$1,700,000 BUTLER COUNTY, MISSOURI, PUBLIC FACILITIES AUTHORITY LEASEHOLD REVENUE REFUNDING BONDS SERIES 2010 (BUTLER COUNTY JAIL PROJECT)

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1 NEW ISSUE BANK QUALIFIED (Book Entry Only)Not Rated In the opinion of Gilmore & Bell, P.C., Bond Counsel, under existing law and assuming continued compliance with certain requirements of the Internal Revenue Code of 1986, as amended, the interest on the Bonds (including any original issue discount properly allocable to an owner thereof) is excludable from gross income for federal and Missouri income tax purposes, except as described in this Official Statement, and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. The Bonds are qualified tax-exempt obligations within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. See TAX MATTERS in this Official Statement. $1,700,000 BUTLER COUNTY, MISSOURI, PUBLIC FACILITIES AUTHORITY LEASEHOLD REVENUE REFUNDING BONDS SERIES 2010 (BUTLER COUNTY JAIL PROJECT) Dated: February 1, 2010 Due: See Inside Cover Page The Bonds will be issued as fully registered bonds and will be available for purchase in denominations of $5,000 or any integral multiple thereof. Principal of and semiannual interest on the Bonds will be paid from moneys available therefore under the Indenture (herein defined). Interest will be payable semiannually on June 1 and December 1, beginning on June 1, 2010, by check or draft mailed (or by wire transfer in certain circumstances) to the persons who are the registered owners of the Bonds as of the close of business on the 15th day of the month preceding the applicable interest payment date. The Bonds are being issued by the Butler County, Missouri, Public Facilities Authority (the Corporation ), under the Indenture between the Corporation and the Trustee. The Bonds are special, limited obligations of the Corporation, payable solely from Rental Payments to be made by Butler County, Missouri (the County ) and other moneys derived by the Corporation pursuant to the annually renewable Lease described herein. The Bonds are secured by a pledge of such Rental Payments and other moneys under the Indenture and by a mortgage of the Facility under the First Deed of Trust, as described herein. The County intends to satisfy its obligation to make Rental Payments out of revenues generated from (1) a ¼-cent law enforcement sales tax and (2) other available moneys of the County. However, the County has not pledged the sales tax or any other moneys to the payment of the Bonds. The Bonds do not constitute a debt or liability of the County, the State of Missouri or of any political subdivision thereof and do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. THE PAYMENT OF THE BONDS IS SUBJECT TO ANNUAL APPROPRIATIONS BY THE COUNTY. THE ISSUANCE OF THE BONDS DOES NOT OBLIGATE THE COUNTY TO LEVY ANY FORM OF TAXATION THEREFOR OR TO MAKE ANY APPROPRIATION FOR THEIR PAYMENT IN ANY YEAR SUBSEQUENT TO A YEAR IN WHICH THE LEASE IS IN EFFECT. The Corporation has no taxing power. See the caption SECURITY FOR THE BONDS herein. herein. The Bonds are subject to extraordinary optional redemption at any time under certain circumstances, as described The Bonds are offered when, as and if issued and received by Oppenheimer & Co., Inc., as Underwriter, subject to the approval of legality by Gilmore & Bell, P.C., Kansas City, Missouri, Bond Counsel, and certain other conditions. It is expected that the Bonds will be available for delivery at The Depository Trust Company in New York, New York, on or about February 9, The date of this Official Statement is January 27, 2010

2 MATURITY SCHEDULE Due December 1 Principal Amount Interest Rate Price 2010 $435, % % , , ,

3 $1,700,000 BUTLER COUNTY, MISSOURI, PUBLIC FACILITIES AUTHORITY Leasehold Revenue Refunding Bonds Series 2010 (Butler County Jail Project) MEMBERS OF THE BUTLER COUNTY, MISSOURI, PUBLIC FACILITIES AUTHORITY James Vernon, President & Director Ray Thomas, Vice President & Director Kathleen Robertson, Secretary/Treasurer & Director Scot Preslar, Director Jerry Aldrich, Director Greg Kirk, Alternate Director MEMBERS OF THE COUNTY COMMISSION OF BUTLER COUNTY, MISSOURI Ed Strenfel, Presiding Commissioner Don Anderson, Associate Commissioner Jeff Darnell, Associate Commissioner COUNTY ADMINISTRATION Sharon Payne, Public Administrator Tonyi Deffendall, County Clerk Emily Parks, Circuit Court Clerk Debby Lundstorm, Recorder of Deeds Mark Dobbs, Sheriff Brenda Fox, Collector of Revenue Marion Tibbs, Assessor Joe Humphrey, Treasurer COUNSEL TO THE CORPORATION AND THE COUNTY Kevin Barbour, Prosecuting Attorney Poplar Bluff, Missouri BOND COUNSEL AND DISCLOSURE COUNSEL Gilmore & Bell, P.C. Kansas City, Missouri UNDERWRITER Oppenheimer & Co., Inc. Kansas City, Missouri

4 REGARDING USE OF THIS OFFICIAL STATEMENT No dealer, broker, salesman or other person has been authorized by the Corporation, the County or the Underwriter to give any information or to make any representation with respect to the Bonds offered hereby other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Bonds offered hereby by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from the Corporation, the County and other sources believed to be reliable, but it is not guaranteed as to accuracy or completeness and is not to be construed as a representation by the Underwriter. The information and expressions of opinion herein are subject to change without notice. Neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Corporation, or the County since the date hereof. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER ALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE BONDS HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR HAS THE INDENTURE BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COUNTY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE BONDS HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY BOARD. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of that information. CAUTIONARY STATEMENTS REGARDING FORWARD- LOOKING STATEMENTS IN THIS OFFICIAL STATEMENT This Official Statement contains forward-looking statements. These forward-looking statements include statements about the County s and Corporation s projections and future plans and strategies, and other statements that are not historical in nature. These forward-looking statements are based on the current expectations of the County and the Corporation. When used in this Official Statement, the words estimate, intend, expect and similar expressions are intended to identify forward-looking statements. Forward-looking statements involve future risks and uncertainties that could cause actual results and experience to differ materially from the anticipated results or other expectations expressed in forward-looking statements. These future risks and uncertainties include those discussed in the BONDOWNERS RISKS section of this Official Statement. The County and Corporation undertake no obligation to update any forwardlooking statements contained in this Official Statement to reflect future events or developments. (ii)

5 TABLE OF CONTENTS Page INTRODUCTION... 1 General... 1 The Financing... 1 Limited Obligations... 2 Additional Bonds... 2 Continuing Disclosure Information... 2 Definitions and Descriptions; Inspection of Documents... 2 THE BONDS... 3 Authorization... 3 Description... 3 Book-Entry Only System... 3 Redemption Provisions... 5 SECURITY FOR THE BONDS... 6 Limited Obligations; Sources of Payment... 6 Bond Reserve Fund... 7 Mortgage of the Facility... 7 BONDOWNERS RISKS... 7 Limited Obligations... 7 Expiration or Termination of the Lease... 8 Delays in Exercising Remedies... 8 Destruction of the Facility... 9 Condemnation of the Facility... 9 Limitations on Marketability of the Bonds... 9 PLAN OF FINANCING Description of Project Refunding of the Series 1999 Bonds Sources and Uses of Funds THE CORPORATION Organization, Powers and Purposes Other Financings Income of the Corporation Board of Directors GENERAL AND ECONOMIC INFORMATION CONCERNING THE COUNTY Location and Size Government and Organization of the County Commerce and Industry Page Housing...13 Population...13 Per Capita Personal Income...13 DEBT STRUCTURE OF THE COUNTY...14 Financial Overview...14 General Obligation Indebtedness...14 Debt Limitation...14 Overlapping and Underlying General Obligations...14 Lease Obligations...15 FINANCIAL INFORMATION CONCERNING THE COUNTY...15 Accounting, Budgeting and Auditing Procedures...15 Fund Balances Summary...16 Sources of Revenue...16 Property Valuations...17 Property Tax Levies and Collections...18 Sales Tax Collections...19 LEGAL MATTERS...20 Approval of Legality...20 Litigation...20 TAX MATTERS...20 Opinion of Bond Counsel...20 Other Tax Consequences...21 NO RATING...21 UNDERWRITING...21 CONTINUING DISCLOSURE...22 MISCELLANEOUS...22 APPENDIX A: Definitions of Words and Terms and Summaries of Legal Documents APPENDIX B: Independent Auditor s Report for the two Fiscal Years Ended December 31, 2008 APPENDIX C: Continuing Disclosure Instructions

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7 OFFICIAL STATEMENT $1,700,000 BUTLER COUNTY, MISSOURI, PUBLIC FACILITIES AUTHORITY LEASEHOLD REVENUE REFUNDING BONDS SERIES 2010 (BUTLER COUNTY JAIL PROJECT) INTRODUCTION This introduction is only a brief description and summary of certain information contained in this Official Statement and is qualified in its entirety by reference to the more complete and detailed information contained in the entire Official Statement, including the cover page and appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement. General The purpose of this Official Statement is to furnish information in connection with the offering and sale by the Butler County, Missouri, Public Facilities Authority, a Missouri nonprofit corporation (the Corporation ), of its Leasehold Revenue Refunding Bonds, Series 2010 (Butler County Jail Project), in the aggregate principal amount of $1,700,000 (the Bonds ). The Bonds are being issued pursuant to a Trust Indenture dated as of February 1, 2010 (the Indenture ), between the Corporation and Commerce Bank, N.A., Kansas City, Missouri (the Trustee ). The Bonds are being issued for the purpose of providing funds, together with other funds, to (1) refund $2,005,000 outstanding principal amount of the Corporation s Leasehold Revenue Refunding Bonds, Series 1999 (Butler County Jail Project) (the Series 1999 Bonds ), which were issued to refund a series of bonds issued by the Corporation in 1994 (the Series 1994 Bonds ). The Series 1994 Bonds were issued to pay the costs of constructing, furnishing and equipping a facility housing the Sheriff s Department and the County jail (the Project ) located on certain real estate (the Project Site ) in Butler County, Missouri, a body corporate and political subdivision of the State of Missouri (the County ), (2) fund a Bond Reserve Fund, and (3) pay related Bond issuance costs as described herein. See the caption PLAN OF FINANCING herein. The Financing Pursuant to the terms of a Lease Agreement dated as of February 1, 2010 (the Lease ), between the Corporation and the County, (a) the Corporation will use the proceeds of the Bonds to refund the Series 1999 Bonds, and (b) the Corporation will lease the Project Site and the Project (collectively, the Facility ) to the County for an initial term ending December 31, 2010 (the Initial Term ), with 2 successive one-year renewal options plus a final renewal option that will not extend beyond December 1, 2013 (the Renewal Terms ). Each Renewal Term is subject to annual budget appropriations by the County Commission. The Bonds will be payable solely from the rents, revenues and receipts received by the Corporation under the Lease for the use of the Facility, from certain proceeds of insurance policies or condemnation awards, from certain reserves and interest earnings on moneys in certain funds held by the Trustee, from moneys derived from a sale of the Facility, and not from any other fund or source of the Corporation. Pursuant to the Indenture, the Corporation will pledge and assign such rents, revenues and receipts and other moneys to the payment of the Bonds and the interest thereon. Payments under the Lease are designed to be sufficient, together with other funds available for such purpose, to pay when due the principal of, redemption premium, if any, and interest on the Bonds. In addition, the Corporation will grant a mortgage on the Facility to a mortgage trustee pursuant to a First Deed of Trust dated as of February 1, 2010 (the First Deed of Trust ), for the benefit of the owners of the Bonds (the Bondowners or Owners ).

8 The County intends to satisfy its obligation to make Rental Payments out of revenues generated from (1) a ¼-cent law enforcement sales tax within the County, which was approved by a majority of the voters in the County voting on the question at an election held on November 2, 1993, and (2) other available funds of the County. However, neither the sales tax nor other funds are pledged to the payment of the Bonds. See the caption FINANCIAL INFORMATION CONCERNING THE COUNTY Sales Tax Collections for historical collection information. Limited Obligations Payments made by the County under the Lease are payable solely from amounts which may but are not required to be appropriated annually by the County. Neither the Bonds, the Lease nor any payments required under the Lease constitute a mandatory payment obligation of the County in any year beyond the year during which the County is a lessee under the Lease, or constitute or give rise to a general obligation or other indebtedness of the County. The County is not legally obligated to budget or appropriate moneys for any fiscal year beyond the current fiscal year or any subsequent fiscal year in which the Lease is in effect, and there can be no assurance that the County will appropriate funds to make Rental Payments or renew the Lease after the Initial Term or any Renewal Term of the Lease. The County may terminate its obligations under the Lease on an annual basis. The County will have the option to purchase the Corporation s title and interest in the Facility on an annual basis at the end of the Initial Term of the Lease and at the end of any Renewal Term thereof. The Bonds do not constitute a debt or liability of the County or of the State of Missouri or of any political subdivision thereof and do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. The issuance of the Bonds does not obligate the County to levy any form of taxation therefor or to make any appropriation for their payment in any fiscal year subsequent to a fiscal year in which the Lease is in effect. The Corporation has no taxing power. Additional Bonds The Indenture permits the future issuance of Additional Bonds which, if issued, would rank on a parity with the Bonds and any other Additional Bonds then Outstanding under the Indenture, but only if (a) the County is not in default in the payment of principal of or interest on the Bonds and (b) certain other requirements of the Indenture are met. See the caption THE INDENTURE Additional Bonds in Appendix A. Continuing Disclosure Information The County has covenanted to provide such continuing disclosure information as is required by applicable securities laws and regulations for municipal securities dealers to make a market in or trade the Bonds. See the caption CONTINUING DISCLOSURE. Definitions and Descriptions; Inspection of Documents All capitalized terms used in this Official Statement not defined in the text hereof are defined under the caption DEFINITIONS OF WORDS AND TERMS set forth in Appendix A to this Official Statement. Brief descriptions of the Bonds, the Lease, the Indenture and certain other matters are included in this Official Statement. Such descriptions do not purport to be comprehensive or definitive. All references herein to the Lease, the Indenture and the First Deed of Trust are qualified in their entirety by reference to such documents, copies of which may be viewed at the offices of the Underwriter, Oppenheimer & Co. Inc., 4717 Grand Avenue, Suite 700, Kansas City, Missouri 64112, and following delivery of the Bonds, at the principal corporate trust office of the Trustee, Commerce Bank, N.A., 922 Walnut Street, 10th Floor, Kansas City, Missouri 64106, or will be provided to any prospective purchaser requesting the same, upon payment by such -2-

9 prospective purchaser of the cost of complying with such request. All references to the Bonds are qualified in their entirety by the definitive terms thereof and the information with respect thereto included in the Lease and the Indenture. Authorization THE BONDS The Bonds are being issued pursuant to the Indenture and pursuant to and in full compliance with the Constitution and laws of the State of Missouri and pursuant to proceedings duly had by the Corporation. Description The Bonds are being issued in the principal amount of $1,700,000, are dated February 1, 2010, bear interest at the rates per annum set forth on the inside cover page hereof, payable semiannually on June 1 and December 1 of each year beginning on June 1, 2010, and mature on December 1 in the years and in the principal amounts set forth on the inside cover page hereof. The Bonds are issuable as fully registered Bonds without coupons in the denominations of $5,000 or any integral multiple thereof. Principal of the Bonds is payable at the principal payment office of the Trustee. Interest on the Bonds is payable (a) by check or draft mailed by the Trustee to the person in whose name each Bond is registered on the 15th day of the month next preceding an interest payment date at such person s address as it appears on the bond registration books (the Bond Register ) kept by the Trustee under the Indenture, or (b) in the case of the payment of interest to the Securities Depository or any Registered Owner of $500,000 or more in aggregate principal amount of Bonds, by electronic transfer to such Registered Owner upon written notice given to the Trustee by such Registered Owner not less than the Business Day prior to the Record Date for such interest, containing the electronic transfer instructions including the bank (which shall be in the continental United States), ABA routing number and account number to which such Registered Owner wishes to have such transfer directed. Book-Entry Only System The following information concerning DTC and DTC s Book-Entry System has been obtained from sources that the County and the Corporation believe to be reliable, but is not guaranteed as to accuracy or completeness by and is not to be construed as a representation by the County, the Corporation, the Paying Agent or the Underwriter. The County, the Corporation, the Paying Agent and the Underwriter make no assurances that DTC, Direct Participants, Indirect Participants or other nominees of the Beneficial Owners will act in accordance with the procedures described herein or in a timely manner. General. The Bonds are available in book-entry only form. Purchasers of the Bonds will not receive certificates representing their interests in the Bonds. Ownership interests in the Bonds will be available to purchasers only through a book-entry system (the Book-Entry System ) maintained by The Depository Trust Company ( DTC ), New York, New York. DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Bond certificate will be issued for each maturity of the Bonds and will be deposited with DTC. DTC and its Participants. 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 DTC holds and provides asset servicing for -3-

10 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 Standard & Poor s highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at and Purchases of Ownership Interests. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC s records. The ownership interest of each actual purchaser of each Bond ( Beneficial Owner ) is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. Transfers. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Notices. 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 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the 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 notices be provided directly to them. Voting. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the County as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). -4-

11 Payments of Principal and Interest. Payments of principal of and interest on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC s practice is to credit Direct Participants accounts upon DTC s receipt of funds and corresponding detail information from the County or the Paying Agent, on the payable date in accordance with their respective holdings shown on DTC s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participant and not of DTC, the Paying Agent or the County, subject to any statutory or regulatory requirements as may be in effect from time to time. Payments of principal of and interest on the Bonds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. Discontinuation of Book-Entry System. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the County or the Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered. The County may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed, 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), and delivered to DTC (or a successor securities depository), to be held by it as securities depository for Direct Participants. If, however, the system of book-entry-only transfers has been discontinued and a Direct Participant has elected to withdraw its Bonds from DTC (or such successor securities depository), Bond certificates may be delivered to Beneficial Owners in the manner described in the Bond Resolution. None of the Underwriter, the Paying Agent, the County nor the Corporation will have any responsibility or obligations to any Direct Participants or Indirect Participants or the persons for whom they act with respect to (i) the accuracy of any records maintained by DTC or any such Direct Participant or Indirect Participant; (ii) the payment by any Participant of any amount due to any Beneficial Owner in respect of the principal or interest on the Bonds; (iii) the delivery by any such Direct Participant or Indirect Participant of any notice to any Beneficial Owner that is required or permitted under the terms of the Bond Ordinance to be given to owners of the Bonds; or (iv) any consent given or other action taken by DTC as Bondholder. Redemption Provisions Optional Redemption. The Bonds are not subject to optional redemption prior to maturity. Extraordinary Optional Redemption. The Bonds are to be subject to redemption and payment prior to the stated maturity thereof by the Corporation, at the option of the County, as a whole or in part on any date, at a redemption price of 100% of the principal amount of the Bonds being called for redemption, plus accrued interest to the redemption date, upon the occurrence of any of the following conditions or events: (1) if title to, or the use for a limited period of, the Facility is condemned by any authority having the power of eminent domain (other than the County or any entity controlled by or otherwise affiliated with the County); (2) if title to the Facility is found to be deficient or nonexistent to the extent that the efficient utilization of the Facility by the County is impaired; -5-

12 (3) if substantially all of the Facility is damaged or destroyed by fire or other casualty; or (4) if as a result of changes in the Constitution of the State of Missouri, or of legislative or administrative action by the State of Missouri or any political subdivision thereof, or by the United States, or by reason of any action instituted in any court, the Lease becomes void or unenforceable, or impossible of performance without unreasonable delay, or in any other way, by reason of such occurrences, unreasonable burdens or excessive liabilities are imposed on the County or the Corporation. Limited Obligations; Sources of Payment SECURITY FOR THE BONDS The Bonds and all interest thereon are special, limited obligations of the Corporation, payable solely from (i) the Rental Payments derived by the Corporation from the lease of the Facility pursuant to the Lease and (ii) to the extent received by the Trustee, interest earnings, proceeds of insurance and condemnation awards, moneys on deposit in the Bond Reserve Fund and proceeds of any foreclosure of the Facility. Under the Indenture, the Corporation will pledge and assign the Rental Payments under the Lease to the Trustee for the benefit of the Bondowners, as security for the payment of the Bonds and the interest thereon. In addition, the Corporation will grant a mortgage on the Facility pursuant to the First Deed of Trust for the benefit of the Bondowners. The County intends to satisfy its obligation to make Rental Payments out of revenues generated from (1) a ¼-cent law enforcement sales tax within the County, which was approved by a majority of the voters in the County voting on the question at an election held on November 2, 1993, and (2) other available funds of the County. However, neither the sales tax nor other funds of the County are pledged to the payment of the Bonds. See the caption FINANCIAL INFORMATION CONCERNING THE COUNTY Sales Tax Collections herein for historical sales tax collection information. The Bonds do not constitute a debt or liability of the County or of the State of Missouri or of any political subdivision thereof and do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. The issuance of the Bonds does not obligate the County to levy any form of taxation therefor or to make any appropriation for their payment in any fiscal year subsequent to a fiscal year in which the Lease is in effect. The Corporation has no taxing power. Under the terms of the Lease, if the County elects to renew the Lease at the end of the Initial Term or any Renewal Term, it is obligated to budget, appropriate and set aside a portion of its general revenues derived from sales taxes, property taxes and other sources, which appropriation shall be sufficient to make the Rental Payments coming due during the ensuing fiscal year. The County is obligated to make Rental Payments to the Trustee on May 15 and November 15 during each fiscal year in which the Lease is in effect, which payments shall be sufficient to enable the Corporation to meet its obligation to pay the principal of, redemption premium, if any, and interest on the Bonds becoming due during such fiscal year (but only if the County elects to renew the Lease for each Renewal Term). THERE CAN BE NO ASSURANCE THAT THE COUNTY WILL APPROPRIATE FUNDS FOR RENTAL PAYMENTS OR RENEW THE LEASE AFTER THE INITIAL LEASE TERM. NEITHER THE BONDS NOR THE LEASE CONSTITUTE A GENERAL OBLIGATION OR OTHER INDEBTEDNESS OF THE COUNTY, NOR A MANDATORY PAYMENT OBLIGATION IN ANY FISCAL YEAR SUBSEQUENT TO A FISCAL YEAR IN WHICH THE LEASE IS IN EFFECT. THE COUNTY IS NOT LEGALLY REQUIRED TO BUDGET OR APPROPRIATE MONEYS FOR ANY SUBSEQUENT FISCAL YEAR BEYOND THE CURRENT FISCAL YEAR. -6-

13 Bond Reserve Fund A Bond Reserve Fund is established pursuant to the Indenture and is required to be funded in an aggregate amount equal to $170,000 (the Bond Reserve Requirement ). Amounts in the Bond Reserve Fund are to be used to pay principal of and interest on the Bonds to the extent of any deficiency in the Bond Fund and for certain other purposes as described in Appendix A under the caption THE INDENTURE Bond Reserve Fund. Mortgage of the Facility The Corporation has, pursuant to the First Deed of Trust, granted a first mortgage on the Facility to a mortgage trustee for the benefit of the Bondowners. If an Event of Default occurs under the Indenture, and if the Trustee accelerates the payment of the Bonds pursuant thereto, the Trustee shall also direct the mortgage trustee to foreclose the lien created under the First Deed of Trust, either by public sale or by proceedings in equity. The Trustee shall receive the proceeds of the sale and apply them in accordance with the Indenture. Proceeds shall be applied to the payment of principal and interest then due and unpaid on all of the Bonds, ratably, according to the amounts due respectively for principal and interest, to the Bondowners. BONDOWNERS RISKS The purchase of the Bonds involves certain investment risks that are discussed throughout this Official Statement. Each prospective purchaser of the Bonds should evaluate all of the information presented in this Official Statement in order to make an informed investment decision. Certain risk factors relating to the Bonds are described below. Limited Obligations The Bonds are payable from amounts due under the Lease, which constitute currently budgeted expenditures of the County, payable only if the County Commission appropriates sufficient moneys to extend the term of the Lease for each successive fiscal year. The Initial Term of the Lease commences as of the date of issuance and delivery of the Bonds and expires on December 31, The Lease is thereafter subject to 2 successive one-year Renewal Terms commencing on January 1 of each year, plus a final Renewal Term commencing January 1, 2013 and ending December 1, 2013, subject to prior termination as provided in the Lease. The County s obligations under the Lease do not constitute indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. The County Commission has declared its current intention and expectation that the Lease will be renewed annually until the County acquires title to the Facility. However, such a declaration may not be construed as contractually obligating or otherwise binding the County. Subsequent members of the County Commission may elect not to budget and appropriate moneys to make the payments required under the Lease even if sufficient funds are available therefor. Accordingly, the likelihood that the County will renew the Lease throughout the term of the Bonds is dependent upon certain factors which are beyond the control of the Bondowners, including (a) the continuing need of the County for the Facility, (b) the demographic conditions within the County, (c) the ability of the County to generate sufficient revenues from property taxes, sales taxes and other sources to pay its obligations under the Lease and the other obligations of the County and (d) the value of the Facility if relet or sold in a foreclosure or other liquidation proceeding instituted by the Trustee in the event of the termination of the term of the Lease as a result of an Event of Default or nonappropriation. The willingness of the County to appropriate moneys to make payments under the Lease will depend in part on the amount of revenues received by the County to fund such payments and other services provided by the County. Over the last two years, receipts from the County s law enforcement sales tax have been down from the prior year. See FINANCIAL INFORMATION CONCERNING THE COUNTY Sales Tax -7-

14 Collections. If such revenues are insufficient to fund law enforcement activities and the rental payments, the County would be less likely to make rental payments. Decrease in sales tax revenues also negatively affect the general fund of the County. Lower than expected revenues in the general fund make it less likely that the County will utilize this fund as a source of funds to appropriate for payments under the Lease. Expiration or Termination of the Lease The Lease will expire by its terms on December 31 during each year unless the County in its sole discretion exercises the option provided in the Lease to extend its term for each next succeeding Renewal Term with a final Lease expiration date of December 1, If the County does not extend in any year the term of the Lease, the County s obligation to make Rental Payments will terminate on the December 31 occurring at the end of the Initial Term or the then current Renewal Term. Upon (a) the expiration of the Initial Term or any Renewal Term during which the County has determined not to appropriate funds for the next succeeding year, or (b) a default under the Lease and an election by the Trustee to terminate the possessory interest of the County under the Lease, the County s right of possession of the Facility under the Lease will expire or be terminated, as appropriate. See THE LEASE Events of Default and Remedies in Appendix A hereto. If the County s right of possession of the Facility under the Lease expires or is terminated for either of the reasons described in the preceding paragraph, the obligation of the County to make payments thereunder will continue through the Initial Term or the Renewal Term then in effect, but not thereafter. The Bonds will be payable from, among other sources, moneys that may be available by way of recovery from the County of the Rental Payments that are due through the Initial Term or the Renewal Term then in effect. If the Lease expires at the end of the Initial Term or a Renewal Term without any extension for the next succeeding Renewal Term or if an event occurs as described above pursuant to which the Trustee terminates the County s right of possession of the Facility under the Lease, the Trustee may recover and relet or sell the Facility as provided in the Indenture. The net proceeds of any reletting or sale of the Facility, together with certain other moneys then held by the Trustee under the Indenture, are required to be used to pay the Bonds to the extent of such moneys. However, no assurance can be given that the Trustee could relet or sell the Facility for the amount necessary (after taking into account moneys legally available from other sources) to pay in full the principal and interest on the Bonds. Furthermore, no assurance can be given that the amount, if any, realized upon any reletting or sale of the Facility will be available to provide for the payment of the Bonds on a timely basis. Delays in Exercising Remedies A termination of the County s right of possession of the Facility under the Lease as a result of an Event of Default or expiration of the term of the Lease at the end of the Initial Term or any Renewal Term without an extension for the next succeeding Renewal Term will give the Trustee the right to possession of, and the right to relet or foreclose upon and sell, the Facility in accordance with the provisions of the Lease and the Indenture. However, the enforceability of the Lease and the Indenture is subject to applicable bankruptcy laws, equitable principles affecting the enforcement of creditors rights generally and liens securing such rights, the exercise of judicial authority by State of Missouri or federal courts and the exercise by the United States of America of the powers delegated to it by the federal constitution. Further, the Facility is used by the County for the performance of essential governmental functions of the County. Due to the essential governmental use of the Facility and the delays inherent in obtaining foreclosure upon real property and other judicial remedies, no assurance can be given that (a) a court, in the exercise of judicial discretion, would enforce these remedies in a timely manner, or (b) any moneys realized by the Trustee upon an exercise of any remedies would be sufficient to pay the principal of and interest on the Bonds. If any such moneys are insufficient to pay all outstanding Bonds in full, the Bonds would be paid in part on a pro rata basis. Any delays in the ability of the Trustee to obtain possession of the Facility, of necessity, will result in delays in any payment of the principal of and interest on the Bonds. -8-

15 Destruction of the Facility The Lease requires the Facility to be insured as described in THE LEASE Insurance in Appendix A hereto. In the event of damage to or destruction of the Facility, the County is nevertheless required to continue to make Rental Payments under the Lease, subject to the exercise of its option provided in the Lease to extend the term of the Lease for each next succeeding Renewal Term and to the application of net proceeds from insurance and certain other sources to repair, restore, modify, improve or replace the affected portion of the Facility. If the net proceeds from insurance and such other sources are sufficient to repair, restore, modify, improve or replace the affected portion of the Facility, such proceeds are to be so applied. If such net proceeds are insufficient for such purpose, (a) the County is obligated to commence and thereafter complete the work and pay any cost in excess of such net proceeds, but only from funds appropriated for such purpose, in order for the affected portion of the Facility to be repaired, restored and replaced or (b) if the failure to repair or restore does not materially detract from the value of the Facility, such net proceeds may be deposited into the Bond Fund and used to redeem Bonds at the first possible date or to pay principal and interest on the Bonds as they become due. There can be no assurance either as to the adequacy of or timely payment under property damage insurance in effect at that time or that the County will elect to extend the term of the Lease for the next Renewal Term succeeding such damage or destruction. See THE LEASE Damage and Destruction in Appendix A hereto. Condemnation of the Facility Section of the Revised Statutes of Missouri, as amended, grants Missouri counties the power to condemn property for, among other purposes, a county courthouse and a jail. There is no assurance that if the County were to condemn the Corporation s interest under the Lease that the condemnation award would be sufficient to pay the outstanding principal of and interest on the Bonds. The County has agreed in the Lease that, in the event that the whole or any part of the Facility is taken by eminent domain proceedings, the interest of the Corporation will be recognized. Under the Lease, the County and the Corporation have reached an agreement on the terms of the acquisition of the Facility at the County s option, and to the use of the Facility. The County has agreed that any acquisition of the Facility or rights to its use by the County (whether pursuant to the exercise of eminent domain powers or otherwise) shall be pursuant to and in accordance with the Lease, including payment of Rental Payments and the applicable purchase price (as set forth in the Lease). If the County allows the Lease to expire without exercising its option to purchase, whether by failure to exercise its option to extend the Lease for a Renewal Term, failure to exercise its option to purchase at the conclusion of the Lease Term or failure to cure an Event of Default (as such terms are defined in the Lease), the County s failure to exercise the option to purchase shall constitute an irrevocable determination by the County that the Facility is not required by it for any public purpose for the term of the Lease. The enforceability of the foregoing agreements of the County has not been the subject of judicial interpretation. Limitations on Marketability of the Bonds Although the Underwriter may engage in secondary market transactions with respect to the Bonds, the Underwriter is not obligated to repurchase the Bonds from the owners thereof. There is no assurance that a secondary market for the Bonds will develop or that Bondowners who wish to sell their Bonds prior to the stated maturity will be able to do so. -9-

16 PLAN OF FINANCING Description of Project The proceeds of the Corporation s Series 1994 Bonds were used to construct, furnish and equip the Project. The Series 1994 Bonds were subsequently refinanced with the proceeds of the Series 1999 Bonds. The Project consists of a 2½ story, 133-bed law enforcement facility located across the street from the existing County courthouse in downtown Poplar Bluff, Missouri. The lower floor of the facility houses the Sheriff s Department, including secure parking. The middle level of the facility houses the jail and related operations, including the kitchen, laundry, medical office, central control area, multipurpose room and indoor recreational area. The facility s mezzanine is designed to be easily converted into a holding area for prisoners in the future if the need should warrant. A tunnel connects the jail facility to the County courthouse across the street. The Project was completed in March 1997 at a cost of $6,295,000. Concurrently with the issuance of the Bonds, the Lease will be delivered. Under the Lease, the Corporation agrees (a) to issue the Bonds to provide for refunding the Series 1999 Bonds and (b) to lease the Facility to the County for an initial term ending December 31, 2010 (the Initial Term ), with 2 successive one-year renewal options (the Renewal Terms ), plus a final Renewal Term that will not extend beyond December 1, Refunding of the Series 1999 Bonds To effect the refunding, the Corporation will transfer $2,029, from proceeds of the Bonds and the reserve fund established for the Series 1999 Bonds to Commerce Bank, N.A., as escrow agent (the Escrow Agent ), for deposit in the Escrow Fund established under an escrow letter of instructions from the County and the Corporation to the Escrow Agent. The moneys deposited in the Escrow Fund will be sufficient, together with the interest to accrue thereon, if any, to pay the principal of and interest on the outstanding Series 1999 Bonds. Sources and Uses of Funds The following table summarizes the estimated sources of funds, including the proceeds from the sale of the Bonds, and the expected uses of such funds, in connection with the plan of financing: Sources of Funds: Uses of Funds: Par Amount of the Bonds $1,700, Accrued Interest Net Original Issue Discount (7,145.20) Bond Reserve Fund for Series 1999 Bonds 564, Total $2,257, Deposit to Escrow Fund $2,029, Deposit to new Bond Reserve Fund 170, Deposit to Bond Fund Costs of Issuance 57, Total $2,257,

17 THE CORPORATION Organization, Powers and Purposes The Corporation is a nonprofit corporation duly organized and existing under the laws of the State of Missouri, including particularly the Missouri Nonprofit Corporation Act, Chapter 355 of the Revised Statutes of Missouri, as amended (the Act ), for the purpose of providing for the planning, development, acquisition, construction, improvement, extension, widening, repair, remodeling, renovation and financing of public sites, buildings, structures, facilities, streets, roads, bridges, culverts, furnishings and equipment for the benefit or use of the County. The Corporation is authorized pursuant to the Act to issue the Bonds, to improve, repair, remodel, furnish and equip the Project, to lease the Facility to the County and to secure the Bonds under the Indenture and the First Deed of Trust as herein described. The Corporation is organized exclusively for charitable purposes and will be operated for the benefit of the County and its residents. No part of the net earnings or other assets of the Corporation shall inure to the benefit of any director, officer, contributor or other private individual having directly or indirectly any personal or private interest in the activities of the Corporation. Other Financings The Project described herein is the only project to be financed by the Corporation to date. Pursuant to the Indenture, the Corporation may at some time in the future issue Additional Bonds on a parity with the Bonds in order to provide for further improvements, repairs or renovation of the Project, but there are no current plans for the issuance of such Additional Bonds. The Corporation is also authorized to issue bonds to finance other projects of the County, although no such projects are presently contemplated. Any future financing would not affect the security for the Bonds, except for the effect of Additional Bonds as permitted under the Indenture. Income of the Corporation The only anticipated income of the Corporation will be the Rental Payments to be made by the County and investment earnings accruing on funds held by the Trustee. The Trustee will maintain appropriate records and accounts in order to account for income received and disbursements made by the Corporation. Board of Directors The affairs and activities of the Corporation are managed by a five-member Board of Directors appointed initially by the County Commission for staggered terms. New members of the Board of Directors of the Corporation are elected by the remaining members thereof, subject to approval by the County Commission. The current directors of the Corporation are: Name James Vernon, President & Director Ray Thomas, Vice President & Director Kathleen Robertson, Secretary/Treasurer & Director Scot Preslar, Director Jerry Aldrich, Director Greg Kirk, Alternate Director -11-