statements of the Authority and the County not submitted as part of the Annual Report shall be provided to the Repository, if and when available to the Authority and the County, and in any event not more than thirty (30) days after receipt thereof from the Authority’s and County’s respective auditors. In the event that audited financial statements are not submitted as part of the Annual Report, the party who fails to provide the audited financial statements shall provide in lieu thereof, when available, unaudited financial statements for the relevant fiscal year.

(e) The Authority and the County shall promptly provide written notice of any change in its fiscal year to the MSRB and to each Repository.

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Section 4. Content of Annual Reports.

(a) The Authority’s Annual Report shall contain or incorporate by reference the Annual Financial Information with respect to the relevant fiscal year. The County’s Annual Report shall contain or incorporate by reference the Annual Financial Information including audited financial statements with respect to the relevant fiscal year.

(b) Any or all of the items listed as Annual Financial Information may be incorporated by reference from other documents, including official statements of debt issues of the Authority or the County or related public entities, which have been submitted to any Repository or the Securities and Exchange Commission. If the document incorporated by reference is a final official statement, it must be available from the MSRB. The Authority and the County shall clearly identify each such other document so incorporated by reference.

(c) If any Annual Financial Information can no longer be generated because the operations to which such information relates have been materially changed or discontinued, a statement to that effect shall satisfy the obligations of the Authority and the County under this Section 4, provided however that the Authority and the County shall, to the greatest extent feasible, provide in lieu thereof similar information with respect to any substitute or replacement operations.

Section 5. Reporting of Notice Events.

(a) This Section 5 shall govern the giving of notices of the occurrence of any of the following events with respect to the Bonds:

1. Principal and interest payment delinquencies;

2. Non payment-related defaults, if material;

3. Unscheduled draws on debt service reserves reflecting financial difficulties;

4. Unscheduled draws on credit enhancements reflecting financial difficulties;

5. Substitution of credit or liquidity providers, or their failure to perform;

6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security;

7. Modifications to rights of Holder, if material;

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8. Bond calls (other than mandatory sinking fund redemptions), if material, and tender offers;

9. Defeasances;

10. Release, substitution, or sale of property securing repayment of any Bonds, if material;

11. Rating changes;

12. Bankruptcy, insolvency, receivership or similar event of the Authority or the County (for the purposes of the event identified in subsection 5(a)(12), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the Authority or the County in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Authority or the County, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Authority or the County);

13. The consummation of a merger, consolidation, or acquisition involving the Authority or the County or the sale of all or substantially all of the assets of the Authority or the County, as the case may be, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material;

14. Appointment of a successor or additional trustee or the change of name of a trustee, if material; and

15. Failure to provide annual financial information as required.

(b) Upon the occurrence of a Notice Event, the Authority and the County shall file, or cause the Dissemination Agent to file, a notice of such occurrence with the MSRB via EMMA in a timely manner not in excess of ten (10) Business Days after the occurrence of the Notice Event.

Section 6. Accounting Standards. The financial statements described in Section 4(a)(i) above shall be audited in accordance with generally accepted accounting principles applicable in the preparation of financial statements of the Authority as promulgated by the Financial

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Accounting Standards Board, the Governmental Accounting Standards Board, or such other body recognized as authoritative by the American Institute of Certified Public Accountants or any successor body, as applicable (“GAAP”), and shall also comply with applicable federal and state auditing statutes, regulations, standards and/or guidelines. The Authority may from time-to-time modify its accounting principles to the extent necessary or desirable to comply with changes in either GAAP or applicable federal and state statutes, regulations, standards and/or guidelines. Any such modification of accounting standards or principles to conform to changes in either GAAP or applicable federal or state auditing statutes, regulations, standards or guidelines shall not constitute an amendment to this Disclosure Agreement within the meaning of Section 9 hereof, but such modifications shall be disclosed in the first Annual Report to be provided subsequent to such modifications.

Section 7. Termination of Reporting Obligation. The Authority’s and the County’s obligations under this Disclosure Agreement shall terminate upon (a) the legal defeasance, prior redemption or payment in full of all of the Bonds, or (b) the assumption by a successor Obligated Person of all of the obligations of the prior Obligated Person both hereunder and under the Bonds. The Authority and the County shall provide timely written notice to each Repository of any termination of its obligations hereunder.

Section 8. Dissemination Agent. The Authority or the County may, from time-to-time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such agent, with or without appointing a successor Dissemination Agent.

Section 9. Amendments. (a) Notwithstanding any other provision of this Disclosure Agreement, the Authority or the County may modify or amend this Disclosure Agreement. The Authority and the County acknowledge and agree that the current SEC interpretation of the Rule requires satisfaction of the following preconditions for any amendment:

(i) the modification or amendment is being made in connection with a change of circumstances that arises from a change in legal requirements, change in law, change in the identity, nature or status of the Authority, or change in the type of business conducted by the Authority or the County;

(ii) this Disclosure Agreement, as amended, would have complied with the requirements of the Rule as of the date of issuance of the relevant Bonds, after taking into account any amendment or interpretations of the Rule, as well as any change in circumstances; and

(iii) the modification or amendment does not materially adversely affect the interests of Holders, as determined either by a party unaffiliated with the Authority or the County (such as the Trustee or nationally recognized bond counsel) or by an approving vote of a majority of Holders.

(b) The Authority and the County shall report any modification or amendment of this Disclosure Agreement as required by the Rule. To the extent required by the Rule, the Authority and the County shall include as a component of the first Annual Report to be provided

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subsequent to the relevant amendment, a copy of the amendment, together with a notice explaining in narrative form both (i) the reasons for the amendment and (ii) the impact of the change in the type of operating data or financial information being provided. To the extent required by the Rule, if the amendment relates to changes in accounting principles to be followed in preparing financial statements, the first Annual Report to be provided subsequent to the relevant amendment shall also include a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles and a qualitative (and to the extent reasonably feasible, quantitative) discussion of the differences in the accounting principles and the impact of the change in the accounting principles upon the presentation of the financial information. Written notice of any such change in accounting principles shall be provided in a timely fashion to each Repository.

(c) Neither a supplement to this Disclosure Agreement to declare that it is applicable to Additional Bonds or a modification of accounting principles or standards pursuant to Section 6 shall be considered an amendment for purposes of this Section 9.

Section 10. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Authority or the County from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including disclaimers or any other information in any Annual Report or notice of occurrence of a Notice Event, in addition to that which is required by this Disclosure Agreement. If the Authority or the County chooses to include any information in any Annual Report or notice of occurrence of a Notice Event in addition to that which is specifically required by this Disclosure Agreement, the Authority and the County shall have no obligation under this Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Notice Event.

Section 11. Submission of Information to the MSRB. The information required to be disclosed pursuant to this Disclosure Agreement shall be submitted to the MSRB through EMMA. Subject to future changes in submission rules and regulations, such submissions shall be provided to the MSRB, through EMMA, in portable document format (“PDF”) files configured to permit documents to be saved, viewed, printed and retransmitted by electronic means. Such PDF files shall be word-searchable (allowing the user to search for specific terms used within the document through a search or find function available in a software package).

Subject to future changes in submission rules and regulations, at the time that such information is submitted through EMMA, the Authority, or any Dissemination Agent engaged by the Authority or the County, shall also provide to the MSRB information necessary to accurately identify the category of information being provided and other identifying descriptions required by MSRB rules and regulations.

Section 12. Default. In the event of a failure of the Authority or the County to comply with any provision of this Disclosure Agreement, the Trustee, any Participating Underwriter or any Holder may take such actions as may be necessary and appropriate, including seeking a writ of mandamus or specific performance by court order to cause the Authority or the County to comply with its obligations under this Disclosure Agreement. A default under this Disclosure

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Agreement shall not be deemed an Event of Default under the Bonds or any document relating to the Bonds, and the sole remedy under this Disclosure Agreement in the event of any failure of the Authority or the County to comply with this Disclosure Agreement shall be an action to compel performance; provided however that nothing herein shall limit any Holder’s rights under applicable federal securities law.

Section 13. Severability. In case any section or provision of this Disclosure Agreement or any covenant, stipulation, obligation, agreement, or action, or any part thereof, made, assumed, entered into or taken under this Disclosure Agreement, or any application thereof, is for any reason held to be illegal or invalid or is at any time inoperable, such illegality, invalidity or inoperability shall not affect the remainder thereof or any other section or provision or the Disclosure Agreement, or any other covenant, stipulation, obligation, agreement, act or action, or part thereof, made, assumed, entered into or taken under this Disclosure Agreement, which shall at the time by construed and enforced as if such illegal or invalid or inoperable portion were not contained therein.

Section 14. Entire Agreement. This Disclosure Agreement contains the entire agreement of the Authority and the County with respect to the subject matter hereof and supersedes all prior arrangements and understandings with respect thereto, provided however that this Disclosure Agreement shall be interpreted and construed with reference to and in pari materia with the Rule.

Section 15. Captions. The captions or headings herein shall be solely for convenience of reference and shall in no way define, limit or describe the scope or intent of any provisions or sections hereof.

Section 16. Beneficiaries. This Disclosure Agreement is being entered into solely for the benefit of the Participating Underwriters and Holders from time-to-time of the Bonds, and nothing in this Disclosure Agreement expressed or implied is intended to or shall be construed to give to any other person or entity any legal or equitable right, remedy or claim under or in respect of this Disclosure Agreement or any covenants, conditions or provisions contained herein.

Section 17. Governing Law. This Disclosure Agreement shall be deemed to be a contract made under the laws of the Commonwealth of Pennsylvania, and all provisions hereof shall be governed and construed in accordance with the laws of the Commonwealth of Pennsylvania, without reference to the choice of law principles thereof.

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IN WITNESS WHEREOF, this Disclosure Agreement has been duly executed and delivered as of the day and year first above written.

REDEVELOPMENT AUTHORITY OF THE COUNTY OF MONTGOMERY By: Chairman COUNTY OF MONTGOMERY, PENNSYLVANIA By:

APPENDIX E

OPINION OF BOND COUNSEL DATED JUNE 1, 2007

preliminary remarketing circular dated may … · preliminary remarketing circular dated may ... of...

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