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HomeMy Public PortalAboutOrd 457 Supplementing Ord 365 & 417 2nd Water Supply .<" , . . .' (PUBLISHED IN THE ARK V ALLEY NEWS ON APRIL 5, 2007) ORDINANCE NO. 'fS7 AN ORDINANCE SUPPLEMENTING ORDINANCE NOS. 365 AND 417 OF TIlE CITY; AUTHORIZING THE EXECUTION OF A SECOND SuPPLEMENTAL WATER SUPPLY AND WASTEWATER SERVICE AGREEMENT WITH CHISHOLM CREEK UTILITY AUTHORITY; AND AUTHORIZING ALL OTHER NECESSARY DOCUMENTS AND ACTIONS WITH RESPECT THERETO. WHEREAS, the City of Bel Aire, Kansas (the "City") is a city of the second class, duly created, organized and existing under the Constitution and laws of the State; and WHEREAS, pursuant to an Interlocal Cooperation Agreement, certain Kansas municipalities, including the City, have joined together under the provisions of K.S.A. 12-2901 et seq. (the "Act"), to organize and create the Chisholm Creek Utility Authority ("Authority"); and WHEREAS, Authority has acquired, constructed, furnished and equipped a water treatment plant, a wastewater treatment plant, and associated facilities (the "Project") for the purpose of providing an economic means of long-term public water supply and wastewater collection and treatment for the mutual benefit of Authority members participating in the Project (the "Contracting Members"); and WHEREAS, the Authority financed the costs of the Project through the issuance of its Water and Wastewater Facilities Revenue Bonds, Series 2002 (Cities of Bel Aire and Park City, Kansas Project), dated as of the March 1,2002 (the "Series 2002 Bonds") which are secured in part by revenues generated, and an assignment of the Authority's rights under, a Water Supply and Wastewater Service Agreement with the City and a similar agreement with the other Contracting Member; and WHEREAS, the Authority refunded in advance of maturity the Series 2002 Bonds scheduled to mature in the years 2013 to 2020, inclusive (the "Series 2004 Refunded Bonds") through the issuance of the Authority's "Water and Wastewater Facilities Refunding Revenue Bonds (Cities of Bel Aire and Park City Project), Series 2004," in the aggregate principal amount of $7,235,000 (the "Series 2004 Bonds"); and WHEREAS, the Authority has found it to be desirable and in the best interest of the Authority to refund in advance of maturity the Series 2002 Bonds scheduled to mature in the years 2021 to 2032, inclusive (the "Refunded Bonds") and to accomplish such refunding through the issuance ofthe Authority's "Water and Wastewater Facilities Refunding Revenue Bonds (Cities of Bel Aire and Park City Project), Series 2007," in the aggregate principal amount of$19,415,000 (the "Series 2007 Bonds"); aIid WHEREAS, in connection with the issuance of the Series 2007 Bonds, it is necessary and advisable for the City to amend and supplement its Ordinance Nos. 365 and 417 and its Water Supply and Wastewater Service Agreement, as amended and supplemented by a First Supplemental Water Supply and Wastewater Service Agreement, with the Authority; WHEREAS, Section 1401 of Ordinance No. 365 provides that, without notice to or the consent of any other entity, the City may amend or supplement such Ordinance for the purpose of curing any formal defect, omission, inconsistency or ambiguity herein, to grant to or confer any additional rights, remedies, powers or authority that may lawfully be granted to or conferred, to conform this Ordinance to the Code or KMC\404202\BEL AIRE ORDINANCE . future applicable federal law concerning tax-exempt obligations, or in connection with any other change therein which is not materially adverse to the interests of the Authority; WHEREAS, the City hereby fmds that this Ordinance will amend or supplement Ordinance Nos. 365 and 417 only to cure a formal defect, omission, inconsistency or ambiguity and to provide for the issuance of the Series 2007 Bonds, which will provide debt service savings to the Authority and Agreement Obligation savings to the City and, as such, this Ordinance is not materially adverse to the interests of the Authority. NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF BEL AIRE, KANSAS, AS FOLLOWS: ARTICLE I DEFINITIONS Section 101. Definitions of Words and Terms. In addition to words and terms defined elsewhere in Ordinance Nos. 365 and 417 and in the Agreement, as amended and supplemented, the following words and terms as used in this Ordinance shall have the meanings hereinafter set forth. Unless the context shall otherwise indicate, words importing the singular number shall include the plural and vice versa, and words importing persons shall include firms, associations and corporations, including public bodies, as well as natural persons. "Additional Indebtedness Resolution" means Ordinance Nos. 365 and 417, this Ordinance and . the ordinances or resolutions under which any Additional Indebtedness is authorized. "Agreement" means the Water Supply and Wastewater Service Agreement, as amended and supplemented by the First Supplemental Agreement, as further amended and supplemented by the Second Supplemental Agreement, and as further amended and supplemented from time to time. "Ambac" shall mean Ambac Assurance Corporation, a Wisconsin-domiciled stock insurance company. "Bond Insurance Policy" means (a) with respect to the Series 2002 Bonds, the fmancial guaranty insurance policy issued by MBlA on the date of delivery of the Series 2002 Bonds insuring the payment when due of the principal of and interest on the Series 2002 Bonds, as provided therein, (b) with respect to the Series 2004 Bonds, the municipal bond insurance policy issued by FSA concurrently with the delivery of the Series 2004 Bonds guaranteeing the scheduled payment when due of the principal of and interest on the Series 2004 Bonds, and (b) with respect to the Series 2007 Bonds, the municipal bond insurance policy issued by Ambac concurrently with the delivery of the Series 2007 Bonds guaranteeing the scheduled payment when due of the principal of and interest on the Series 2007 Bonds. "Bond Insurer" means (a) with respect to the Series 2002 Bonds, MBlA; and (b) with respect to the Series 2004 Bonds, FSA; and (c) with respect to the Series 2007 Bonds, Ambac. . "Bonds" means the Series 2002 Bonds, the Series 2004 Bonds, the Series 2007 Bonds and any additional bonds of the Authority issut(d pursuant to the Indenture, secured in whole or in part by the Agreement. KMC\404202\BEL AIRE ORDINANCE 2 /. . "Disclosure Agreement" means, jointly, the Continuing Disclosure Agreements relating to the Series 2002 Bonds, the Series 2004 Bonds and the Series 2007 Bonds and certain obligations contained in the SEC Rule. "First Supplemental Agreement" means the First Supplemental Water Supply and Wastewater Service Agreement between the City and the Authority, dated as of October 1, 2004, which supplements the Water Supply and Wastewater Service Agreement in connection with the issuance of the Series 2004 Bonds. "FSA" means Financial Security Assurance Inc., a New York stock insurance company, or any successor thereto or assignee thereof. "MBIA" means MBIA Insurance Corporation, Armonk, New York. "Notice Address" means with respect to the following entities: (a) To the City at: City Hall 7651 E. Central Park Ave. Bel Aire, Kansas 67220 (b) To the Authority: . Chisholm Creek Utility Authority 5551 N. Broadway Park City, Kansas 67219 (c) To the Bond Insurer: Series 2002: MBIA Insurance Corporation 113 King Street Armonk, New York 10504 Series 2004: Financial Security Assurance Inc. 350 Park Avenue New York, New York 10022-6022 Series 2007: Ambac Assurance Corporation One State Street Plaza New York, New York 10004 (d) To the Trustee: . The Bank of New York Trust Company, N.A. 911 Washington Avenue St. Louis, Missouri 63101 KMC\404202\BEL AIRE ORDINANCE 3. . . . or such other address as is furnished in writing to the other parties referenced herein. "Notice Representative" means: (a) With respect to the City, the Clerk. (b) (c) Counsel. With respect to the Authority, the Manager thereof. With respect to the Bond Insurer, any Vice President, with a copy to its General (d) With respect to the Trustee and Escrow Agent, the senior Corporate Trust Officer. "Purchaser" means (a) with respect to the Series 2002 Bonds, U.S. Bancorp Piper Jaffray, Kansas City, Missouri, the original purchaser of the Series 2002 Bonds, and any successor and assigns; and (b) with respect to the Series 2004 Bonds, Piper Jaffray & Co., Leawood, Kansas, the original purchaser of the Series 2004 Bonds, and any successor and assigns; and (c) with respect to the Series 2007 Bonds, Piper Jaffray & Co., Leawood, Kansas, the original purchaser of the Series 2007 Bonds, and any successor and assigns. "Second Supplemental Agreement" means the Second Supplemental Water Supply and Wastewater Service Agreement between the City and the Authority, dated as of April 1, 2007, which supplements the Water Supply and. Wastewater Service Agreement, as amended and supplemented by a First Supplemental Agreement, in connection with the issuance of the Series 2007 Bonds. "Series 2002 Bonds" means the Authority's Water and Wastewater Facilities Revenue Bonds, Series 2002 (Cities of Bel Aire and Park City, Kansas Project), dated as of March 1,2002. "Series 2004 Bonds" means the Authority's Water and Wastewater Facilities Refunding Revenue Bonds, Series 2004 (Cities of Bel Aire and Park City, Kansas Project), dated as of October 1,2004. "Series 2007 Bonds" means the Authority's Water and Wastewater Facilities Refunding Revenue Bonds, Series 2007 (Cities of Bel Aire and Park City, Kansas Project), dated as of April 1, 2007. "Trustee" means the trustee designated in the Indenture, which is as of the date of the Series 2007 Bonds, The Bank of New York Trust Company, N.A., St. Louis, Missouri. "Water Supply and Wastewater Service Agreement" means the Water Supply and Wastewater Service Agreement between the City and the Authority, dated as of March 1, 2002, as amended and supplemented by the First Supplemental Agreement and by the Second Supplemental Agreement. ARTICLE IT AUTHORIZATION OF THE SECOND SUPPLEMENTAL AGREEMENT Section 201. Authorization of the Second Supplemental Agreement. The Second Supplemental Agreement is authorized and the Mayor and the Clerk are authorized and directed to execute the Second Supplemental Agreement on behalf of the City in substantially the form presented to the governing body this date, with such changes as may be approved by the Mayor and City Attorney. KMC\404202\BEL AIRE ORDINANCE 4 . . . Section 202. Preliminary and Final Official Statement. Th~ p'ortions of the Preliminary Official Statement relating to the Series 2007 Bonds which set forth City information, including AppendixA-2 thereto, dated March 8, 2007, are hereby ratified and approved. The portions of the fmal Official Statement relating to the Series 2007 Bonds which set forth City information, including Appendix A-2 thereto, are 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 use and public distribution of the portions of the fmal Official Statement setting forth City information, including Appendix A-2 thereto, by the Purchaser in connection with the reoffering of the Series 2007 Bonds is hereby authorized. The proper officials of the City are hereby authorized to execute and deliver a certificate pertaining to such Official Statement, dated as of the date of payment for and delivery of the Series 2007 Bonds. ARTICLE ill TAX COVENANTS Section 301. General Covenants. (a) The City covenants and agrees that (1) it will comply with all applicable provisions of the Code, including Code 99 103 and 141 through 150, necessary to maintain the exclusion from gross income for federal income tax purposes of the interest on the Series 2007 Bonds and (2) it will not use or permit the use of any proceeds of the Series 2007 Bonds or any other funds of the City, will not 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 2007 Bonds. The CitY will, in addition, adopt such other ordinances or resolutions and take such other actions as may be necessary to comply with the Code and with all other applicable future laws, regulations, published rulings and judicial decisions, in order to ensure that the interest on the Series 2007 Bonds will remain excluded from federal gross income, to the extent any such actions can be taken by the City. (b) The City covenants and agrees that (l) it will use any proceeds of the Series 2007 Bonds as soon as practicable and with all reasonable dispatch for the purpc>ses for which such proceeds are intended, and (2) it will not invest or directly or indirectly use or permit the use of any proceeds of the Series 2007 Bonds or any other funds of the City in any manner, or take or omit to take any action, that would cause the Series 2007 Bonds to be "arbitrage bonds" within the meaning of Code 9 148(a). (c) The City covenants and agrees that it will not use any portion of the proceeds of the Series 2007 Bonds, including any investment income earned on such proceeds, directly or indirectly, in a manner that would cause any Series 2007 Bond to be a "private activity bond" within the meaning of Code 9 141(a), or to make or finance a loan to any Person other than the State or a political subdivision thereof. ARTICLE IV CONTINUING DISCLOSURE REQUIREMENTS Section 401. Disclosure Requirements. The City hereby covenants with the Purchaser and the Beneficial Owners to provide and disseminate such information as is required by the SEC Rule and as further set forth in the Disclosure Agreement for the Series 2007 Bonds, which are incorporated herein by KMC\404202\BEL AIRE ORDINANCE 5 . . . reference. Such covenant shall be for the benefit of and enforceable by the Authority and the Beneficial Owners. Section 402. Failure to Comply with Continuing Disclosure Requirements. In the event the City fails to comply in a timely manner with its covenants contained in the preceding section, the Authority and/or any Beneficial Owner may make demand for such compliance by written notice to the City. In the event the City does not remedy such noncompliance within 10 days of receipt of such written notice, the Authority or any Beneficial Owner may in its discretion, without notice or demand, proceed. to enforce compliance by a suit or suits in equity for the specific performance of such covenant or agreement contained in the preceding section or for the enforcement of any other appropriate legal or equitable remedy, as the Authority and/or any Beneficial Owner shall deem effectual to protect and enforce any of the duties of the City under such preceding section. The Authority or Beneficial Owner shall provide a copy of any such demand or notice to the Bond Insurer. ARTICLE V PROVISIONS RELATING TO TIlE BOND INSURANCE POLICY Section 501. Consent of Bond Insurer. Any provision of this Ordinance expressly recognizing or granting rights in or to the Bond Insurer may not be amended in any manner which affects the rights of the Bond Insurer hereunder without the prior written consent of the Bond Insurer. The Bond Insurer's consent shall be required in addition to Authority consent, when required, for the execution and delivery of any supplemental Ordinance, or any amendment, supplement or change to or modification of other documents relating to the security for the Agreement Obligations. Section 502. Notices. (a) While the Bond Insurance Policy is in effect, the City shall furnish to the Bond Insurer: (1) As soon as practicable after the filing thereof, a copy of any fmancial statement of the City and a copy of any audit and annual report of the City; (2) A copy of any notice to be given to the Authority, including, without limitation, notice of defeasance of the Agreement Obligations; and (3 ) Such additional information it may reasonably request. (b) The City shall notify the Bond Insurer of any failure of the City to provide relevant notices, certificates, etc. ( c) Notwithstanding any other provision of this Ordinance, the City shall immediately notify the Bond Insurer if at any time there are insufficient moneys to make any paym,ents of Agreement Obligations and immediately upon the occurrence of any Event of Default hereunder. (d) The City agrees, and hereby directs the Authority or Trustee, to notify the Bond Insurer of any Event of Default of which any such party has actual knowledge, such notification to be made within five Business Days of such actual knowledge. KMC\404202\BEL AIRE ORDINANCE 6 . . . (e) The City shall notify the Bond Insurer of the commencement of any proceeding by or against the City commenced under the United States Bankruptcy Code or any other applicable bankruptcy, insolvency, receivership, rehabilitation or similar law (an "Insolvency Proceeding"); (f) Copies of any supplement, modification or amendment to this Ordinance or the Agreement shall be sent to Standard & Poor's and Moody's.at least 10 days prior to the effective date thereof. (g) All notices required to be given to the Bond Insurer under this Ordinance shall be in writing and shall be sent by registered or certified mail addressed to the Notice Address. Section 503. Exercise of Rights by Bond Insurer. The rights granted to the Bond Insurer under this Ordinance or the Agreement to request, consent to or direct any action are rights granted to the Bond Insurer in consideration of its issuance of the Bond Insurance Policy. Any exercise by the Bond Insurer of such rights is merely an exercise of the Bond Insurer's contractual rights and shall not be construed or deemed to be taken for the benefit or on behalf of the Bond holders nor does such action evidence any position of the Bond Insurer, positive or negative, as to whether a Bond holder consent is required in addition to consent of the Bond Insurer. Section 504. Bond Insurance Provisions of Ordinance No. 365. In addition to the provisions of Sections 501 and 502 and all other provisions of this Ordinance that relate to the Bond Insurance Policy or the Bond Insurer, all provisions of Ordinance No. 365 which relate to the Bond Insurance Policy or the Bond Insurer are made expressly applicable to the Bond Insurer for the Series 2007 Bonds. ARTICLE VI MISCELLANEOUS PROVISIONS Section 601. Inconsistent Provisions. Except with respect to Section 301 hereof, the provisions of which shall apply from the Dated Date set forth in Ordinance Nos. 365 and 417 and shall expressly apply in connection with the First Supplemental Agreement, Second Supplemental Agreement, the Series 2004 Bonds and the Series 2007 Bonds, in case anyone or more of the provisions of this Ordinance shall for any reason be inconsistent with the provisions of Ordinance Nos. 365 or 417 or any ordinance or resolution authorizing any Additional Indebtedness: (a) the provisions of Ordinance Nos. 365 and 417 shall prevail with respect to Agreement Obligations incurred prior in time to this Ordinance, so long as such Agreement Obligations are Outstanding; and (b) the provisions of this Ordinance shall prevail with respect to any Additional Indebtedness incurred subsequent to this Ordinance, so long as any Agreement Obligations are Outstanding. Section 602. Electronic Transactions. The transactions contemplated by this Ordinance may be conducted, and documents may be stored, by electronic means. Section 603. Further Authority. The officers and officials of the City, including the Mayor and Clerk, are hereby authorized and directed to execute all documents and take such actions as they may deem necessary or advisable in order to carry out and perform the purposes of this Ordinance and to make ministerial alterations, changes or additions in the foregoing agreements, statements, instruments and othc:lr documents herein approved, authorized and confirmed which they may approve, and the execution or taking of such action shall be conclusive evidence of such necessity or advisability. KMC\404202\BEL AIRE ORDINANCE 7 . . . Section 604. Severability. If any section or other part of this Ordinance, whether large or small, is for any reason held invalid, the invalidity thereof shall not affect the validity of the other provisions of this Ordinance. Section 605. Governing Law. This Ordinance shaH be governed exclusively by and construed in accordance with the applicable laws of the State. Section 606. Effective Date. This Ordinance shall take effect and be in full force from and after its passage by the governing body of the City. PASSED by the governing body of the City on April 3, 2007, and APPROVED AND SIGNED by the Mayor. (SEAL) ~~ Mayor ATTEST: ~~ '1J1~ Clerk CERTIFICATE I, the undersigned, hereby certify that the above and foregoing is a true and correct copy of the Ordinance No.-5f,57 (the "Ordinance") of The City of Bel Aire, Kansas, passed by the governing body on April 3, 2007 as the same appears of record in my office, and that this Ordinance has not been modified, amended or repealed and is in full force and effect as of this date. DATED: April 3, 2007. ~ 7n~ "~rk KMC\404202\BEL AIRE ORDINANCE 8 . . . Gilmore & Bell, P.c. 3/19/2007 SECOND SUPPLEMENTAL WATER SUPPLY AND WASTEWATER SERVICE AGREEMENT BETWEEN THE CmSHOLMCREEK UTILITY AUTHORITY AND THE CITY OF BELAIRE, KANSAS . . . Section 1.1. Section 1.3. Section 1.4. Section 1.5. Section 1.6. Section 1. 7. Section 1.9. TABLE OF CONTENTS PART I Definitions... .... ......... ..... ..................... ....................... ........... ......................... ...................... 1 Tax Covenant. ......... ...... ......... ........ ..... ........... ........... ......... ........ ............................. ....... ..... 2 Governing Law. ... .... ..... :........ ............ ............... ............ ....... ............. ..... ................. ....... ..... 2 Amended Exhibit C....... ..... ........................ '" .......;.... ......... ...... ......... ....... .............. ........ .....3 Severability; Inconsistent Provisions ................. ......... ....... ........... ......... ....... '" ........ ...........3 Ratification of Agreement.............................................................................. ........... ..........3 Electronic Transactions....................................................................................................... 3 . . . SECOND SUPPLEMENTAL WATER SUPPLY AND WASTEWATER SERVICE AGREEMENT This Second Supplemental Water Supply and Wastewater Service Agreement made and entered. into as of April 1, 2007, by and between THE CmSHOLM CREEK UTILITY AUTHORITY (the "Seller") and the CITY OF BEL AIRE, KANSAS (the "Purchaser"). WITNESSETH: WHEREAS, the Seller and Purchaser have heretofore entered into a Water Supply and Wastewater Service Agreement, dated as of March 1,2002 (the "Original Agreement"), as amended and supplemented by a First Supplemental Water Supply and Wastewater Service Agreement, dated as of October 1, 2004 (the "First Supplemental Agreement," and jointly with the Original Agreement, the "Agreement"), pursuant to which the Purchaser purchases potable water and wastewater collection and treatment services from the Seller; and WHEREAS, in connection with the Original Agreement, Seller financed certain water supply and distribution system improvements and wastewater collection and treatment improvements (as defmed in the Original Agreement, the "Initial Project") through the issuance of certain revenue bonds (as defined in the Original Agreement, the "Initial Project Bonds"); and WHEREAS, the Seller has, pursuant to the Bond Indenture and Section 7.2 of the Original Agreement, authorized the issuance of its Water and Wastewater Facilities Refunding Revenue Bonds (Cities of Bel Aire and Park City, Kansas Project), Series 2007" in an aggregate principal amount $19,415,000 (the "Series 2007 Bonds"), to refund in advance of maturity a portion of the Initial Project Bonds and has determined that, as a result of such refunding, the Monthly Wastewater Service Costs and Monthly Water Supply Costs will be reduced; and WHEREAS, pursuant to Section 10.2(f) of the Original Agreement, the Original Agreement may be amended, modified or otherwise altered in any manner by writing signed by both parties; and WHEREAS, the Seller, pursuant to its Resolution No. 2007--, and the Purchaser, pursuant to its Ordinance No. _, have authorized the execution of this Second Supplemental. Water Supply and Wastewater Service Agreement in connection with the issuance of the Series 2007 Bonds. NOW, THEREFORE, in consideration of the foregoing and of the mutual agreements and covenants herein contained, the Seller and the Purchaser hereby agree as follows: PART I Section 1.1. . Definitions. As used herein, the terms hereinafter set forth shall have the meanings hereinafter given. In addition to the words and terms defmed in this Second Supplemental Agreement, the capitalized words and terms in this Second Supplemental Agreement shall have the meanings assigned in the Original Agreement and First Supplemental Agreement, unless some other meaning is plainly intended. "Agreement" shall mean, jointly, the Original Agreement, the First Supplemental Agreement, and this Second Supplemental Agreement, by and between Seller and the Purchaser, as the same may be amended from time to time pursuant hereto. . . . "Bond Indenture" shall mean the Trust Indenture, as amended and supplemented by a First Supplemental Trust Indenture and a Second Supplemental Trust Indenture, between Seller and The BNY Trust Co. of Missouri, S1. Louis, Missouri, or successors and assigns, as Trustee, authorizing the issuance of System revenue bonds of the Seller, including the Initial Project Bonds, the Series 2004 Bonds and the Series 2007 Bonds, as amended or supplemented as in the Bond Indenture provided. "Purchaser's Ordinance" means, jointly, Ordinance Nos. 365, 417 and _ of the Purchaser, which approve and authorize execution of the Agreement and make certain covenants in relation thereto, as amended and supplemented. "Resolution" shall mean, jointly, the resolutions of the Seller authorizing the Bond Indenture and the issuance of the Initial Project Bonds, the Series 2004 Bonds and the Series 2007 Bonds. "System Bonds" shall mean the Initial Project Bonds, the Series 2004 Bonds, the Series 2007 Bonds, additional bonds permitted by Section 7.1 of the Original Agreement and refunding bonds permitted by Section 7.2 of the Original Agreement. "Wastewater Base Charge" shall mean the amount owed by Purchaser to Seller with respect to Debt Service for the Wastewater collection and treatment portion of the System, as set forth on Exhibit C attached to this Second Supplemental Agreement, plus amounts necessary, following draws on the Debt Service Reserve Fund established by the Bond Indenture, to replenish such Fund to the Series Required Reserve established by the Bond Indenture. Such replenishment shall be done in the proportion that the Purchaser's $13,505,000 Wastewater collection and treatment portion of the Initial Project Bonds bears to the total principal amount of the Initial Project Bonds. "Water Base Charge" shall mean the amount owed by Purchaser to Seller with respect to Debt Service for the Water treatment and supply portion of the System, as set forth on Exhibit C attached to this Second Supplemental Agreement, plus amounts necessary, following draws On the Debt Service Reserve Fund established by the Bond Indenture, to replenish such Fund to the Series Required Reserve established by the Bond Indenture. Such replenishment shall be done in the proportion that the Purchaser's $15,475,000 Water treatment and distribution portion of the Initial Project Bonds bears to the total principal amount of the Initial Project Bonds. Section 1.2. Effective Date, Term. Upon execution of this Second Supplemental Agreement by the Seller and the Purchaser and the execution of similar contracts by the Seller and the other Contracting Members, this Second Supplemental Agreement shall be in full force and effect. The term of the Agreement shall extend to the last day of the Contract Year in which all System Bonds and the interest thereon have been paid in full or provision for the payment thereof has been made in accordance with any indenture or bond resolution relating thereto. Section 1.3. Tax Covenant. The Seller shall not make any sale or sales of Wastewater Services or Water which might adversely affect the tax-exempt status of any System Bonds. The Purchaser shall not, without the prior written consent of the Seller, resell any of the Water purchased under the terms of this Agreement except by retail to regular customers of the Purchaser's System. No such sale shall be made to any public water supply district, city or any other entity operating a water distribution system, except with the prior written consent of the Seller. Section 1.4. Governing Law~ The Agreement shall be governed by and construed ill accordance with the laws of the State of Kansas. -2- . . . Section 1.5. Amended Exhibit C. Exhibit C to the Agreement shall now be and refer to Exhibit C attached to this Second Supplemental Agreement. Such Exhibit C now reflects Wastewater Base Charges and Water Base Charges applicable after issuance of the Series 2007 Bonds. Section 1.6. Severability; Inconsistent Provisions. If any provision in the Agreement is declared illegal or no longer in force by reason of any judgment or order issued by any court or' regulatory body of jurisdiction, all remaining provisions of the Agreement not affected by such judgment or order shall continue in full force and effect. In case anyone or more of the provisions of this Second Supplemental Agreement shall for any reason be inconsistent with the provisions of the Original Agreement and the First Supplemental Agreement, the provisions of the Original Agreement and the First Supplemental Agreement shall prevail with respect to the Initial Project Bonds and Series 2004 Bonds, so long as such Initial Project Bonds and Series 2004 Bonds are outstanding. Section 1.7. Ratification of Agreement. Except as expressly modified in this Second Supplemental Agreement, the Original Agreement and First Supplemental Agreement and the covenants therein contained are hereby ratified and confIrmed by the parties as of the date of this Second Supplemental Agreement. Section 1.9. Electronic Transactions. The transactions related to the Agreement and described therein may be conducted and documents may be stored by electronic means. -3- . . . CITY OF BEL AIRE. KANSAS BY~~~ ayor ATTEST: ~ lnMLR_ City Clerk ACKNOWLEDGMENT AND VERIFICATION OF SIGNATURES I hereby certify that I am personally acquainted with the Mayor and Clerk of the Purchaser whose signatures appear above; and that I know that the signatures appearing above are the true and genuine signatures of said Mayor and Clerk. ~~~~ Notary Public ~. VICKI S. BRADFORD I (Seah~ Notary Public. Stale ~f Kansas My Appt. Expires # - 01-<.' Q 7' My Appointment Expires: 11- ,;(I.l. - 07 , -5- . ' . EXHIBIT C Wastewater Base Charge and Water Base Charge (Effective as of April 12, 2007, the date of issue ofthe Series 2007 Bonds) . .