$8,825,000 crowder college facilities corporation ...2018 500,000 2.450% 227873 ck0 2026 1,350,000...

NEW ISSUE BOOK-ENTRY ONLY RATING: S&P: “A” In the opinion of Thompson Coburn LLP, Bond Counsel, conditioned on continuing compliance with certain requirements of the Internal Revenue Code of 1986, as amended (the “Code”), interest on the Series 2011 Bonds is excluded from gross income for federal income tax purposes and is exempt from income taxation by the State of Missouri. Also in the opinion of Bond Counsel, interest on the Series 2011 Bonds is not a specific item of tax preference for purposes of the federal alternative minimum tax on corporations and other taxpayers, including individuals. However, interest on the Series 2011 Bonds is included in a corporate taxpayer’s adjusted current earnings for purposes of determining its federal alternative minimum tax liability. In the opinion of Bond Counsel, the Series 2011 Bonds are “qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the Code (relating to financial institution deductibility of interest expense). No opinion is expressed as to the federal or Missouri tax exemption of interest on the Series 2011 Bonds in the event of payment, other than from amounts paid by the District pursuant to the Sublease, after an event of nonappropriation, event of default or any other event resulting in the termination of the Sublease. See “TAX MATTERS” herein.

$8,825,000

CROWDER COLLEGE FACILITIES CORPORATION

LEASEHOLD REVENUE BONDS

(THE COMMUNITY COLLEGE DISTRICT

OF NEWTON AND MCDONALD COUNTIES, MISSOURI)

SERIES 2011

Dated: Date of Issuance Due: February 1, as shown on the inside cover page

The Series 2011 Bonds are deliverable only as fully registered Bonds, without coupons, and, when delivered, will be registered in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company (“DTC”), New York, New York. DTC will act as securities depository for the Series 2011 Bonds. Purchases of the Series 2011 Bonds will be made in book-entry form, in authorized denominations. Purchasers will not receive certificates representing their interests in Series 2011 Bonds purchased. So long as Cede & Co. is the registered owner of the Series 2011 Bonds, as nominee of DTC, references herein to the owners or registered owners shall mean Cede & Co., as aforesaid, and shall not mean the Beneficial Owners (herein defined) of the Series 2011 Bonds. Principal of and interest on the Series 2011 Bonds will be payable at maturity or upon earlier redemption at the principal corporate office of The Bank of New York Mellon Trust Company, N.A., St. Louis, Missouri, as trustee and paying agent (the “Trustee”). So long as DTC or its nominee, Cede & Co., is the owner, such payments will be made directly to such owner. DTC is expected, in turn, to remit such payments to the DTC Participants (herein defined) for subsequent disbursement to the Beneficial Owners.

The Series 2011 Bonds will be delivered in the denomination of $5,000 or any integral multiple thereof. Principal and redemption premium, if any, will be payable at the principal payment office of the Trustee. Principal will be payable annually on February 1, beginning on February 1, 2012, and semiannual interest will be payable each February 1 and August 1, beginning February 1, 2012, by check or draft mailed by the Trustee to the person in whose name each Series 2011 Bond is registered on the fifteenth day of the month next preceding each interest payment date.

The Series 2011 Bonds are issued under, and equally and ratably secured on a parity with any other outstanding Additional Bonds by, the Indenture (as defined herein). The Series 2011 Bonds and the interest thereon are special obligations of the Crowder College Facilities Corporation, a Missouri nonprofit corporation (the “Corporation”) payable solely out of the Subrentals and certain other revenues and receipts derived by the Corporation pursuant to an annually renewable Sublease to The Community College District of Newton and McDonald Counties, Missouri (the “District”), and are secured by a pledge and assignment of the trust estate granted to the Trustee and in favor of the Bondholders pursuant to the Indenture, all as more fully described herein.

The Series 2011 Bonds shall not constitute a debt or liability of the District, the State of Missouri (the “State”) or of any political subdivision thereof within the meaning of any State constitutional provision or statutory limitation and shall not constitute a pledge of the faith and credit of the District or the State. The payment of the Series 2011 Bonds is subject to annual appropriations by the District. The issuance of the Series 2011 Bonds shall not, directly, indirectly or contingently, obligate the District, the State or any political subdivision thereof to levy any form of taxation or to make any appropriation for their payment. The Corporation has no taxing power.

Interest on the Series 2011 Bonds will be payable on each February 1 and August 1, commencing February 1, 2012. The maturities, amounts, interest rates, prices or yields, and CUSIP numbers of the Series 2011 Bonds are set forth on the inside cover.

The Series 2011 Bonds shall be subject to redemption and payment prior to maturity as more fully described herein.

The Series 2011 Bonds are being offered by Edward D. Jones & Co., L.P. and UMB Bank, N.A., (collectively, the “Underwriters”) subject to prior sale and withdrawal of such offer without notice when, as and if issued by the Corporation and accepted by the Underwriters, and subject to the approving opinion of Thompson Coburn LLP, St. Louis, Missouri, Bond Counsel. Certain legal matters will be passed upon for the Corporation by Spencer, Scott & Dwyer, P.C., Joplin Missouri and for the Underwriters by Wilson Law Group, PC, San Diego, California. It is expected that the Series 2011 Bonds will be available for delivery through the facilities of DTC in New York, New York, on or about December 15, 2011.

The date of this Official Statement is December 2, 2011


$8,825,000

Leasehold Revenue Bonds

(The Community College District of Newton and McDonald Counties, Missouri)

Series 2011

MATURITIES, AMOUNTS, INTEREST RATES AND PRICES

Maturity

February 1

Principal

Amount

Interest

Rate CUSIP1

Maturity

February 1

Principal

Amount

Interest

Rate CUSIP1

2012 $655,000 0.750% 227873 CD6 2020 $530,000 3.000% 227873 CM6

2013 460,000 1.100% 227873 CE4 2021 545,000 3.250% 227873 CN4

2014 465,000 1.500% 227873 CF1 2022 560,000 3.400% 227873 CP9

2015 470,000 1.800% 227873 CG9 2023 580,000 3.600% 227873 CQ7

2016 480,000 2.150% 227873 CH7 2024 600,000 3.750% 227873 CR5

2017 490,000 2.250% 227873 CJ3 2025 625,000 3.900% 227873 CS3

2018 500,000 2.450% 227873 CK0 2026 1,350,000 4.000% 227873 CT1

2019 515,000 2.700% 227873 CL8

Price of all Series 2011 Bonds: 100%

1 CUSIP numbers shown above have been assigned by an organization not affiliated with the Corporation or the District. Neither the

Corporation nor the District is responsible for the selection of CUSIP numbers nor does the Corporation make any representations to the

correctness of such numbers on the Series 2011 Bonds or as shown above.


BOARD OF DIRECTORS

Jim Armstrong President

Vicki Babbitt Member

Ray Stipp Member

Glenna Wallace Member

Gene Hall Member

THE COMMUNITY COLLEGE DISTRICT OF NEWTON

AND MCDONALD COUNTIES, MISSOURI

BOARD OF TRUSTEES

Andrew Wood President

Rick Butler Vice President

Al Chapman Secretary

Vickie Barnes Treasurer

Diane Andris Member

James Tatum Member

ADMINISTRATION

Dr. Alan D. Marble President

Ron Granger Vice President of Finance

Dr. Herb Schade Vice President of Academic Affairs

Dr. Nicole Striegel Vice President of Student Services

CORPORATION COUNSEL

Spencer, Scott & Dwyer, P.C.

Joplin, Missouri

DISTRICT ACCOUNTANTS

Mense, Churchwell & Mense, P.C.

Joplin, Missouri

BOND COUNSEL

Thompson Coburn LLP

St. Louis, Missouri

UNDERWRITERS Edward D. Jones & Co., L.P.

St. Louis, Missouri

UMB Bank, N.A.

Kansas City, Missouri

(i)

TABLE OF CONTENTS

Page Page

INTRODUCTORY STATEMENT ........................... 1

USE OF PROCEEDS ................................................ 1

THE SERIES 2011 BONDS ...................................... 1

Description of the Series 2011 Bonds ...................... 1 Bond Registration..................................................... 2 Redemption Provisions ............................................ 2 Selection of Bonds for Redemption ......................... 2 Notice of Redemption .............................................. 2 Additional Bonds ..................................................... 2

BOOK-ENTRY ONLY SYSTEM ............................ 3

SOURCES OF REVENUE AND SECURITY

FOR THE SERIES 2011 BONDS ............................. 5

Basic Plan for Financing .......................................... 5 Nature of the District’s Obligation ........................... 5 Other Bonds Issued under the Indenture .................. 6 Authority for the Base Lease and the Sublease ........ 6 Sublease and Renewals of the Sublease Term.......... 6 Pledge and Assignment of Subrentals ...................... 7 Debt Service Reserve Account ................................. 7

PLAN OF FINANCE ................................................ 7

General ..................................................................... 7 The 2011 Project ...................................................... 7 Refunding of the Series 2006 Bonds ........................ 8 Application of Funds for the Project ........................ 8

CROWDER COLLEGE FACILITIES

CORPORATION ....................................................... 8

RISK FACTORS ....................................................... 8

General .................................................................... 9 Debt Service Reserve Account .............................. 9 State Appropriations ............................................. 10 Enrollment ............................................................. 10 Financial Aid .......................................................... 10 Other Factors Affecting the District .................... 10 Risk of Taxability of the Interest on the Series

2011 Bonds ....................................................... 11 Risk of Audit of the Series 2011 Bonds ................. 11

GENERAL INFORMATION CONCERNING

THE DISTRICT ...................................................... 11

General ................................................................... 11

Administration ....................................................... 12 Present Facilities of the District ............................. 12 Employee Groups ................................................... 13 Employee Pension and Benefit System .................. 13 Budgetary Process and Control .............................. 14

ECONOMIC INFORMATION CONCERNING

THE DISTRICT ...................................................... 14

General and Demographic Information .................. 15 Income Statistics .................................................... 16 Housing Structures ................................................. 16

FINANCIAL INFORMATION CONCERNING

THE DISTRICT ...................................................... 17

Accounting, Budgeting and Auditing Procedures .. 17 Sources of Revenue ................................................ 18 Property Valuations ................................................ 18 Property Tax Levies and Collections ..................... 19 Tax Rates ............................................................... 20 Historical State Aid to the District ......................... 21 Historical Student Fees .......................................... 22

DEBT STRUCTURE OF THE DISTRICT ............. 22

CERTAIN RELATIONSHIPS ................................ 22

TAX MATTERS ..................................................... 22

Tax Exemption ....................................................... 22 Premium ................................................................. 23 Market Discount ..................................................... 23 Bank Qualified Bonds ............................................ 24 Collateral Tax Consequences ................................. 24

LEGAL MATTERS ................................................ 25

LITIGATION .......................................................... 25

The Corporation ..................................................... 25 The District ............................................................ 25

CONTINUING DISCLOSURE ............................... 26

BOND RATING ...................................................... 27

UNDERWRITING .................................................. 27

MISCELLANEOUS ................................................ 28

APPENDIX A DEFINITIONS OF WORDS AND TERMS AND SUMMARY OF CERTAIN OTHER

LEGAL DOCUMENTS

APPENDIX B DISTRICT’S AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR 2010

APPENDIX C DISTRICT’S AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR 2011 APPENDIX D FORM OF OPINION OF BOND COUNSEL

(ii)

REGARDING USE OF THIS OFFICIAL STATEMENT

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR

EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2011

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 Series 2011 Bonds have not been registered with the Securities and Exchange Commission under

the Securities Act of 1933, as amended, or under any state securities or “blue sky” laws. The Series 2011

Bonds are offered pursuant to an exemption from registration with the Securities and Exchange Commission.

In making an investment decision, investors must rely on their own examination of the terms of this offering,

including the merits and risks involved. These securities have not been recommended by any federal or state

securities commission or regulatory authority. Furthermore, the foregoing authorities have not confirmed

the accuracy or determined the adequacy of this document. Any representation to the contrary may be a

criminal offense.

No dealer, broker, salesman or other person has been authorized by Crowder College Facilities Corporation

(the “Corporation”), The Community College District of Newton and McDonald Counties, Missouri (the

“District”), or the Underwriters to give any information or to make any representations, 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 a

solicitation of an offer to buy any of the securities offered hereby by any person in any jurisdiction in which such

offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so

or to any person to whom it is unlawful to make such offer or solicitation. The information set forth herein has been

obtained from the District and from other sources which are believed to be reliable. Such information is not

guaranteed as to accuracy or completeness by, and is not to be construed as a representation by, the Underwriters.

The information and expressions of opinion contained herein are subject to change without notice and neither the

delivery of this Official Statement nor the sale made hereunder shall under any circumstances create any implication

that there has been no change in the affairs of the Corporation or the District since the date hereof.

The Underwriters have reviewed the information in this Official Statement in accordance with, and as part

of, their responsibilities to investors under federal securities laws as applied to the facts and circumstances of this

transaction, but the Underwriters do not guarantee the accuracy or completeness of that information.

______________________________

CAUTIONARY STATEMENTS REGARDING FORWARD-

LOOKING STATEMENTS IN THIS OFFICIAL STATEMENT ______________________________

Certain statements included or incorporated by reference in this Official Statement constitute “forward-

looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995,

Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United

States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such

as “plan,” “expect,” “estimate,” “anticipate,” “projected,” “budget” or other similar words.

THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN

SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS,

UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE

OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS,

PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING

STATEMENTS. THE CORPORATION DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO

THOSE FORWARD-LOOKING STATEMENTS IF OR WHEN ITS EXPECTATIONS, OR EVENTS,

CONDITIONS OR CIRCUMSTANCES UPON WHICH SUCH STATEMENTS ARE BASED OCCUR.

(THIS PAGE LEFT BLANK INTENTIONALLY)

OFFICIAL STATEMENT

$8,825,000


Leasehold Revenue Bonds

(The Community College District of Newton and McDonald Counties, Missouri)

Series 2011

INTRODUCTORY STATEMENT

The purpose of this Official Statement is to set forth certain information concerning Crowder College

Facilities Corporation, a nonprofit corporation organized under the general nonprofit corporation law of the

State of Missouri (the “Corporation” or “Issuer”), the Corporation’s $8,825,000 Leasehold Revenue Bonds

(The Community College District of Newton and McDonald Counties, Missouri), Series 2011 (the “Series

2011 Bonds”), and The Community College District of Newton and McDonald Counties, Missouri, a junior

college district organized under the Constitution and statutes of the State of Missouri (formerly referred to as

The Junior College District of Newton and McDonald Counties, Missouri) (the “District”). The Series 2011

Bonds will be issued in accordance with the provisions of a Mortgage, Deed and Indenture of Trust and

Security Agreement dated as of April 1, 1996 (the “Original Indenture”), as supplemented by the First

Supplemental Mortgage, Deed and Indenture of Trust and Security Agreement dated as of May 1, 2002 (the

“First Supplemental Indenture”), the Second Supplemental Mortgage, Deed and Indenture of Trust and

Security Agreement dated as of September 1, 2006 (the “Second Supplemental Indenture”) and the Third

Supplemental Mortgage, Deed and Indenture of Trust and Security Agreement dated as of December 1, 2011

(the “Third Supplemental Indenture”) (the Original Indenture, as so supplemented is hereinafter referred to as

the “Indenture”), by and among the Corporation, the Mortgage Trustee named therein and The Bank of New

York Mellon Trust Company, N.A., St. Louis, Missouri, as successor trustee (the “Trustee”). The Series 2011

Bonds and any Additional Bonds hereinafter issued under the Indenture, are hereinafter referred to as the

“Bonds.” See APPENDIX A hereto for a summary of the definitions of certain other words and terms used in

this Official Statement.

USE OF PROCEEDS

The proceeds of the Series 2011 Bonds (other than accrued interest), together with other available

funds, will be used to provide funds to the Corporation to: (1) finance the construction, furnishing and

equipping of an approximately 32,000 square foot building to include classrooms, computer, science and

nursing labs, offices and conference center (the “2011 Project”) on a 40-acre property located in McDonald

County, Missouri and owned by the District (the “Additional Property”), (2) refund the Corporation’s

Leasehold Revenue Bonds (McDonald Hall Addition), Series 2006 (the “Series 2006 Bonds”), currently

outstanding in the principal amount of $5,355,000, (3) fund a debt service reserve for the Series 2011 Bonds,

and (4) provide funds to pay costs related to the issuance of the Series 2011 Bonds and the refunding of the

Series 2006 Bonds. See “PLAN OF FINANCE” herein.

THE SERIES 2011 BONDS

Description of the Series 2011 Bonds

The Series 2011 Bonds will be dated as of their date of issuance and will bear interest from their latest

date or from the most recent Interest Payment Date to which interest has been paid. The Series 2011 Bonds

will be payable, will bear interest at the rates per annum and will mature in the amounts and at the times set

forth on the inside cover page hereof. The principal of the Series 2011 Bonds is payable at the principal

payment office of the Trustee. The interest on the Series 2011 Bonds is payable by check or draft mailed to

the persons who are the registered owners of the Series 2011 Bonds as of the close of business on January 15

and July 15 for the respective interest payment dates, as shown on the Bond registration books maintained by

the Trustee, at its addresses as shown on such registration books.

2

Bond Registration

The Series 2011 Bonds will be issued in the form of fully registered Bonds. Any Series 2011 Bond

may be transferred only upon the registration books kept by the Trustee upon the surrender thereof to the

Trustee duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner or

his attorney or legal representative in such form as shall be satisfactory to the Trustee. The Trustee and the

Corporation may charge the Bondholder requesting any registration, change in registration or transfer a fee

covering taxes and other governmental charges in connection therewith.

Redemption Provisions

Optional Redemption. The Series 2011 Bonds maturing in the year 2018 and thereafter shall be

subject to redemption and payment prior to maturity, by the Corporation at the option of and upon instructions

from the District, on and after February 1, 2017 in whole or in part at any time at the redemption price of 100%

of the principal amount thereof, plus accrued interest thereon to the redemption date, in any order of maturity

as shall be determined by the District.

Extraordinary Redemption. The Series 2011 Bonds will be subject to redemption and payment prior

to the stated maturity thereof, by the Corporation, at the option of and upon instructions from the District, in

whole on any date or in part on any Interest Payment Date upon the occurrence of a “condemnation” and/or

“casualty loss,” within the meaning of the Sublease to the extent of funds provided therefor as set forth in the

Sublease.

Selection of Bonds for Redemption

Bonds of each series shall be redeemed from the Maturities selected by the District in the principal

amount of $5,000 or any integral multiple thereof. In the case of a partial redemption of Bonds of a particular

Maturity, the Bonds to be redeemed shall be selected by the Trustee from the Outstanding Bonds of that

Maturity by such method as the Trustee shall deem equitable, which may provide for the selection for

redemption of portions of the principal of Outstanding Bonds of that maturity of a denomination larger than

$5,000. The portions of the principal of Outstanding Bonds so selected for partial redemption shall be equal to

$5,000 or integral multiples thereof.

Notice of Redemption

Notice of redemption of any Series 2011 Bond or portion thereof will be required to be given not less

than 30 days prior to the redemption date by first-class mail to the registered owner or owners thereof, at their

addresses shown on the registration books maintained by the Trustee. Any notice of redemption shall state the

date and place of redemption, the series, maturities and numbers of the Series 2011 Bonds to be redeemed, the

redemption price and that interest will cease to accrue from and after the redemption date.

Additional Bonds

There are no bonds or other obligations outstanding and payable from Subrentals other than the Series

2006 Bonds, which are being refunded by the Series 2011 Bonds, and the Series 2011 Bonds, which are being

issued in the original principal amount of $8,825,000. The Corporation may issue Additional Bonds to

complete the 2011 Project or for Additional Projects or to refund the Series 2011 Bonds or Additional Bonds,

subject to the limitations described herein. The Series 2011 Bonds will not have a claim on rents or revenues

derived from any facility other than the Project, except to the extent additional facilities are constructed with

the proceeds of Additional Bonds and such facilities are encumbered by the Base Lease. Any Additional

Bonds will be equally and ratably secured by the Indenture on a parity with the Series 2011 Bonds, although

the Corporation may issue Additional Bonds which are not entitled to the benefits and security of the Debt

3

Service Reserve Account. Concurrently with the issuance of any such Additional Bonds, the Corporation and

the District shall deliver amendments to the Base Lease and the Sublease obligating the District to make

payments of principal thereof and interest thereon in amounts and at times sufficient to provide for the timely

payment of principal of and interest on such Additional Bonds. Any Additional Bonds will be secured by an

encumbrance of any additional facilities constructed for the District with the proceeds of the Additional Bonds,

and will be issued in an amount not to exceed the costs of the Additional Project and the amounts necessary for

reasonable reserves and costs related to the issuance of the Additional Bonds.

BOOK-ENTRY ONLY SYSTEM

The information in this section concerning DTC and DTC’s book-entry system has been obtained

from sources that the Corporation believes to be reliable, but the Corporation takes no responsibility for the

accuracy or completeness by and is not to be construed as a representation by the Corporation, the District, the

Trustee or the Underwriters. The Corporation, the District, the Trustee and the Underwriters make no

assurances that DTC, Direct Participants, Indirect Participants or other nominees of the Beneficial Owners will

act in accordance with the procedures described above or in a timely manner.

General. Ownership interests in the Series 2011 Bonds will be available to purchasers only through a

book-entry only system (the “Book-Entry Only System”) maintained by The Depository Trust Company,

New York, New York (“DTC”), which will act as securities depository for the Series 2011 Bonds. The Series

2011 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 Bond certificate will be issued for each maturity of the Series 2011 Bonds, in the aggregate principal

amount of such maturity, and will be deposited with DTC or held by the Paying Agent.

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 1934, as amended. 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.

Purchase of Ownership Interests. Purchases of the Series 2011 Bonds under the DTC system must

be made by or through Direct Participants, which will receive a credit for the Series 2011 Bonds on DTC’s

records. The ownership interest of each actual purchaser of each Bond (the “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

4

Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of

ownership interests in the Series 2011 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 interest in the Series 2011 Bonds, except in the event that use of the

book-entry system for the Series 2011 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 Series 2011 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 communication 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 Series 2011 Bonds, such as

redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial

Owners of Bonds may wish to ascertain that the nominee holding the Series 2011 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.

Redemption notices will be sent to DTC. If less than all of the Series 2011 Bonds within an issue are

being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in

such issue to be redeemed.

Voting. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect

to the Series 2011 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 District 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 Series 2011 Bonds are credited on the record date (identified in a listing

attached to the Omnibus Proxy).

Payments of Principal and Interest. Principal of and interest payments on the Series 2011 Bonds and

redemption proceeds, if any, 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 Corporation or the Paying Agent, on 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 Direct Participant and not of DTC, the Paying Agent or the Corporation, subject to any

statutory and regulatory requirements as may be in effect from time to time. Payment of principal, premium, if

any, and interest and redemption proceeds, if any, to Cede & Co. (or such other nominee as may be requested

by an authorized representative of DTC) is the responsibility of the District or 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 Series 2011 Bonds at any time by giving reasonable notice to the Corporation or the Paying

5

Agent. Under such circumstances, in the event that a successor depository is not obtained, Bonds are required

to be printed and delivered. The Direct Participants holding a majority position in the Series 2011 Bonds 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.

The Corporation 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 and delivered to

DTC.

None of the Underwriters, the Trustee, the District 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 Direct Participant or Indirect Participant of

any amount due to any Beneficial Owner in respect of the principal of, premium, if any, or interest on

the Series 2011 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 Indenture to be

given to owners of the Series 2011 Bonds; or (iv) any consent given or other action taken by DTC as the

owner of the Series 2011 Bonds.

SOURCES OF REVENUE AND SECURITY FOR THE SERIES 2011 BONDS

Basic Plan for Financing

The District, which now holds title to certain real estate including the Additional Property (the “Real

Estate”), will continue to hold such title and will lease the Real Estate to the Corporation pursuant to the

provisions of Section 177.088 of the Revised Statutes of Missouri, as amended, and the terms of the Base

Lease between the District and the Corporation, dated as of April 1, 1996 (the “Original Base Lease”), as

supplemented by the First Supplemental Base Lease dated as of May 1, 2002, the Second Supplemental Base

Lease dated as of September 1, 2006 and the Third Supplemental Base Lease dated as of December 1, 2011

(the Original Base Lease, as so supplemented being referred to herein as the “Base Lease”) for a term expiring

on June 30, 2040. The Corporation will sublease the Real Estate and the facilities located thereon, including

the 2011 Project (the “Facility,” and together with the Real Estate is collectively the “Project”) back to the

District pursuant to a Sublease Agreement dated as of April 1, 1996 (the “Original Sublease”), as

supplemented by the First Supplemental Sublease dated as of May 1, 2002, the Second Supplemental Sublease

Agreement dated as of September 1, 2006 and the Third Supplemental Sublease Agreement dated as of

December 1, 2011 (the Original Sublease, as so supplemented is hereinafter referred to as the “Sublease”).

The current term of the Sublease ends on June 30, 2012, with annual Sublease Renewal Terms at the option of

the District beginning on July 1 and expiring on the following June 30 in each of the following fifteen years,

with the Final Sublease Renewal Term beginning on July 1, 2025 and expiring on February 1, 2026, at annual

rental payments (the “Subrentals”) sufficient to pay the principal of and interest on the Series 2011 Bonds.

The Subrentals will be payable out of the District’s general funds and will be subject to appropriation each

year by the District Board of Trustees. See “PLAN OF FINANCE” herein.

Nature of the District’s Obligation

The Series 2011 Bonds and the interest thereon are special obligations of the Corporation payable

solely out of the Subrentals and other revenues, moneys and receipts derived by the Corporation pursuant to

the Sublease and are secured by a pledge and assignment of the Corporation’s rights in the Base Lease and the

Sublease (except for certain indemnification provisions) to the Trustee and in favor of the Bondholders, and

will not constitute a debt or liability of the District, the State of Missouri or of any political subdivision thereof

within the meaning of any State constitutional provision or statutory limitation and shall not constitute a pledge

of the faith and credit of the District or the State. The issuance of the Series 2011 Bonds will not, directly,

indirectly or contingently, obligate the District or the State or any political subdivision thereof to levy any form

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of taxation therefore or to make any appropriation for their payment. The Corporation has no taxing power.

The District is under no obligation to renew the Sublease at the end of any one-year Sublease term.

Other Bonds Issued under the Indenture

In addition to the Series 2011 Bonds and the Series 2006 Bonds, the Corporation has previously issued

other bonds under the Indenture, which bonds are no longer outstanding. The Series 2006 Bonds are to be

refunded and redeemed with a portion of the proceeds of the Series 2011 Bonds, and the Series 2011 Bonds

will be the only Bonds outstanding under the Indenture following the issuance of the Series 2011 Bonds. The

Indenture provides for the future issuance of additional bonds (“Additional Bonds”) which, if issued, would

rank on a parity with the Series 2011 Bonds. See the caption “THE SERIES 2011 BONDS – Additional

Bonds” herein.

Authority for the Base Lease and the Sublease

The District is authorized to enter into the Third Supplemental Base Lease and the Third Supplemental

Sublease pursuant to a resolution duly passed by the Board of Trustees of the District (the “Board of

Trustees”). The Corporation is authorized to enter into the Third Supplemental Base Lease, the Third

Supplemental Sublease and the Third Supplemental Indenture pursuant to a resolution duly passed by the

Board of Directors of the Corporation (the “Board of Directors”).

Sublease and Renewals of the Sublease Term

The District has budgeted an amount sufficient to pay the Subrentals required under the Sublease

through June 30, 2012. The District intends to continue the Sublease Term through the next renewal term and

all subsequent renewal terms thereafter, subject to annual budget appropriations applicable to each renewal

term. The District reasonably believes that legally available funds in an amount sufficient to make all

Subrentals during the Sublease Term and each of the Sublease Renewal Terms can be obtained. The Sublease

directs the District to do all things lawfully within its power to obtain and maintain funds from which the

Subrentals may be made, including making provision for each Subrental to the extent necessary in each annual

budget submitted for approval during any renewal term in accordance with applicable procedures of the

District, and to exhaust all available reviews and appeals in the event such portion of the budget is not

approved. However, the District is not obligated to renew the Sublease or budget or appropriate funds in

anticipation of any renewal term; the decision to budget and appropriate funds or to continue the Sublease is to

be made in accordance with the District’s normal procedures for such decisions. (See “GENERAL

INFORMATION CONCERNING THE DISTRICT — Budgetary Process and Control” herein.)

THERE CAN BE NO ASSURANCE THAT THE DISTRICT WILL APPROPRIATE FUNDS

FOR SUBRENTALS OR RENEW THE SUBLEASE AFTER THE CURRENT SUBLEASE TERM.

NEITHER THE BONDS NOR THE SUBLEASE CONSTITUTE A GENERAL OBLIGATION OR

OTHER INDEBTEDNESS OF THE DISTRICT, NOR A MANDATORY PAYMENT OBLIGATION

IN ANY YEAR SUBSEQUENT TO A YEAR IN WHICH THE SUBLEASE IS IN EFFECT. THE

DISTRICT IS NOT LEGALLY REQUIRED TO BUDGET OR APPROPRIATE MONEYS FOR ANY

SUBSEQUENT FISCAL YEAR BEYOND THE CURRENT FISCAL YEAR.

The Sublease is automatically renewed each year unless the District gives written notice of its intent

not to renew; provided that failure of the District to budget and appropriate sufficient funds to continue making

the Subrentals under the Sublease for the next following Fiscal Year will terminate the Sublease at the end of

the then current Fiscal Year. Upon termination, the District will not be obligated to make any further

Subrentals due beyond said Fiscal Year. In such case, payment on all outstanding Bonds would be made only

out of the net proceeds received by the Corporation, if any, from the disposition, if possible, of the Corporation’s interest (as assigned to the Trustee) in the Project. THERE CAN BE NO ASSURANCE THAT

IN SUCH CASE THERE WILL BE SUFFICIENT FUNDS TO PAY AMOUNTS EQUAL TO THE

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PRINCIPAL AND INTEREST WHICH WOULD OTHERWISE BE PAYABLE ON THE SERIES 2011

BONDS. No arrangements have been made for or evaluations done concerning the possibility of a backup

purchaser or lessee of the Corporation’s interest (as assigned to the Trustee) in the Project should the District

terminate the Sublease prior to the expiration of the last Sublease Renewal Term.

The 2011 Project consists of the construction an approximately 32,000 square foot building to include

classrooms, computer, science and nursing labs, offices and a conference center on a 40-acre property owned

by the District in McDonald County.

Construction on the 2011 Project is expected to begin in March 2012, with completion expected by

April 2013. The construction of the 2011 Project is expected to cost approximately $4,500,000, of which the

District will contribute approximately $1,500,000 from donations it has raised to date and additional donations

it expects to receive. The remaining funds necessary to complete construction will come from the proceeds of

the Series 2011 Bonds. See “PLAN OF FINANCE” herein.

Pledge and Assignment of Subrentals

The Series 2011 Bonds are secured by a pledge and assignment of Subrentals to the Trustee under the

Indenture and are further secured by certain mortgage provisions contained therein whereby the Corporation

grants a deed of trust lien upon its leasehold interest in the Project to the Trustee for the benefit of the Holders

of the Series 2011 Bonds.

Debt Service Reserve Account

Proceeds of the Series 2011 Bonds in an amount equal to $704,407.50 shall be deposited into the Debt

Service Reserve Account established pursuant to the Indenture. Amounts in the Debt Service Reserve Account

are to be used to pay principal of and interest on the Series 2011 Bonds to the extent of any deficiency in the

Bond Fund and for certain other purposes as described under APPENDIX A: “THE INDENTURE.”

PLAN OF FINANCE

General

The Series 2011 Bonds are being issued pursuant to and in full compliance with the Constitution and

statutes of the State, including particularly the Act and Section 177.088 of the Revised Statutes of Missouri, as

amended. The Series 2011 Bonds are being issued for the purpose of providing funds to: (1) finance the

construction, furnishing and equipping of the 2011 Project; (2) refund the Series 2006 Bonds; (3) fund a debt

service reserve for the Series 2011 Bonds; and (4) provide funds to pay costs related to the issuance of the

Series 2011 Bonds.

The 2011 Project

The 2011 Project consists of the construction of an approximately 32,000 square foot building to

include six classrooms, biology, chemistry and nursing laboratories, a computer laboratory and conference

facilities. The 2011 Project is being undertaken to accommodate residents in the McDonald County portion of

the District and to alleviate overcrowding on the District’s Neosho campus, which over the last five years has

had an increase in enrollment of over 70%. In February 2008 the District acquired approximately 40 acres of

property located in McDonald County, Missouri (the “Additional Property”) on which the 2011 Project will

be built. The Board of Trustees of the District hired Pellham Phillips as the architect for the 2011 Project. A

contractor for the 2011 Project has not yet been selected. The groundbreaking for the 2011 Project is scheduled

for March 2012 and completion of the 2011 Project is expected in April 2013.

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Refunding of the Series 2006 Bonds

The Corporation will use a portion of the proceeds of the Series 2011 Bonds for the purpose of

providing funds to currently refund all of the Corporation’s outstanding Series 2006 Bonds, outstanding in the

principal amount of $5,355,000. After the issuance of the Series 2011 Bonds and the deposit to the Bond Fund

of proceeds thereof, the Series 2006 Bonds will be refunded pursuant to their terms.

Application of Funds for the Project

SOURCES & USE OF FUNDS

Sources:

Par Amount of Bonds $ 8,825,000.00

Series 2006 Debt Service Reserve 573,500.00

Total Sources $ 9,398,500.00

Uses:

Deposit to Project Construction Fund $ 3,000,000.00

Deposit to Series 2006 Account of the

Bond Fund (Series 2006 Refunding) 5,466,225.76

Deposit to Debt Service Reserve Account 704,407.50

Costs of Issuance (including

underwriter’s discount) 227,866.74

Total Uses $ 9,398,500.00


The Corporation is a nonprofit corporation duly organized and existing under Chapter 355 of the

Revised Statutes of Missouri, as amended (the “Act”). The Corporation is organized exclusively for charitable

purposes and is operated for the benefit of the District and its residents. No part of the net earnings or other

assets of the Corporation will 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.

The Corporation has typical corporate powers, including the power to lease property as either lessor or

lessee and to sell, convey, mortgage and pledge its property and assets. It has the power to make contracts, to

borrow money and to secure its obligations by mortgage, pledge or deed of trust of all or any of its property

and income. The Corporation is empowered to finance facilities for the District and to issue its own bonds or

notes or other obligations for any of its corporate purposes.

The Corporation is authorized to finance facilities other than the Project but such financing shall not

affect the security of the Series 2011 Bonds, except for the issuance of Additional Bonds pursuant to the

Indenture. At the present time, neither the Corporation nor the District has any immediate plans for financing

any Additional Projects.

RISK FACTORS

The following is a discussion of certain risks that could affect Subrentals to be made by the District. Such discussion is not, and is not intended to be, exhaustive and should not be considered as a complete

9

description of all risks that could affect such payments. Prospective purchasers of the Series 2011 Bonds should

analyze carefully all the information contained in this Official Statement, including the Appendices hereto, and additional information in the form of the complete documents summarized herein and in the Appendices hereto,

copies of which are available as described herein.

General

The payment of the Series 2011 Bonds is subject to certain risks. The Board of Trustees of the

District has declared its current intention and expectation that the Sublease will be renewed annually until the

Series 2011 Bonds are paid. Such a declaration may not, however, be construed as contractually obligating or

otherwise binding the District. Neither the payment of the Subrentals by the District under the Sublease nor

any payments under the Series 2011 Bonds constitutes a general obligation or other indebtedness of the

District or a mandatory payment obligation of the District in any fiscal year subsequent to a fiscal year in

which the Sublease is in effect. See “SOURCES OF REVENUE AND SECURITY — Nature of the

District’s Obligation” and “— Sublease and Renewals of the Sublease Term.”

Limited Obligation. The obligation of the District to pay Subrentals and Additional Subrentals is

limited to those District funds which are specifically budgeted and appropriated annually by the Board of

Trustees of the District for such purpose. The failure to renew the Sublease could mean the loss of occupancy

of the entire Project by the District during the term of the Base Lease which ends June 30, 2026.

Future Events. The District’s obligations under the Sublease may be terminated on an annual

basis by the District without any penalty and there is no assurance that the District will renew the Sublease

or will budget or appropriate funds in anticipation of any renewal term of the Sublease. Accordingly, the

likelihood that the District will renew the Sublease throughout the term of the Series 2011 Bonds is

dependent upon certain factors which are beyond the control of the Bondowners, including (a) the

continuing need of the District for facilities such as the Project to provide educational services to the

patrons and students of the District, (b) the demographic conditions within the District, including the

number of persons attending community colleges in the District, and (c) the ability of the District to

generate sufficient funds from state funds, tuition, property taxes and other sources to pay its obligations

under the Sublease and the other obligations of the District.

Results of a Nonappropriation. Assuming that the District has elected not to renew the Sublease,

whether by providing notice thereof or by not budgeting for or otherwise appropriating moneys to make the

payments under the Sublease, the Trustee would exercise its available remedies against the Project on behalf

of the Owners. The moneys derived from any lease of the Corporation’s interest in the Project following an

event of default or an event of nonappropriation, along with other moneys then held by the Trustee under

provisions of the Indenture (with certain exceptions as provided in the Sublease and the Indenture) are

required to be used to redeem the Series 2011 Bonds to the extent moneys are available. The Corporation’s

interest in the Project consists of its rights under the Base Lease and the Sublease. There is no assurance that

proceeds from a sale or lease of the Corporation’s interest in the Project would be sufficient for payment of

the Series 2011 Bonds. Furthermore, any such sale or lease of the Corporation’s interest in the Project may

adversely affect the exclusion from gross income for federal and Missouri income tax purposes. Bond

Counsel expresses no opinion regarding such exclusion from gross income subsequent to an event of default

or event of nonappropriation pursuant to the Sublease.

Debt Service Reserve Account

At the time of the delivery of the Series 2011 Bonds, the Debt Service Reserve Account will be funded

in an amount equal to $704,407.50. There can be no assurance that the amounts on deposit in the Debt Service

Reserve Account will be available if needed for payment of the Series 2011 Bonds in the full amount of the Bond Reserve Fund because (1) of fluctuations in the market value of securities deposited therein and/or (2) if funds are

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transferred to the Bond Fund, sufficient revenues may not be available or appropriated to replenish the Debt

Service Reserve Account.

State Appropriations

Historically, a limited portion of the current revenues of the District have been from appropriations

by the State of Missouri. Any significant decline in the level of State support for the District would likely have

a material adverse effect on the District, its operations and student programs. At the present time, the State

continues to experience significant shortfalls in revenues and continues to evaluate its current and future

appropriation levels for various facilities, including community colleges. There can be no assurance that the

current level of State appropriations will continue or that such level will not decrease in the future.

Enrollment

Since beginning operation in 1963, the District has experienced significant growth in its enrollment.

No assurance can be given, however, that enrollment will remain at historical levels. A significant decrease in

enrollment could adversely affect the District’s financial position.

Financial Aid

A significant percentage of the District’s students receive financial support in the form of federally

supported loans and scholarships and grants from the District. There can be no assurance that the amount of

federally supported loans will remain stable or increase in the future. If the amount of such loans decreases in

the future, there can be no assurance that the District will be able to increase the amount of financial aid

provided by it. Any change in the availability of financial aid could adversely affect the District’s enrollment.

Other Factors Affecting the District

One or more of the following factors or events, or the occurrence of other unanticipated factors or

events, could adversely affect the District’s operations and financial performance to an extent that cannot be

determined at this time:

1. Changes in Administration. Changes in key administrative personnel could affect the

capability of administration of the District. See also “GENERAL INFORMATION CONCERNING

THE DISTRICT – Administration”.

2. Future Economic Conditions. Adverse economic conditions or changes in demographics

in the service area of the District could increase the proportion of students who are seeking financial aid; an

inability to control expenses in periods of inflation and difficulties in increasing tuition and other fees could

affect the quality of educational services.

3. Competition from Other Educational Providers. Increased competition from other

educational facilities, which may offer comparable programs at lower prices, which could adversely affect the

ability of the District to maintain enrollment, or which could adversely affect the ability of the District to

attract faculty and other staff.

4. Tuition and Fee Increases. Increases in tuition and fees have been necessary to partially

offset the increasing costs of the District and declining State appropriations, and have been effected without

adversely affecting enrollment. Future efforts to increase tuition and fees could adversely affect enrollment.

5. Organized Labor Efforts. Efforts to organize employees of the District into collective

bargaining units could result in adverse labor actions or increased labor costs.

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6. Environmental Matters. Legislative, regulatory, administrative or enforcement action

involving environmental controls that could adversely affect the operation of the facilities of the District.

7. Natural Disasters. The occurrence of natural disasters, such as floods or droughts, could

damage the facilities of the District, interrupt services or otherwise impair operations.

Risk of Taxability of the Interest on the Series 2011 Bonds

For information with respect to events that may require interest on the Series 2011 Bonds be included

in gross income for purposes of federal income taxation and not be exempt from income taxation by the State

of Missouri, see “TAX MATTERS” herein.

Risk of Audit of the Series 2011 Bonds

The Internal Revenue Service (the “Service”) has established an ongoing program to audit tax-exempt

obligations to determine whether interest on such obligations should be included in gross income for federal

income tax purposes. No assurance can be given that the Service will not commence an audit of the Series

2011 Bonds resulting in a negative determination with respect to the Series 2011 Bonds causing the loss to the

owners thereof of the tax exemption of the interest on the Series 2011 Bonds for federal and State of Missouri

income tax purposes. Owners of the Series 2011 Bonds are advised that, if an audit of the Series 2011 Bonds

were commenced, in accordance with its current published procedures, the Service is likely to treat the

Corporation as the taxpayer, and the owners of the Series 2011 Bonds may not have a right to participate in

such audit. Public awareness of any audit could adversely affect the market value and liquidity of the Series

2011 Bonds during the pendency of the audit, regardless of the ultimate outcome of the audit.

GENERAL INFORMATION CONCERNING THE DISTRICT

General

The District, also known as “Crowder College,” was established in 1963 to serve an area consisting of

the Diamond, East Newton, McDonald, Neosho, and Seneca school districts located in the Southwestern

corner of the State (the “District Service Area”). The District Service Area is comprised of approximately

1,033 square miles located primarily in Newton and McDonald Counties. A small portion of the District

Service Area is located within Jasper County, Missouri. In 2010, approximately 67,800 residents lived within

the District Service Area. The largest city in the District is Neosho, with a population of 11,835 in 2010. The

college currently enrolls 4,500 students in credit classes and an additional 700 students in noncredit

professional development courses. The college employs 310 full-time faculty and staff and another 320

faculty serve the college on a part-time basis.

Crowder College defines its mission as being threefold: preparation of transfer students; career and

technical education for immediate entry into the job market; and adult continuing education. A growing part

of the latter has been the college’s work with business and industry on specialized training for employees.

Roughly 6,500 employees per year receive training through this effort.

The District’s six-member Board of Trustees is elected by District voters for staggered six-year terms.

The Board of Trustees has the responsibility of determining policy for the District within the legal framework

established by Missouri statutes. The Board of Trustees is entrusted with making all final decisions

concerning employment, termination of services, expenditure of funds, contracts, establishment of new

programs, student fees, tax levies, and construction of facilities. To accomplish its goals, the Board of

Trustees empowers the President as its executive officer to implement its policies. The President, with the

other administrative officers of the District, reports semi-annually to the Board of Trustees on annually

established objectives concerning District goals.

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Administration

The District’s executive team is headed by the President of the District who reports directly to the

District Board of Trustees and is the chief administrative officer of the District responsible for carrying out the

policies set by the Board. Dr. Alan Marble is the current President of the District and has been with the

District since 1986 and has served as President since 2007. The President’s central executive staff is

comprised of a Vice President of Finance, a Vice President of Academic Affairs, and a Vice President of

Student Services.

Ron Granger, the District’s current Vice President of Finance, recently announced his retirement from

the District effective December 31, 2011. The District has identified and hired Dr. James Cummins as

Mr. Granger’s successor, and Dr. Cummins is expected to join the District in January, 2012.

Prior District and Corporation Obligations

In 1969 voters of the District approved by a three-to-one vote a $650,000 bond issue for the

simultaneous construction of a gymnasium/multi-purpose building and a technical school. As of September

1989, these general obligation bonds were retired, leaving the District debt free. In June of 1988 residents of

the District approved a five-cent increase in the District’s general property tax levy, bringing the levy up to

$0.40 per $100 of assessed valuation, essentially transferring the expiring debt service levy to the District’s

operating fund.

In 2006, the Corporation issued its Leasehold Revenue Bonds (McDonald Hall Addition) Series 2006

(the “Series 2006 Bonds”) to finance the construction, furnishing and equipping of an addition to McDonald

Hall on the District’s Neosho Campus to serve as a library/academic building and conference center (the “2006

Expansion Project”). The Series 2006 Bonds are being refunded with a portion of the proceeds of the Series

2011 Bonds. In 2002, the Corporation issued its Leasehold Refunding Revenue Bonds (The Junior College

District of Newton & McDonald Counties, Missouri) Series 2002 (the “Series 2002 Bonds”), which refunded

its outstanding Leasehold Refunding Revenue Bonds (The Junior College District of Newton & McDonald

Counties, Missouri) Series 1996 (the “Series 1996 Bonds”). The Series 2002 Bonds matured in 2009 and are

no longer outstanding. The Series 1996 Bonds were originally issued to refund the Corporation’s Leasehold

Revenue Bonds (The Junior College District of Newton & McDonald Counties, Missouri) Series 1990, which

were used to pay part of the cost of acquiring, constructing, installing and equipping a combination classroom

building, performing arts center and museum (the “1990 Project”). Following the issuance of the Series 2011

Bonds and the refunding of the Series 2006 Bonds, the Corporation will have no outstanding obligations other

than the Series 2011 Bonds.

Present Facilities of the District

At the time of the creation of Crowder College, 538 acres that were previously a part of Fort Crowder,

a United States Army installation, were transferred to the Board of Trustees by the United States government.

In 1976 the college received an additional 69 acres from the United States government.

Included on these properties are the following buildings and facilities all of which are subject to the

Base Lease:

• Two single story family unit residences.

• The four major classroom buildings, McDonald Hall, Newton Hall, Farber Hall and Davidson Halls with approximately 161,000 total square feet.

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• The Area Vocational-Technical School with approximately 40,000 square feet constructed in1969.

• A Diesel/Ag Mechanics Building with approximately 7,500 square feet constructed in 1983.

• A Truck Driver Training Classroom Building with approximately 8,000 square feet which wasextensively remodeled in 1986.

• A Student Center with approximately 8,000 square feet constructed in 1988.

• A Gymnasium/Multi-Purpose Building with approximately 27,000 square feet constructed in1969.

• Elsie Plaster Community Center with approximately 30,000 square feet constructed in 1991.

• Several other assorted maintenance and utility buildings.

• Anna H. & John Y. Williams Agricultural Science Building with approximately 18,000 squarefeet constructed in 1999.

• R. L. (Bob) and Ethel Brown Student Residence Complex with 30,000 square feet (12 suites -132 student capacity) constructed in 1999.

Employee Groups

Crowder College does not have any officially recognized employee groups. Salaries and benefits arenegotiated between the President and elected representatives of employee subdivisions, with therecommendations from the President requiring approval of the Board of Trustees.

Employee Pension and Benefit System

The District contributes to the Public School Retirement System of Missouri (“PSRS”), a cost-sharingmultiple-employer benefit pension plan. PSRS provides retirement and disability benefits to full-time (andcertain part-time) certified employees (“PSRS Members”) and death benefits to PSRS Members andbeneficiaries. Positions covered by the PSRS are not covered by Social Security. PSRS benefit provisions areset forth in Chapter 169 of the Revised Statutes of Missouri. PSRS Members and employers make matchingcontributions to PSRS at levels established by the PSRS Board of Trustees. For detailed information regardingthe financial condition of the PSRS, please refer to the most recent Annual Report published by the PSRS andavailable at the PSRS website (www.psrsmo.org). Such information, as appropriate, is incorporated herein byreference. For more information, also see APPENDICES B and C – “DISTRICT’S AUDITEDFINANCIAL STATEMENTS FOR FISCAL YEAR 2010” and “DISTRICT’S AUDITED FINANCIALSTATEMENTS FOR FISCAL YEAR 2010” – Note 11 of each.

The District also contributes to the Public Education Employee Retirement System of Missouri(“PEERS”), also a cost-sharing multiple-employer defined benefit pension plan. PEERS provides retirementand disability benefits to District employees who work 20 or more hours per week and do not contribute toPSRS (“PEERS Members”). Positions covered by PEERS are covered by Social Security. PEERS Membersand employers make matching contributions to PEERS, as established by the PSRS Board of Trustees. Fordetailed information regarding the financial condition of PEERS, please refer to the most recent Annual Reportpublished by PEERS and available at the PSRS website (www.psrsmo.org). Such information, as appropriate,is incorporated herein by reference. For more information also see APPENDICES B and C – “DISTRICT’SAUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR 2010” and “DISTRICT’S AUDITEDFINANCIAL STATEMENTS FOR FISCAL YEAR 2010” – Note 11 of each.

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Budgetary Process and Control

Missouri law requires the District to prepare an annual budget. The budget is prepared under the

direction of the President of the college. The President submits the proposed budget along with supporting

documents to the Board of Trustees. The Board of Trustees may revise the items contained in the proposed

budget. After the Board of Trustees has approved the budget and adopted the resolutions required to authorize

expenditures, a public hearing is held on the proposed tax rates. Following this hearing and no later than

September 1, the Board of Trustees fixes tax rates for the year and must certify these rates to the County Clerks

in Newton, McDonald and Jasper Counties.

The total authorized expenditures from any fund cannot exceed the estimated revenues to be received

plus any unencumbered balance as of the beginning of the budget year.

After the Board of Trustees has approved the budget for any year and has adopted the resolutions

required, the District may not increase the total amount authorized for expenditures from any fund unless the

Board of Trustees adopts a resolution approving the increase and authorizing the additional expenditure.

The budget and all related resolutions must remain on file for three years and are public record, open

to inspection.

ECONOMIC INFORMATION CONCERNING THE DISTRICT

Approximately 31% of the student population is derived from McDonald, Newton and Jasper

Counties in Missouri. Approximately 63% of the student population is derived from other counties in the State

of Missouri and the remaining approximately 6% are from out-of-state, including international students. The

following table summarizes student enrollment for the last five years.

CROWDER COLLEGE

FULL-TIME EQUIVALENT ENROLLMENT - FALL SEMESTER

Year FTE

2011 4,260*

2010 4,137

2009 3,542

2008 2,826

2007 2,658

* Estimated

Source: The District.

[Remainder of page intentionally left blank]

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General and Demographic Information

The following tables set forth certain population information.

1980 1990 2000 2010

McDonald County 14,917 16,938 21,681 23,083

Newton County 40,555 44,445 52,636 58,114

Jasper County 86,958 90,465 104,686 117,404

State of Missouri 4,916,776 5,117,073 5,595,211 5,988,927

Source: U.S. Department of Commerce, Economics & Statistics Administration; Bureau of the Census.

POPULATION DISTRIBUTION BY AGE (2010 CENSUS)

Jasper McDonald Newton State of

Age County County County Missouri

Under 5 years 8,962 1,692 3,874 390,237

5 to 9 years 8,577 1,768 3,957 390,463

10 to 14 years 7,953 1,880 4,286 396,925

15 to 19 years 8,267 1,759 4,377 423,786

20 to 24 years 8,710 1,318 3,391 413,289

25 to 29 years 8,400 1,334 3,293 403,239

30 to 34 years 7,743 1,409 3,168 372,228

35 to 39 years 7,374 1,455 3,507 368,070

40 to 44 years 7,063 1,565 3,685 380,546

45 to 49 years 7,803 1,745 4,279 444,766

50 to 54 years 7,943 1,647 4,202 443,806

55 to 59 years 6,931 1,382 3,731 389,985

60 to 64 years 5,964 1,242 3,507 333,293

65 to 69 years 4,671 1,058 2,854 257,053

70 to 74 years 3,665 743 2,148 193,437

75 to 79 years 2,949 510 1,651 155,271

80 to 84 years 2,290 317 1,198 118,754

85 and older 2,139 259 1,006 113,779

Total 117,404 23,083 58,114 5,988,927

Median Age 35.1 36.5 39.0 37.9

Source: U.S. Census Bureau, 2008-2010 American Community Survey.


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The following table sets forth unemployment figures for the last five years for McDonald, Newton and

Jasper Counties and the State of Missouri.

2007 2008 2009 2010 2011*

McDonald County

Total Labor Force 11,565 11,100 10,663 10,844 10,927

Unemployed 476 541 831 999 944

Unemployment Rate 4.1% 4.9% 7.8% 9.2% 8.6%

Newton County


Unemployed 1,313 1,527 2,248 2,504 2,139


Jasper County


Unemployed 2,541 2,968 4,729 4,845 4,466


State of Missouri Total Labor Force 3,050,422 3,046,891 3,051,123 3,014,310 3,047,713

Unemployed 154,691 185,636 282,979 288,783 252,407


___________________

* Estimated as of September 2011

Source: Missouri Economic Research and Information Center, Missouri Department of Economic

Development.

Income Statistics

The following table sets forth estimated income figures from the census bureau.

Per Capita Median Family

Jasper County $ 19,683 $ 44,299

McDonald County 17,166 42,886

Newton County 20,921 50,680

State of Missouri 24,496 57,226

Source: U.S. Census Bureau, 2008–2010 American Community Survey.

Housing Structures

The median value of owner occupied housing units in the area of the District and related areas was,

according to the 2010 census, as follows:

Median Value

Jasper County $ 97,300

McDonald County 86,600

Newton County 102,100

State of Missouri 139,700

Source: U.S. Census Bureau, 2008–2010 American Community Survey.

17

PRINCIPAL PROPERTY TAXPAYERS IN THE DISTRICT

Employer Type of Business Assessed Valuation*

Wal-Mart Inc. Retail $41,085,655

Simmons Foods, Inc. Food 14,540,724

New Mac Electric Coop Utility 5,855,320

Tyson/Hudson Foods Food 4,823,118

Sunbeam Corp. Warehousing 2,177,220

Hunte Corp. Dog Breeder/Kennels 1,788,006

Lowe’s Hardware Store 1,761,250

IBM Leasing Co. 1,742,922

Sunbeam Products Warehousing 1,656,560

La-Z-Boy Chair Co. Manufacturer 1,571,780

*Combined real estate and business/personal property.

Source: Assessors’ Offices: McDonald and Newton Counties.

FINANCIAL INFORMATION CONCERNING THE DISTRICT

Accounting, Budgeting and Auditing Procedures

The District currently produces financial statements that are in conformity with generally accepted

accounting principles. The accounts of the District are organized on the basis of funds and account groups,

each of which is considered a separate accounting entity. The operations of each fund are accounted for with a

separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and

expenditures or expenses as appropriate.

The financial records of the District are audited annually by a firm of independent certified public

accountants in accordance with generally accepted governmental auditing standards. The annual audit for the

fiscal years ending June 30, 2010 and June 30, 2011 were performed by Mense, Churchwell & Mense, P.C.,

Joplin, Missouri and are attached hereto as APPENDIX B and APPENDIX C, respectively. Copies of the

District’s audit reports beginning with the report for the fiscal year ending June 30, 2007 have been filed and

are available from the Electronic Municipal Market Access system (“EMMA”).


18

Sources of Revenue

The District financed its general operations through the following sources of revenue as indicated

below for the last fiscal year for which financial statements are available:

2010 2011

Source of Operating Revenue Amount Percent Amount Percent

Student tuition and fees1 $ 10,598,898 32.2% $ 11,337,956 28.5%

Federal grants and contracts 14,493,075 44.0 20,489,624 51.5

State and local grants and contracts 4,030,375 12.2 3,558,521 9.0

Auxiliary enterprises 3,020,673 9.2 3,825,943 9.6

Gain (loss) on sale of assets 34,620 0.1 - 0.0

Other revenues 723,560 2.2 543,282 1.4

Total1 $ 32,901,201 100% $ 39,755,326 100%

Source: Audited Financial Statements of the District for fiscal years ended June 30, 2010 and June

30, 2011. 1

Includes scholarship allowance of $9,305,254 for fiscal year 2010 and $11,992,552 for fiscal year

2011, which amounts are excluded in the District’s financial statements.

THERE CAN BE NO ASSURANCE THAT THE LEVEL OF GOVERNMENT GRANTS AND

APPROPRIATIONS WILL NOT DECREASE IN THE FUTURE. AT THE PRESENT TIME, THE STATE

OF MISSOURI IS EXPERIENCING SIGNIFICANT REVENUE SHORTFALL, WHICH MAY AFFECT

THE DISTRICT’S FUTURE GOVERNMENT APPROPRIATIONS AND GRANTS.

Property Valuations

Assessment Procedure. All taxable real and personal property within the District is assessed annually

by the County Assessors. Missouri law requires that real property be assessed at the following percentages of

true value:

Residential real property 19%

Agricultural and horticultural real property 12%

Utility, industrial, commercial, railroad and all other real property 32%

A general reassessment of real property occurred statewide in 1985. In order to maintain equalized

assessed valuations following this reassessment, the Missouri General Assembly adopted a maintenance law in

1986. Beginning January 1, 1987, and every odd-numbered year thereafter, each County Assessor must adjust

the assessed valuation of all real property located within his or her county in accordance with a two-year

assessment and equalization maintenance plan approved by the State Tax Commission.

The assessment ratio for personal property is generally 33 1/3% of true value. However, subclasses of

tangible personal property, are assessed at the following assessment percentages: grain and other agricultural

crops in an unmanufactured condition, 1/2%; livestock, 12%; farm machinery, 12%; historic motor vehicles,

5%; and poultry, 12%.

The County Assessor is responsible for preparing the tax roll each year and for submitting the tax roll

to the Board of Equalization. The County Board of Equalization has the authority to adjust and equalize the

values of individual properties appearing on the tax rolls.

19

Current Assessed Valuation. The following table shows the total assessed valuation, by category, of

all taxable tangible property (excluding state assessed railroad and utility property) situated in the District

according to the assessment of January 1, 2011 (the last completed assessment):

Assessed Assessment Estimated

Valuation Rate Actual Valuation

Real Estate: Residential $ 314,439,190 19% $ 1,654,943,105

Commercial 164,167,027 32% 513,021,959

Agricultural 37,681,390 12% 314,011,583

Sub-total 516,287,607 2,481,976,647

Personal Property*: $ 218,423,528 33 1/3% $ 655,270,591

Total $ 734,711,135 $ 3,137,247,238

* Assumes all personal property is assessed at 33 1/3%; because certain subclasses of tangible

personal property are assessed at less than 33 1/3%, the estimated actual valuation for personal

property would likely be greater than that shown above. See “Assessment Procedure” discussed

above.

Source: Clerks’ Offices of Jasper, McDonald and Newton Counties.

History of Property Valuation. The total assessed valuation of all taxable tangible property situated

in the District (including state assessed railroad and utility property) according to the assessments of January 1

in each of the following years, has been as follows:

ASSESSED VALUATION OF TAXABLE PROPERTY

WITHIN THE DISTRICT

Year Assessed Valuation

2011 $ 753,193,137

2010 741,524,431

2009 737,918,079

2008 730,024,620

2007 698,707,566

Source: Clerks’ Offices of Jasper, McDonald and Newton Counties.

Property Tax Levies and Collections

Tax Collection Procedure. The District is required by law to prepare an annual budget, which

includes an estimate of the amount of revenues to be received from all sources for the budget year, including

an estimate of the amount of money required to be raised from property taxes and the tax levy rates required to

produce such amounts. The budget must also include proposed expenditures and must state the amount

required for the payment of interest, amortization and redemption charges on the District’s debt for the ensuing

budget year. Such estimates are based on the assessed valuation figures provided by the County Clerks. The

District must fix its ad valorem property tax rates and certify them to the County Clerk not later than

September 1 for entry in the tax books.

20

The County Clerks receive the County tax books from the County Assessors, which set forth the

assessments of real and personal property. The County Clerks enter the tax rates certified to them by the local

taxing bodies in the tax books and assess such rates against all taxable property in the District as shown in such

books. The County Clerks forward the tax books by October 31 to the County Collectors, who are charged

with levying and collecting taxes as shown therein. The County Collectors extend the taxes on the tax rolls

and issue the tax statements in early December. Taxes are due by December 31 and become delinquent if not

paid to the County Collector by that time. All tracts of land and city lots on which delinquent taxes are due are

charged with a penalty of eighteen percent of each year’s delinquency. All lands and lots on which taxes are

delinquent and unpaid are subject to sale at public auction in August of each year.

The County Collectors are required to make disbursements of collected taxes to the District each

month. Because of the tax collection procedure described above, the District receives the bulk of its moneys

from local property taxes in the months of December, January and February.

Tax Rates

Debt Service Levy. The District does not currently collect any debt service levy based upon the fact

that the District currently has no general obligation bond indebtedness outstanding. Once indebtedness has

been approved by the voters voting therefor and bonds are issued, the District is required under Article VI,

Section 26(f) of the Missouri Constitution to levy an annual tax on all taxable tangible property therein

sufficient to pay the interest and principal of the indebtedness as they fall due and to retire the same within 20

years from the date of issue. The Board of Trustees may set the tax rate for debt service, without limitation as

to rate or amount, at the level required to make such payments.

Operating Levy. The current operating levy of the District is $0.40 per $100 of assessed valuation.

The operating levy does not require annual voter approval but the Board of Trustees cannot raise the rate above

that approved in the last election.

ASSESSED VALUE OF TAXABLE PROPERTY/TAX LEVIES AND COLLECTION (NEWTON AND MCDONALD COUNTIES)

(1)

Levy Assessed Taxes Taxes

Year Rate Valuation(2)

Levied(3)

Collected(3) ,(4)

Percentage

2011 0.40 $ 748,545,496 $ 2,970,730

2010 0.40 737,177,514 2,932,021 $ 2,906,162 99.12 %

2009 0.40 733,770,859 2,918,556 2,874,069 98.48

2008 0.40 725,910,751 2,858,233 2,838,701 99.32

2007 0.40 694,644,540 3,322,394 3,260,106 98.13

(1)

Certain property tax collection information for Jasper County was not available as of the date of

this Official Statement; therefore no information for Jasper County was included in the table

above. Based upon information available, the Jasper County portion of the total assessed

valuation of property within the District was less than 1% for the years 2007-2011.

(2)

Including state assessed railroad and utility property.

(3)

The increase in taxes levied in 2007 and taxes collected in 2008 relates to an inadvertent failure

to assess certain taxes in McDonald County in 2005 and 2006, resulting in a higher tax bill to

certain taxpayers and increased tax receipts in 2007.

(4)

Includes current and delinquent taxes collected.

Source: Clerks’ Offices of McDonald and Newton Counties.

21

STATEMENT OF REVENUES AND EXPENDITURES OF THE DISTRICT

(EXCLUDING NON-MANDATORY TRANSFERS)

Fiscal Year: 2008 2009 2010 2011

Operating Revenues $ 19,496,783 $ 19,290,348 $ 23,595,947 $ 27,762,774

Non-Operating Revenues 8,479,438 7,800,220 6,588,973 6,752,811

Total Revenues $ 27,976,221 $ 27,090,568 $ 30,184,920 $ 34,515,585

Total Expenditures $ 22,406,094 $ 25,858,769 $ 26,201,912 $ 30,144,540

Excess of Revenues over $ 5,570,127 $ 1,231,799 $ 3,983,008 $ 4,371,045

Expenditures

Source: Audited Financial Statements of the District for fiscal years ended June 30, 2008-2011.

DISTRICT’S HISTORICAL OPERATING EXPENSES

Fiscal Year

Ended

June 30 Amount

2011 $ 30,144,540

2010 26,201,912

2009 25,858,769

2008 22,406,094

2007 21,243,387

Source: Audited Financial Statements of the District for fiscal years ended June 30, 2007-2011.

Historical State Aid to the District

Year Ended Annual Percent of

June 30 State Aid Total Revenue

2011 $4,254,205 12.3%

2010 4,493,304 14.9

2009 4,485,013 16.6

2008 4,306,355 15.4

2007 4,257,588 18.6


THERE CAN BE NO ASSURANCE THAT THE LEVEL OF GOVERNMENT GRANTS AND

CONTRACTS WILL NOT DECREASE IN THE FUTURE. AT THE PRESENT TIME, THE STATE OF

MISSOURI CONTINUES TO EXPERIENCE SIGNIFICANT REVENUE SHORTFALLS, WHICH MAY

AFFECT THE DISTRICT’S FUTURE GOVERNMENT APPROPRIATIONS AND GRANTS.

22

Historical Student Fees

Year Ended Percent Percent of

June 30 Total Change Total Revenue

2011 $ 11,337,956 7.0% 32.8%

2010 10,598,898 40.6 35.1

2009 7,536,258 18.9 27.8

2008 6,338,478 15.1 22.6

2007 5,509,096 4.5 24.0


DEBT STRUCTURE OF THE DISTRICT

The District has no general obligation debt outstanding and, after the issuance of the Series 2011

Bonds, will have no other revenue debt outstanding.

CERTAIN RELATIONSHIPS

Thompson Coburn LLP, St. Louis, Missouri, represents the Underwriters from time to time in

transactions unrelated to the Series 2011 Bonds, but is not representing the Underwriters in this transaction.

TAX MATTERS

Tax Exemption

The opinion of Thompson Coburn LLP, Bond Counsel, to be delivered upon the issuance of the Series

2011 Bonds will state that, under existing law, interest on the Series 2011 Bonds is excluded from gross

income for federal income tax purposes and is exempt from income taxation by the State of Missouri.

Bond Counsel’s opinion will be subject to the condition that the Corporation and the District comply

with all requirements of the Code that must be satisfied in order that interest on the Series 2011 Bonds be, and

continue to be, excluded from gross income for federal income tax purposes and exempt from income taxation

by the State of Missouri. The Corporation and the District are to covenant in the Indenture, Lease and the Tax

Compliance Agreement to comply with all such requirements. In addition, Bond Counsel will rely on

representations by the Corporation and others, with respect to matters solely within their knowledge, which

Bond Counsel has not independently verified. Failure to comply with the requirements of the Code (including

due to the foregoing representations being determined to be inaccurate or incomplete) may cause interest on

the Series 2011 Bonds to be included in gross income for federal income tax purposes and not be exempt from

income taxation by the State of Missouri retroactive to the date of issuance of the Series 2011 Bonds. Bond

Counsel has not been retained to monitor compliance with requirements such as described above subsequent to

the issuance of the Series 2011 Bonds. In addition, the Indenture does not require the Corporation to redeem

the Series 2011 Bonds or to pay any additional interest or penalty in the event that interest on the Series 2011

Bonds becomes taxable.

In addition, the opinion of Bond Counsel will state that, under existing law, interest on the Series

2011 Bonds is not a specific item of tax preference for purposes of the federal alternative minimum tax on

corporations and other taxpayers, including individuals. However, interest on the Series 2011 Bonds is

included in a corporate taxpayer’s adjusted current earnings for purposes of determining its federal alternative

minimum tax liability. Furthermore, the opinion of Bond Counsel will state that, under existing law, the Series

23

2011 Bonds are “qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the Code

(relating to financial institution deductibility of interest expense).

No opinion is expressed as to the federal or State of Missouri tax-exemption of the interest on the

Series 2011 Bonds in the event of payment thereof, other than from amounts paid by the District pursuant to

the Sublease, after an event of nonappropriation, event of default or any other event resulting in the termination

of the Sublease.

Except as stated above, the opinion of Bond Counsel will express no opinion as to any federal, state or

local tax consequences arising with respect to the Series 2011 Bonds.

Bond Counsel’s opinions are based on Bond Counsel’s knowledge of facts as of the date thereof.

Further, Bond Counsel’s opinions are based on existing legal authorities, cover certain matters not directly

addressed by such authorities and represent Bond Counsel’s legal judgment as to the proper treatment of the

Series 2011 Bonds for federal and State of Missouri income tax purposes. Such opinions are not a guarantee

of result and are not binding on the Service or the courts. Furthermore, Bond Counsel cannot give and has not

given any opinion or assurance about the future activities of the Corporation, or about the effect of future

changes in the Code, the applicable regulations, the interpretation thereof or the enforcement thereof by the

Service. Bond Counsel assumes no duty to update or supplement its opinions to reflect any facts or

circumstances that may thereafter come to Bond Counsel’s attention or to reflect any changes in any law that

may thereafter occur.

Premium

An amount equal to the excess of the purchase price of a Series 2011 Bond over its stated redemption

price at maturity constitutes amortizable bond premium on such Series 2011 Bond. A purchaser of a Series

2011 Bond generally must amortize any premium over such Series 2011 Bond’s term using constant yield

principles, based on the purchaser’s yield on the Series 2011 Bond to maturity; provided that the premium

must be amortized over the period to a call date with respect to the Series 2011 Bond, based on the purchaser’s

yield on the Series 2011 Bond to such call date, if the call by the Corporation on such date would minimize the

purchaser’s yield on the Series 2011 Bond. As premium is amortized, the purchaser’s basis in such Series

2011 Bond (and the amount of tax-exempt stated interest received) will be reduced by the amount of

amortizable premium properly allocable to such purchaser. This will result in an increase in the gain (or

decrease in the loss) to be recognized for federal and State of Missouri income tax purposes upon a sale or

disposition of such Series 2011 Bond prior to its maturity. Even though the purchaser’s basis is reduced, no

federal or State of Missouri income tax deduction is allowed.

Owners of Series 2011 Bonds who purchase at a premium (whether at the time of initial issuance or

subsequent thereto) should consult their own tax advisors with respect to the determination and treatment of

premium for federal and State of Missouri income tax purposes and with respect to other federal, state, local

and foreign tax consequences of owning or disposing of such Series 2011 Bonds.

Market Discount

If a Series 2011 Bond is purchased at any time for a price that is less than the Series 2011 Bond’s

stated redemption price at maturity, the purchaser will be treated as having purchased such Series 2011 Bond

at a “market discount,” unless such market discount is less than a statutory de minimis amount). Under the

market discount rules, an owner of a Series 2011 Bond will be required to treat any principal payment on, or

any gain realized on the sale, exchange, retirement or other disposition (including certain nontaxable

dispositions such as gifts) of, such Series 2011 Bond as ordinary income to the extent of the market discount

which has previously not been included in gross income and is treated as having accrued on such Series 2011

Bond at the time of such payment or disposition. An owner of a Series 2011 Bond may instead elect to include

market discount in gross income each taxable year as it accrues with respect to all debt instruments (including

24

a Bond) acquired in the taxable year for which the election is made. Such election would apply to the taxable

year for which it is made and for all subsequent taxable years and could be revoked only with the consent of

the Service. The accrued market discount on a Series 2011 Bond is generally determined on a ratable basis,

unless the owner of the Series 2011 Bond elects with respect to such Series 2011 Bond to determine accrued

market discount under a constant yield method similar to that applicable to original issue discount.

The applicability of the market discount rules may adversely affect the liquidity or secondary market

price of a Series 2011 Bond. Owners of Series 2011 Bonds should consult their own tax advisors regarding the

potential implications of the market discount rules with respect to the Series 2011 Bonds.

Bank Qualified Bonds

The Code prohibits the deduction by a bank or other financial institution of interest expense allocable

to tax-exempt interest, such as interest on the Series 2011 Bonds. A limited exception to this provision

generally permits an 80% deduction to a financial institution for interest expense allocable to “qualified tax-

exempt obligations” under Section 265(b)(3) of the Code. The opinion of Bond Counsel to be delivered upon

the issuance of the Series 2011 Bonds will state that, under existing law and based on the representations and

certifications of the Corporation and the District with respect to the qualification of the Series 2011 Bonds as

“qualified tax-exempt obligations,” the Series 2011 Bonds are “qualified tax-exempt obligations” for purposes

of Section 265(b)(3) of the Code.

Collateral Tax Consequences

Prospective purchasers of the Series 2011 Bonds should be aware that the ownership of the Series

2011 Bonds may result in other federal and State of Missouri income tax consequences to certain taxpayers,

including, without limitation, financial institutions, insurance companies, individual recipients of Social

Security or Railroad Retirement benefits, certain S corporations with Subchapter C earnings and profits,

foreign corporations subject to the branch profits tax, taxpayers who have incurred or continued indebtedness

to purchase or carry, or have paid or incurred certain expenses allocated to, the Series 2011 Bonds, individuals

who may be eligible for the earned income credit, owners who dispose of any Series 2011 Bond prior to its

stated maturity (whether by sale or otherwise) and owners who purchase any Series 2011 Bond at a price

different from its initial offering price. All prospective purchasers of the Series 2011 Bonds should consult

their own tax advisors as to the applicability and the impact of any other tax consequences (which may depend

upon their particular tax status or other tax items), as well as to the treatment of interest on the Series 2011

Bonds under state or local laws other than those of the State of Missouri.

Under the Code, all taxpayers are required to report on their federal income tax returns the amount of

interest received or accrued during the year that is excluded from gross income for federal income tax

purposes. This requirement applies to interest on all tax-exempt obligations, including, but not limited to, the

Series 2011 Bonds. Also, the Code requires the reporting by payors of tax-exempt interest in a manner similar

to that for interest on taxable obligations. Generally, payors (including paying agents and other middlemen

and nominees) of tax-exempt interest (such as interest on the Series 2011 Bonds) to non-corporate payees are

subject to federal income tax information return and payee statement reporting and recordkeeping

requirements. Also, as to payor reportable payments of tax-exempt interest (such as payments to non-

corporate payees of interest on the Series 2011 Bonds), the general rules of federal income tax backup

withholding will apply to such payments, unless the payor obtains from the payee a completed, certified Form

W-9, Request for Taxpayer Identification Number and Certification.

Federal, state or local legislation, if enacted in the future, may cause interest on the Series 2011 Bonds

to be subject, directly or indirectly, to federal or State of Missouri income taxation or otherwise adversely

affect the federal, state or local tax consequences of ownership or disposition of, and, whether or not enacted,

may adversely affect the value and liquidity of, the Series 2011 Bonds.

25

LEGAL MATTERS

Certain legal matters incident to the authorization and issuance of the Series 2011 Bonds are subject to

the approving opinion of Thompson Coburn LLP, St. Louis, Missouri, Bond Counsel. The proposed form of

such opinion is included herein as APPENDIX D. Certain legal matters will be passed upon by Thompson

Coburn LLP as disclosure counsel to the District, for the Corporation by Spencer, Scott & Dwyer, P.C., Joplin,

Missouri and for the Underwriter by the Wilson Law Group, PC, San Diego, California. Neither the

Underwriter nor its counsel has independently verified the factual and financial information contained in this

Official Statement.

Bond Counsel has participated in the preparation of this Official Statement; however Bond Counsel

expresses, in such capacity, no opinion as to the accuracy or sufficiency thereof except for the matters

appearing in the sections of this Official Statement captioned “INTRODUCTORY STATEMENT,”

“SOURCES OF REVENUE AND SECURITY,” “THE SERIES 2011 BONDS,” “TAX MATTERS,” “LEGAL MATTERS,” and APPENDIX A and accordingly expresses no opinion as to the accuracy or

sufficiency of any other statements, material or financial information contained herein or used in the sale or

offering for sale of the Series 2011 Bonds.

The various legal opinions to be delivered concurrently with the delivery of the Series 2011 Bonds

express the professional judgment of the attorneys rendering the opinions as to the legal issues explicitly

addressed therein. By rendering a legal opinion, the opinion giver does not become an insurer or guarantor of

that expression of professional judgment, of the transactions opined upon, or of the future performance of

parties to the transaction, nor does the rendering of an opinion guarantee the outcome of any legal dispute that

may arise out of the transaction.

LITIGATION

The Corporation

There is no litigation of any nature now pending or threatened against the Corporation restraining or

enjoining the issuance, sale, execution or delivery of the Series 2011 Bonds, or in any way contesting or

affecting the validity of the Series 2011 Bonds or any proceedings of the Corporation taken with respect to the

issuance or sale thereof, or the pledge or application of any moneys or security provided for the payment of the

Series 2011 Bonds or the existence or powers of the Corporation.

The District

No litigation is pending or, to the knowledge of the District, threatened against the District which in

any way questions or materially affects the validity of the Series 2011 Bonds or any proceedings or

transactions relating to their sale or delivery or the authority under which they were issued or questioning,

disputing or affecting in any way the legal organization of the District or its boundaries, or the right or title of

any of its officers to their respective offices.

To the knowledge of the District there is no pending or threatened litigation against the District which

in any way questions or materially affects the validity of the Base Lease or the Sublease, or any proceedings or

transactions relating to the execution and delivery of the Base Lease or the Sublease. The District will provide

a certificate at the time of execution and delivery of the Series 2011 Bonds to the effect that it is not involved

in any litigation which might affect the District’s ability to meet its obligations to pay the Base Rentals under

the Sublease.

26

CONTINUING DISCLOSURE

The District will enter into a Continuing Disclosure Undertaking (the “Undertaking”) for the Series

2011 Bonds for the benefit of the Beneficial Owners of the Series 2011 Bonds to provide certain financial

information and operating data relating to the District as described below (the “Annual Report”), within 180

days following the end of each fiscal year, commencing with the fiscal year ending June 30, 2012, and to

provide notices of the occurrence of certain enumerated events. The District shall file the Annual Reports with

the Municipal Securities Rulemaking Board (the “MSRB”) via the Electronic Municipal Market Access

system (“EMMA”). The Annual Report shall include:

(1) The District’s audited financial statements for the prior fiscal year, prepared in accordance

with generally accepted accounting principles. If audited financial statements are not available by the time

the Annual Report is required to be filed, the Annual Report shall contain the unaudited financial

statements in a format similar to the financial statements contained in the final Official Statement relating

to the Series 2011 Bonds, and the audited financial statements will be filed in the same manner as the

Annual Report promptly after they become available.

(2) Updates as of the end of the respective fiscal year of certain financial information and

operating data, as described below:

(i) ECONOMIC INFORMATION CONCERNING THE DISTRICT - Full-Time

Equivalent Enrollment - Fall Semester;

(ii) ECONOMIC INFORMATION CONCERNING THE DISTRICT - Principal

Property Taxpayers in the District;

(iii) FINANCIAL INFORMATION CONCERNING THE DISTRICT - Sources of

Revenue;

(iv) FINANCIAL INFORMATION CONCERNING THE DISTRICT - Property

Valuations—Current Assessed Valuation; and

(v) FINANCIAL INFORMATION CONCERNING THE DISTRICT - Tax Rates-

Assessed Value of Taxable Property/Tax Levies and Collection.

Any or all of the items listed above may be included by specific reference to other documents,

including official statements of debt issues with respect to which the District is an “obligated person” (as

defined by the Rule), which have been filed with the MSRB and are available through EMMA or the Securities

and Exchange Commission. If the document included by reference is a final official statement, it must be

available from the MSRB on EMMA. The District will clearly identify each such other document so included

by reference.

Within 10 business days after the occurrence of any of the following events, the District shall give, or

cause to be given to the MSRB, through EMMA, notice of the occurrence of any of the following events with

respect to the Series 2011 Bonds (“Material Events”):

(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;

27

(6) adverse tax opinions; the issuance by the 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 Series 2011 Bonds, or other material

events affecting the tax status of the Series 2011 Bonds;

(7) modifications to rights of bondholders, if material;

(8) bond calls, if material, and tender offers;

(9) defeasances;

(10) release, substitution or sale of property securing repayment of the Series 2011 Bonds if

material;

(11) rating changes;

(12) bankruptcy, insolvency, receivership or similar event of the District;

(13) the consummation of a merger, consolidation, or acquisition involving the District or the sale

of all or substantially all of the assets of the District, 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; and

(14) appointment of a successor or additional trustee or the change of name of the trustee, if

material.

(15) the occurrence of an event of nonappropriation under the Base Lease or Sublease.

Nothing in the Continuing Disclosure Undertaking shall prevent the District from disseminating any

other information in addition to that which is required by the Continuing Disclosure Undertaking. If the

District chooses to include any information in any Annual Report or notice of occurrence of a Material Event

in addition to that which is specifically required, the District shall have no obligation to update such

information or include it in any future Annual Report or notice of occurrence of a Material Event.

These covenants have been made in order to assist the Underwriters in complying with Rule 15c2-12

promulgated by the Securities and Exchange Commission.

The District has previously assumed continuing disclosure obligations with respect to the issuance of

the Series 2006 Bonds. The District inadvertently failed to file its annual financial statements for the fiscal

year ending June 30, 2010, which financial statements are attached hereto as APPENDIX B and will be filed

with the MSRB via EMMA together with this Official Statement. The District will hereafter comply with the

continuing disclosure obligations as set forth in the Undertaking.

BOND RATING

Standard & Poor’s Ratings Services, a division of the McGraw-Hill Companies, Inc. (“S&P”) has

assigned a rating of “A” to the Series 2011 Bonds. Such ratings reflect only the views of such organization

and any desired explanation of the significance of such rating should be obtained from Standard & Poor’s

Ratings Services, 25 Broadway, New York, New York 10004. Generally, a rating agency bases its rating on

the information and materials furnished to it and on investigations, studies and assumptions of its own. There

is no assurance such rating will continue for any given period of time or that such rating will not be revised

downward or withdrawn entirely by the rating agency, if in the judgment of such rating agency, circumstances

so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the

market price of the Series 2011 Bonds.

UNDERWRITING

Edward D. Jones & Co., L.P., as representative and on behalf of itself and the other

underwriter listed on the cover page of this Official Statement (the “Underwriter”) has agreed to purchase the

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Series 2011 Bonds from the Corporation at a purchase price equal to $8,701,487.50 (which represents the par

amount of the Series 2011 Bonds, less and Underwriter’s discount of $123,512.50). The Series 2011 Bonds

will be offered to the public at the prices as set forth on the inside cover page of this Official Statement. The

Underwriter will be obligated to purchase all of the Series 2011 Bonds if any are purchased. The Underwriter

reserves the right to join with dealers and other underwriters in offering a Series of Bonds to the public.

The obligation of the Underwriter to accept delivery of and pay for the Series 2011 Bonds is subject to

various conditions set forth in the Bond Purchase Agreement to the Series 2011 Bonds, including, among

others, the delivery of specified opinions of counsel and certificates of the Board of Trustees of the District and

the Board of Directors of the Corporation that there have been no material adverse changes in their respective

condition (financial or otherwise) from that set forth in this Official Statement.

MISCELLANEOUS

The references herein and in APPENDIX A hereto regarding the Base Lease, the Sublease and the

Indenture are brief outlines of certain provisions thereof. Such outlines do not purport to be complete; for full

and complete statements of such provisions, reference is made to the Base Lease, the Sublease and the

Indenture.

The agreements and covenants of the Corporation with the Holders of the Series 2011 Bonds are fully

set forth in the Indenture, and neither any advertisement of the Series 2011 Bonds nor this Official Statement is

to be construed as constituting an agreement with the purchasers of the Series 2011 Bonds. Statements made

in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended merely

as such and not as representations of facts. Copies of the documents mentioned under this heading are on file

at the District and following delivery of the Series 2011 Bonds will be on file at the offices of the Trustee.

The attached APPENDICES A, B, C and D are integral parts of this Official Statement and should be

read in their entirety together with all foregoing statements.

[The remainder of this page intentionally left blank.]

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The execution and delivery of this Official Statement have been duly authorized by the Corporation

and the District.

CROWDER COLLEGE FACILITIES

CORPORATION

By: /s/ James Armstrong

President of the Board of Directors

THE JUNIOR COLLEGE DISTRICT OF

NEWTON AND MCDONALD COUNTIES,

MISSOURI

By: /s/ Andrew Wood

President of the Board of Trustees

APPENDIX A

DEFINITIONS OF WORDS AND TERMS

AND

SUMMARY OF CERTAIN OTHER LEGAL DOCUMENTS

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DEFINITIONS OF WORDS AND TERMS

In addition to words and terms defined elsewhere in this Official Statement, the following are

definitions of certain words and terms used in the Indenture, the Sublease, the Base Lease and this Official Statement unless the context clearly otherwise requires. Reference is hereby made to the Indenture, the

Sublease, and the Base Lease for complete definitions of all terms.

“2011 Project” means the acquisition, construction and equipping of the facilities described on

Exhibit A to the Base Lease that will be located on the McDonald County Property owned by the District.

“Additional Bonds” means any additional parity Bonds issued by the Corporation pursuant to the

Indenture.

“Additional Project” means any additional improvements, extensions, remodeling, renovating or

altering of the Project to be financed with the proceeds of Additional Bonds.

“Additional Subrent” or “Additional Subrentals” means the payments required to be made by the

District by the Sublease.

“Base Lease Rent” means the items referred to as such in the Base Lease.

“Base Lease Term” means the term of the Base Lease commencing as of the date of the delivery of

the Original Base Lease and ending on June 30, 2040.

“Bond,” “Bonds” or “Series of Bonds” means any bond or bonds, including the Series 1996 Bonds,

the Series 2002 Bonds, the Series 2006 Bonds, the Series 2011 Bonds and Additional Bonds, authenticated and

delivered under and pursuant to the Indenture and the right to receive interest due on the Bonds.

“Bond Counsel” means Thompson Coburn LLP, St. Louis, Missouri, or other firm of attorneys with a

nationally recognized standing in the field of municipal bond financing approved by the Corporation.

“Bond Register” means the register and all accompanying records kept by the Bond Registrar

evidencing the registration, transfer and exchange of Bonds.

“Bond Registrar” means the Trustee when acting as such under the Indenture.

“Code” means the Internal Revenue Code of 1986, as amended.

“Corporation Representative” means the person or persons at the time designated to act on behalf of

the Corporation in matters relating to the Base Lease, the Sublease, the Indenture, and the Bond Purchase

Agreement as evidenced by a written certificate furnished to the District and the Trustee containing the

specimen signature of such person or persons and signed on behalf of the Corporation by the President or any

Vice President of its Board of Directors. Such certificate may designate an alternate or alternates, each of

whom shall be entitled to perform all duties of the Corporation Representative.

“Counsel” means an attorney duly admitted to practice law before the highest court of any state and,

without limitation, may include legal counsel for either the District or the Corporation.

“District Representative” means the person or persons at the time designated to act on behalf of the

District in matters relating to the Base Lease, the Sublease, the Indenture and the Bond Purchase Agreement as

evidenced, by a written certificate furnished to the Corporation and the Trustee containing the specimen signature of such person or persons and signed on behalf of the District by its President. Such certificate may

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designate an alternate or alternates each of whom shall be entitled to perform all duties of the District

Representative.

“Event of Default” means (a) with respect to the Sublease any Event of Default as defined in the

Sublease, and (b) with respect to the Indenture any Event of Default as defined in the Indenture.

“Facility” means the Facility referred to in the recitals to the Base Lease and the Sublease.

“Fiscal Year” means the fiscal year adopted by the Corporation and the District for financial

reporting purposes. Currently, such Fiscal Year begins on July 1 of each calendar year for both the

Corporation and the District.

“Full Insurable Value” means the actual replacement cost of the Project less physical depreciation

and exclusive of land, excavations, footings, foundations and parking lots.

“Government Securities” means bonds, notes, certificates of indebtedness, treasury bills, or other

securities constituting noncallable direct obligations of the United States.

“Holder” shall have the same meaning as the term “Bondholder.”

“Interest Payment Date” means the date or dates on which principal or interest on the Bonds is

payable.

“Maturity” means, with respect to any Bond, the date on which the principal of such Bond becomes

due and payable as therein provided, whether at the Stated Maturity or by declaration or acceleration, call for

redemption or otherwise.

“Outstanding,” when used with reference to Bonds, means, as of a particular date, all Bonds

theretofore authenticated and delivered, except:

(a) Bonds theretofore cancelled by the Trustee or delivered to the Trustee for

cancellation;

(b) Bonds for which redemption moneys or Government Securities, or both, in the

necessary amount have theretofore been deposited with the Trustee in trust for the Holders of such

Bonds (whether upon or prior to maturity or the redemption date of such Bonds), the principal of and

the interest on such Government Securities, if any, when due, providing sufficient moneys to pay, with

such other moneys so deposited with the Trustee, the principal of, redemption premium, if any, and

the interest on such Bonds being paid or redeemed provided that such deposit is in accordance with

the Indenture;

(c) Bonds in exchange for or in lieu of which other Bonds have been authenticated and

delivered pursuant to the Indenture; and

(d) For purposes of any consent or other action to be taken by the holders of a specified

percentage of Bonds under the Indenture or the Sublease, Bonds held by or for the account of the

Corporation, the District or any person controlling, controlled by or under common control with either

of them.

“Paying Agent” means the Trustee when acting as such under the Indenture.

“Permitted Encumbrances” means, as of any particular time (a) liens for ad valorem taxes and

special assessments not then delinquent, (b) the Indenture, (c) the Sublease, (d) the Base Lease, (e) any and all

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Uniform Commercial Code Financing Statements executed to perfect any security interest created in

connection with the issuance of the Series 2011 Bonds, (f) utility, access and other easements and rights-of-

way, mineral rights, restrictions, exceptions and encumbrances that will not materially interfere with or impair

the operations being conducted on the Real Estate or easements granted to the Corporation, and (g) such minor

defects, irregularities, encumbrances, easements, mechanic’s liens, rights-of-way and clouds on title as

normally exist with respect to properties similar in character to the Project and affected thereby for the purpose

for which it was acquired or is held by the Corporation.

“Permitted Investments” means the following investments:

(a) United States Treasury Bills or United States Treasury Notes traded on an open

market or issued directly to the Trustee by the United States.

(b) United States Treasury Obligations — State and Local Government Series issued by

the United States of America.

(c) Direct obligations of any state of the United States of America or any subdivision or

agency thereof whose unsecured general obligation debt is rated by Moody’s Investors Service and by

Standard and Poor’s Ratings Group as being in their two highest rating categories, or any obligation

fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured general

obligation debt is rated by Moody’s Investors Service and by Standard and Poor’s Ratings Group in

their two highest rating categories.

(d) United States Treasury Obligations — State and Local Government Series demand

deposit securities issued by the United States.

(e) Interest-bearing demand or time deposits or interests in money market portfolios

issued by national or state banks or trust companies (including the Trustee and its affiliates) or that are

members of the Federal Deposit Insurance Corporation (FDIC). These deposits or interests must be

(a) continuously and fully insured by FDIC, or (b) fully secured by Government Securities. Such

Government Securities must have a market value at all times at least equal to the principal amount of

the deposits or interests. The Government Securities must be held by the Trustee, or by any Federal

Reserve Bank or depositary, as custodian for the institution issuing the deposits or interests. The

Trustee should have a perfected first lien in the Government Securities serving as collateral or hold

such Government Securities pursuant to a Joint Custody Receipt issued by a Federal Reserve Bank,

and such collateral is to be free from all third-party liens (provided, however, the Trustee shall not be

responsible for determining whether such collateral is free of such liens unless it has actual knowledge

of such liens).

Any such investments referred to above shall be made only as permitted by law and for a period not longer

than is specified by law or not longer than the date on which the principal thereof will be needed for the

purposes for which such investment is held, whichever first occurs. The Trustee shall maintain and keep a

complete record of all investments made pursuant to the above provisions.

“Project” means the Project referred to in the recitals of the Base Lease and the Sublease, including

the Real Estate, the Facility and the 2011 Project.

“Real Estate” means the real estate described in the Base Lease, the Sublease, and the Indenture.

“Redemption Date” when used with respect to any Bond to be redeemed means the date fixed for

redemption pursuant to the Indenture.

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“Regular Record Date” means, for the interest payable on any Interest Payment Date, the fifteenth

day (whether or not a business day) of the calendar month next preceding such Interest Payment Date.

“Series 1996 Bonds” means the Leasehold Revenue Bonds, Series 1996, issued pursuant to the

original Indenture.

“Series 2002 Bonds” means the Leasehold Refunding Revenue Bonds (The Junior College District of

Newton and McDonald Counties, Missouri), Series 2002, issued pursuant to the First Supplemental Indenture.

“Series 2006 Bonds” means the Leasehold Revenue Bonds (McDonald Hall Addition), Series 2006,

issued pursuant to the Second Supplemental Indenture.

“Series 2011 Bonds” or “Series 2011 Bond” means the Leasehold Revenue Bonds (The Community

College District of Newton and McDonald Counties, Missouri) Series 2011, aggregating the principal amount

specified in and issued pursuant to the Third Supplemental Indenture.

“Special Record Date,” for the payment of any Defaulted Interest, as defined in the Indenture, means

a date fixed by the Trustee as Bond Registrar pursuant to the Indenture.

“State” means the State of Missouri.

“Stated Maturity” means, when used with respect to any Bond, the date specified in the Indenture or

any Supplemental Indenture authorizing Additional Bonds as the fixed date on which the principal of such

Bond is due and payable.

“Sublease Renewal Terms” means the optional renewal terms of the Sublease, each having a

duration of one year (and a term coextensive with the District’s Fiscal Year), except for the last term, as

provided in the Sublease.

“Subrentals” or “Subrent” means those payments required to be made by the District by the

Sublease.

“Trust Estate” means the Trust Estate described in the Granting Clauses of the Indenture.

* * * * *

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SUMMARY OF THE INDENTURE

The following is a summary of certain provisions contained in the Indenture. The following is not a

comprehensive description, however, and is qualified in its entirety by reference to the Indenture for a complete recital of the terms thereof.

Trust Estate

In order to secure the payment of the principal of, and redemption premium, if any, and interest on,

the Bonds, and to secure the performance and observance by the Corporation of the covenants, agreements and

conditions in the Indenture and in the Bonds, the Corporation pledges, assigns and grants a security interest in

all and singular the following property (said property being referred to in the Indenture as the “Trust Estate”)

unto the Mortgage Trustee, and his successors in trust and his assigns:

1. All of the leasehold estate and interest of the Corporation in and to the Real Estate, together

with any and all other, further or additional title, estates, interests or rights which may at any time be acquired

by the Corporation in or to the premises demised by the Base Lease.

2. All right, title and interest of the Corporation (including the right to enforce any of the terms

thereof) in, to and under:

(a) the Sublease and all Subrentals, Additional Subrentals and certain other revenues,

moneys and receipts derived by the Corporation pursuant to the Sublease entered into,

(b) all financing statements or other instruments or documents evidencing, securing or

otherwise relating to the Base Lease and the Sublease.

3. All moneys and securities from time to time held by the Mortgage Trustee or the Trustee

under the Indenture, and any and all other real or personal property of every kind and nature from time to time,

by delivery or by writing of any kind, conveyed, pledged, assigned or transferred as and for additional security

under the Indenture by the Corporation or by anyone in its behalf, or with its written consent, to the Mortgage

Trustee or the Trustee, which is authorized to receive any and all such property at any and all times and to hold

and apply the same subject to the terms of the Indenture.

4. All proceeds and products of any of the foregoing.

Establishment of Funds and Accounts

There is created and ordered to be established and maintained with the Trustee the following separate

funds and accounts to be known respective as the:

(a) Bond Fund.

(b) Debt Service Reserve Account.

(c) Costs of Issuance Fund.

(d) Project Fund.

Costs of Issuance Fund

The proceeds of the Bonds deposited in the Costs of Issuance Fund shall be disbursed by the Treasurer

of the Corporation to pay costs of issuing the Series 2011 Bonds. Any such moneys not used for such purpose

and remaining on deposit on February 1, 2012, shall be transferred to and deposited in the Bond Fund.

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Bond Fund

Except as provided in the Indenture, moneys in the Bond Fund shall be expended solely for the

payment of the principal of, and redemption premium, if any, and interest on, the Bonds as the same mature

and become due or upon the redemption thereof prior to maturity.

Deposits into the Debt Service Reserve Account

All moneys paid and credited to the Debt Service Reserve Account shall be expended and used by the

Corporation solely to prevent any default in the payment of interest on and principal of the Series 2011 Bonds

if moneys in the Bond Fund are insufficient to pay the interest on and principal of the Series 2011 Bonds as

they become due. If the Corporation shall ever be required to expend and use a part of the moneys in the Debt

Service Reserve Account for the purpose herein authorized and such expenditure shall reduce the amount in

said account below the Debt Service Reserve Requirement, then the Corporation shall, within one month after

such expenditure, begin making 12 consecutive monthly payments to the Debt Service Reserve Account, each

payment to be equal to 1/12 of the amount of the expenditure; provided, however, that no such payments shall

be required whenever the amount in the Debt Service Reserve Account is at least equal to the Debt Service

Reserve Requirement.

Use of Proceeds; Completion of 2011 Project.

The Corporation agrees to cause the 2011 Project to be diligently and continuously pursued and to be

completed with reasonable dispatch, and to provide (from its own funds if required) all moneys necessary to

complete the 2011 Project substantially in accordance with the plans and specifications for the 2011 Project.

In the event the moneys on deposit in the Project Fund are at any time insufficient to pay for the completion of

the 2011 Project, the Corporation agrees to pay the amount of such deficiency forthwith to the Trustee for

deposit in the Project Fund. The Corporation covenants that any moneys received from any other source

which are properly designated (whether by such source, by the Corporation or in some other manner) for the

completion of the 2011 Project shall be deposited to the credit of the Project Fund.

Project Fund.

Proceeds of the Series 2011 Bonds in the Project Fund shall be used solely for the purpose of paying

the costs of issuing the Series 2011 Bonds and the costs of the 2011 Project, in accordance with the plans and

specifications approved by the Board of Directors of the Corporation and on file in the office of the Secretary

of the Board of Directors, including any alterations in or amendments to said plans and specifications deemed

advisable and approved by the Board of Directors of the Corporation.

The Trustee shall disburse moneys on deposit in the Project Fund from time to time to pay or as

reimbursement for payment made for the costs of the 2011 Project, in each case within three (3) Business Days

after receipt by the Trustee of written disbursement requests of the Corporation signed by the Corporation

Representative, in substantially the form of Exhibit B to the Indenture. In making such payments and

determinations, the Trustee may conclusively rely upon such written requests and accompanying certificates

and statements and shall not be required to make any independent investigation in connection therewith. The

Trustee shall not be required to make any inspection of the 2011 Project or the improvements thereon, make

any provision to obtain completion bonds, mechanics or materialmen’s lien releases, or otherwise supervise

any construction, equipping, repair or substitution in connection with the 2011 Project. Upon completion of

the 2011 Project or within 90 days thereafter, the Corporation shall deliver to the Trustee an Officer’s

Certificate as provided in the Indenture stating that the 2011 Project has been fully completed substantially in

accordance with the plans and specifications for the 2011 Project, as then amended, and the date of completion

of the 2011 Project.

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If after payment by the Trustee of all disbursement requests theretofore tendered to the Trustee under

the provisions of this Section and after receipt by the Trustee of the Officer’s Certificate required by the

Indenture there shall remain any proceeds of the Series 2011 Bonds in the Project Fund, such moneys shall be

deposited and applied in the following order of priority: (1) in the Debt Service Reserve Fund to the extent

necessary to attain the amount required to be on deposit therein as of the date of such deposit, (2) in the Debt

Service Fund and used to redeem Series 2011 Bonds at the earliest permissible date under the Indenture, and

(3) in the Debt Service Fund to pay the next successive principal payment on the Series 2011 Bonds to become

due. If an Event of Default specified in the Indenture hereof shall have occurred and the Bonds shall have

been declared due and payable, any remaining proceeds of the Series 2011 Bonds in the Project Fund shall

without further authorization be deposited in the Debt Service Fund by the Trustee with advice to the

Corporation of such action.

Payments Due on Saturdays, Sundays and Holidays

In any case where the date of maturity of principal of, or redemption premium, if any, or interest on,

any Bonds or the date fixed for redemption of any Bonds shall be a Saturday, a Sunday or a legal holiday or a

day on which banking institutions in the city of payment are authorized by law to close, then payment of

principal, redemption premium, if any, or interest need not be made on such date but may be made on the next

succeeding business day not a Saturday, a Sunday or a legal holiday or a day upon which banking institutions

are authorized by law to close with the same force and effect as if made on the date of maturity or the date

fixed for redemption, and no interest shall accrue for the period after such date.

Nonpresentment of Bonds

In the event any Bond shall not be presented for payment when the principal thereof becomes due,

either at its Maturity or otherwise, or at the date fixed for redemption thereof, if funds sufficient to pay such

Bond shall have been made available to the Trustee, all liability of the Corporation to the Bondholder thereof

for the payment of such Bond shall forthwith cease, determine and be completely discharged, and thereupon it

shall be the duty of the Trustee to hold such fund or funds, without liability for interest thereon, for the benefit

of the Holder of such Bond who shall thereafter be restricted exclusively to such fund or funds for any claim of

whatever nature on his part under the Indenture or on, or with respect to, said Bond. If any Bond shall not be

presented for payment within two years following the date when such Bond becomes due, whether by maturity

or otherwise, the Trustee shall repay to the District the funds theretofore held by it for payment of such Bond,

and such Bond shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured

obligation of the District, and the Bondholder thereof shall be entitled to look only to the District for payment

and then only to the extent of the amount so repaid, and the District shall not be liable for any interest thereon

and shall not be regarded as a trustee of such money.

Investment of Moneys in the Bond Fund and the Debt Service Reserve Account

Moneys held in the Bond Fund and the Debt Service Reserve Account shall, pursuant to written

direction of the District, signed by a District Representative, be invested and reinvested by the Trustee,

provided, however, in the event written directions are not received by the Trustee, at the discretion of the

Trustee, in Permitted Investments which mature or are subject to redemption by the holder prior to the date

such funds will be needed. Any such Permitted Investments shall be held by or under the control of the

Trustee and shall be deemed at all times a part of the fund or account in which such moneys are originally

held, and the interest accruing thereon and any profit realized from such Permitted Investments shall be

credited to such fund or account, and any loss resulting from such Permitted Investments shall be charged to

such fund or account; provided, however, that if at the time of any valuation the amount held in the Debt

Service Reserve Account shall be in excess of the Debt Service Reserve Requirement, such excess shall be

immediately paid to and credited to the Bond Fund. The Trustee shall sell and reduce to cash a sufficient amount of such Permitted Investments whenever the cash balance in such fund is insufficient for the purposes

of such fund or account.

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Events of Default

If any one or more of the following events occur, it is defined as and declared to be and to constitute

an “Event of Default”:

(a) Default by the Corporation in the due and punctual payment of any interest on any

Bond;

(b) Default by the Corporation in the due and punctual payment of the principal of or

redemption premium, if any, on any Bond, whether at the Stated Maturity or other Maturity thereof, or

upon proceedings for redemption thereof;

(c) Default in the performance or observance of any other of the covenants, agreements

or conditions on the part of the Corporation contained in the Indenture or in the Bonds or in any other

document or instrument that secures or otherwise relates to the debt and obligations secured, and the

continuance thereof for a period of 30 days after written notice given to the Corporation and the

District by the Trustee or to the Trustee, the District and the Corporation by the Holders of not less

than 25% in aggregate principal amount of Bonds then Outstanding; provided, however, if the failure

stated in the notice cannot be corrected within said 30-day period, the Trustee may consent in writing

to an extension of such time prior to its expiration and the Trustee will not unreasonably withhold its

consent to such an extension if corrective action is instituted by the Corporation or the District within

the 30-day period and diligently pursued to completion and if such consent, in its judgment, does not

materially adversely affect the interests of the Bondholders. In making its judgment under this

Subsection (c) the Trustee may rely on an Opinion of Counsel. Upon receipt of notice of any Event of

Default under this subparagraph (c), the District shall have the rights specified in the Indenture;

(d) An Event of Default under the Sublease; or

(e) An event of default in respect of any subordinate debt issued by the Corporation as

permitted by the Indenture.

Notice of any Event of Default shall be given to the Corporation and the District by the Trustee or to

the Trustee, the District and the Corporation by the registered owners of not less than 25% in aggregate

principal amount of Bonds then Outstanding and the District, upon receipt of such notice, shall have the rights

specified in the Indenture.

Acceleration of Maturity in Event of Default

If an Event of Default shall have occurred and be continuing, the Trustee may, and upon the written

request of the Holders of not less than 25% in aggregate principal amount of Bonds then Outstanding shall, by

notice in writing delivered to the Corporation and the District, declare the principal of all Bonds then

Outstanding and the interest accrued thereon immediately due and payable, and such principal and interest

shall thereupon become and be immediately due and payable.

Surrender of Possession of Trust Estate; Rights and Duties of Trustee in Possession

If an Event of Default shall have occurred and be continuing, the Corporation, upon demand of the

Trustee, shall forthwith surrender the possession of, and it shall be lawful for the Trustee, by such officer or

agent as it may appoint, to take possession of all or any part of the Trust Estate, together with the books, papers

and accounts of the Corporation pertaining thereto, and including the rights and the position of the Corporation under the Sublease and to collect, receive and sequester the Subrentals and other revenues, moneys and

receipts derived under the Sublease, and out of the same and any moneys received from any receiver of any

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part thereof pay, and set up proper reserves for the payment of all proper costs and expenses of so taking,

holding and managing the same, including (i) reasonable compensation to the Trustee, its agents and counsel,

and (ii) any charges of the Trustee under the Indenture, and (iii) any taxes and assessments and other charges

prior to the lien of the Indenture, and (iv) all expenses of such repairs and improvements, and the Trustee shall

apply the remainder of the moneys so received in accordance with the Indenture. The collection of such

subrentals, revenues and other receipts, or the entering upon and taking possession of the Trust Estate, or the

application thereof as aforesaid, shall not cure or waive any default or notice of default under the Indenture or

invalidate any act done in response to such default or pursuant to notice of default. Whenever all that is due

upon the Bonds shall have been paid and all defaults made good, the Trustee shall surrender possession of the

Trust Estate to the Corporation, its successors or assigns, the same right of entry, however, to exist upon any

subsequent Event of Default.

Appointment of Receivers in Event of Default

If an Event of Default shall have occurred and be continuing, and upon the filing of a suit or other

commencement of judicial proceedings to enforce the rights of the Trustee or of the Bondholders under the

Indenture, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver or receivers of the

Trust Estate and of the earnings, income, products and profits thereof, pending such proceedings, with such

powers as the court making such appointment shall confer.

Exercise of Remedies by the Trustee

Upon the occurrence of an Event of Default, the Trustee may pursue any available remedy at law or

equity by suit, action, mandamus or other proceeding to enforce the payment of the principal of and

redemption premium, if any, and interest on, the Bonds then Outstanding, and to enforce and compel the

performance of the duties and obligations of the Corporation as set forth in the Indenture or to enforce or

realize on any of the rights, powers, liens or interests granted to the Trustee.

Exercise of Power of Sale; Exercise of Rights and Powers

Upon the occurrence of an Event of Default, the Trustee and/or the Co-Trustee may direct the

Mortgage Trustee (or any successor) to proceed to sell the Trust Estate and any and every part thereof, at

public vendue, to the highest bidder, at the customary place in the County of Newton State of Missouri, for

cash, first giving the public notice required by law of the time, terms and place of sale, and of the property to

be sold; and upon such sale shall execute and deliver a proper conveyance of the property sold to the purchaser

or purchasers thereof, and any statement or recital of fact in such conveyance in relation to the non-payment of

money secured to be paid, existence of the indebtedness so secured, notice of advertisement, sale, receipt of

money, and the happening of any of the aforesaid events or whereby any successor trustee became successor as

provided in the Indenture, shall be prima facie evidence of the truth of such statement or recital.

The Mortgage Trustee (or any successor) shall have the option to proceed with foreclosure in

satisfaction of any portion of the Bonds with respect to which an Event of Default has occurred without

declaring the whole of the Bonds as immediately matured, and such foreclosure may be made subject to the

unmatured portion of the Bonds, and it is agreed that such foreclosure, if so made, shall not in any manner

affect the unmatured portion of the Bonds, but as to such unmatured portion the Indenture, as well as the

Sublease, shall remain in full force and effect just as though no foreclosure had been made. Several

foreclosures may be made without exhausting the right of foreclosures for any unmatured part of the Bonds, it

being the purpose to provide for a foreclosure of the security for any matured portion of the Bonds without

exhausting the power of foreclosure for any other part of the Bonds.

If an Event of Default shall have occurred and be continuing, and if requested so to do by the Holders of 25% in aggregate principal amount of Bonds then Outstanding and indemnified as provided in the

Indenture, the Trustee shall be obligated to exercise such one or more of the rights and powers conferred by

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this Article as the Trustee, being advised by counsel, shall deem most expedient in the interests of the

Bondholders.

Limitation on Exercise of Remedies by Bondholders

No Bondholder shall have any right to institute any suit, action or proceeding in equity or at law for

the enforcement of the Indenture or for the execution of any trust under the Indenture or for the appointment of

a receiver or any other remedy under the Indenture, unless

(i) a default has occurred of which the Trustee has been notified as provided in

the Indenture or of which by said subsection the Trustee is deemed to have notice,

(ii) such default shall have become an Event of Default,

(iii) the Holders of 25% in aggregate principal amount of Bonds then

Outstanding shall have made written request to the Trustee, shall have offered it reasonable

opportunity either to proceed to exercise the powers granted in the Indenture or to institute

such action, suit or proceeding in its own name, and shall have offered to the Trustee

indemnity as provided in the Indenture, and

(iv) the Trustee shall thereafter fail or refuse to exercise the powers granted in

the Indenture or to institute such action, suit or proceeding in its own name;

and such notification, request and offer of indemnity are declared in every case, at the option of the Trustee, to

be conditions precedent to the execution of the powers and trusts of the Indenture, and to any action or cause of

action for the enforcement of the Indenture, or for the appointment of a receiver or for any other remedy under

the Indenture, it being understood and intended that no one or more Bondholders shall have any right in any

manner whatsoever to affect, disturb or prejudice the Indenture by its, his or their action or to enforce any right

under the Indenture except in the manner provided in the Indenture, and that all proceedings at law or is equity

shall be instituted, had and maintained in the manner provided in the Indenture and for the equal benefit of the

Holders of all Bonds then Outstanding. Nothing in the Indenture contained shall, however, affect or impair the

right of any Bondholder to payment of the principal of, and redemption premium, if any, and interest on any

Bond at and after its Maturity or the obligation of the Corporation to pay the principal of, and redemption

premium, if any, and interest on, each of the Bonds to the respective Holders thereof at the time, place, from

the source and in the manner in the Indenture and in such Bond expressed.

Right of Bondholders to Direct Proceedings

Anything in the Indenture to the contrary notwithstanding, the Holders of a majority in aggregate

principal amount of Bonds then Outstanding shall have the right, at any time, by an instrument or instruments

in writing executed and delivered to the Trustee, to direct the time, method and place of conducting all

proceedings to be taken in connection with the enforcement of the Indenture, or for the appointment of a

receiver or any other proceedings under the Indenture; provided that such direction shall not be otherwise than

in accordance with the provisions of law and of the Indenture, and provided, further, that the Trustee shall have

the right to decline to follow any such direction if the Trustee in good faith shall determine that the proceeding

so directed would involve it in personal liability.

Application of Moneys in Event of Default

Upon an Event of Default, by the Mortgage Trustee and/or the Trustee all moneys received by the

Trustee pursuant to the Sublease or by the Mortgage Trustee and/or the Trustee pursuant to any right given or action taken under this Article or any other provisions of the Indenture, shall, after payment of the cost and

expenses of the proceedings resulting in the collection of such moneys and of the expenses, liabilities and

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advances incurred or made by the Mortgage Trustee and/or the Trustee (including but not limited to attorneys’

fees and expenses and the fees and expenses of the Mortgage Trustee and the Trustee), be deposited in the

Bond Fund and any other Bond Fund created for the payment of Bonds and all moneys so deposited in the

Bond Fund or such other Bond Fund shall be applied as follows:

(a) If the principal of all the Bonds shall not have become or shall not have been

declared due and payable, all such moneys shall be applied:

First — To the payment to the persons entitled thereto of all installments of interest

then due and payable on the Bonds, in the order in which such installments of interest became

due and payable, and, if the amount available shall not be sufficient to pay in full any

particular installment, then to the payment ratably, according to the amounts due on such

installment, to the persons entitled thereto, without any discrimination or privilege; and

Second — To the payment to the persons entitled thereto of the unpaid principal of

any of the Bonds which shall have become due and payable (other than Bonds called for

redemption for the payment of which moneys are held pursuant to the Indenture), in the order

of their due dates, with interest on such Bonds from the respective dates upon which they

became due and payable, and, if the amount available shall not be sufficient to pay in full

Bonds due on any particular date, together with such interest, then to the payment ratably,

according to the amount of principal due on such date, to the persons entitled thereto without

any discrimination or privilege.

(b) If the principal of all the Bonds shall have become due or shall have been declared

due and payable, all such moneys shall be applied to the payment of the principal and interest then due

and unpaid on all of the Bonds, without preference or priority of principal over interest or of interest

over principal or of any installment of interest over any other installment of interest or of any Bond

over any other Bond, ratably, according to the amounts due respectively for principal and interest, to

the persons entitled thereto, without any discrimination or privilege.

(c) If the principal of all the Bonds shall have been declared due and payable, and if such

declaration shall thereafter have been rescinded and annulled under this Article then, subject to

subparagraph (b) of this Section in the event that the principal of all the Bonds shall later become due

or be declared due and payable, the moneys shall be applied in accordance with subparagraph (a) of

this Section.

Effect of Discontinuance of Proceedings

In case the Mortgage Trustee and/or the Trustee shall have proceeded to enforce any right under the

indenture by the appointment of a receiver, by entry, or otherwise, and such proceedings shall have been

discontinued or abandoned for any reason, or shall have been determined adversely, then and in every such

case the Corporation, the District, the Mortgage Trustee and/or the Trustee and the Bondholders shall be

restored to their former positions and rights under the Indenture, and all rights, remedies and powers of the

Mortgage Trustee and/or the Trustee shall continue as if no such proceedings had been taken.

Waivers of Events of Default

The Trustee shall waive any Event of Default and its consequences and rescind any declaration of

maturity of principal upon the written request of the Holders of at least a majority in aggregate principal

amount of all Bonds then Outstanding; provided, however, that there shall not be waived without the consent

of the Holders of all the Bonds Outstanding (a) any Event of Default in the payment of the principal of any Outstanding Bonds at their Stated Maturity, or (b) any Event of Default in the payment when due of the

interest on any such Bonds unless, prior to such waiver or rescission, all arrears of interest, with interest (to the

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extent permitted by law) at the rate borne by the Bonds on overdue installments of interest in respect of which

such default shall have occurred, or all arrears of payments of principal when due, as the case may be, and all

expenses of the Trustee in connection with such default shall have been paid or provided for. In case of any

such waiver or rescission, or in case any proceeding taken by the Trustee on account of any such default shall

have been discontinued or abandoned or determined adversely, then and in every such case the Corporation,

the District, the Trustee and the Bondholders shall be restored to their former positions, rights and obligations

under the Indenture, respectively, but no such waiver or rescission shall extend to any subsequent or other

default, or impair any right consequent thereon.

Acceptance of the Trusts

The Trustee accepts the trusts imposed upon it by the Indenture, and agrees to perform said trusts

exercising the same degree of care and skill as a prudent corporate trustee ordinarily would exercise under the

circumstances, but only upon and subject to the express terms and conditions contained in the indenture, and

no implied covenants or obligations shall be read into the Indenture against the Trustee or the Co-Trustee.

Notice to Bondholders if Default Occurs

If a default occurs of which the Trustee is by the Indenture required to take notice or if notice of

default be given, then the Trustee shall give written notice thereof by first class mail, postage prepaid, to the

Holders of all Bonds then Outstanding at their respective addresses appearing on the Bond Register.

Intervention by the Trustee

In any judicial proceeding to which the Corporation is a party and which, in the opinion of the Trustee

and its counsel, has a substantial bearing on the interests of the Bondholders, the Trustee may intervene on

behalf of Bondholders and shall do so if requested in writing by the Holders of at least 25% of the aggregate

principal amount of Bonds then Outstanding, provided that the Trustee shall first have been offered such

reasonable indemnity as it may require against the costs, expenses and liabilities which it may incur in or by

reason of such proceeding.

Resignation of Trustee

The Trustee and any successor Trustee may at any time resign from the trusts created by giving at

least 30 days written notice to the Corporation, the District and the Bondholders, but such resignation shall not

take effect until the appointment of and acceptance by a successor Trustee by the Bondholders or by the

Corporation.

Removal of Trustee

The Trustee may be removed at any time by an instrument or concurrent instruments in writing

delivered to the Trustee, the Corporation and the District and signed by the Holders of a majority in aggregate

principal amount of Bonds then Outstanding.

Appointment of Successor Trustee

In case the Trustee shall resign or be removed, or shall otherwise become incapable of acting under

the Indenture, or in case it shall be taken under the control of any public officer or officers or of a receiver

appointed by a court, a successor Trustee may be appointed by the Holders of a majority in aggregate principal

amount of Bonds then Outstanding, by an instrument or concurrent instruments in writing; provided that, in

case of such vacancy and so long as no Event of Default under the Indenture shall have occurred and be

continuing, the Corporation, by an instrument executed and signed by its President or any of its Vice Presidents and attested by its Secretary or any of its Assistant Secretaries under its seal, may appoint a

temporary Trustee to fill such vacancy until a successor Trustee shall be appointed by the Bondholders in the

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manner above provided. Any such temporary Trustee so appointed by the Corporation shall immediately and

without further acts be superseded by the successor Trustee so appointed by such Bondholders. Every such

Trustee so appointed shall be a trust institution or commercial bank in good standing and qualified to accept

such trusts, shall be subject to examination by a federal or state bank regulatory authority and shall have a

combined capital and surplus of at least $25,000,000, or be a direct or indirect subsidiary of such corporation,

or a member of a bank holding company group, having a combined capital and surplus or consolidated net

worth of at least $100,000,000, and such subsidiary or member itself shall have a capital and surplus of at least

$9,000,000.

If no successor Trustee or temporary Trustee shall have been so appointed and have accepted

appointment within 60 days of the giving of written notice of the pending vacancy, the resigning Trustee or

any Bondholder may petition any court of competent jurisdiction for the appointment of a successor Trustee.

Annual Accounting

The Trustee shall render an annual accounting to the Corporation and to any Bondholder requesting

the same, showing in reasonable detail all financial transactions relating to the Trust Estate during the

accounting period and the balance in any funds created by the Indenture as of the beginning and close of such

accounting period.

Supplemental Indentures Not Requiring Consent of Bondholders

Subject to the Indenture, the Corporation and the Trustee may from time to time, without the consent

of or notice to any of the Bondholders, enter into such Supplemental Indenture or Supplemental Indentures for

any one or more of the following purposes:

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

supplement any provision in the indenture which may be inconsistent with any other provision in the

Indenture;

(b) To grant to or confer upon the Trustee for the benefit of the Bondholders any

additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon the

Bondholders or the Trustee or either of them;

(c) To more precisely identify the Project or to substitute or add additional property

thereto;

(d) To subject to the Indenture additional revenues, properties or collateral;

(e) To issue Additional Bonds as provided in the Indenture;

(f) To make any other change which in the sole determination of the Trustee does not

materially adversely affect the Bondholders; in making such determination the Trustee may rely on

the opinion of such Counsel as it may select; and

(g) To evidence the appointment of a separate trustee or a co-trustee or the succession of

a new Trustee.

Supplemental Indentures Requiring Consent of Bondholders

Exclusive of Supplemental Indentures not requiring the consent of bondholders, the Holders of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding shall have the right,

from time to time, to consent to and approve the execution by the Corporation and the Trustee of such other

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Supplemental Indenture or Supplemental Indentures as shall be deemed necessary and desirable by the

Corporation for the purpose of modifying, amending, adding to or rescinding, in any particular, any of the

terms or provisions contained in the Indenture or in any Supplemental Indenture; provided that the consent of

all the Holders of Bonds then Outstanding shall be required for (a) an extension of the maturity of the principal

of or the interest on any Bond, or (b) a reduction in the principal amount of any Bond or the rate of interest

thereon, or (c) a privilege or priority of any Bond or Bonds over any other Bond or Bonds, or (d) a reduction in

the aggregate principal amount of Bonds the Holders of which are required for consent to any such

Supplemental Indenture.

Supplemental Base Leases and Subleases Not Requiring Consent of Bondholders

The Corporation and the Trustee shall, without the consent of or notice to the Bondholders, consent to

the execution of any Supplemental Base Lease or Supplemental Sublease, as may be required (i) by the Base

Lease, Sublease or the Indenture, (ii) for the purpose of curing any ambiguity or formal defect or omission,

(iii) so as to more precisely identify the Project or substitute or add additional property thereto, (iv) in

connection with the issuance of Additional Bonds, or (v) in connection with any other change therein which, in

the sole determination of the Trustee, does not materially adversely affect the interests of the Trustee or the

Bondholders; in making such determination the Trustee may rely on the opinion of such Counsel as it may

select.

Supplemental Base Leases and Subleases Requiring Consent of Bondholders

Except for Supplemental Base Leases and Supplemental Subleases not requiring the consent of

Bondholders, neither the Corporation nor the Trustee shall consent to the execution of any Supplemental Base

Leases and Supplemental Subleases between the Corporation and the District without the mailing of notice and

the obtaining of the written approval or consent of the Holders of not less than a majority in aggregate

principal amount of the Bonds at the time Outstanding given and obtained as provided in the Indenture;

provided that the consent of all the Holders of Bonds shall be required for (a) the creation of any lien ranking

prior to or on a parity with the lien of the Indenture, unless otherwise permitted, or (b) a reduction in the

aggregate principal amount of Bonds the Holders of which are required to consent to any Supplemental

Sublease.

Satisfaction and Discharge of the Indenture

When all Bonds are deemed to be paid as provided in the Indenture, and provision shall also be made

for paying all other sums payable under the Indenture, including the fees and expenses of the Trustee and the

Paying Agent to the date of retirement of the Bonds, then the right, title and interest of the Trustee in respect of

the Indenture shall thereupon cease, determine and be void, and thereupon the Trustee shall cancel, discharge

and release the lien of the Indenture.

Bonds Deemed to be Paid

Bonds shall be deemed to be paid within the meaning of this Article when payment of the principal of

and the applicable redemption premium, if any, on such Bond, plus interest thereon to the due date thereof

(whether such due date be by reason of maturity or upon redemption as provided in the Indenture, or

otherwise), either (i) shall have been made or caused to be made in accordance with the terms thereof, or

(ii) shall have been provided for by depositing with the Trustee, in trust and irrevocably set aside exclusively

for such payment (a) moneys sufficient to make such payment or (b) Government Securities maturing as to

principal and interest in such amount and at such times as will insure the availability of sufficient moneys to

make such payment. At such time as a Bond shall be deemed to be paid under the Indenture, as aforesaid, it

shall no longer be secured by or entitled to the benefits of the Indenture, except for the purposes of any such payment from such moneys or Government Securities.

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SUMMARY OF THE SUBLEASE

The following is a summary of certain provisions of the Sublease. The following is not a

comprehensive description, however, and is qualified in its entirety by reference to the Sublease for a full recital of the provisions thereof.

Granting of Subleasehold

The Corporation rents, leases and lets the Project unto the District and the District rents, leases and

hires the Project from the Corporation for the rentals and subject to the terms and conditions set forth in the

Indenture.

Term of Sublease

The current term of the Sublease shall terminate on June 30, 2012, the last day of the District’s current

Fiscal Year. The term of the Sublease may be continued, solely at the option of the District, at the end of the

current term or any Sublease Renewal Term for an additional one year; provided, that the final Sublease

Renewal Term shall be for the period from July 1, 2025 through February 1, 2026, inclusive, rather than for

one year. The District shall give notice to the Corporation and the Trustee at least sixty (60) days prior to the

end of the Sublease Term or any Sublease Renewal Term then in effect of either the termination of the

Sublease or of the renewal thereof for the subsequent Sublease Renewal Term. When notice of termination

has been duly given, all of the District’s right, title, interest and obligations under the Sublease shall terminate

without penalty on the last day of the Sublease Term or the Sublease Renewal Term then in effect. Failure to

notify the Corporation of either the termination or renewal of the Sublease in the manner specified in the

Sublease at least sixty (60) days prior to the end of the Sublease Term or any Sublease Renewal Term then in

effect shall constitute and is accepted by both parties to be a renewal of the Sublease for the subsequent

Sublease Renewal Term; provided, however, that failure of the District to budget and appropriate sufficient

funds to pay Subrentals for the next following Sublease Renewal Term of the Sublease shall constitute

termination of the Sublease at the end of the Sublease Term or Sublease Renewal Term then in effect, and

failure to give notice to the Corporation of such termination as provided shall not affect such automatic

termination. The terms and conditions during any Sublease Renewal Term shall be the same as the terms and

conditions during the Sublease Term, and Subrentals shall be as provided in the Sublease.

The District intends, subject to the provisions above respecting the failure of the District to budget or

appropriate funds to make Subrentals, to continue the Sublease Term through the Sublease Term and all

Sublease Renewal Terms and to pay the Subrentals under the Sublease. The District reasonably believes that

legally available funds in an amount sufficient to make all Subrentals during the Sublease Term and each of

the Sublease Renewal Terms can be obtained. The District’s Director of Development and Business Relations

and other financial staff are directed to do all things lawfully within their power to obtain and maintain funds

from which the Subrentals may be made, including making provision for such Subrentals to the extent

necessary in each proposed annual budget submitted for approval in accordance with applicable procedures of

the District and to exhaust all available reviews and appeals in the event such portion of the budget is not

approved. Notwithstanding the foregoing, the decision to budget and appropriate funds or to continue the

Sublease Term is to be made in accordance with the District’s normal procedures for such decisions, and the

then current Board of Trustees of the District shall have the final responsibility for that decision.

Subrentals

The Corporation reserves and the District, subject to the provisions of the Sublease, covenants and

agrees to pay in immediately available funds to the Trustee designated in the Indenture, for the trust account of

the Corporation under the Indenture and during the Sublease Term or Sublease Renewal Term then in effect, exclusively from legally available funds, Subrentals, for deposit in the Bond Fund at least five business days

before February 1, 2012, and at least five business days before each February 1 and August 1 thereafter (the

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“Interest Payment Dates”), until the principal of and interest on the Bonds shall have been fully paid or

provision for the payment thereof shall have been made in accordance with the indenture, an amount which,

when added to any money then on deposit in the Bond Fund and available for the payment of principal and

interest on the Bonds on the next succeeding Interest Payment Dates, shall be equal to the amount payable as:

(a) Principal on the Bonds in accordance with the terms of the Indenture, and

(b) All interest on the Bonds in accordance with the terms of the Indenture, and

(c) Any other amounts due on the Bonds on such next succeeding Interest Payment Date.

Additional Subrent

The District shall pay, subject to the provisions of the Sublease, as Additional Subrent (i) to the

Trustee, all fees, charges and expenses, including agent and counsel fees, of the Trustee, including, but not

limited to, the fees, charges and expenses of the Trustee referred to in the Indenture (including those of the

Trustee when acting as Paying Agent and Bond Registrar as provided in the Indenture) and (ii) all Impositions

as defined in the Sublease and (iii) all amounts required under the Sublease and all other payments of whatever

nature which the District has agreed to pay or assume under the provisions of the Sublease and (iv) all costs

incident to the payment of the principal of and interest on the Bonds as the same become due and payable,

including all costs, premiums and expenses in connection with the call, redemption and payment of all

Outstanding Bonds, and (v) payments into the Debt Service Reserve Account necessary to maintain such

account in the amount of the Debt Service Reserve Account Requirement and (vi) all expenses incurred in

connection with the enforcement of or the defense of the enforcement of any rights under the Sublease or the

Indenture by the Corporation, the Trustee or the Holders of the Bonds and any expenses incurred by the

Corporation or the Trustee to enable it to comply with the provisions of the Base Lease, the Sublease or the

Indenture.

Subrentals and Additional Subrent Payable Without Abatement or Set-Off; District Obligations

Subject to the provisions of the Sublease, the District covenants and agrees with and for the express

benefit of the Corporation, the Trustee and the Holders of the Bonds that all payments of Subrentals and

Additional Subrent shall be made by the District on or before the date the same become due, and the District

shall perform all of its other obligations, covenants and agreements under the Sublease (including the

obligation to pay Subrentals and Additional Subrent) without notice or demand, and without abatement,

deduction, set-off, counterclaim, recoupment or defense or any right of termination or cancellation arising from

any circumstance whatsoever, whether existing or arising, and irrespective of whether the Project shall have

been started or completed.

Insurance Required

The District shall, during the Original Term and all Sublease Renewal Terms, cause the Project to be

kept continuously insured against such risks customarily insured against for such facilities and shall pay

(except as otherwise provided in the Sublease), as the same become due, all premiums in respect thereof, such

insurance to include the following policies of insurance:

(a) Insurance insuring the Project against loss or damage by fire, lightning and all other

risks covered by the extended coverage insurance endorsement then in use in the State in an amount

not less than the lesser of an amount equal to the Full Insurable Value thereof or the then applicable

purchase price under the Sublease (subject to reasonable loss deductible clauses) issued by such

insurance company or companies authorized to do business in the State as may be selected by the District. The Full Insurable Value of the Project may be determined from time to time at the request

of the District or the Trustee (but not less frequently than every three years) by an architect,

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contractor, appraiser, appraisal company or one of the insurers, to be selected, subject to the Trustee’s

approval, and paid by the District. The policy or policies of such insurance shall name the District and

the Corporation as insureds and the Trustee as loss payee, as their respective interests may appear, and

payments thereunder shall be payable to the Trustee. All payments received by the District under such

policy or policies that are required to be paid to the Trustee shall be paid to the Trustee. All proceeds

from such policies of insurance shall be applied as provided in the Sublease.

(b) (i) Comprehensive general accident and public liability insurance under which the

District, the Corporation and the Trustee are named as insureds, in an amount not less than $1,000,000

combined single limit for bodily injuries and property damage and (ii) coverage for losses arising from

the ownership, maintenance, operation or use of any motor vehicle, under which the District, the

Corporation and the Trustee are named as insureds, for bodily injuries.

(c) Workers’ compensation as required by the laws of the State.

(d) Owner’s and Mortgagee’s policies of title insurance insuring the Project in an

amount not less than the principal amount of the Bonds issued by a company authorized to issue such

insurance in the State. All proceeds from such policies of insurance shall be applied as provided in,

the Sublease.

Nothing in the Sublease shall be construed as preventing the District from satisfying the insurance

requirements set forth in the Sublease by using blanket policies of insurance provided each and all of the

requirements and specifications of the Lease respecting insurance are complied with.

Assignment and Subleasing by the District.

The Sublease may not be assigned by the District without the written consent of the Corporation and

the giving of prior written notice to the Trustee. However, the Project may be subleased by the District, in

whole or in part, without the consent of the Corporation, subject, however, to each of the following conditions:

(a) The Sublease and the obligation of the District to make Subrentals under the

Sublease, shall remain obligations of the District.

(b) The District shall within ten (10) days after the delivery thereof, furnish or cause to

be furnished to the Corporation and the Trustee a true and complete copy of such sublease.

(c) No sublease by the District shall cause the Project to be used for a purpose other than

a governmental or proprietary function authorized under the provisions of the constitution and laws of

the State of Missouri.

(d) Before entering into any sublease, the District shall obtain and file with the Trustee

and the Corporation an opinion from Bond Counsel to the effect that the sublease will not cause the

interest on the Bonds to become includable in gross income for federal and Missouri income tax

purposes.

Maintenance, Repairs and Modifications

The District shall, at its own expense, maintain, preserve and keep the Project in good repair, working

order and condition, and shall from time to time make all repairs, replacements and improvements necessary to

keep the Project in such condition. In addition, the District shall, at its own expense, have the right to remodel

the Project or to make additions, modifications and improvements thereto. All such additions, modifications and improvements shall thereafter comprise part of the Project and be subject to the provisions of the Sublease.

Such additions, modifications and improvements shall not in any way damage the Project nor cause it to be

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used for purposes other than those authorized under the provisions of municipal, state and federal law; and the

Project, upon completion of any additions, modifications and improvements made pursuant to this Section,

shall be of a value which is not less than the value of the Project immediately prior to the making of such

additions, modifications and improvements. Any property for which a substitution or replacement is made

pursuant to this Section may be disposed of by the District in such manner and on such terms as are determined

by the District. The District will not permit any mechanic’s or other lien to be established or remain against

the Project for labor or materials furnished in connection with any remodeling, additions, modifications,

improvements, repairs, renewals or replacements made by the District pursuant to this Section; provided that if

any such lien is established and the District shall first notify the Corporation and the Trustee of the District’s

intention to do so, the District may in good faith contest any lien filed or established against the Project and in

such event may permit the items so contested to remain undischarged and unsatisfied during the period of such

contest and any appeal therefrom unless the Corporation shall notify the District that, in the opinion of

Counsel, by nonpayment of any such item the interest of the Corporation in the Project will be materially

endangered or the Project or any part thereof will be subject to loss or forfeiture, in which event the District

shall promptly pay and cause to be satisfied and discharged all such unpaid items or provide the Corporation

and the Trustee with full security against any such loss or forfeiture, in form satisfactory to the Corporation.

The Corporation will cooperate fully with the District in any such contest, upon request and at the expense of

the District.

Liens

The District shall not, directly or indirectly, create, incur, assume or suffer to exist any mortgage,

pledge, lien, charge, encumbrance or claim on or with respect to the Project, other than the respective rights of

the Corporation and the Trustee and the District as provided in the Sublease. Except as expressly provided in

the Sublease, the District shall promptly, at its own expense, take such action as may be necessary to duly

discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim if the same shall arise at

any time. The District shall reimburse the Corporation and the Trustee for any expense incurred by it in order

to discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim.

District’s Option to Purchase Corporation’s Interest

The District shall have the option to purchase the Corporation’s interest in the Project under the Base

Lease and to terminate the Base Lease and the Sublease at any time during the Base Lease Term (subject to the

requirements of the following provisions of this subparagraph (a)) upon payment of the Bonds and all other

amounts due under the Indenture or providing funds for the Corporation to make provision for their payment

pursuant to the Indenture. Except as otherwise provided in this Section, the District shall give at least sixty

(60) days written notice to the Corporation and to the Trustee of its intent to execute the option and so

terminate the Sublease. The District shall exercise its option before the end of its then current fiscal year.

Payment of the final Subrentals and Additional Subrentals shall constitute exercise of the option granted under

the Sublease without further action by the District.

If the District receives notice of an Event of Default pursuant to the Indenture, the District shall also

have the option to purchase the Corporation’s interest in the Project under the Base Lease and to terminate the

Sublease upon payment of the Bonds and all other amounts due under the Indenture or providing funds for the

Corporation to make provision for their payment pursuant to the Indenture. The District shall give notice of its

intent to exercise the option provided for by this subparagraph (b) by giving notice thereof to the Corporation

and the Trustee not later than 30 days after receipt of notice of any such Event of Default. The District shall

make the payment provided for in this subparagraph (b) not later than 30 days after it has given notice of its

intent to exercise this option to the Corporation and the Trustee.

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Damage, Destruction and Condemnation

Unless the District shall have exercised its option to purchase the Corporation’s interest under the

Base Lease and terminate the Sublease as provided in the Sublease, if (i) any component of the Project is

destroyed (in whole or in part) or is damaged by fire or other casualty or (ii) title to or the temporary use of

such component of the Project or the interest of the District or the Corporation in the component of the Project,

shall be taken under the exercise of the power of eminent domain by any governmental body or by any person,

firm or corporation acting under governmental authority, the District shall cause the net proceeds of any

insurance or condemnation award (such net proceeds being the gross proceeds from such insurance or

condemnation award remaining after the payment of all expenses (including attorneys’ fees and any expenses

of the Corporation or the Trustee) incurred in the collection of such gross proceeds) to be applied to the prompt

repair, restoration, modification or improvement of the Project by the District.

If the District determines that the repair, restoration, modification or improvement of the Project is not

economically feasible or in the best interest of the District, then, in lieu of making such repair, restoration,

modification or improvement, the District shall promptly purchase the Corporation’s interest in the Base Lease

by paying the Bonds in full and all other amounts due under the Indenture or enabling the Corporation to make

provision for their payment and such net proceeds shall be applied by the District to such payment to the extent

required for such payment. Any balance of the Net Proceeds remaining after such work has been completed or

after the Bonds have been paid shall belong to the District.

Insufficiency of Net Proceeds

If the net proceeds are insufficient to pay in full the cost of any repair, restoration, modification or

improvement of any component of the Project in accordance with the Sublease, subject to appropriation of

sufficient funds, the District shall complete the work and pay any cost in excess of the amount of the net

proceeds, and the District agrees that if by reason of any such insufficiency of the net proceeds, the District

shall make any payments pursuant to the provisions in the Sublease, the District shall not be entitled to any

reimbursement therefor from the Corporation.

Events of Default Defined

The following shall be “Events of Default” under the Sublease and the terms “Events of Default” and

“Default” shall mean, whenever they are used in the Sublease, any one or more of the following events:

(a) Subject to the provisions of the Sublease, failure by the District to pay any

Subrentals, Additional Subrentals or other payment required to be paid under the Sublease at the time

specified in the Sublease.

(b) Failure by the District to observe and perform any covenant, condition or agreement

on its part to be observed or performed, other than as referred to in clause (a) of this Section, for a

period of thirty (30) days after written notice specifying such failure and requesting that it be remedied

has been given to the District by the Corporation (with a copy to the Trustee) or the Trustee, unless the

Trustee shall agree in writing to an extension of such time prior to its expiration; provided however, if

the failure stated in the notice cannot be corrected within the applicable period, the Trustee will not

unreasonably withhold its consent to an extension of such time if corrective action is instituted by the

District within the applicable period and diligently pursued until the default is corrected.

(c) The filing by the District of a voluntary petition in bankruptcy, or failure by the

District to promptly lift any execution, garnishment or attachment of such consequence as would

impair the ability of the District to carry on its operation, or adjudication of the District as a bankrupt, or assignment by the District for the benefit of creditors, or the entry by the District into an agreement

of composition with creditors, or the approval by a court of competent jurisdiction of a petition

A-20

applicable to the District in any proceedings instituted under the provisions of the federal bankruptcy

statute, as amended, or under any similar acts which may be enacted.

The provisions of this Section are subject to the following limitation: if by reason of force majeure the

District is unable in whole or in part to carry out its obligations under the Sublease, other than its obligation to

pay Subrentals and Additional Rentals with respect thereto, the District shall not be deemed in default under

the continuance of such inability, provided notice thereof is given to the Corporation and the Trustee.

Remedies on Default

Whenever any event of default referred to in the Sublease shall have happened and be continuing, the

Corporation shall have the right, at its option and without any further demand or notice, to take any one or

more of the following remedial steps:

(a) with or without terminating the Sublease take possession of the Project, in which

event the District shall take all actions necessary to authorize, execute and deliver to the Corporation

all documents necessary to vest in the Corporation for the remainder of the Corporation’s leasehold

term, all of the District’s interest in and to the Project, sell the Corporation’s (or its assignee’s) interest

in the Base Lease, or lease the Project and collect the rentals therefor, for all or any portion of the

remainder of its leasehold term upon such terms and conditions as it may deem satisfactory in its sole

discretion, with the District remaining liable for the difference between (i) the Subrentals, Additional

Subrentals and other amounts payable by the District under the Sublease during the Original Term or

then current Renewal Term, as the case may be, and (ii) the net proceeds or any purchase price, rents

or other amounts paid by the new purchaser, lessee or sublessee of the Project, and, provided further,

that, in such event, if the Corporation or the Trustee shall receive a payment for sale of its interest or

total Subrentals for sublease that are, after payment of the Corporation’s and Trustee’s expenses in

connection therewith, in excess of the principal amount of Bonds then Outstanding and the interest

due and to become due thereon and all other amounts due under the Indenture, then such excess shall

be paid to the District either by the Corporation, its assigns, or by its sublessee; or

(b) Take whatever action at law or in equity may appear necessary or desirable to collect

the Subrentals then due and thereafter to become due during the then current Term of the Sublease, or

enforce performance and observance of any obligation, agreement or covenant of the District under

the Sublease.

In the event the District fails to budget or appropriate funds to make the Subrentals, the Corporation

and the Trustee shall have the same remedies on default as set forth in the Sublease.

Any remedy taken by the Corporation or the Trustee under the Sublease shall be subject to the

requirement of the Base Lease that the Project shall always be used and operated for a public purpose subject

to the exceptions to such requirement set forth in the Base Lease.

Amendments, Changes and Modifications

Except as otherwise provided in the Sublease or in the Indenture, subsequent to the issuance of Bonds

and prior to all of the Bonds being paid in accordance with the Indenture and provision being made for the

payment of all sums payable under the Indenture, the Sublease may not be effectively amended, changed,

modified, altered or terminated without the concurring written consent of the Trustee given in accordance with

the provisions of the Indenture.

A-21

Tax Covenants

The District covenants and agrees that (1) it will comply with all applicable provisions of the Code,

including Sections 103 and 141 through 150, necessary to maintain the exclusion from gross income for

federal income tax purposes of the interest on the Series 2011 Bonds and (2) it will not use or permit the use of

any proceeds of the Series 2011 Bonds or any other funds of the District nor take or permit any other action, or

fail to take any action, if any such action or failure to take action would adversely affect the exclusion from

gross income of the interest on the Series 2011 Bonds.

SUMMARY OF THE BASE LEASE

The following is a summary of certain provisions of the Base Lease. The following is not a comprehensive description, however, and is qualified in its entirety by reference to the Base Lease for a full

recital of the provisions thereof.

Lease of the Project

The District demises and leases to the Corporation and the Corporation leases from the District, the

Project for a Base Lease Term commencing as of the date of the delivery of the Series 1996 Base Lease and

ending on June 30, 2040, for the rentals and other consideration set forth in accordance with the provisions of

the Base Lease.

Sublease of the Project

Simultaneously with the delivery of the Base Lease, the Corporation is subleasing the Project to the

District pursuant to the Sublease, but subject to the Indenture and the reservation of certain rights under the

Sublease.

Assignments, Subleases and Mortgage

The Corporation may (i) mortgage or otherwise assign its rights under the Base Lease or (ii) sublet the

Project (other than to the District) without the written consent of the District only (a) in connection with any

assignments of its rights under the Base Lease, (b) if the Sublease is terminated for any reason, (c) if an Event

of Default as defined in the Sublease has occurred, (d) to add security for the benefit of the Holders of the

Bonds, or (e) an event of nonappropriation pursuant to the Sublease has occurred.

Rent and Other Considerations

As and for rental under the Base Lease (“Base Lease Rent”), the Corporation shall:

(a) Simultaneously with the delivery of the Base Lease, issue, sell and cause to be

delivered to the purchaser thereof the Series 2011 Bonds in the principal amount, bearing interest,

maturing and having the other details as set forth in the Indenture;

(b) Deposit the proceeds of the sale of the Series 2011 Bonds as provided in the

Indenture; and

(c) Sublease the Project to the District.

The District and the Corporation agree and determine that the Base Lease Rent represents the fair

market value for the lease of the Real Estate under the terms of the Base Lease by the Corporation for the Base Lease Term. The District determines that the Base Lease Term is satisfactory and that the Base Lease Rent

A-22

represents satisfactory compensation to the District for the lease of the Real Estate under the terms of the Base

Lease for the Base Lease Term.

Additional Bonds

The Corporation may issue Additional Bonds for the purposes and upon the terms and conditions

provided in the Indenture. If the District is not in default under the Base Lease, the Corporation agrees, on

request of the District, from time to time, to use its best efforts to issue the amount of Additional Bonds

specified by the District (within the limits and under the conditions specified above and in the Indenture),

provided that (i) the terms, manner of issuance, purchase price and disposition of proceeds of the sale of such

Additional Bonds have been approved in writing by the District; (ii) the Corporation and the District shall have

entered into a Supplemental Base Lease and a Supplemental Sublease, if necessary, to provide for the lease of

any such additional improvements, repairs and extensions to the Corporation and the payment by the District

of Subrentals necessary to pay the principal of and interest on the Additional Bonds; and (iii) the Corporation

shall have otherwise complied with the provisions of the Indenture with respect to the issuance of such

Additional Bonds.

Termination

The Base Lease shall terminate upon the completion of the Base Lease Term; provided, however, in

the event the District makes all of the Subrental payments provided for in the Sublease and exercises thereafter

the option to purchase the remaining Base Lease Term of the Corporation under the Base Lease as provided in

the Sublease, then the Base Lease shall be considered assigned to the District and terminated through merger

of the leasehold interest with the fee interest if the District is the owner of the fee interest and elects to

terminate the leasehold interest so acquired from the Corporation. The Corporation agrees, upon such

assignment and termination or upon termination or completion of the Base Lease Term, to quit and surrender

the Project and that the Project as it then exists at the time of the termination of the Base Lease shall remain

thereon and title thereto shall vest in the District free and clear of the encumbrance of the Base Lease.

If an Event of Default under the Sublease occurs or if the District fails to renew the Sublease for any

Sublease Renewal Term for any reason, the Corporation shall have the right to possession of the Project for the

remainder of the Base Lease Term and shall have the right to sublease the Project or sell its leasehold interest

in the Project and in the Base Lease upon whatever terms and conditions it deems prudent. In such event, the

Corporation shall provide the District with adequate public liability insurance covering the Project for the

remainder of the Base Lease Term and will furnish the District with evidence thereof, provided that the

Corporation will be obligated to purchase such public liability insurance only from funds available therefor

after payment in full of the Series 2011 Bonds. In the event that the Corporation shall receive a payment for

the sale of its interest or total rental payments for subleasing that are, after the payment of the Corporation’s

expenses in connection therewith, including fees and expenses of the Trustee, in excess of the purchase price

applicable at the time of termination or default plus interest thereon at the interest rate per annum borne by the

Bonds (with amounts so received to be credited first to such interest and then to principal) and all amounts due

under the Indenture, then such excess shall be paid to the District by the Corporation, its assigns or its

sublessee.

Default by the Corporation

The District shall not have the right to exclude the Corporation from the Project or to take possession

of the Project (except pursuant to the Sublease) or to terminate the Base Lease prior to the termination of the

Base Lease Term upon any default by the Corporation under the Base Lease; except that if, upon exercise of

the option to purchase the Corporation’s interest in the Project granted to the District in the Sublease and after

the payment of the purchase price specified therein and the Bonds are no longer outstanding and the other sums payable under the Sublease and the Indenture, the Corporation fails to convey its interest in the Project to

the District pursuant to said option, then the District shall have the right to terminate the Base Lease, such

A-23

termination to be effective 30 days after delivery of written notice of such termination to the Corporation.

However, in the event of any default by the Corporation under the Base Lease, the District may maintain an

action, if permitted in equity, for specific performance.

Control of Project During Base Lease Term

During the Base Lease Term but subject to the terms of the Sublease, the Corporation shall have

complete control over the Project and its operation.

Amendments, Changes and Modifications

The Base Lease may not be effectively amended, changed, modified, altered or terminated, except as

provided in the Indenture.

* * * * *

APPENDIX B

DISTRICT’S AUDITED FINANCIAL

STATEMENTS FOR FISCAL YEAR 2010

COMMUNITY COLLEGE DISTRICT NEWTON AND MCDONALD COUNTIES,

MISSOURI (CROWDER COLLEGE) June 30, 2010 and 2009

Financial Statements and

Independent Auditors' Report

MENSE, CHURCHWELL & MENSE, P.C. Certified Public Accountants

COMMUNITY COLLEGE DISTRICT OF NEWTON AND MCDONALD COUNTIES, MISSOURI

(CROWDER COLLEGE)

TABLE OF CONTENTS June 30, 2010 and 2009

Page

College Officials 1

Management's Discussion and Analysis 2-10

Independent Auditor's Report 11-12

EXHIBIT

A Statements of Net Assets 13

B Statements of Revenues, Expenses, and Changes in Net Assets 14

C Statements of Cash Flows 15-16

Notes to Financial Statements 17-29

Federal Awards Information

Introduction and Background of Student Financial Assistance (SFA) Programs 30

Schedule of Expenditures of Federal Awards 31

Notes to Schedule of Expenditures of Federal Awards 32

Compliance Reports

Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards

Independent Auditor's Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control Over Compliance in Accordance With OMB Circular A-133

33-34

35-36


(CROWDER COLLEGE)

TABLE OF CONTENTS June 30, 2010 and 2009

Page

Summary Schedule of Prior Audit Findings 37

Schedule of Findings and Questioned Costs

38-39


(CROWDER COLLEGE)

COLLEGE BOARD OF TRUSTEES

President Andy Wood

Vice-President Diane Andris

Secretary Rick Butler

Treasurer Vickie Barnes

Member James Tatum

Member Al Chapman

COLLEGE PRESIDENT

Alan D. Marble, PhD

DEAN OF BUSINESS AND SUPPORT SERVICES

Ronald A. Granger

1


(CROWDER COLLEGE) Management's Discussion and Analysis

For the Year Ended June 30, 2010

Overview of Financial Statements and Financial Analysis

This discussion and analysis of the Crowder College (the College) financial statements provides an overview of the College's financial performance during the year ended June 30, 2010. A comparative analysis with the prior year is presented where appropriate.

Using this Report

In 1999, the Governmental Accounting Standards Board (GASB) released Statement No. 34, Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments and Statement No. 35, Basic Financial Statements and Management's Discussion and Analysis for Public Colleges and Universities. The changes embodied in the GASB 34 and 35 reporting guidelines are intended to create a financial report that is similar to those found in the corporate world. In doing so, several changes from past year's are worth noting:

• The depreciation of capital assets will be calculated and reported.

• The Statement of Net Assets replaces the former Balance Sheet.

• Fund accounting is replaced by business-type reporting similar to the methods used by private-sector institutions.

• The Statement of Revenues, Expenses, and Changes in Net Assets replace the Statement of Changes in Fund Balances and Statement of Current Funds Revenues, Expenditures, and Other Changes in Fund Balances.

• A Statement of Cash Flows presents the College's cash flow by defined category.

Historically, the College has followed the accrual method of accounting in reporting revenues and expenses when they occur rather than when cash is received or expended. The new format continues the requirement to report on the accrual basis of accounting.




Financial Highlights

At June 30, 2010 the College's net assets were $37,359,628 representing an increase of $3,983,008 (+11.93%) over the prior year. These net assets are comprised of Capital assets, net of related debt $23,084,045, Restricted assets $5,248,171 and Unrestricted assets $9,027,412.

Operating revenues totaled $23,595,947, which included tuition and fees $1,293,644, Federal grants and contracts $14,493,075, State and local grants and contracts $4,030,375, Auxiliary enterprise income $3,020,673 and other revenues $758,180.

Operating expenses amounted to $26,201,912, resulting in an operating loss of $2,605,965 before the inclusion of Non-operating revenues, which consist of State appropriations of $2,303,604, Local property taxes of $3,008,497, Private gifts of $320,510, Investment income of $44,479, Interest expense on capital asset-related debt of $253,976, Customized training of $873,448 and other non-operating revenues of $292,411. The current year operating loss of $2,605,965 and net non-operating revenue of $6,588,973 resulted in an increase in net assets of $3,983,008, which includes a depreciation expense of $1,506,630.

Statement of Net Assets Fiscal Year End

ASSETS June 30, 2010 June 30, 2009

Current assets $ 11,734,859 $ 10,878,284 Capital assets, net of accumulated depreciation 27,398,185 23,692,098 Other Non current assets 6,573,998 6,540,361

Total Assets 45,707,042 41,110,743 LIABILITIES

Current liabilities 2,960,764 2,192,123 Non current liabilities 5,386,650 5,542,000

Total Liabilities 8,347,414 7,734,123 NET ASSETS

Invested in capital assets, net of related debt 23,084,045 19,247,956 Restricted 5,248,171 5,209,151 Unrestricted 9,027,412 8,919,513

TOTAL NET ASSETS $ 37,359,628 $ 33,376,620

3




Net Assets FY 2010

Invested in capital assets, net of related debt 0 Restricted IMUnrestricted

The following table summarizes and compares the College's fiscal year end revenues, expenses, and changes in net assets.

Revenues, Expenses, and Changes in Net Assets Fiscal Year End

June 30, 2010 June 30, 2009

Operating Revenues $ 23,595,947 $ 19,290,348 Operating Expenses (26,201,912) (25,858,769)

Operating Loss (2,605,965) (6,568,421)

Nonoperating Revenues & Expenses 6,588,973 7,800,220

Increase in Net Assets $ 3,983,008 $ 1,231,799

4




Operating Revenues

Tuition, fees, and auxiliary revenues are reported only to the extent billed to students. Student financial aid provided by federal and state sources are reported as federal and state grants and contracts revenue rather than tuition, fees, or auxiliary revenues.

Operating

17%

Revenues by Source FY 2010

13% 3% 5%

-d41111111Orr

61%

Student tuition

Federal grants

❑ State and local

and fees (net of scholarship allowance of $9,305,254)

and contracts

grants and contracts

Auxiliary enterprises

❑ Other revenues

Non-Operating

4%

1%

5%—

Revenues by Source FY 2010

4% 12%

-agillIlli"Iall 32%

42%

o State appropriations

❑ Private gifts

O Interest on capital asset-related

FM Other nonoperating revenues

expense

Local property taxes

la Investment income, net of investment

debt 0 Customized training

Total Revenues FY 2010 1% -1 % 0/ 0% 3% 3 /0 4 0

8%

10%

13%

48%

❑ Student tuition and fees (net of scholarship allowance of $9,305,254) OFederal grants and contracts ❑ State and local grants and contracts IDAuxiliary enterprises DState appropriations

Local property taxes Private gifts

❑ Investment income (net) DInterest (capital asset-related debt) ❑ Customized training ❑ 0ther revenues

Operating Expenses FY 2010 2%

Compensation and benefits Travel ■Contracted services

13Supplies and materials IjUtilities ODepreciation

Scholarsh ips DRepairs and maintenance MOther




Operating Expenses

To comply with the new audit guidelines, Crowder College elected to use the natural classification for operating expenses (as did all other Missouri institutions of higher education). In previous years, the College reported using functional classification of expenses (reporting expenses for

6




instruction, student services, scholarships, etc.). Irrespective of the reporting format, there were no significant changes in operating expenses between 2010 and 2009.

Statement of Cash Flows

The primary purpose of the Statement of Cash Flows is to provide information about the cash receipts and disbursements of an entity during a period. This statement also aids in the assessment of and entity's ability to generate future net cash flows, ability to meet obligations as they come due, and needs for external financing.

Cash Flows (end of year)

Cash Flows From Operating Activities

June 30, 2010 June 30, 2009

Operating activities $ (1,588,762) $ (5,967,058) Non capital financing activities 5,969,501 7,469,498 Capital and related financing activities (4,740,183) (1,819,990) Investing activities 44,479 141,137

Net change in Cash (314,965) (176,413)

Cash, beginning of year 12,742,955 12,919,368

Cash, end of year $ 12,427,990 $ 12,742,955

Cash used in operating activities amounted to $1,588,762, which resulted from receipts from tuition, fees, state and federal grants and contracts, and auxiliary enterprise charges minus payments to employees and suppliers. Cash provided by non-capital financing activities including state appropriations, local property taxes, donations, and other receipts totaling $5,969,501.

7




Capital Assets

As of June 30, 2010, the College had recorded $41,743,887 in gross capital assets and $13,159,842 in accumulated depreciation that resulted in $28,584,045 in net capital assets.

Capital Assets, Net June 30, 2010

Cost Accumulated Depreciation

Net Capital Assets

Land $ 1,185,860 $ - $ 1,185,860 Land improvements 3,259,064 994,626 2,264,438 Buildings and improvements 28,034,454 8,782,813 19,251,641 Vehicles 908,904 634,096 274,808 Equipment and machinery 4,657,798 2,645,374 2,012,424 Furniture and fixtures 136,346 102,933 33,413 Works of art and collections 47,500 - 47,500 Construction in progress 3,513,961 - 3,513,961

Net carrying amount $ 41,743,887 $ 13,159,842 $ 28,584,045

The construction of a new two-story Academic/Library building began in early 2007 and completed in the summer of 2008. To fund the construction in progress, the College issued $5,735,000 Series 2006 Leasehold Revenue Bonds. The bonds carry interest rates ranging from 3.80% to 4.65%, with the final payment due in 2026.

The construction of the Health and Science Building began in early 2009 and will be complete in the fall semester of 2010. The funding for this building will come from a combination of FEMA funds ($2.18 million), private donations, and capital funds from the College reserves. The projected cost of this construction is $5.1 million.

8




Economic Outlook

The economic outlook for the state and region remains grim. Economic growth is virtually stagnant, unemployment rates are high, and there is still a very real threat of future problems due to business closings, credit difficulties, and an unstable housing market. As stated in previous years, the College's enrollment totals are typically tied closely to the economy with the dominant trend reflecting an inverse relationship to the relative vitality of business and consumer activity. Historically, we have witnessed enrollment increases in periods of recession or slow economic growth (due to rising unemployment) and decreases or flat enrollments during times of robust economic growth (due to the ample supply of jobs). Over the past five years the College has experienced a period of rapid and unprecedented enrollment growth, and we expect this trend to continue as the economy regains its footing.

The current state plan for higher education funding provides for a 5% cut in the upcoming year and suggests cuts of 15% to 25% in base funding the following year as American Recovery and Reinvestment Act (ARRA) funds dry up. The state will utilize ARRA funding to limit the cuts to 5% for 2010-2011, but that is being done with the stipulation that colleges and universities will not raise tuition rates or fees. Further, we anticipate that local tax revenue will remain flat until property values eventually correct from the chilling effects of the prolonged recession.

Construction of the Health and Science Building will be complete in the fall semester of 2010. This building will add vitally needed lab space for both physical and biological sciences, new multi-use classrooms for science and nursing, and new offices for the science and nursing faculty/staff. This building will also serve as a tornado shelter, with a capacity of approximately 3,000 people. The funding for this building will come from a combination of FEMA funds ($2.18 million), private donations, and capital funds from the College reserve. The projected cost of construction is $5.1 million.

Even with the addition of the new Health and Science Building the College continues to need additional space due to rapid and sustained enrollment growth. Currently, ground breaking for the first phase of the MARET Center is scheduled for early 2011 (MARET - Missouri Alternative/Renewable Energy Technology). The MARET Center will help expand and support the renewable energy industry in the region by providing space for training in the application of emerging technologies, hands on applied research, new product design, and a full array of instructional programs in all areas of "green" energy production, storage, and distribution. Funding for construction of the MARET Center is anticipated to come from a combination of state and federal appropriations, grants, and private donations.

9




We also continue to plan for the construction of a facility in McDonald County. Accordingly, the College has purchased 40 prime acres on Highway 71 as the site for this facility. The property has access to a rural water system but the rural sewer system is not yet available; however, the lines are currently under construction and the system should reach College property sometime in 2011.

In addition, we need to construct a new facility at our off-campus location in Webb City due to very rapid enrollment growth at that location. Even though we were able to add a new science lab at this campus last year, the other classes continue to be offered in the old part of the Armory building that we acquired over a decade ago. The building is severely over-crowded because enrollment has now grown to over 700 students per semester. So, we are looking at various building alternatives to help solve the growth problems in Webb City. Our Cassville — Watley Center campus continues to grow and the new buildings we currently utilize are proving to be adequate for the near term. And, the Moss Center in Nevada is currently capable of meeting the needs of its growing enrollment, but we will need to monitor the campus carefully as programs continue to develop and mature.

Despite the challenges listed above, the College anticipates continued success in the delivery of quality educational programming. The College maintains strong fund balances, employs talented and dedicated personnel, and enjoys broad community support in a region that is known for its grit and tenacity.

Acknowledgements

The accurate preparation of the College's annual financial statement was made possible by the dedicated service of the Accounting and Business office personnel. These talented individuals have our sincere appreciation for a job well done.

ie,,,_as1

Alan D. Marble, Ph.D. Ronald A. Granger President Dean of Business & Support Services

MENSE, CHURCHWELL & MENSE, P.C. CERTIFIED PUBLIC ACCOUNTANTS

427 Wall Street, P.O. Box 818 Joplin, Missouri 64802-0818 Telephone 417-623-2505

Fax 417-623-2507

EUGENE M. MENSE, JR., C.P.A. (1929 - 2006) CHRIS D. CHURCHWELL, C.P.A. EUGENE M. MENSE III, C.P.A.

UNQUALIFIED OPINION ON FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULE OF EXPENDITURES OF FEDERAL

AWARDS -- GOVERNMENT ENTITY

INDEPENDENT AUDITOR'S REPORT

To the Board of Trustees Community College District of Newton. and McDonald Counties, Missouri

We have audited the accompanying financial statements of the governmental activities and the business-type activities of Community College District of Newton and McDonald Counties, Missouri ("Crowder College"), as of and for the years ended June 30, 2010 and 2009, which collectively comprise the Crowder College's basic financial statements as listed in the table of contents. These financial statements are the responsibility of Crowder College's management. Our responsibility is to express opinions on these financial statements based on our audit.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinions.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and the business-type activities of Crowder College, as of June 30, 2010 and 2009, and the respective changes in financial position and cash flows, where applicable, thereof for the years then ended in conformity with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report dated December 3, 2010, on our consideration of Crowder College's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be assessing the results of our audits.

-11-

The management's discussion and analysis on pages 2 through 10 are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it.

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Community College District of Newton and McDonald Counties, Missouri's basic financial statements. The introductory section to SFA Programs is presented for purposes of additional analysis and is not a required part of the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required part of the basic financial statements of Community College District of Newton and McDonald Counties, Missouri. The introductory section to SFA Programs and the schedule of expenditures of federal awards have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects, in relation to the basic financial statements taken as a whole.

MENSE, CHURCHWELL & MENSE, P.C. Certified Public Accountants

Joplin, Missouri December 3, 2010

Exhibit A


(CROWDER COLLEGE) Statements of Net Assets

As of June 30, 2010 and 2009

2010 2009 ASSETS

Current assets Cash and cash equivalents $ 7,179,819 $ 7,533,804 Tuition and fees receivable,

(net allowance of $150,039 and 41,907, respectively) 1,350,349 768,042 Other receivables 2,123,132 1,371,557 Note receivable 400,000 400,000 Inventories 598,963 709,488 Prepaid items 82,596 95,393

Total Current Assets 11,734,859 10,878,284

Noncurrent assets Restricted cash and cash equivalents 5,248,171 5,209,151 Bond issuance costs, net of accumulated amortization 139,967 145,350 Land 1,185,860 1,185,860 Capital assets, net of accumulated depreciation 27,398,185 23,692,098

Total Noncurrent Assets 33,972,183 30,232,459

TOTAL ASSETS 45,707,042 41,110,743

LIABILITIES Current liabilities:

Accounts payable 1,851,100 1,119,029 Accrued payroll and liabilities 179,015 224,108 Deferred tuition and fees revenue 473,869 395,152 Agency funds 208,888 218,830 Bond interest payable 102,892 105,004 Long-term liabilities - current portion 145,000 130,000

Total Current Liabilities 2,960,764 2,192,123

Noncurrent liabilities: Rental deposits 31,650 42,000 Bonds payable 5,355,000 5,500,000

Total noncurrent liabilities 5,386,650 5,542,000

TOTAL LIABILITIES 8,347,414 7,734,123

NET ASSETS Invested in capital assets, net of related debt 23,084,045 19,247,956 Restricted 5,248,171 5,209,151 Unrestricted 9,027,412 8,919,513

TOTAL NET ASSETS $ 37,359,628 $ 33,376,620

The accompanying notes are an integral part of these financial statements.

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Exhibit B


(CROWDER COLLEGE) Statements of Revenues, Expenses, and Changes in Net Assets

For the Years Ended June 30, 2010 and 2009

2010 2009 OPERATING REVENUES

Student tuition and fees (net of scholarship allowance of $9,305,254 and $5,485,714, respectively) $ 1,293,644 $ 2,050,544 Federal grants and contracts 14,493,075 10,094,948 State and local grants and contracts 4,030,375 2,946,218 Auxiliary enterprises 3,020,673 2,876,536 Gain (loss) on sale of assets 34,620 66,218 Other revenues 723,560 1,255,884

Total Operating Revenues 23,595,947 19,290,348

OPERATING EXPENSES

Compensation and benefits 15,687,681 15,017,708 Travel 456,257 641,481 Contracted services 1,582,792 1,733,572 Supplies and materials 3,404,597 3,209,010 Utilities 736,114 626,441 Depreciation 1,506,630 1,091,733 Scholarships 195,931 210,432 Repairs and maintenance 565,842 450,620 Other 2,066,068 2,877,772

Total Operating Expenses 26,201,912 25,858,769

Operating Loss (2,605,965) (6,568,421)

NONOPERATING REVENUES (EXPENSES)

State appropriations 2,303,604 2,559,385 Local property taxes 3,008,497 2,947,867 Private gifts 320,510 1,449,971 Investment income, net of investment expense 44,479 141,137 Interest on capital asset-related debt (253,976) (261,844) Customized training 873,448 592,566 Other nonoperating revenues 292,411 371,138

Total nonoperating revenues 6,588,973 7,800,220

Increase in net assets 3,983,008 1,231,799

NET ASSETS

Net assets - Beginning of year 33,376,620 32,144,821

Net assets - End of year $ 37,359,628 $ 33,376,620

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Exhibit C


(CROWDER COLLEGE) Statements of Cash Flows


2010 2009 Cash Flows From Operating Activities

Tuition and fees $ 10,095,372 $ 7,094,898 Scholarship allowance (9,305,254) (5,485,714) Federal grants and contracts 13,947,046 10,080,462 State and local grants and contracts 3,872,945 2,946,218 Food Service 564,755 568,181 Residence Halls 296,947 285,498 Bookstore 2,158,971 2,022,857 Scholarships (195,931) (210,432) Other receipts 676,028 1,192,778 Payments to employees (15,725,984) (15,417,834) Payments to suppliers (7,973,657) (9,043,970)

Net cash used in operating activities (1,588,762) (5,967,058)

Cash Flows From Noncapital Financing Activities State appropriations 2,303,604 2,559,385 Tax Levy 3,008,497 2,947,867 Other receipts 336,890 512,275 Endowment gifts 320,510 1,449,971

Net cash provided by noncapital financing activities 5,969,501 7,469,498

Cash Flows From Capital and Related Financing Activities Purchase of capital assets (4,356,207) (1,443,146) Principal paid on capital debt and lease (130,000) (115,000) Interest paid on capital debt and lease (253,976) (261,844)

Net cash used in capital activities (4,740,183) (1,819,990)

Cash Flows From Investing Activities Interest on investments 44,479 141,137

Net cash provided by investing activities 44,479 141,137

Net change in cash (314,965) (176,413)

Cash and cash equivalents, beginning of year 12,742,955 12,919,368

Cash and cash equivalents, end of year $ 12,427,990 $ 12,742,955

Reconciliation of cash and cash equivalents to the Statement of Net Assets

Cash and cash equivalents $ 7,179,819 $ 7,533,804 Restricted cash and cash equivalents 5,248,171 5,209,151

Total cash and cash equivalents $ 12,427,990 $ 12,742,955


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Exhibit C


(CROWDER COLLEGE) Statements of Cash Flows (Continued)


2010 2009 Reconciliation of Net Operating Revenues (Expenses) to Net Cash

Used in Operating Activities Operating loss $ (2,605,965) $ (6,568,421) Depreciation expense 1,506,630 1,091,733 (Gain) loss on sale of assets (34,620) (66,218) Change in current assets and liabilities

Receivables, Net (1,333,882) (558,003) Inventory 110,525 (325,092) Prepaid items 12,797 16,670 Accounts payable and accrued liabilities 686,978 394,009 Deferred revenue 78,717 39,051 Agency funds (9,942) 9,213

Net cash used in operations $ (1,588,762) $ (5,967,058)

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(CROWDER COLLEGE) Notes to Financial Statements

June 30, 2010 and 2009

1. SIGNIFICANT ACCOUNTING POLICIES

Reporting Entity - Crowder College is a state-supported public institution offering programs leading to the associate's degree.

For financial reporting purposes, the College includes all funds and account groups and all entities over which the College exercises or has the ability to exercise oversight authority. The significant accounting policies followed by the College are presented below to enhance the usefulness of the financial statements to the reader.

Financial Statement Presentation - In June 1999, GASB approved Statement No. 34 "Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments". This was followed by Statement No. 35 "Basic Financial Statements and Management's Discussion and Analysis for Public Colleges and Universities". The financial statement presentation required by GASB No. 34 and No. 35 provides a comprehensive, entity-wide perspective of the College's assets, liabilities, and net assets, revenues, expenses and changes in net assets, and cash flows, and replaces the fund-group perspective that was previously required.

Basis of Accounting — For financial reporting purposes, the College is considered a special-purpose government engaged in business-type activities. The College has the option to apply all Financial Accounting Standards Board (FASB) pronouncements that were issued after November 30, 1989, unless the FASB pronouncement conflicts with or contradicts a GASB pronouncement. The College has elected not to apply FASB pronouncements after the applicable date. Accordingly, the College's financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting. The accounting objectives of this measurement focus are the determination of changes in net assets, financial position, and cash flows. All assets and liability, whether current or noncurrent, are reported. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. All significant intra-agency transactions have been eliminated.

Cash and Cash Equivalents — For purpose of reporting cash flows on the Statement of Cash Flows, all cash and investments are considered to be cash equivalents. At June 30, 2010 and 2009, cash equivalents consisted primarily of certificates of deposit, U.S. Treasury Bills and U.S. Treasury Reserve investments.

Accounts Receivable — Accounts receivable consist of tuition and fee charges to students. Accounts receivable also include amounts due from the Federal government, state and local governments, or private sources, in connection with reimbursements of allowable expenditures made pursuant to the College's grants and contracts. Accounts receivable are recorded net of estimated uncollectible amounts.

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June 30, 2010 and 2009

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Inventories — Inventories are stated at the lower of cost or market with cost determined primarily on a first-in, first-out basis. Market is considered to be net realizable value.

Capitalization of assets — Vehicles, equipment, and furnishings with a cost of less than $2,500 per item are expensed directly. Major improvements and building additions with a cost of less than $10,000 are also expensed directly. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 50 years for buildings, 15 years for land improvements, and 5 to 10 years for vehicles, equipment, and furnishings. Infrastructure assets such as roads, bridges, sewers, lighting systems and sidewalks are not included under the transition provisions of GASB No. 34.

Compensated Absences - The College follows the practice of accruing the costs of employees' vacation pay in the period the benefits are earned.

Deferred Revenues — Deferred revenues consist of advanced tuition and fees not earned during the current year.

Noncurrent Liabilities — Noncurrent liabilities include (1) principal amounts of revenue bonds payable with maturities greater than one year; and (2) dorm rental deposits that will not be repaid within the next fiscal year.

Net Assets — The College's net assets are classified as follows:

Invested in capital assets, net related debt — This represents the College's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent, debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt.

Restricted net assets — expendable — Restricted expendable net assets include resources in which the College is legally or contractually obligated to spend resources in accordance with restrictions imposed by third parties.

Unrestricted net assets — Unrestricted net assets represent resources derived from student tuition and fees, state appropriations, and sales and services from auxiliary enterprises. These resources are used for transactions relating to the educational and general operations of the College, and may be used at the discretion of the governing board to meet current expenses for any purpose. These resources also include auxiliary enterprises, which are substantially self-supporting activities that provide services for students, faculty and staff.

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June 30, 2010 and 2009

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Classification of Revenues — The College has classified its revenues as either operating or nonoperating revenues according to the following criteria:

Operating revenues — Operating revenues include activities that have the characteristics of exchange transactions, such as (1) student tuition and fees, (2) sales and services of auxiliary enterprises, and (3) most Federal, state and local grants and contracts and Federal appropriations.

Non-Operating revenues — Non-operating revenues include activities that have the characteristics of non-exchange transactions, such as gifts and contributions, and other revenue sources that are defined as non-operating revenues by GASB No. 9, Reporting Cash flows of Proprietary and Non expendable Trust Funds and Government entities That Use Proprietary Fund Accounting, and GASB No. 34, such as State appropriations and investment income. Contributions, including unconditional promises to give, are recognized as revenues in the period received

Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of the revenues and expenses during the reported period. Actual results could differ from those estimates.

Scholarship Allowances and Student Financial Aid — Certain governmental grants, such as Pell grants and other federal, state or nongovernmental programs, are recorded as either operating or non-operating revenues in the College's financial statements. To the extent that revenues from such programs are used to satisfy tuition and fees and certain other student charges, the College has recorded a scholarship discount and allowance.

Income Taxes - The College is exempt from federal income taxes under Section 501 (c)(3) of the Internal Revenue Code.

2. DEPOSITS AND INVESTMENTS

Custodial Credit Risk - For an investment, custodial rate risk is the risk that, in event of failure of the counter party, the College will not be able to recover the value of its investments or collateral securities that are in possession of an outside party. State statutes and Board policy require that the College's deposit with financial institutions must be collateralized in the name of the College by the trust department of a bank that does not hold the collateralized deposits.

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June 30, 2010 and 2009

2. DEPOSITS AND INVESTMENTS (CONTINUED)

As of June 30, 2010 and 2009, respectively, the carrying amount of the College's deposits was $13,596,568, and $13,584,944. Of the carrying amount as of June 30, 2010 and 2009, respectively, $4,250,335 and $3,774,273 was covered by federal depository insurance, $10,281,291 and $9,230,607 was covered by collateral held by the respective banks, and $2,572,067 and $574,805 was invested in U.S. Treasury Notes, U.S. Treasury Reserve investments and Federal Home Loan Bonds. At June 30, 2010, the College's bank balances were fully secured by federal depository insurance or fully collateralized with securities held by the College's safe keeping agent pledged in the name of the College. At June 30, 2009, $5,259 of the College's bank balances was unsecured. At various times during 2010 and 2009, the deposits exceeded coverage.

Interest Rate Risk - The College does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. However, management generally follows the practice of purchasing securities with staggered maturity dates, all of which are less than 12 months.

Credit Risk - State law permits public colleges to invest in obligations of the State of Missouri or U.S. Government and obligations of government agencies. The College's investments are made up solely of U.S. Treasury Bills and U.S. Treasury Reserve investments. Obligations of the U.S. government or obligations explicitly guaranteed by the U.S. government are not considered to have credit risk and do not require disclosure of credit quality.

3. OTHER RECEIVABLES

Other receivables as of June 30, 2010 and 2009 consisted of the following:

2010 2009

Grants receivable 580,431 $ 327,516 Federal funds 1,512,692 966,664 Foundation receivable 29,426 77,377 Other receivables 583

$ 2,123,132 $ 1,371,557



June 30, 2010 and 2009

4. NOTE RECEIVABLE

Crowder College sold real estate located in downtown of City of Neosho, Newton County, Missouri, to the Talkington Foundation, Inc., a not-for-profit corporation for $450,000 on October 6, 2008. One thousand dollars ($1,000) was paid upon the execution of the sale agreement and the additional forty-nine thousand dollars ($49,000) was paid upon closing of this agreement, while the remaining balance is evidenced by a non-interest bearing promissory note, secured by a first Deed of Trust on the above-described real estate, of $400,000 payable on October 6, 2011. Fiscal year 2009 has been restated to reflect the gain on sale and note receivable on the above-described real estate.

5. ACCRUED LIABILITIES

Accrued vacation and related liabilities as of June 30, 2010 and 2009 consisted of the following:

2010 2009

Accrued vacation payable $ 154,399 $ 178,565 Payroll deductions payable (prepaid) 24,616 38,752 Sales tax payable 6,791

$ 179,015 $ 224,108

6. DEFERRED REVENUE

Deferred revenues are fees collected for the summer and fall semesters, which are regarded as revenue of the upcoming fiscal year.



June 30, 2010 and 2009

7. RESTRICTED FUNDS - NET ASSETS

of the following:

2010 2009

Restricted net assets at June 30, 2010 and 2009 consisted

Restricted by third parties Investments with trustees $ 573,500 $ 574,805 Work Study, Pell Grants and other 58,325 18,000

631,825 592,805

Designated by College Board of Trustees Unemployment compensation 50,000 50,000 Building and equipment 3,168,490 3,168,490 Elsie Plaster building repair 3,958 3,958 MSLP repayment contingency fund 1,916 1,916 Matching state maintenance and repair 480,000 480,000 Compensation and benefit protection fund 500,000 500,000 System maintenance and improvement 411,982 411,982

4,616,346 4,616,346

TOTAL $ 5,248,171 $ 5,209,151

Crowder College elected on November 3, 1977, to be self-insured rather than to participate in the unemployment reserve fund administered by the State of Missouri.

The amount stipulated by the Board of Trustees as adequate to cover potential claims is $50,000. Restricted Current Funds include $50,000 restricted for the unemployment self-insured plan.

8. CAPITAL ASSETS

Capital assets are reported at actual or estimated historical cost based on appraisals or deflated current replacement cost. Contributed assets are reported at estimated fair value at the time received. Capitalization policies, depreciation methods, and estimated useful lives of capital assets are described in Note 1.



June 30, 2010 and 2009

8. CAPITAL ASSETS (CONTINUED)

Capital assets activity for the year ended June 30, 2010 was:

Beginning Balance Additions

Transfers and Adjustments Deductions

Ending Balance

Cost of fixed assets Land $ 1,185,860 $ - $ 1,185,860 Land improvements 2,916,921 288,063 54,080 3,259,064 Buildings and improvements 26,310,347 409,829 1,314,278 28,034,454 Vehicles 1,217,435 182,450 (146,310) (344,671) 908,904 Equipment and machinery 3,298,042 545,586 814,170 4,657,798 Furniture and fixtures 93,078 2,554 40,714 136,346 Works of art and collections 47,500 47,500 Construction in progress 654,750 3,159,244 (300,033) 3,513,961

35,723,933 4,587,726 2,076,932 (644,704) 41,743,887

Less accumulated depreciation: Land improvements $ 778,135 $ 212,886 $ 3,605 $ - $ 994,626 Buildings and improvements 7,550,280 571,412 661,121 8,782,813 Vehicles 1,072,018 89,375 (182,626) (344,671) 634,096 Equipment and machinery 1,392,057 624,223 629,094 2,645,374 Furniture and fixtures 53,485 8,734 40,714 102,933

10,845,975 1,506,630 1,151,908 (344,671) 13,159,842

Net carrying amount $24,877,958 $ 3,081,096 $ 925,024 $ (300,033) $ 28,584,045



June 30, 2010 and 2009

8. CAPITAL ASSETS (CONTINUED)

Capital assets activity for the year ended June 30, 2009 was:

Beginning Balance Additions

Transfers and Adjustments Deductions

Ending Balance

Cost of fixed assets Land $ 1,185,860 $ $ $ $ 1,185,860 Land improvements 2,866,562 50,359 2,916,921 Buildings and improvements 18,139,387 379,911 8,157,170 (366,121) 26,310,347 Vehicles 1,125,865 91,570 1,217,435 Equipment and machinery 3,996,085 735,257 (1,433,300) 3,298,042 Furniture and fixtures 93,078 93,078 Works of art and collections 47,500 47,500 Construction in progress 8,157,170 654,750 (8,157,170) 654,750

35,611,507 1,911,847 (1,799,421) 35,723,933 Less accumulated depreciation:

Land improvements $ 585,073 $ 193,062 $ $ $ 778,135 Buildings and improvements 7,062,518 520,101 (32,339) 7,550,280 Vehicles 1,019,344 52,674 1,072,018 Equipment and machinery 2,507,769 317,588 - (1,433,300) 1,392,057 Furniture and fixtures 45,177 8,308 53,485

11,219,881 1,091,733 (1,465,639) 10,845,975

Net carrying amount $ 24,391,626 $ 820,114 $ (333,782) $ 24,877,958

9. BONDS PAYABLE

During the year ending June 30, 1990, Crowder College entered into a contract of approximately $1.8 Million to construct a new community center. The building was financed by a bond issue from Crowder College Facilities Corporation, of approximately $1.4 million with the remainder provided by Crowder College. Crowder College Facilities Corporation is the legal owner of the building and has entered into a lease with Crowder College. The bonds have a 20 years life, with a call provision. Upon retirement or call, Crowder College will transfer funds to Crowder College Facilities Corporation for the balance then due. Crowder College entered into a lease of the building for an initial term through June 30, 1990, with 20 annual renewal terms. The lease called for payments in amounts to satisfy the principal and interest obligations of Crowder College Facilities Corporation.

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June 30, 2010 and 2009

9. BONDS PAYABLE (CONTINUED)

On May 28, 2002, the College issued $765,000 Crowder College Facilities Corporation Leasehold Refunding Revenue Bonds, Series 2002, to provide for the refunding of outstanding Crowder College Facilities Corporation Leasehold Refunding Revenue Bonds, Series 1996. Proceeds from prior issue debt service retirement funds were used to pay cost of issuance and to establish debt service reserve funds for the 2002 issue.

The Series 2002 bonds carried interest rates ranging from 2.00% to 4.75%. The net proceeds from the issuance of the Series 2002 bonds were used to purchase U.S. Government securities and those securities were deposited in an irrevocable trust with an escrow agent to provide debt service payments until the bonds were called, subsequent to year end.

As part of the transaction to refinance the Series 1996 bonds, Crowder College deposited funds with the bond issue trustee. These funds were being held in the event future payments made by Crowder College were not sufficient to meet future obligations due under the bond issue. Earnings from these funds can be used to offset current amounts due from Crowder College, to satisfy the principal and interest obligations. On March 5, 2009, the deposited funds of $77,187 were refunded to Crowder College.

On September 6, 2006, the College issued $5,735,000 Crowder College Facilities Corporation Leasehold Revenue Bonds, Series 2006, to provide funds to finance the construction, furnishing and equipping of a library/academic building and conference center, to fund a debt service reserve for the Series 2006 Bonds and to provide funds to pay costs related to the issuance of the Series 2006 Bonds. The bonds carry interest rates ranging from 3.80% to 4.65%.

As part of the Series 2006 bond issue, Crowder College deposited funds with the bond issue trustee. A debt service reserve fund was established in the event future payments made by Crowder College are not sufficient to meet obligations due under the bond issue. At June 30, 2010 and 2009, there was $573,500 and $574,805 respectively, being held by the trustee in the construction fund and the reserve fund. These funds have been reflected as restricted cash and cash equivalents in noncurrent assets.

Bonds payable represents the outstanding balance on the Series 2006 bond issue at June 30, 2010 and 2009. The arrangements described above concerning the lease arrangements between Crowder College Facilities Corporation and Crowder College have been incorporated into the Series 2006 bond issue. The Series 2006 bonds have a 20 years life.

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June 30, 2010 and 2009

9. BONDS PAYABLE (CONTINUED)

The following is a summary of the College's bonds payable transactions for the year ended June 30, 2010 and 2009:

2010 2009

Outstanding Balance, beginning of year Retirements

$ 5,630,000 $ 5,745,000

(130,000) (115,000)

Outstanding Balance, end of year $ 5,500,000 $ 5,630,000

Debt service requirements are as follows:

Year Ended June 30, Principal Interest Total

2011 $ 145,000 $ 246,940 $ 391,940 2012 160,000 241,212 401,212 2013 180,000 234,812 414,812 2014 195,000 227,433 422,433 2015 215,000 219,243 434,243

Thereafter 4,605,000 1,534,130 6,139,130

$ 5,500,000 $ 2,703,770 $ 8,203,770

10. OPERATING LEASES

Non-cancellable operating leases for office equipments years through 2015. Future minimum lease payments at

Year Ended June 30

and building expire in various June 30, 2010, were:

2011 $ 37,936 2012 25,144 2013 25,144 2014 19,691 2015 18,600

$ 126,515



June 30, 2010 and 2009

11. PENSION PLAN

Crowder College contributes to The Public School Retirement System of Missouri (PSRS), a cost-sharing multiple-employer benefit pension plan. PSRS provides retirement and disability benefits to full-time (and certain part-time) certified employees and death benefits to members and beneficiaries. Positions covered by the Public School Retirement System of Missouri are not covered by Social Security. PSRS benefit provisions are set forth in Chapter 169.010 - .141 of the Missouri Revised Statutes. The statutes assign responsibility for the administration of the system to a seven member Board of Trustees. PSRS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to: The Public School Retirement System of Missouri, P. 0. Box 268, Jefferson City, Missouri 65102, or by calling 1-800-392-6848.

For the years ending June 30, 2010 and 2009, PSRS members are required to contribute 13.50% and 13.00%, respectively, of their annual covered salary and Crowder College is required to contribute a matching amount. The contribution requirements of members and Crowder College are established and may be amended by the PSRS Board of Trustees. Crowder College's contributions to PSRS for the year ending June 30, 2010 and 2009 were $1,233,509 and $1,123,992, respectively, equal to the required contributions.

Crowder College also contributes to the Public Education Employee Retirement System of Missouri (PEERS), a cost-sharing multiple-employer defined benefit pension plan. PEERS provides retirement and disability benefits to employees of the district who work 20 or more hours per week and who do not contribute to The Public School Retirement System of Missouri. Positions covered by the Public Education Employee Retirement System of Missouri are also covered by Social Security. Benefit provisions are set forth in Chapter 169.600 - .715 of the Missouri Revised Statutes. The statutes assign responsibility for the administration of the system to the Board of Trustees of The Public School Retirement System of Missouri. PEERS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to: The Public Education Employee Retirement System of Missouri, P.O. Box 268, Jefferson City, MO 65102, or by calling 1-800-392-6848.

At June 30, 2010 and 2009, PEERS members are required to contribute 6.50% and 6.00%, respectively, of their annual covered salary and Crowder College is required to contribute a matching amount. The contribution requirements of the members and Crowder College are established and may be amended by the Board of Trustees. Crowder College's contributions to PEERS for the year ending June 30, 2010 and 2009 were $172,791 and $144,705, respectively, equal to the required contributions.

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June 30, 2010 and 2009

12. RISK MANAGEMENT

The College is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; business interruptions; errors and omissions; employee injuries and illnesses, natural disasters and employee health and accidental benefits. Commercial insurance coverage is purchased for claims arising from such matters.

13. CROWDER COLLEGE FOUNDATION

Crowder College Foundation serves as the official gift-receiver for the College. As such, the Foundation receives gifts, manages funds received and disburses the funds in accordance with donor restrictions. The Foundation is a separate corporation from the College, and the Foundation's operations, assets, liabilities and fund balances are not reflected in the financial statements of the College.

Financial Statements - The financial statements of the Crowder College Foundation (Foundation) are presented in accordance with the provisions of Statement of Financial Accounting Standards No. 116, Accounting for Contributions Received and Contributions Made and No. 117, Financial Statements of Not-for-Profit Organizations. Statement No. 116 requires the Foundation to distinguish between contributions that increase permanently restricted net assets, temporarily restricted net assets and unrestricted net assets. It also required recognition of contributions, including contributed services meeting certain criteria, at fair values. Statement No. 117 establishes standards for external financial statements of not-for-profit organizations and requires a statement of position, a statement of activities and a statement of cash flows.

Investments and Investment Return - Investments at June 30, 2010 and 2009, consisted of the following:

2010 2009

Certificates of Deposit $ 906,235 $ 602,830 Vanguard Short Term Treasury Funds 101,487 128,555 Vanguard Intermediate-Term Treasury Funds 124,836 156,847 Vanguard FTSE - International 364,026 Stock Market Index Fund 1,684,706 1,685,155 U.S. Treasury Bond 6,505 6,420 Equity Securities 27,198 22,591

$ 3,214,993 $ 2,602,398

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June 30, 2010 and 2009

13. CROWDER COLLEGE FOUNDATION (CONTINUED)

Total investment return is comprised of the following:

2010 2009

Interest and dividend income $ 81,294 89,273 Net realized and unrealized gains (losses)

on investments reported at fair value 215,149 (563,703)

$ 296,443 $ (474,430)

Net Assets - The following classifications reflect the nature of restrictions on temporarily and permanently restricted net assets at June 30, 2010 and 2009:

June 30, 2010 June 30, 2009

Temporarily

Permanently Temporarily Permanently Restricted

Restricted Restricted

Restricted

Scholarships $ 183,311 $ 522,387 $ 151,258 $ 520,527 Crowder College Project Funds 1,896,186 1,533,115

$ 2,079,497 $ 522,387 $ 1,684,373 $ 520,527

Fiscal year 2009 has been restated to correct the classification of net assets between unrestricted, temporarily restricted and permanently restricted net assets.

14. SUBSEQUENT EVENTS

Beginning July 1, 2010, Crowder College maintains a self-funded health insurance program with claims processed by a third party administrator on behalf of Crowder College. A separate Insurance Fund was created on July 1, 2010 to account for and finance the health insurance program.

All funds of Crowder College from which employee salaries are paid participate in the health insurance program and make payments to the Insurance Fund based on actuarial estimates of the amounts needed to pay prior and current year claims and to establish a reserve for incurred but not reported claims.

Subsequent events have been evaluated through December 3, 2010, the date that the financial statements were available to be issued.

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(CROWDER COLLEGE)

INTRODUCTION TO SFA PROGRAMS June 30, 2010

BACKGROUND

The Community College District of Newton and McDonald Counties, Missouri, (Crowder College), is a fully accredited Public Junior College and has been approved by the Office of Education for participation in the student financial aid program. Our examination for the year ended June 30, 2010, covered the following programs:

• College Work-Study Program • Supplemental Education Opportunity Grant • Pell Grant Program • Academic Competitiveness Grant Program • TRIO Cluster

COLLEGE WORK-STUDY (CWS) PROGRAM

The CWS Program was established pursuant to Title IV, Part C, of the Higher Education Act of 1965. For the year ended June 30, 2010, 138 students participated in the program. Grant authorizations for the school year 2009-2010 totaled $233,963. Matching funds in the amount of $61,709 were paid by Crowder College on CWS wages.

SUPPLEMENTAL EDUCATION OPPORTUNITY GRANT (SEOG) PROGRAM

The SEOG Program was established at Crowder College under Title IV, Part A, of the Higher Education Act of 1965. For the year ended June 30, 2010, 394 students were awarded SEOG's totaling $88,750.

PELL GRANT

Crowder College entered into an agreement with the Office of Education in November of 1973 to participate in the Basic Educational Grant Program. Total authorizations for the fiscal year were $8,348,182. For the year ended June 30, 2010, 2596 students received grants totaling $8,176,170. Recoveries of $172,012 were made during the year including $152,837 from current year awards and $19,175 from prior year awards.

ACADEMIC COMPETITIVENESS GRANT PROGRAM

The Academic Competitiveness Grant was made available for the first time for the 2006-2007 school year. Total authorizations for the fiscal year were $94,146. For the year ended June 30, 2010, 126 students received grants totaling $93,983. Recoveries of $163 were made during the year including $163 from current year awards and none from prior year awards.


(CROWDER COLLEGE) Schedule of Expenditures of Federal Awards


Federal Grantor/ Pass-Through Grantor/ Program Title

Federal CFDA

Number

Pass-Through Grantor's Number

Disbursements/ Expenditures

U.S. Department of Education: Direct Programs:

College Assistance Migrant Program 84.149A N/A $ 386,762 High School Equivalency Program 84.141A N/A 444,887 TRIO - Student Support Services 84.042A N/A 300,794 * TRIO - Talent Search 84.044A N/A 237,751 * TRIO - Upward Bound 84.047A N/A 1,459,511 * TRIO - Educational Opportunity Centers 84.066A N/A 219,707 * Pell Grant 84.063 N/A 8,348,182 * College Work Study 84.033 N/A ' 181,320 * Supplemental Education Opportunity Grant 84.007 N/A 91,600 * Academic Competitiveness Grant 84.375 N/A 94,146 *

$ 11,764,660

Passed Through State Department of Education: Adult Education and Literacy Program 84.002 44-6000-987 221,693

TOTAL DEPARTMENT OF EDUCATION $ 11,986,353

U.S. Department of Homeland Security: Passed Through State Emergency Management Agency:

Hazard Mitigation Grant Program 97.039 FEMA-DR-1676-MO $ 1,191,335

U.S. Department of State Bureau of Education and Cultural Affairs Pass-Through Community Colleges for International Development, Inc.

Community College Initiative - Egypt Student Program 19.009 S-ECAAS-08-CA-207(SM)-(Egypt) $ 142,223

U.S. Department of Health & Human Services Pass-through programs from:

Health Resources and Services Administration Health Care and Other Facilities 93.887 C76HF11103 $ 31,921

U.S. Department of Energy: Direct Programs:

Missouri Alternative and Renewable Energy Technology (MARET) 81.049 N/A $ 265,903

U.S. Department of Labor: Direct Programs:

WIA Pilots, Demonstrations, and Research Projects 17.261 N/A $ 309,099 Community Based Job Training Grants 17.269 N/A 480,658 Program of Competitive Grants for Worker Training

and Placement in High Growth and Emerging Industry Sectors 17.275 N/A 31,527

TOTAL DEPARTMENT OF LABOR $ 821,284

TOTAL FEDERAL AWARDS $ 14,439,019

* Denotes program cluster See notes to Schedule of Expenditures of Federal Awards

-31-


(CROWDER COLLEGE) Notes to the Schedule of Expenditures of Federal Awards


NOTE 1 - BASIS OF PRESENTATION

The accompanying schedule of expenditures of federal awards includes the federal grant activity of Community College District of Newton and McDonald Counties, Missouri and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements.



Fax 417-623-2507


REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL

STATEMENTS PERFORMED IN ACCORDANCE WITH GO VERNMENT AUDITING STANDARDS

Board of Trustees Community College District of Newton and McDonald Counties, Missouri (Crowder College)

We have audited the accompanying financial statements of the governmental activities and the business-type activities of Community College District of Newton and McDonald Counties, Missouri, as of and for the year ended June 30, 2010, which collectively comprise Crowder College's basic financial statements and have issued our report thereon dated December 3, 2010. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered Community College District of Newton and McDonald Counties, Missouri's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Community College District of Newton and McDonald Counties, Missouri's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of Community College District of Newton and McDonald Counties, Missouri's internal control over financial reporting.

A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects Community College District of Newton and McDonald Counties, Missouri's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of Community College District of Newton and McDonald Counties, Missouri's financial statements that is more than inconsequential will not be prevented or detected by Community College District of Newton and McDonald Counties, Missouri's internal control.

-33-

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by Community College District of Newton and McDonald Counties, Missouri's internal control.

Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Community College District of Newton and McDonald Counties, Missouri's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

We noted certain other matters that we reported to management of Community College District of Newton and McDonald Counties, Missouri in a separate letter dated December 3, 2010.

This report is intended solely for the information and use of management, Board of Trustees, others within the entity and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.

OdtraA-ZQ fitkP-WAD-- MENSE, CHURCHWELL & MENSE, P.C.

Certified Public Accountants




Fax 417-623-2507


REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN

ACCORDANCE WITH OMB CIRCULAR A-133

Board of Trustees Community College District of Newton and McDonald Counties, Missouri (Crowder College)

Compliance

We have audited the compliance of Community College District of Newton and McDonald Counties, Missouri, with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2010. Community College District of Newton and McDonald Counties, Missouri's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of Community College District of Newton and McDonald Counties, Missouri's management. Our responsibility is to express an opinion on Community College District of Newton and McDonald Counties, Missouri's compliance based on our audit.

We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Community College District of Newton and McDonald Counties, Missouri's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of Community College District of Newton and McDonald Counties, Missouri's compliance with those requirements.

In our opinion, Community College District of Newton and McDonald Counties, Missouri, complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2010.

Internal Control Over Compliance

The management of Community College District of Newton and McDonald Counties, Missouri, is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered Community College District of Newton and McDonald Counties, Missouri's internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Community College District of Newton and McDonald Counties, Missouri's internal control over compliance.

A control deficiency in an entity's internal control over compliance exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect noncompliance with a type of compliance requirement of a federal program on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies ; that adversely affects the entity's ability to administer a federal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a federal program that is more than inconsequential will not be prevented or detected by the entity's internal control.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected by the entity's internal control.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above.

This report is intended solely for the information and use of management, Board of Trustees, others within the entity, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.

tvwf\t/CtiiiLldA n(triiv MENSE, CHURCHWELL & MENSE, P.C. Certified Public Accountants



(CROWDER COLLEGE)

Summary Schedule of Prior .Audit Findings For the year ended June 30, 2009

There are no prior findings or recommendations to report.


(CROWDER COLLEGE)

Schedule of Findings and Questioned Costs For the Year Ended June 30, 2010

SUMMARY OF AUDITOR'S RESULTS

1. The auditor's report expresses an unqualified opinion on the financial statements of Crowder College.

2. No significant deficiencies or material weaknesses relating to the audit of the financial statements are reported in the Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards.

3. No instances of noncompliance material to the financial statements of Crowder College, which would be required to be reported in accordance with Government Auditing Standards, were disclosed during the audit.

4. No significant deficiencies or material weaknesses relating to the audit of the major federal award programs are reported in the Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control over Compliance in Accordance with OMB Circular A-133.

5. The auditor's report on compliance for the major federal awards programs for Crowder College expresses an unqualified opinion on all major federal programs.

6. No audit findings that are required to be reported in accordance with Section 510(a) of OMB Circular A-133 were disclosed during the audit.

7. The programs tested as major programs included:

• CFDA 84.007 Federal Supplemental Education Opportunity Grant Program (SEOG) • CFDA 84.033 Federal Work Study (FWS) • CFDA 84.063 Federal Pell Grant Program (PELL) • CFDA 84.375 Academic Competitiveness Grant (ACG) • CFDA 84.149 College Assistance Migrant Program • CFDA 84.141 High School Equivalency Program • The TRIO Cluster programs including:

* CFDA 84.042A TRIO — Student Support Services * CFDA 84.044A TRIO — Talent Search * CFDA 84.047A TRIO — Upward Bound * CFDA 84.066A TRIO — Educational Opportunity Centers

• CFDA 97.039 Hazard Mitigation Grant Program (HMGP)

8. The threshold used for distinguishing Type A and B programs was $300,000.

9. The Crowder College qualified as a low risk auditee. -38-


(CROWDER COLLEGE)

Schedule of Findings and Questioned Costs For the Year Ended June 30, 2010

FINDINGS — FINANCIAL STATEMENTS AUDIT

None

FINDINGS AND QUESTIONED COSTS — MAJOR FEDERAL AWARD PROGRAMS AUDIT

None

APPENDIX C

DISTRICT’S AUDITED FINANCIAL

STATEMENTS FOR FISCAL YEAR 2011

APPENDIX D

FORM OF OPINION OF BOND COUNSEL

D-1

Form of Opinion of Bond Counsel

December 15, 2011

The Community College District of Edward D. Jones & Co., L.P.

Newton and McDonald Counties, Missouri St. Louis, Missouri

Neosho, Missouri

Crowder College Facilities Corporation The Bank of New York Trust Company, N.A.,

Neosho, Missouri as Trustee

St. Louis, Missouri

Re: $8,825,000 Crowder College Facilities Corporation Leasehold Revenue

Bonds (The Community College District of Newton and McDonald Counties,

Missouri), Series 2011

Ladies and Gentlemen:

We have acted as bond counsel in connection with the issuance by Crowder College Facilities

Corporation, a Missouri nonprofit corporation (the “Corporation”), of the above-referenced bonds (the

“Series 2011 Bonds”), pursuant to a Resolution adopted by the Corporation on December 2, 2011 (the

“Bond Resolution”). The Series 2011 Bonds are being issued for the purpose of providing funds to (1)

finance the acquisition, construction, improvement and extension of school sites, buildings, facilities,

furnishings and equipment to be used by The Community College District of Newton and McDonald

Counties, Missouri (the “District”), (2) refund the Corporation’s Leasehold Revenue Bonds (McDonald

Hall Addition), Series 2006 (the “Refunded Bonds”), (3) fund a debt service reserve for the Series 2011

Bonds, and (4) provide funds to pay costs related to the issuance of the Series 2011 Bonds. Capitalized

terms used and not defined herein shall have the meanings assigned to such terms in the hereinafter

defined Indenture.

In our capacity as bond counsel, we have examined such law and such certified proceedings and

other documents and materials as we deem necessary to enable us to render this opinion, including the

following documents:

(a) the Mortgage, Deed and Indenture of Trust and Security Agreement dated as of

April 1, 1996 (the “Original Indenture”), by and among the Corporation, the Mortgage Trustee

named therein and The Bank of New York Trust Company, N.A., St. Louis, Missouri, as

successor trustee, as amended by the First Supplemental Mortgage, Deed and Indenture of Trust

and Security Agreement dated as of May 1, 2002, the Second Supplemental Mortgage, Deed and

Indenture dated as of September 1, 2006, and the Third Supplemental Mortgage, Deed and

Indenture dated as of December 1, 2011 (the “Third Supplemental Indenture”) (the Original

Indenture as so amended is herein the “Indenture”);

(b) the Base Lease, dated as of April 1, 1996, between the District and the

Corporation (the “Original Base Lease”), as amended by the First Supplemental Base Lease

dated as of May 1, 2002, the Second Supplemental Base Lease dated as of September 1, 2006,

D-2

and the Third Supplemental Base Lease dated as of December 1, 2011 (the “Third Supplemental

Base Lease”) (the Original Base Lease as so amended is herein the “Base Lease”);

(c) the Sublease dated as of April 1, 1996, between the Corporation and the District

(the “Original Sublease”), as amended by the First Supplemental Sublease dated as of May 1,

2002, the Second Supplemental Sublease dated as of September 1, 2006, and the Third

Supplemental Sublease dated as of December 1, 2011 (the “Third Supplemental Sublease”) (the

Original Sublease as so amended is herein the “Sublease”);

(d) the Bond Purchase Agreement dated December 2, 2011, among the Corporation,

the District and Edward Jones & Co., L.P., the representative of the original purchasers of the

Series 2011 Bonds (the “Bond Purchase Agreement”), and

(e) such other certificates and documents as we deem necessary in order to render

this opinion.

As to questions of fact material to this opinion, we have relied upon representations of the

Corporation contained in the Bond Resolution, the certified proceedings and other certifications of public

officials and others furnished to us without undertaking to verify the same by independent investigation.

We note that various issues with respect to the Corporation and the District in connection with the Series

2011 Bonds are addressed in the opinion of their counsel, Spencer, Scott & Dwyer, P.C. Except as

otherwise stated herein, we express no opinion with respect to those issues.

We express no opinion as to the title to or the description of the Project or as to the priority of the

liens of the Indenture, the Base Lease and the Sublease.

As bond counsel, we have not been engaged or undertaken to participate in the preparation of or

to review the accuracy, completeness or sufficiency of any offering material relating to the Series 2011

Bonds except to the extent stated in the Official Statement, and we express no opinion with respect

thereto.

Based upon the foregoing, we are of the opinion, that, under existing law:

1. The Series 2011 Bonds have been duly authorized, issued and delivered by the

Corporation and, when duly authenticated and delivered by the Trustee, will be valid and binding limited

obligations of the Corporation payable in accordance with the Indenture, will be entitled to the benefits

and security of the Indenture in accordance with the constitution and laws of the State of Missouri.

2. The Series 2011 Bonds constitute valid and binding special obligations of the

Corporation payable solely out of the rentals, revenues and receipts derived by the Corporation pursuant

to the Sublease, all in the manner provided in the Indenture and the Sublease. The Series 2011 Bonds do

not constitute a debt of the District or the State of Missouri, do not constitute an indebtedness within the

meaning of any constitutional or statutory debt limitation or restriction and are not payable in any manner

by taxation.

3. The Third Supplemental Indenture, the Third Supplemental Base Lease and the Third

Supplemental Sublease have been duly authorized, executed and delivered by the Corporation, constitute

valid and binding agreements of the Corporation and are enforceable in accordance with their terms. All

right, title and interest of the Corporation in, to and under the Sublease have been duly pledged and

assigned by the Corporation to the Trustee as security for the payment of the Series 2011 Bonds and any

Additional Bonds issued pursuant to the Indenture.

D-3

4. The Third Supplemental Base Lease has been duly authorized, executed and delivered by

the District, constitutes a valid and binding agreement of the District and is enforceable in accordance

with its terms. The Third Supplemental Sublease has been duly authorized, executed and delivered by the

District, constitutes a valid and binding agreement of the District and is enforceable in accordance with its

terms during the current Sublease Term and during any Sublease Renewal Term (as those terms are

defined in the Base Lease) which the District elects to undertake.

5. Interest on the Series 2011 Bonds (including any original issue discount properly

allocable to an owner thereof) is excluded from gross income for federal income tax purposes and is

exempt from income taxation by the State of Missouri. The opinions set forth in the preceding sentence

are subject to the condition that the Corporation and the District comply with all requirements of the

Internal Revenue Code of 1986, as amended (the “Code”) that must be satisfied in order that the interest

on the Series 2011 Bonds (including any original issue discount properly allocable to an owner thereof)

be, and continue to be, excluded from gross income for federal income tax purposes. The Corporation

and the District have covenanted to comply with all such requirements. Failure to comply with such

requirements of the Code may cause interest on the Series 2011 Bonds (including any original issue

discount properly allocable to an owner thereof) to be included in gross income for federal income tax

purposes and not be exempt from income taxation by the State of Missouri, retroactive to the date of

issuance of the Series 2011 Bonds.

6. The Series 2011 Bonds are not “specified private activity bonds” within the meaning of

the alternative minimum tax provisions of the Code and, accordingly, interest on the Series 2011 Bonds

(including any original issue discount properly allocable to an owner thereof) is not a specific item of tax

preference for purposes of the federal alternative minimum tax on corporations and other taxpayers,

including individuals.

7. The Series 2011 Bonds are “qualified tax-exempt obligations” within the meaning of

Section 265(b)(3) of the Code (relating to financial institution deductibility of interest expense).

We express no opinion as to the exemption for federal or Missouri income tax purposes of the

interest on the Series 2011 Bonds in the event of payment thereof other than from amounts paid by the

District pursuant to the Sublease, after an Event of Nonappropriation, Event of Default or any other event

resulting in a termination of the Sublease. We express no opinion regarding federal, state or local tax

consequences arising with respect to the Series 2011 Bonds (including, without limitation, those from the

inclusion of interest and original issue discount, if any, on the Series 2011 Bonds in a corporate

taxpayer’s adjusted current earnings for purposes of determining its federal alternative minimum tax

liability), other than as expressly set forth herein.

The rights of the holders of the Series 2011 Bonds and the enforceability of the Series 2011

Bonds, the Indenture, the Base Lease and the Sublease may be limited by bankruptcy, insolvency,

reorganization, moratorium and other similar laws affecting creditors’ rights and by equitable principles,

whether considered at law or in equity.

The opinions herein are based upon and limited to the laws of the State of Missouri and the

federal laws of the United States of America and we express no opinion as to the laws of any other state

or jurisdiction. This letter is furnished by us solely for your benefit and may not be relied upon by any

other person or entity or in connection with any other transaction without our prior consent. The opinions

set forth in this letter are given as of the date hereof, and we disclaim any obligation to advise the

addressees or to revise or supplement this letter to reflect any facts or circumstances that may hereafter

D-4

come to our attention or any changes in law that may hereafter occur. Other than as expressly set forth

herein, we express no opinion herein relative to compliance with federal or state securities laws.

This letter expresses our legal opinion as to the matters set forth herein and is based upon our

professional knowledge and judgment at this time; however, it is not to be construed as a guaranty, nor is

it a warranty that a court considering such matters would not rule in a manner contrary to the opinions set

forth herein.

Very truly yours,

$8,825,000 crowder college facilities corporation ...2018 500,000 2.450% 227873 ck0 2026 1,350,000...

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