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HomeMy Public PortalAboutOrd 450 Supplemental Lease No. 1 PBC .,. . . Gll-MORE & BELL, P.c. 1 1/9/2006 (Published in the Ark Valley News on November 30,2006). ORDINANCE NO. 'fS-O AN ORDINANCE AUTHORIZJNG THE CITY OF BEL AIRE, KANSAS TO ENTER INTO A SUPPLEMENTAL LEASE NO.1, DATED DECEMBER 1, 2006, WHICH SUPPLEMENTS A LEASE BETWEEN THE CITY AND THE CITY OF BEL AIRE, KANSAS PUBUC BUILDING COMMISSION, DATED SEPTEMBER 1, 2003, . WHEREBY THE CITY WILL CONTINUE TO LEASE FROM THE PUBliC BUILDING COMMISSION CERTAIN PROPERTY; APPROVING THE FORM OF SAID SUPPLEMENTAL LEASE NO.1; AND AUTHORIZING THE EXECUTION THEREOF AND CERTAIN RELATED DOCUMENTS. WHEREAS, under the authority ofK.S.A. 12-1757 et seq., and Charter Ordinance No. 10 of the City Uointly, the "Act"), the Governing Body (the "Governing Body") of the City of Bel Aire, Kansas (the "City") has heretofore created The City of Bel Aire, Kansas Public Building Commission, a municipal corporation of the State of Kansas (the "PBC"); and WHEREAS, the PBC has heretofore issued its Revenue Bonds in an aggregate amount of $3,545,000 (the "Series A, 2003 Bonds") to fmance the City Hall portion of certain city hall, public park and swimming pool improvements Uointly, the "Improvements," with certain "Land," jointly the "Project") and has leased the Project to the City pursuant to a Lease dated as of September 1,2003 (the "Original Lease") with the City to provide a source of revenues for payment of principal and interest on those Series A, 2003 Bonds, as well as a certain series of Taxable Revenue Bonds, Series B, 2003, which financed the remaining Improvements (the "Series B, 2003 Bonds"); and WHEREAS, the Governing Body has heretofore by resolution declared it necessary to refinance a portion of the PBC's Series A, 2003 Bonds and the City Hall portion of the Project on behalf of the City; and WHEREAS, the PBC has deemed it advisable to provide for the refinancing of the City Hall portion of the Project and the refunding of the Series A, 2003 Bonds maturing in the years 2017-2036, inclusive (the "Refunded Bonds"), by the issuance of Refunding Revenue Bonds, Series' 2006, in the amount of $3,425,000 (the "Refunding Bonds"); and WHEREAS in connection with the issuance of such Refunding Bonds, the Governing Body finds it necessary and advisable to enter into a Supplemental Lease No.1, which supplements the Lease, to ratify the Original Lease, and to authorize certain other actions and documents related thereto. KMC\404155\CITY ORDINANCE .' . . SECTION 5. All action heretofore taken (not inconsistent with the provisions of this Ordinance) by the City or the officials of the City, is hereby authorized and approved. SECTION 6. This Ordinance shall be effective from and after its adoption by the Governing Body. [BALANCE OF TIllS PAGE INTENTIONALLY LEFT BLANK] KMC\404155\CITY ORDINANCE 3 . . . Gilmore & Bell, P.C. 1l/I5/2006 BONDPURCHASEAGREEMffiNT AMONG THE CITY OF BELAIRE, KANSAS PUBLIC BUILDING COMMlSSION AND PIPERJAFFRAY & CO. LEAWOOD, KANSAS AND THE CITY OF BELAIRE, KANSAS DATED AS OF DECEMBER 1,2006 $3,425,000 PUBLIC BUILDING COMMISSION REFUNDING REVENUE BONDS SERIES 2006 KMQ40415S\BPA . The delivery of the Bonds shall be made in definitive form, as fully registered bonds (in such denominations as the Purchaser shall specify in writing at least 48 hours prior to the Closing Time) duly executed and authenticated and bearing CUSIP numbers (provided neither the printing of a wrong number on any Bond nor the failure to print a number thereon shall constitute cause to'tefuse;deIivery of any Bond); provided, however, that the Bonds may be delivered in temporary form. If delivered in defmitive form, the Bonds shaH be available for examination and packaging by the Purchaser at least 24 hours prior to the Closing Time. The Purchaser agrees to offer the Bonds initially at the offering prices or yields set forth in Exhibit A attached hereto and incorporated herein by reference, but may subsequently change such offering price; the Purchaser agrees to notify the Issuer of such changes, if such changes occur prior 'to the Closing Time, but failure so to notify shall not invalidate such changes. The Purchaser may offer and sell the Bonds to certain dealers (including dealers depositing the Bonds into investment trusts) at prices lower than the public offering prices. SECTION 2. USE OF OFFICIAL STATEMENT The Issuer has previously furnished to the Purchaser, the Preliminary Official Statement, dated November 15, 2006 relating to the Bonds, including all appendices thereto and maps and pictorial information included therein (the "Preliminary Official Statement"). The Issuer hereby ratifies and confirms the Purchaser's use ofthe Preliminary Official Statement. The Issuer will cause the Preliminary Official Statement to be amended and supplemented into a final official statement (the "Official Statement"). The Issuer will make available to the Purchaser the Official Statemen~ and hereby authorizes its use by the Purchaser in connection with the sale of the Bonds. . SECTION 3. ISSUER'S AND TENANT'S REPRESENTATIONS AND WARRANTIES By the Issuer's and The City of Bel Aire's (the "Tenant") acceptance hereof, the Issuer and the Tenant hereby represents and warrants to, and agrees with, the Purchaser that: (a) The Issuer is a municipal corporation and the Tenant is a municipal corporation and city of the second class duly organized under the laws of the State of Kansas. (b) The Issuer and Tenant have complied with all provisions of the Constitution and laws of the State of Kansas and have full power and authority to consummate all transactions contemplated by the Bond Resolution and this Bond Purchase Agreement, and all other agreements relating thereto. (c) The Issuer and the Tenant have duly authorized by all necessary action to be taken by the Issuer (I) the adoption and performance of the Bond Resolution; (2) the execution, delivery and performance of this Bond Purchase Agreement; (3) the approval of the Official Statement; (4) the execution and performance of any and all such other agreements and documents as may be required to be executed, delivered and performed by the Issuer in order to carry out, give effect to and consummate the transactions contemplated by the Bond Resolution and this Bond Purchase Agreement; and (5) the carrying out, giving effect to and consummation of the transactions contemplated by the Bond Resolution and this Bond Purchase Agreement. Executed counterparts of the Bond Resolution and all such other agreements and documents specified herein will be delivered to the Purchaser by the Issuer at the Closing Time. . (d) The Tenant has duly authorized by all necessary action to be taken by the Tenant (I) the execution, delivery and performance of the Lease (as supplemented by a Supplemental Lease No.1) and K.,'v1C\404155\BP A 3 . to the Issuer and will not be material to the beneficial owners of the Bonds. As of the Closing Time, no event will have occurred and be continuing which with the lapse of time or the giving of notice, or both, would constitute an event of default under the Bond Resolution or the Bonds. (k) The information contained in the Preliminary Official Statement. as amended and supplemented by the Official Statement and in any amendment or supplement thereto that may be authorized for use by the Issuer and Tenant with respect to the Bonds (collectively, the "Official Statement"), relating to: (1) the Issuer, the Tenant and the Project, including the organization, operations, structure, and financial and other affairs of the foregoing; (2) the financial statements including income statements and balance sheets referred to in subsection (m) hereof; (3) application by the Issuer of the proceeds to be received by it from the sale of the Bonds and other funds, if any, of the Issuer to be applied in accordance with the Bond Resolution; and (4) the Issuer's and the Tenant's participation in the transactions contemplated by the Bond Resolution and this Bond Purchase Agreement is, and as of the Closing Time will be, true, correct and complete in all material respects and does not omit and will not omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. (I) The financial information of the Issuer and Tenant contained in or attached to the Official Statement, except as noted therein, present fairly and accurately the financial condition of the Issuer and Tenant as of the dates indicated and the results of its operations for the periods specified, and such financial information are prepared in conformity with generally accepted accounting principles consistently applied in all material respects for the periods involved. . (m) The Issuer and Tenant have not, since the date of such financial information, incurred any material liabilities and there have been no material adverse change in the condition of the Issuer, financial or otherwise, other than as set forth in the Official Statement. (n) There is no action, suit, proceeding, inquiry or investigation at law or in equity or before or by any court, public board or body pending or, to the knowledge of the Issuer or Tenant, threatened against or affecting the Issuer, Tenant or the Project (or, to its knowledge, any basis therefor) wherein an unfavorable decision, ruling or finding would adversely affect the transactions contemplated hereby or by the Bond Resolution or the validity of the Bonds, the Bond Resolution, the Lease, this Bond Purchase Agreement or any agreement or instrument to which the Issuer or Tenant is a party and which is used or contemplated for use in the consummation of the transactions contemplated hereby or by the Bond Resolution. Any certificate signed by any of the authorized officials of the Issuer and Tenant and delivered to the Purchaser in connection with the Closing shall be deemed a representation and warranty by the Issuer and Tenant to the Purchaser as to the statements made therein. SECTION 4. COVENANTS AND AGREEMENTS OF THE ISSUERAND TENANT The Issuer and Tenant covenant and agree with the Purchaser for the time period specified, and if no period is specified, for so long as any of the Bonds remain Outstanding, as follows: . (a) To cooperate with the Purchaser and its counsel in any reasonable endeavor to qualifY the Bonds for offering and sale under the securities or "Blue Sky" laws of such jurisdictions of the United States as the Purchaser may reasonably request; and the Issuer and Tenant shall, if so requested by the Purchaser, with respect to the offer or sale of the Bonds, file written consents to suit and file written consents to service of process in any jurisdiction in which such consent may be required by law or KMa404155\BPA 5 . (b) At the Closing Time, the Purchaser(s) shall receive: (I) Opinions, dated as of the Closing Date, of Messrs. Gilmore & Bell, P.c., Bond Counsel substantially in the form attached hereto as Exhibits B-1 and B-2; , (2) An opinion of counsel for the Tenant dated as of the closing, in form and substance satisfactory to Bond Counsel and to the Purchaser; . (3) A certificate of the Issuer, satisfactory in form and substance to the Purchaser(s), dated as of the Closing Date, to the effect that (i) since the date of the Preliminary Official Statement there has not been any material adverse change in the business, properties, fmancial condition or results of operations of the Issuer or the Project, whether or not arising from transactions in the ordinary course of business, from that set forth in the Preliminary Official Statement, and except in the ordinary course of business or as set forth in the Preliminary Official Statement, the Issuer has not incurred any material liability with respect to the Project; (ii) there is no action, suit, proceeding or, to the knowledge of the Issuer, any inquiry or investigation at law or in equity or before or by any public board or body pending or, to the knowledge of the Issuer, threatened against or affecting the Issuer or the Project, its officers or its property or, to the best of the knowledge of the Issuer, any basis therefor, wherein an unfavorable decision, ruling or finding would adversely affect the Issuer or the Project, the transactions contemplated hereby or by the Bond Resolution or the Official Statement or the validity or enforceability of the Bonds or the Bond Purchase Agreement, which are not disclosed in the Official Statement; (iii) to the knowledge of the Issuer, the information contained in the Official Statement, other than the sections entitled "The Depository Trust Company," "The Bond Insurance Policy," "Bond Ratings," "Legal Matters," "Escrow Verification" and Appendices B, C and D, for which the Issuer expresses no opinion, is true in all material respects and does not contain any untrue statement of a material fact and does not omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; (iv) the Issuer has duly authorized, by all necessary action, the execution, delivery and due performance by the Issuer of this Bond Purchase Agreement and the Escrow Trust Agreement; and (v) the representations and warranties of the Issuer set forth herein were accurate and complete as of the date hereof and are accurate and complete as of the Closing Time. . (4) A certificate of the Tenant, satisfactory in form and substance to the Purchaser(s), dated as of the Closing Date, to the effect that (i) since the date of the Preliminary Official Statement there has not been any material adverse change in the business, properties, fmancial condition or results of operations of the Tenant or the Project, whether or not arising from transactions in the ordinary course of business, from that set forth in the Preliminary Official Statement, and except in the ordinary course of business or as set forth in the Preliminary Official Statement, the Tenant has not incurred any material liability with respect to the Project; (ii) there is no action, suit, proceeding or, to the knowledge of the Tenant, any inquiry or investigation at law or in equity or before or by any public board or body pending or, to the knowledge of the Tenant, threatened against or affecting the Tenant or the Project, its officers or its property or, to the best of the knowledge of the Tenant, any basis therefor, wherein an unfavorable decision, ruling or fmding would adversely affect the Tenant or the Project, the transactions contemplated hereby or by the Bond Resolution or the Official Statement or the validity or enforceability of the Bonds or the Bond Purchase Agreement, which are not disclosed in the Official Statement; (iii) to the knowledge of the Tenant, the information contained in the Official Statement, other than the sections entitled "The KMC\404155\BPA 7 . . . , , ' favorably reported by such a committee or be introduced, by amendment or otherwise, in or be passed by the House of Representatives or the Senate, or be recommended to the Congress of the United States for passage by the President of the United States, or be enacted by the Congress of the United States, or a decision by a court established under Article ill of the Constitution of the United State~ or the Tax Court of the United States shall be rendered, or a ruling, regulation or order of the Treasury Department of the United States or the Internal Revenue Service shall be made or proposed having the purpose or effect of imposing federal income taxation, or any other event shall have occurred which results in the imposition of federal income taxation, upon revenues or other income of the general character to be derived by the Issuer or by any similar body or upon interest received on obligations of the general character of the Bonds, or the Bonds, which, in the Purchaser's opinion, materially and adversely affects the market price of the Bonds; (d) Any legislation, ordinance, rule or regulation shall be introduced in or be enacted by the Legislature of the State or by any other governmental body, department or agency of the State, or a decision by any court of competent jurisdiction within the State shall be rendered which, in the Purchaser's opinion, materially and adversely affects the market price of the Bonds, or litigation challenging the law under which the Bonds are to be issued shall be filed in any court in the State; (e) A stop order, ruling, regulation or official statement by, or on behalf of, the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall be issued or made to the effect that the issuance, offering or sale, of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including all underlying obligations, as contemplated hereby or by the Official Statement, is in violation or would be in violation of any provision of the Securities Act of 1933, as amended (the "1933 Act"), the 1934 Act or the Trust Indenture Act of 1939, as amended; (t) Legislation shall be enacted by the Congress of the United States of America, or a decision by a court of the United States of America shall be rendered, to the effect that obligations of the general character of the Bonds, or the Bonds, including all the underlying obligations, are not exempt from registration under or from other requirements of the 1933 Act or the 1934 Act; (g) Any event 'shall have occurred, or information become known, which, in the Purchaser's opinion, makes untrue in any material respect any statement or information contained in the Preliminary Official Statement as originally circulated, or has the effect that the Preliminary Official Statement as originally circulated contains an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading; (h) Additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange; (i) The New York Stock Exchange or any other national secunhes exchange, or any governmental authority, shall impose, as to the Bonds or obligations of the' general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of, the Purchaser; G) Any general banking moratorium shall have been established by federal, New York or Kansas authorities; KMC\404I S5\BPA 9 . . . In case any action shall be brought against one .or more of the persons .or entities identified in the preceding paragraph and in respect .of which indemnity may be saught against the Purchaser, such parties shall pramptly natify the Purchaser in writIng and the Purchaser shall pramptly assume the defense thereaf, including the emplayment .of counsel, the payment .of all expenses' and the right to negatiate and cansent ta settlement. Any .one .or mare .of such parties shall have the right ta emplay separate caunsel in any such actian and ta participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense .of such party unless emplayment .of such caunsel has been specifically autharized by the Purchaser. The Purchaser shall nat be liable far any settlement .of any such actian effected withaut its can sent by any .of such parties, but if settled with the cansent .of the Purchaser .or if there be a final judgment far the plaintiff in any such actian against the Purchaser .or any .of such parties, with .or withaut the c.onsent .of the Purchaser, the Purchaser agrees ta indemnify and hald harmless such parties ta the extent pravided herein. SECTION 9. PAYMENT OF EXPENSES (a) Whether .or nat the Bands are saId by the Issuer ta the Purchaser (unless such sale be prevented at the Cl.osing Time by the Purchaser's default), the Purchaser, unless .otherwise c.ontracted far, shall be under na. .obligatian ta pay any expenses incident ta the perfarmance of the .obligatians .of the Issuer hereunder; nar shall the Issuer, unless .otherwise c.ontracted far, be under any abligatian ta pay any expenses incident t.o the perfarmance .of the .obligations .of the Purchaser hereunder (unless such sale be prevented at the Clasing Time by the Purchaser's default). (b) If the Bands are saId by the Issuer ta the Purchaser, all additianal expenses and casts ta effect the autharization, preparatian, issuance, delivery and sale .of the Bands, ather than the fees and expenses .of the Purchaser, shall be paid by the Issuer .out.of the proceeds .of the Bands. Such expenses and casts shall include, but nat be limited t.o: (l)the fees and disbursements .of Gilm.ore & Bell, P.C., band caunsel; (2) the fees and disbursements .of the Issuer's legal caunsel; and (3) all casts and expenses .of the Issuer and the Caunty relating ta the issuance .of the Bands. Such expenses shall nat exceed a sum equal ta $29,568.73. SECTION 10. NOTICE Any natice .or .other c.ommunicatian ta be given under this Band Purchase Agreement may be given by mailing .or delivering the same in writing t.o the applicable persan, as fallaws: ( a) If ta the Issuer at: The City .of Bel Aire, Kansas Public Building Cammissian c/a The City .of Bel Aire, Kansas 7651 E. Central Park Avenue Bel Aire, Kansas 67226 Attn: President (b) If t.o the Tenant at: The City .of Bel Aire, Kansas 7651 E. Central Park Avenue Bel Aire, Kansas 67226 Attn: Clerk KMC\404155\BPA 11 . __ I . Upon your acceptance of the offer, the foregoing agreement will be binding upon you and the Purchaser. Please acknowledge your agreement with the foregoing by executing the 'oenclosed copy of this Bond Purchase Agreement prior to the date and time specified on page 1 hereof and returning it to the undersigned. Accepted and agreed to as of the date first above written. THE CITY OF BEL AIRE, KANSAS PUBLIC BUILDING COMMISSION By President . ATTEST: . By Secretary Accepted and agreed to as of the date first above written. THE CITY OF BEL AIRE, KANSAS By Mayor ATTEST: By Clerk K...MQ404I 55\BPA PIPER JAFFRAY & CO. LEA WOOD, KANSAS, By Gregory M. Vahrenberg, Managing Director 13 . . . ~ ' . Mandatory' Redemption. The _ Term Bonds shall be subject to mandatory redemption by lot and payment prior to maturity pursuant to the mandatory redemption requirements of this Resolution on each date set forth below, at 100% of the principal amount thereof plus accrued interest'to the-redemption date, without redemption premium: Redemption Dates *fmal maturity. KMC\404155\BPA Principal Amount A-2 . . . EXHIBIT B-2 FORM OF DEFEASANCE OPINION KMC\404155\BP A B-2 . . . ... \ Gilmore & Bell, P.c. 11/15/2006 ESCROW TRUST AGREEMENT BETWEEN CITY OF BELAlRE, KANSAS PUBUC BUILDING COMMISSION AND SECURITY BANK OF KANSAS CITY KANSAS CITY, KANSAS as Escrow Agent DATED AS OF DECEMBER 1, 2006 Entered in Connection with the Issuance of $3,425,000 REFUNDING REVENUE BONDS SERIES 2006 KMC\404 I 55\ET A . . . ESCROW TRUST AGREEMENT THIS ESCROW TRUST AGREEMENT, dated as of December 1, 2006, by and between the City of Bel Aire, Kansas Public Building Commission, a municipal corporation organized and existing under the laws of the State of Kansas (the "Issuer"), and Security Bank of Kansas City, a state banking association with an office located in Kansas City, Kansas, and having full trust powers, as Escrow Agent (the "Escrow Agent"). WITNESSETH: WHEREAS, the Issuer has heretofore duly authorized and issued the Refunded Bonds; and WHEREAS, the Refunded Bonds will mature (or will be subject to redemption prior to maturity) and will have interest payable in the amounts and at the times shown in the Verification Report; and WHEREAS, pursuant to the Bond Resolution, the Issuer authorized the issuance and delivery of the Bonds for the purpose of providing funds, together with other funds of the Issuer and investment earnings thereon, to pay the principal of, redemption premium, if any, and interest on the Refunded Bonds, including the purchase of non-callable direct obligations of the United States of America described in the Verification Report NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set forth, the parties hereto agree as follows: 1. Definitions. In addition to the definitions contained in the Bond Resolution, the following words and terms used in this Escrow Agreement shall have the following meanings, unless the context or use indicates another or different meaning: "Agreement" means this Escrow Trust Agreement. "Bond Payment Date" means any date on which any principal of, or interest on, any of the Refunded Bonds is due and payable. "Bond Counsel" means the firm of Gilmore & Bell, P.C., Wichita, Kansas, or any other attorney or firm of attorneys with a nationally recognized standing in the field of municipal bond fmancing selected by the Issuer. "Bond Resolution" means Bond Resolution No. the Bonds. of the Issuer authorizing issuance of "Bonds" means the $3,425,000 aggregate principal amount of Refunding Revenue Bonds, Series 2006, of the Issuer authorized by the Bond Resolution. . "Code" means the Internal Revenue Code of 1986, as amended. KMC\404155\ETA . . . (c) Notwithstanding any other provisions of this Agreement, the Issuer hereby covenants that no part of the proceeds of the Bonds or of the money or funds in the Escrow Fund shall be used, at any time, directly or indirectly, in a manner which, if such use had been reasonably anticipated on the date of issuance of the Bonds would have caused any of the Bonds to be an "arbitrage bond" under S~ction 148 of the Code. (d) Upon the payment in full of the principal of, redemption premium, if any, and interest on the Refunded Bonds, all remaining money and Escrowed Securities in the Escrow Fund, together with any interest thereon, shall be transferred to the Issuer to be applied by the Issuer in accordance with law. 8. Substitute Escrowed Securities.. (a) In the event that any of the Escrowed Securities are not available for delivery on the date of the issuance of the Bonds, the Escrow Agent is directed to accept substitute securities in lieu thereof, provided: (1) the substitute securities are non-callable direct obligations of the United States of America, (2) the maturing principal of and interest on such substitute securities (excluding any interest after any optional call date )is equal to or greater than the maturity value of such unavailable Escrowed Secu.rities, (3) principal of and interest on the substitute securities is payable on or before the maturity date of the unavailable Escrowed Securities, and (4) the Issuer and Bond Counsel in writing approve such substitution. If the original Escrowed Securities become available and are tendered to the Escrow Agent by or on behalf of the Purchaser, the Escrow Agent shall accept such Escrowed Securities, shall return the substitute securities as directed by such Purchaser and shall notifY Bond Counsel and the Issuer of the transaction. (b) At the written request of the Issuer and upon compliance with the conditions hereinafter stated, the Escrow Agent shall have the power to sell, transfer, request the redemption of or otherwise dispose of the Escrowed Securities and to substitute for the Escrowed Securities solely cash or Substitute Escrowed Securities. The Escrow Agent shall purchase such Substitute Escrowed Securities with the proceeds derived from the sale, transfer, disposition or redemption of the Escrowed Securities together with any other funds available for such purpose. The substitution may be effected only if: (1) the substitution of the Substitute Escrowed Securities for the original Escrowed Securities occurs simultaneously; (2) the Escrow Agent shall receive from an independent certified public accountant acceptable to the Escrow Agent in its reasonable judgment a certification, satisfactory in form and substance to the Escrow Agent, to the effect that after such substitution, (A) the principal of and interest on the Escrowed Securities to be held in the Escrow Fund after the substitution (including Substitute Escrowed Securities to be acquired), together with any other money to be held in the Escrow Fund after such transaction, will be sufficient to pay all remaining principal of, redemption premium, if any, and interest on the Refunded Bonds pursuant to the Verification Report and Schedule 2 hereto, and (B) the amounts and dates of the anticipated transfers from the Escrow Fund to the Paying Agent for the Refunded Bonds will not be diminished or postponed thereby; and (3) the Escrow Agent shall receive a written opinion of Bond Counsel to the effect that such substitution is permitted under this Agreement and would not cause the interest on either the Bonds or the Refunded Bonds to become included in gross income for purposes of federal income taxation under then existing law. In the event th.at any such substitution results in cash held in the Escrow Fund in excess of the cash required for the certification of an independent certified public accountant referred to in this subsection (b) (as evidenced by such certification), the Escrow Agent shall, at the request of the Issuer, withdraw such excess from the Escrow Fund and pay such excess to the Issuer, and the Issuer shall apply such excess as provided by law; provided that, in the written opinion of Bond Counsel delivered to the Escrow Agent, such withdrawal KM0404155\ET A 4 . . . moneys are not applied as herein provided, the assets of the Escrow Agent shall be impressed with a trust for the amount thereof until the required application shall be made. (d) The Escrow Agent shall not be responsible for any action or failure to 'bke adion on the part of the Paying Agent. In event of the Escrow Agent's failure to give notice to the Paying Agent to give notice of redemption as required in Section 9 hereof, the Escrow Agent shall be liable for any . loss, expense or cost to the Issuer, including the payment of additional interest on the Refunded Bonds. Notwithstanding the foregoing subsections the Escrow Agent shall not be relieved of liability arising from, and proximate to, its failure to comply fully with the terms of this Agreement. 12. Fees and Costs. The aggregate. amount of the costs, fees and expenses of the Escrow Agent in connection with the creation of the escrow described in and created by this Agreement and in carrying out any of the duties, terms or provisions of this Agreement is a one-time fee in the amount of $ , which amount shall be paid from money on deposit in the Costs of Issuance Account established by the Bond Resolution, concurrently with the issuance and delivery of the Bonds. Notwithstanding the preceding paragraph, the Escrow Agent shall be entitled to reimbursement from the Issuer of reasonable out-of-pocket, legal or extraordinary expenses incurred in carrying out the duties, terms or provisions of this Agreement. Claims for such reimbursement may be made to the Issuer and in no event shall such reimbursement be made from funds held by the Escrow Agent pursuant to this Agreement. In addition to the amount set forth in Section 5 hereof, the Escrow Agent shall receive the sum of $ for deposit into the Costs of Issuance Account hereby created with the Escrow Agent. The Escrow Agent shall pay Costs of Issuance in an aggregate sum not to exceed said amount. An estimated schedule of such expenses are attached hereto as Schedule 3. The Escrow Agent is authorized to pay such costs based on receipt of invoices or statements in amounts not in excess of those estimated on Schedule 3. In the event invoices are received in excess of the estimated amounts set forth on Schedule 3, such amounts shall not be paid without written approval of the Issuer. Any Costs of Issuance funds on deposit which the.. Issuer shall certify to the Escrow Agent are not needed to pay such expenses shall be returned to the Issuer following receipt of such certification, but in any case not later than 30 days prior to 13. Resignation or Removal of Escrow Agent; Successor Escrow Agent. The Escrow Agent at the time acting hereunder may at any time resign and be discharged from its duties and responsibilities hereby created by giving written notice by registered or certified mail to the Issuer and the Paying Agent (who shall cause notice to be given to the Owners of the Refunded Bonds by first-class mail) not less than 60 days prior to the date when the resignation is to take effect. Such resignation shall take effect immediately upon the acceptance of the Issuer of the resignation, the appointment of a successor Escrow Agent (which may be a temporary Escrow Agent) by the Issuer, the acceptance of such successor Escrow Agent of the terms, covenants and conditions of this Agreement, the transfer of the Escrow Fund, including the money and Escrowed Securities held therein, to such successor Escrow Agent and the completion of any other actions required for the principal of and interest on the Escrowed Securities to be made payable to such successor Escrow Agent rather than the resigning Escrow Agent. The Escrow Agent may be removed at any time by an instrument or concurrent instruments in writing, delivered to the Escrow Agent and the Issuer and signed by the owners' of a majority in principal amount of the Refunded Bonds then outstanding;. provided that written notice thereof is mailed on or before the date of such removal by first-class mail, postage prepaid, to all Owners of such Refunded KMC\404I 55\ET A 6 . . . to it may be consolidated, or any corporation resulting from any merger, conversion, consolidation or reorganization to which the Escrow Agent or any successor to it may be a party, shall, if satisfactory to the Issuer, be the successor Escrow Agent under this Agreement without the execution or fitjng of any paper or any other act on the part of the parties hereto, anything herein to the contrary notwithstanding~ In the event of resignation or removal of the Escrow Agent, a portion of the amount paid to the Escrow Agent pursuant to the preceding section shall be returned to the Issuer, such portion to be computed by multiplying the fee specified in the preceding section by the ratio of the number of months which the trust created by this Agreement will continue from the effective date of such resignation or removal to the entire term of such trust. Of the amount paid to the Escrow Agent, one-fourth of the one- time fee shall be treated as the initial set up fee and is not refundable. 14. Amendments to this Agreement. This Agreement is made for the benefit of the Issuer and the Owners from time to time of the Refunded Bonds and it shall not be repealed, revoked, altered or amended without the written consent of all such Owners, the Escrow Agent and the Issuer; provided, however, that the Issuer and the Escrow Agent may, without the consent of, or notice to, such Owners, enter into such agreements supplemental to this Agreement as shall not adversely affect the rights of such Owners and as shaH not be inconsistent with the terms and provisions of this Agreement, for anyone or more of the following purposes: (a) to cure any ambiguity or formal defect or omission in this Agreement; (b) to grant to, or confer upon, the Escrow Agent for the benefit of the Owners of the Refunded Bonds, any additional rights, remedies, powers or authority that may lawfully be granted to, or conferred upon, such Owners or the Escrow Agent; and (c) to subject to this Agreement additional funds, securities or properties. The Escrow Agent shall be entitled to rely exclusively upon an unqualified written opinion of Bond Counsel with respect to compliance with this Section, including the extent, if any, to which any change, modification, addition or elimination affects the rights of the Owners of the Refunded Bonds, or that any instrument executed hereunder complies with the conditions and provisions of this Section. 15. Indemnification. The Issuer hereby assumes liability for, and hereby agrees (whether or not any of the transactions contemplated hereby are consummated) to indemnifY, protect, save and hold harmless the Escrow Agent and its respective successors, assigns, agents and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including legal fees, expenses and disbursements, without limitation) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, at any time, the Escrow Agent (whether or not also indemnified against the same by the Issuer or any other person under any other agreement or instrument) and in any way relating to or arising out of the execution and delivery of this Agreement, the establishment of the Escrow Fund or the Costs of Issuance Account established hereunder, the acceptance of the moneys and securities deposited therein, the purchase of the Escrowed Securities, the retention of the Escrowed Securities or the proceeds thereof and any payment, transfer or other application of moneys or securities by the Escrow Agent in accordance with the provisions of this Agreement; provided however, that the Issuer shall not be required to indemnifY the Escrow Agent against the Escrow Agent's own negligence or willful misconduct. In no event shall the Issuer be liable to any person by reason of the transactions contemplated hereby other than to the Escrow Agent as set forth KMC\404155\ETA 8 . , ' . in this Section 15. The indemnities contained in this Section 15 shall survive the termination of this Agreement. The Escrow Agent and its respective successors, assigns, agents, directors, officers,:employees and servants shall not be held to any personal liability whatsoever, in tort, contract or otherwise, in connection with the execution and delivery of this Agreement, the establishment of the Escrow Fund or the Costs of Issuance Account, the acceptance of the moneys deposited therein, the purchase of the Escrowed Securities, the retention of the Escrowed Securities or the proceeds thereof or any payment, transfer or other application of the moneys or securities held by the Escrow Agent in accordance with the provisions of this Agreement or by reason of any non-negligent act, omission or error of the Escrow Agent made in good faith in the conduct of its duties. The duties and obligations of the Escrow Agent shall be determined by the express provisions of this Agreement. The Escrow Agent may consult with counsel who mayor may not be counsel to the Issuer, and in reliance upon the opinion of such counsel shall have full and complete authorization and protection in respect of any action taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Agent shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering or omitting any action under this Agreement, such matter may be deemed to be conclusively established by a certificate signed by an authorized officer of the Issuer. . 16. Notices. Except as otherwise provided herein, it shall be sufficient service of any notice, request, complaint, demand or other paper required by the Bond Resolution or this Agreement to be given to or filed with the parties hereto or any entity referenced herein (provided that notice to the Escrow Agent shall be effective only following receipt) if the same shall be duly mailed by certified mail, postage prepaid, return receipt requested, addressed to the Notice Representative at the Notice Address (as said terms are defined in the Bond Resolution). 17. Termination. This Agreement shall terminate when all transfers required to be made by the Escrow Agent under the provisions hereof shall have been made. 18. Severability. If anyone or more of the covenants or agreements provided in this Agreement on the part of the Issuer or the Escrow Agent to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed and construed to be severable from the remaining covenants and agreements herein contained, and shall in no way affect the validity of the remaining provisions of this Agreement. 19. Successors and Assigns. All of the covenants, promises and agreements in this Agreement contained by or on behalf of the Issuer or by or on behalf of the Escrow Agent shall be binding upon, and inure to the benefit of, their respective successors and assigns, whether or not so expressed. 20. Governing Law. This Agreement shall be governed by, and be construed in accordance with, the laws of the State of Kansas. 21. Headings. Any headings preceding the text of the several Sections hereof or marginal notes appended to copies hereof, shall be solely for convenience of reference, and shall not constitute a part of this Agreement, nor shall they affect its meaning, construction or effect. . KMC\404I 55\ETA 9 . IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be executed by their duly authorized officers or elected officials, and their corporate seals to be hereunder affixed and attested as of the date first above written. CITY OF BELAIRE, KANSAS PUBLIC BUILDING COMMISSION ATTEST: By Title: President Title: Secretary SECURITY BANK OF KANSAS CITY KANSAS CITY, KANSAS, as Escrow Agent . By Title: . K.,\1C\40415 5\ET A (Signature Page to Escrow Trust Agreement) . . . , ' . SCHEDULE 2 TO ESCROW TRUST AGREEMENT REDEMPTION OF REFUNDED BONDS The following maturities of the Refunded Bonds will be called for redemption and payment, prior to maturity, on the respective redemption dates and at the respective redemption prices shown below: Series Maturities Principal to be Redemption to be to be Redemption Redeemed Date Redeemed Redeemed Price A, 2003 February 1,2013 2017 - 2036 $3,275,000 PAR KMC\40415 5\ET A S-3-1 . . . EXHIBIT A-I CERTIFIED MAIL Treasurer of the State of Kansas Landon State Office Bldg. 900 Southwest Jackson, Suite 201 Tope~ Kansas 66612-1235 Piper Jaffray & Co., Inc. 11150 Overbrook, Suite 310, Leawood, Kansas 66211-2298 RE: CALL FOR REDEMPTION CITY OF BELAIRE, KANSAS PUBLIC BUILDING COMMISSION REVENUE BONDS SERIES A, 2003, DATED SEPTEMBER 1, 2003 Notice is hereby given pursuant to K.S.A. 10-129, as amended, and pursuant to the provisions of Article ill of Bond Resolution No. 05-03 (the "Bond Resolution") of the City of Bel Aire, Kansas Public Building Commission (the "Issuer"), that the above mentioned bonds described in the attached Notice of Call for Redemption (the "Called Bonds"), have been irrevocably called for redemption and payment on February 1,2013. The Paying Agent is hereby requested to disseminate the attached Notice of Call for Redemption in accordance with K.S.A. 10-129 and the Bond Resolution. After redemption of the Called Bonds the Paying Agent is requested to complete the attached Paying Agent's Certification and forward a copy of same to the undersigned. CITY OF BELAIRE, KANSAS PUBLIC BUILDING COMMISSION By Security Bank of Kansas City, Kansas City, Kansas, as Escrow Agent KMC\404I 55\ETA A-I-I . . . ************************ This Notice of Redemption shall be mailed by certified mail to the Treasurer of the State of Kansas, Topeka, Kansas, not less than 45 days prior to the Redemption Date and to Piper Jaffray & Co., the original purchaser of the Series A, 2003 Bonds, not less than 30 days prior to the Redemption Date. Notice shall also be given to certain repositories in order to comply with the provisions of Rule 15c2-12 of the Securities and Exchange Commission. Notice may also be given in accordance with guidelines set forth in Securities and Exchange Commission Release No. 34-23856, but such notice is not required by law. The Paying Agent shall notify the registered owners of the Called Bonds as provided in K.S.A. 10- 129 as amended, and the Bond Resolution. KMC\404155\ET A A-1-3 . . . EXHIBIT B-1 NOTICE OF DEFEASANCE OF BONDS CITY OF BELAIRE, KANSAS PUBLIC BUILDING COMMISSION REVENUE BONDS SERIES A, 2003, DATED NOVEMBER 15, 2000 Notice is hereby given that the City of Bel Aire, Kansas Public Building Commissio.Jl and Security Bank of Kansas City, Kansas City, Kansas have entered into a certain Escrow Trust Agreement dated as of December 1, 2006 which provides that the above-mentioned bonds maturing February 1, 2017, and thereafter, will be called for redemption and payment on February 1, 2013 (the "Redemption Date"), at the principal office of the Treasurer of the State of Kansas, Topeka, Kansas (the "Bond Registrar and Paying Agent"). A Notice of Call for Redemption shall be disseminated prior to the Redemption Date. CITY OF BELAIRE, KANSAS PUBLIC BUILDING COMMISSION By Security Bank of Kansas City Kansas City, Kansas, as Escrow Agent ************************ This Notice of Defeasance shall be mailed by fIrst class mail to the Treasurer of the State of Kansas, Topeka, Kansas, and to Piper Jaffray & Co., the original purchaser of the Series A, 2003 Bonds not more than 60 days after December 17, 2006. Notice shall also be given to certain repositories in order to comply with the provisions of Rule 15c2-12 of the Securities and Exchange Commission. Notice may also be given in accordance with guidelines set forth in Securities and Exchange Commission Release No. 34-23856, but such notice is not required by law. KMC\40415 5\ET A B-1 . . . >- C I+~( GILMORE & BELL, P.c. 11/9/2006 EXCERPT OF MINUTES OF A MEETING OF THE GOVERNING BODY OF CITY OF BEL AIRE, KANSAS HELD ON NOVEMBER 21, 2006 The Governing Body (the "Governing Body") of City of Bel Aire, Kansas (the "City"), met in regular session at the usual meeting place in the City at 7:00 p.m. The Mayor presided and the following members of the Governing Body were present: The following members of the Governing Body were absent: The Mayor declared that a quorum was present and called the meeting to order. *************** (Other proceedings) Thereupon, there was presented an Ordinance entitled: AN ORDINANCE AUTHORIZING THE CITY OF BEL AIRE, KANSAS TO ENTER INTO A SUPPLEMENTAL LEASE NO.1, DATED DECEMBER 1, 2006, WHICH SUPPLEMENTS A LEASE BETWEEN THE CITY AND THE CITY OF BEL AIRE, KANSAS PUBLIC BUILDING COMMISSION, DATED SEPTEMBER 1, 2003, WHEREBY THE CITY WILL CONTINUE TO LEASE FROM THE PUBLIC BUILDING COMMISSION CERTAIN PROPERTY; APPROVING THE FORM OF SAID SUPPLEMENTAL LEASE NO.1; AND AUTHORIZING THE EXECUTION THEREOF AND CERTAIN RELATED DOCUMENTS. The Ordinance was considered and discussed; and on motion of Councilmember , seconded by Councilmember , the Ordinance as a whole was passed by the following roll call vote: Aye: Nay: Thereupon, a majority of the members of the Governing Body having voted in favor of the passage of the Ordinance, it was given No. (the "Ordinance") and was signed by the Mayor and attested by the City Clerk. ************** KMa404155\CITY ORDINANCE . . . (Seal) (Other Proceedings) On motion duly made, seconded and carried, the meeting thereupon adjourned. City Clerk KM0404155\CITY ORDINANCE 2 t. II .. GILMORE & BELL, P.C. 11/9/2006 (Published in the Ark Valley News on November 30,2006). ORDINANCE NO. AN ORDINANCE AUTHORIZING THE CITY OF BEL AIRE, KANSAS TO ENTER INTO A SUPPLEMENTAL LEASE NO.1, DATED DECEMBER 1,2006, WHICH SUPPLEMENTS A LEASE BETWEEN THE CITY AND THE CITY OF BEL AIRE, KANSAS PUBLIC BUILDING COMMISSION, DATED SEPTEMBER 1, 2003, . WHEREBY THE CITY Wll..L CONTINUE TO LEASE FROM TIlE PUBLIC BUILDING COMMISSION CERTAIN PROPERTY; APPROVING THE FORM OF SAID SUPPLEMENTAL LEASE NO.1; AND AUTHORIZING THE EXECUTION THEREOF AND CERTAIN RELATED DOCUMENTS. WHEREAS, under the authority of K.SA. 12-1757 et seq., and Charter Ordinance No. 10 of the City Gointly, the "Act"), the Governing Body (the "Governing Body") of the City of Bel Aire, Kansas (the "City") has heretofore created The City of Bel Aire, Kansas Public Building Commission, a municipal corporation of the State of Kansas (the "PBC"); and WHEREAS, the PBC has heretofore issued its Revenue Bonds in an aggregate amount of $3,545,000 (the "Series A, 2003 Bonds") to finance the City Hall portion of certain city hall, public park and swimming pool improvements Gointly, the "Improvements," with certain "Land," jointly the "Project") and has leased the Project to the City pursuant to a Lease dated as of September 1,2003 (the "Original Lease") with the City to provide a source of revenues for payment of principal and interest on those Series A, 2003 Bonds, as well as a certain series of Taxable Revenue Bonds, Series B, 2003, which financed the remaining Improvements (the "Series B, 2003 Bonds"); and WHEREAS, the Governing Body has heretofore by resolution declared it necessary to refinance a portion of the PBC's Series A, 2003 Bonds and the City Hall portion of the Project on behalf of the City; and WHEREAS, the PBC has deemed it advisable to provide for the refinancing of the City Hall portion of the Project and the refunding of the Series A, 2003 Bonds maturing in the years 2017-2036, inclusive (the "Refunded Bonds"), by the issuance of Refunding Revenue Bonds, Series 2006, in the amount of $3,425,000 (the "Refunding Bonds"); and WHEREAS in connection with the issuance of such Refunding Bonds, the Governing Body finds it necessary and advisable to enter into a Supplemental Lease No.1, which supplements the Lease, to ratify the Original Lease, and to authorize certain other actions and documents related thereto. KMC\404J55\CITY ORDINANCE t. -. II NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF BEL AIRE, KANSAS: SECTION 1. The Bond Purchase Agreement among the PBC, the City and Piper Jaffray & Co., Leawood, Kansas, dated as of December 1, 2006, whereby Piper Jaffray & Co., as Purchaser, has agreed to purchase the Refunding Bonds from the PBC upon the terms and conditions set forth therein, in substantially the form presented to this meeting of the governing body, is in all material respects approved, authorized and confrrrned. The Mayor and the City Clerk are hereby authorized and directed to affix their signatures and the seal of the City to the Bond Purchase Agreement, for and on behalf of the City, with such changes therein as the City Attorney may deem necessary or appropriate. SECTION 2. The Supplemental Lease No.1, in substantially the form presented to this meeting of the Governing Body, is in all material respects approved, authorized and confrrrned. The Mayor and the City Clerk are hereby authorized and directed to affix their signatures and the seal of the City to Supplemental Lease No. I, for and on behalf of the City, with such changes therein as the City Attorney may deem necessary or appropriate. The Original Lease (with Supplemental Lease No. I, jointly the "Lease") are hereby ratified and confirmed, and, except as the Original Lease is supplemented by Supplemental Lease No.1, continue in full force and effect. SECTION 3. The Preliminary Official Statement dated November 15, 2006, which, for the purpose of enabling the Purchaser to comply with the requirements of Rule 15c2-12(b)(1) of the Securities and Exchange Commission, has been reviewed and deemed "fmal" as of its date by the Mayor, except for the omission of such information as is permitted by Rule 15c2-12(b)( 1), is hereby ratified and approved. The appropriate officers of the City are hereby authorized, if requested, to provide the Purchaser a letter or certification to such effect and to take such other actions or execute such other documents as such officers in their reasonable judgment deem necessary to enable the Purchaser to comply with the requirement of such Rule. The final Official Statement is hereby authorized to be prepared by supplementing, amending and completing the Preliminary Official Statement, with such changes and additions thereto as are necessary to conform to and describe the transaction. The Mayor is hereby authorized to execute the final Official Statement as so supplemented, amended and completed, and the use and public distribution of the final Official Statement by the Purchaser in connection with the reoffering of the Refunding Bonds is hereby authorized. The proper officials of the City are hereby authorized to execute and deliver a certificate pertaining to such Official Statement as prescribed therein, dated as of the date of payment for and delivery of the Refunding Bonds. The City agrees to provide to the Purchaser within seven business days of the date of the sale of Refunding Bonds sufficient copies of the fmal Official Statement to enable the Purchaser to comply with the requirements of Rule 15c2-12(b)(4) of the Securities and Exchange Commission and with the requirements of Rule G-32 of the Municipal Securities Rulemaking Governing Body. SECTION 4. The Mayor and City Clerk are hereby authorized to execute any and all documents and take such actions as they may deem necessary or advisable in order to carry out and perform the intent of this Ordinance. KMC\404155\CITY ORDINANCE 2 t. M .. ';'''F .. SECTION 5. All action heretofore taken (not inconsistent with the provisions of this Ordinance) by the City or the officials of the City, is hereby authorized and approved. SECTION 6. This Ordinance shall be effective from and after its adoption by the Governing Body. [BALANCE OF TIllS PAGE INTENTIONALLY LEFT BLANK] KMC\404 155\CITY ORDINANCE 3 -e II .. PASSED by the Governing Body of the City of Bel Aire, Kansas, on November 21, 2006 and APPROVED AND SIGNED by the Mayor. (Seal) Mayor ATTEST: City Clerk KMC\404155\CITY ORDINANCE 4 . . . GILMORE & BELL, P.C. 11/15/2006 rvuI.. 'Is-o CITY OF BEL AIRE, KANSAS PUBLIC BUILDING COMMISSION AS ISSUER AND CITY OF BEL AIRE, KANSAS AS TENANT SUPPLEMENTAL LEASE NO.1 DATED AS OF DECEMBER 1,2006 $3,425,000 REFUNDING REVENUE BONDS SERIES 2006 KMC\404155\SUPP LEASE . . . SUPPLEMENTAL LEASE NO.1 TABLE OF CONTENTS Page Parties... ........... ............ .... ........... .... ......... ..... .......... ....... ......... ............ .......... ....... ......... ......... ....1 Recitals............... ...... .................................................................................................................1 Section 1. Definitions. ........ ........ ........ ..................... ........ .................... .......................... ........................ 1 Section 2. Representations and Covenants of Tenant...................................................................... 1 Section 3. Representations and Covenants of Issuer........................................................... .............2 Section 4. Continuing Disclosure ................. ..................................... ......... ................ ............ .............2 Section 5. Modification of Basic Rent ............. ................ ........ ......... ........... ............. ..........................2 Section 6. Bond Insurer Provisions...... .......... ........... ............... .............. ................ ....... ... ..... .......... ...2 Section 7. Amendments .................................................................. .....................................................2 Section 8. Other Lease Provisions ............... ....... ... ......... ......... ................... ................... ........ .............3 Section 9. Ratification and Confirmation of Lease ..........................................................................3 Schedule I, Description of Property ............................................................................................... .... S- I Schedule II-A Schedule of Basic Rent Payments ........................................................................ S-II-A KMC\404155\SUPP LEASE . . . SUPPLEMENTAL LEASE NO.1 THIS SUPPLEMENTAL LEASE NO.1 is made as of December 1,2006, between the City of Bel Aire, Kansas Public Building Commission, a municipal corporation of the State of Kansas (the "Issuer"), and the City of Bel Aire, Kansas, a municipal corporation and city of the second class duly organized under the laws of the State of Kansas (the "Tenant"), and supplements a Lease between the same parties made as of September I, 2003. WHEREAS, the parties have heretofore entered into a Lease dated as of September 1,2003 (the "Original Lease" and, with this Supplemental Lease No.1, the "Lease") covering the property described in Schedule I attached hereto and made a part hereof; and WHEREAS, the Project and all rentals due under the Original Lease were pledged as part of the Pledged Property to secure payment of the City of Bel Aire, Kansas Public Building Commission, Revenue Bonds, Series A, 2003, in the original principal amount of $3,545,000 (the "Series A, 2003 Bonds"), and Taxable Revenue Bonds, Series B, 2003, in the original principal amount of $790,000 (the "Series B, 2003 Bonds" and, with the Series A, 2003 Bonds, jointly the "Series 2003 Bonds") issued pursuant to Resolution No. 05-03 of the Issuer (the "Original Resolution"), the proceeds of which were used to construct and equip additions and improvements located on the Land described in Schedule I; and WHEREAS, Issuer is duly organized under the laws of the State of Kansas, with authority to enter into this Supplemental Lease No.1, acting by and through its governing body, all as authorized by the Act (as defmed in the Refunding Bond Resolution); and WHEREAS, to provide funds to pay the costs of refunding all of the Series A, 2003 Bonds maturing in the years 2017 through 2036, inclusive, the Issuer intends to issue and sell its Refunding Revenue Bonds, Series 2006 in the aggregate principal amount of $3,425,000 (the "Series 2006 Bonds") pursuant to Resolution No. (the "Refunding Bond Resolution" and, with the Original Resolution, jointly, the "Resolution"); and WHEREAS, the Series 2006 Bonds shall be secured by the Pledged Property, including the Project and all rentals under the Lease; and WHEREAS, the governing body of the Issuer has adopted a resolution authorizing the issuance of the Series 2006 Bonds, fixing the amount and terms thereof and describing the Series A, 2003 Bonds to be refunded, and requiring the Issuer to enter into this Supplemental Lease No. 1 to provide for rental payments sufficient to pay the principal ot: premium, if any, and interest on all Series 2003 Bonds and Series 2006 Bonds Gointly, the "Bonds") then Outstanding; NOW, THEREFORE, in consideration of the premises, of other good and valuable consideration, and of the mutual benefits, covenants and agreements herein contained, the parties hereto supplement the Original Lease and agree as follows: Section I. Definitions. Capitalized terms not otherwise defined in this Supplemental Lease No. I shall have the meanings set forth in the Original Lease and the Resolution. Section 2. Representations and Covenants of Tenant. Tenant hereby ratifies and confirms the following covenants and representations of Ten ant as originally set forth in the Original Lease: KMC\404155\SUPP LEASE . . . (a) The federal tax and securities law representations set forth in subsections (a) and (e) through (i), inclusive, of Section 1.3 of the Original Lease are hereby reaffirmed, ratified and made applicable to the Series 2006 Bonds. (b) The general representations and covenants set forth in Section 1.3 of the Original Lease are hereby reaffirmed, ratified and made applicable with respect to the Series 2006 Bonds. Section 3. Representations and Covenants of Issuer. Issuer hereby ratifies and confIrms the following covenants and representations ofIssuer, as originally set forth in the Lease: (a) The federal tax and securities law representations set forth in subsections (e) through (i), inclusive, of Section 1.4 of the Original Lease are hereby reaffirmed, ratified and made applicable to the Series 2006 Bonds. (b) The general representations and covenants set forth in Section 1.4 of the Original Lease are hereby reaffirmed, ratified and made applicable with respect to the Series 2006 Bonds. Section 4. Continuing Disclosure. The parties hereto acknowledge that the Issuer has a certain obligation to comply with the provisions of the SEC Rule, as more fully set forth in the Disclosure Instructions relating to the Series 2006 Bonds. The Tenant will assume these responsibilities of continuing disclosure with respect to the Series 2006 Bonds and will provide and file the information required as set forth in the Disclosure Instructions. Upon providing for any appropriate filings, the Tenant will furnish a copy of said information to the Issuer. Section 5. Modification of Basic Rent. "Basic Rent" as payable under Section 3.1 of the Lease shall be modified to provide only such funds as are sufficient to permit the Issuer to make, when due, all interest and principal payments on the Series 2006 Bonds, the Series 2003 Bonds, and all other Bonds Outstanding under the Resolution (less Basic Rent Credits as set out in the Lease and any other credits provided in the Resolution). A "Schedule of Basic Rent Payments" is attached hereto as Schedules ll-A and I1-B, and shall replace the Schedule of Basic Rent Payments attached to the Original Lease as Schedules ll- A and ll-B. Section 6. Bond Insurer Provisions. The Issuer shaU notifY the Bond Insurer of any Event of Default under the Lease of which it has actual notice. Upon the occurrence and continuance of an Event of Default under the Lease, the Bond Insurer shall be entitled to control and direct the enforcement of all rights and remedies granted to the Issuer under this Lease. Any reorganization or liquidation plan with respect to the County must be acceptable to the Bond Insurer. In the event of any reorganization or liquidation, the Bond Insurer shall have the right to vote on behalf of the Issuer and all Owners who hold the Bonds insured by the Bond Insurer absent a default by the Bond Insurer under the applicable Bond Insurance Policy insuring the Series 2006 Bonds. The Issuer shall notifY the Bond Insurer of any proposed purchase of the Project by the Tenant pursuant Article XVIII of the Lease. Section 7. Amendments. Notwithstanding the provisions of Section 28.1 of the Original Lease, the Lease may be amended or supplemented without the consent of any Owners for the purpose of issuing Additional Bonds as permitted by the Resolution. KMC\404] 55\SUPP LEASE " ... . . . Section 8. Other Lease Provisions. Except as may be specifically otherwise provided herein, and except as a contrary intention clearly appears, all provisions of the Original Lease and this Supplemental Lease No. lare hereby declared to be applicable to the Project. As used in the Lease, the term "Bonds" shall include the Series 2006 Bonds. Section 9. Ratification and Confirmation of Lease. Except as expressly modified in this Supplemental Lease No. I, the Original Lease and the covenants therein contained are hereby ratified and confIrmed by the parties as of the date of this Supplemental Lease No. 1 and shall apply to the Series 2006 Bonds and the proceeds thereof. To the extent there is a conflict between the provisions of the Original Lease and this Supplemental Lease No.1, the provisions of this Supplemental Lease No.1 shall control. [BALANCE OF TIllS PAGE lNTENTIONALL Y LEFT BLANK] KMQ404155\sUPP LEASE 3 . IN WITNESS WHEREOF, the Issuer has caused this Supplemental Lease No.1 to be signed by an authorized official, such signature to be attested by an authorized officer, and its official seal to be applied, as of the date fIrst above written. CITY OF BEL AIRE, KANSAS PUBLIC BUILDING COMMISSION [SEAL] By: President Attest: By: Secretary "ISSUER" ACKNOWLEDGMENT . STATE OF KANSAS ) ) 5S. COUNTY OF SEDGWICK ) This instrument was acknowledged before me on the _ day of November, 2006, by Dr. Brian Withrow, President and Peggy Sue O'Donnell, Secretary, of the City of Bel Aire, Kansas Public Building Commission, a municipal corporation of the State of Kansas. (Seal) Notary Public My Appointment Expires: . KMC\404155\SUPP LEASE 4 . . . IN WITNESS WHEREOF, the Tenant has caused this Supplemental Lease No. I to be signed by an authorized officer, such signature to be attested by an authorized officer, and its seal to be applied, as of the date first above written. [SEAL] Attest: By: Title: Clerk CITY OF BEL AIRE, KANSAS By: Title: Mayor "TENANT" ACKNOWLEDGMENT STA TE OF KANSAS ) ) SS. ) COUNTY OF SEDGWICK This instrument was acknowledged before me on the _ day of November, 2006, by Dr. Brian Withrow, Mayor, City of Bel Aire, Kansas, a municipal corporation and city of the second class of the State of Kansas. (Seal) My Appointment Expires: KMC\404155\SUPP LEASE Notary Public 5 . . . SCHEDULE I DESCRIPTION OF PROPERTY SCHEDULE I TO THE LEASE DATED AS OF SEPTEMBER 1, 2003, BY AND BETWEEN THE CITY OF BEL AIRE, KANSAS PUBLIC BUILDING COMMISSION AND THE CITY OF BEL AIRE, KANSAS. PROPERTY SUBJECT TO LEASE (a) The following described real estate located in Sedgwick County, Kansas, to-wit: (i) Lot 1, Block 18 of the Central Park Addition to the City of Bel Aire, Sedgwick County, Kansas (the "City Hall Land"); and (ii) Reserve A of the Central Park Addition to the City of Bel Aire, Sedgwick County, Kansas (the "Swimming Pool Land"). said real property collectively constituting the "Land" as referred to in said Lease. (b) All buildings, improvements, machinery and equipment now or hereafter constructed, located or installed on the Land pursuant to said Lease. The property described in paragraphs (a) and (b) of this Schedule I together constituting the "Facility" as referred to in said Lease and Bond Resolution. KMC\404155\SUPP LEASE S-I . . .~' SCHEDULE ll-A SCHEDULE ll-A TO SUPPLEMENTAL LEASE NO.1 DATED AS OF DECEMBER 1,2006, BY AND BETWEEN THE CITY OF BEL AIRE, KANSAS PUBLIC BUILDING COMMISSION AND THE CITY OF BEL AIRE, KANSAS. SCHEDULE OF BASIC RENT PAYMENTS BASIC RENT PAYMENT DATE (Twenty Days Prior to the following dates) BASIC RENT KMC\404155\SUPP LEASE S-II-A