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APPENDIX II CONTINUING DISCLOSURE • In order to permit bidders for the Bonds and other participating underwriters in the primary offering of the Bonds to comply with paragraph (b)(5) of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (as in effect and interpreted from time to time, the "Rule"), the City will covenant and agree in the Bond Resolution, for the benefit of the Owners (as hereinafter defined) from time to time of any Bonds which are Outstanding, to provide annual reports of specified information and notice of the occurrence of certain events, if material, as hereinafter described (the "Disclosure Covenants"). The City of St. Anthony (the "City") is the only "obligated person" in respect of the Bonds within the meaning of the Rule for purposes of identifying the entities in respect of which continuing disclosure must be made. The City has complied in all material respects with any ' undertaking previously entered into by it under the Rule. Breach of the Disclosure Covenants will not constitute a default under the Bond Resolution or the Bonds. A broker or dealer is to consider a known breach of the Disclosure Covenants, however, before recommending the purchase or sale of Bonds in the secondary market. Thus, a failure on the part of the City to observe the Disclosure Covenants may adversely affect the transferability and liquidity of the Bonds and their market price. As used herein, "Owner" or "Bondowner" means, in respect of a Bond, the registered holder or holders thereof appearing in the bond register maintained by the Registrar or any "Beneficial Owner" (as hereinafter defined) thereof, if such Beneficial Owner provides to the Registrar evidence of such beneficial ownership in form and substance reasonably satisfactory to the Registrar. As used herein, "Beneficial Owner" means, in respect of a Bond, any person or entity which (i) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, such Bond (including persons or entities holding Bonds through • nominees, depositories or other intermediaries), or (ii) is treated as the owner of the Bond for federal income tax purposes. As used herein, a "Material Fact" is a fact as to which a substantial likelihood exists that a reasonably prudent investor would attach importance thereto in deciding to buy, hold or sell a Bond or, if not disclosed, would significantly alter the total information otherwise available to an investor from the Official Statement, information disclosed under the Disclosure Covenants or information generally available to the public. Notwithstanding the foregoing sentence, a "Material Fact" is also an event that would be deemed "material" for purposes of the purchase, holding or sale of a Bond within the meaning of applicable federal securities laws, as interpreted ' at the time of discovery of the occurrence of the event. Information to be Disclosed The City will provide, in the manner set forth under"Manner of Disclosure" below, either directly or indirectly through an agent designated by the City, the following information at the following times: Annual Information As soon as available but not later than 365 days after the end of each fiscal year of the City, commencing with the fiscal year ending December 31, 1996, the following financial information and operating data (the "Disclosure Information"): (A) The audited financial statements of the City for such fiscal year, prepared in ` accordance with generally accepted accounting principles promulgated by the r Financial Accounting Standards Board as modified in accordance with the governmental accounting standards promulgated by the Governmental II-1