COMMITTEE SUBSTITUTE FOR ORDINANCE NO. 070482

Approving the conversion to a fixed rate of the interest rate on certain bonds previously issued by The Industrial Development Authority of the City of Kansas City, Missouri and the entering into one or more swap agreements; approving and authorizing certain documents and actions relating to the fixing of the interest rate and swap agreement relating to such bonds.

WHEREAS, The Industrial Development Authority of the City of Kansas City, Missouri (the "Issuer") is a public corporation duly organized and existing under Chapter 349, Revised Statutes of Missouri, as amended (the Act); and

WHEREAS, pursuant to the Indenture of Trust, dated as of March 1, 2005 (the Original Indenture) between the Issuer and UMB Bank, N.A., as Trustee, as amended and supplemented by a First Supplemental Indenture of Trust, dated as of July 1, 2006 (the First Supplemental Indenture), the Issuer has previously issued its $115,015,000.00 Variable Rate Demand Tax‑Exempt Revenue Bonds (Kansas City Downtown Redevelopment District), Series 2005A (the Series 2005A Bonds), its $64,985,000.00 Variable Rate Demand Tax‑Exempt Revenue Bonds (Kansas City Downtown Redevelopment District) Series 2005B (the Series 2005B Bonds), its $69,500,000.00 Variable Rate Demand Tax‑Exempt Revenue Bonds (Kansas City Downtown Redevelopment District), Series 2006A (the Series 2006A Bonds) and its $45,500,000.00 Variable Rate Demand Tax‑Exempt Revenue Bonds (Kansas City Downtown Redevelopment District) Series 2006B in the aggregate principal amount of (the Series 2006B Bonds) (collectively, the Bonds) to finance certain costs associated with the Kansas City Downtown Redevelopment Project (the Project); and

WHEREAS, in connection with the issuance of the Bonds, the City has previously entered into a Financing Agreement dated as of March 1, 2005 (the 2005 Financing Agreement) and a Financing Agreement dated as of July 1, 2006 (the 2006 Financing Agreement and collectively, the Financing Agreement) pursuant to which the City has agreed, subject to annual appropriation, to make certain payments to pay debt service on the Bonds and to make certain additional payments; and

WHEREAS, the City proposes that the Original Indenture and the First Supplemental Indenture be amended pursuant to the Amended and Restated Indenture of Trust dated as of the date set forth therein (collectively, the Indenture)to facilitate a restructuring of the Bonds and the Issuer is authorized to make such amendments pursuant to the Indenture; and

WHEREAS the City proposes that the interest rate on the Series 2005A Bonds be converted to a fixed rate of interest; and

WHEREAS, in connection with such transaction, the Issuer will enter into a Series 2005A Series Supplement to the Indenture dated as of the date set forth therein; and

WHEREAS, the City proposes that the Issuer enter into an ISDA Master Agreement, Schedule, Credit Support Annex and one or more Confirmations (collectively, the swap agreement) relating to each of the Series 2005B Bonds and the Series 2006A Bonds, swapping the floating interest rate thereon to a fixed rate (subject to the conditions set forth in the swap agreement); and

WHEREAS, the City has been advised by counsel that the proposed swap agreement fits within the legal constraints imposed by applicable law, the Indenture, City resolutions and other contracts, and the City in consultation with its financial advisor has evaluated the costs, benefits, risks and other considerations regarding the proposed swap transaction; and

WHEREAS, in connection with such swap transaction, the City and the Issuer will enter into a Supplement to the Financing Agreement (Swap Transactions); and

WHEREAS, in connection with the execution and delivery of the Amended and Restated Indenture of Trust and in connection with the conversion to fixed rate transaction described herein, each respective series of Bonds will be remarketed pursuant to the respective Remarketing Agreement entered when such series of Bonds was issued; and

WHEREAS, the City has found and determined that restructuring the Bonds and the conversion to a fixed rate of interest on the Series 2005A Bonds and the entering of a swap agreement with respect to the Series 2005B Bonds and Series 2006A Bonds issued to finance the Project will benefit the citizens of the City; and

WHEREAS, in order to accomplish the foregoing, it is necessary and desirable that the City approve the transaction described in this Ordinance and the execution and delivery of the financing documents and certain other matters in connection with the transaction, as herein provided; NOW, THEREFORE,

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:

Section 1. Approval of Restructuring of Bonds. The City hereby requests, directs and instructs the Issuer to, and consents to and approves the restructuring by the Issuer of the Bonds issued to finance the Project, for the purpose of converting the interest rate on the Series 2005A Bonds to a fixed rate of interest and entering a swap agreement with respect to the Series 2005B Bonds and the Series 2006A Bonds to swap the floating interest rate thereon to a fixed rate (subject to the conditions set forth in the swap agreement), the remarketing of each series of the Bonds to facilitate such transactions and the funding of certain costs of remarketing of the Bonds. The Series 2005A Bonds upon conversion to a fixed rate of interest shall bear interest at rates not to exceed 6.0% per annum and the Series 2005B Bonds and Series 2006A Bonds upon the entry of the swap agreement shall have a interest cost of not to exceed 6.0% per annum, and shall have such other terms and provisions as shall be provided in the applicable supplemental indenture of trust or swap agreement approved by the Director of Finance.

Section 2. Authorization and Approval of Financing Documents. The proposed documents relating to the financing (the Financing Documents) are hereby approved in substantially the forms submitted to the City Council, and the Director of Finance is authorized to execute and deliver the Financing Documents with such changes therein and additions thereto as the Director of Finance deems necessary or appropriate.

(a) Supplement to Financing Agreement (Swap Transactions).

(b) Continuing Disclosure Agreement, under which the City agrees to provide continuing disclosure of certain financial information, operating data and material events, for the benefit of the owners of the applicable series of Bonds.

The City Council further approves the execution and delivery by the City of any documents which may be required in connection with the execution and delivery by the Issuer of the Amended and Restated Indenture, the Series 2005A Series Supplement to the Indenture and the swap agreement, documents relating to the remarketing of the Bonds and of such other documents as the Director of Finance deems necessary or appropriate in connection with the transactions authorized by this Ordinance.

Section 3. Conversion of Series 2005A Bonds to Fixed Rate of Interest. The Issuers conversion of the interest rate on the Series 2005A Bonds to a fixed rate of interest is hereby approved and the Director of Finance is hereby authorized and directed to execute, enter into and deliver on behalf of the City any documents, certificates and instruments with respect thereto as the Director of Finance determines to be in the best interest of the City.

Section 4. Floating-to-Fixed Swap Relating to Series 2005B Bonds and Series 2006A Bonds. The Issuers entering into the swap agreement to effect a floating-to-fixed rate swap relating to the Series 2005B Bonds and the Series 2006A Bonds (subject to the conditions set forth in the swap agreement) is hereby approved and the Director of Finance is hereby authorized and directed to execute, enter into and deliver on behalf of the City any documents, certificates and instruments with respect thereto as the Director of Finance determines to be in the best interest of the City. One or more prequalified Counterparties designated by the Director of Finance shall be authorized to bid on a competitive basis. The Director of Finance is delegated the power, in consultation with the financial advisor, to negotiate the price and other terms and conditions of the swap transaction with the Counterparties. The term of the swap as to a series of Bonds shall not exceed the term of the applicable series of Bonds and the notional amount of the swap shall not exceed $135,000,000. The Director of Finance is authorized to modify the swap transaction, provided that the modifications do not extend the average life of the term of the swap, increase the overall risk to the City resulting from the swap or increase the notional amount of the swap beyond parameters stated herein. The Director of Finance is authorized in such Directors discretion to divide the swap agreement and award portions of the notional amount of the swap agreement to more than one of the prequalified Counterparties so long as the divided awards have the same economic effect as a single swap agreement.

Section 5. Remarketing Statements. The City hereby delegates authority to the Director of Finance to prepare, approve and deem final any Preliminary Remarketing Statements and any final Remarketing Statements relating to the remarketing of the Bonds, with the signature of the Director of Finance thereon being conclusive evidence of the Director's approval and the City's approval thereof, and the Director of Finance is further authorized to approve the final terms of the conversion to fixed rate of the interest on the Series 2005A Bonds. The City hereby consents to the use and public distribution of any Preliminary Remarketing Statements and any final Remarketing Statements in connection with the remarketing of the Bonds.

Section 6. Financial Advisor. The City hereby authorizes the selection of First Albany Capital Inc. and Valds & Moreno, Inc. as the co-financial advisors to the City for the conversion to fixed rate and floating-to-fixed swap transactions described in this Ordinance.

Section 7. Underwriters for Conversion of Series 2005A Bonds to Fixed Rate of Interest. The City hereby authorizes the selection of Oppenheimer & Company Inc., Piper Jaffray & Co. and Harvestons Securities, Inc. as co-underwriters for the conversion to fixed rate of the Series 2005A Bonds, subject to satisfactory negotiation of the terms thereof as approved by the Director of Finance.

Section 8. Further Authority. The officials of the City, Kutak Rock LLP and The Broadus Law Firm as co-swap counsel, Kutak Rock LLP and The Hardwick Law Firm LLC as co-bond counsel, First Albany Capital Inc. and Valds & Moreno, Inc. as co-financial advisors, Oppenheimer & Company Inc. as Remarketing Agent for the Series 2005A Bonds, Series 2005B Bonds and Series 2006A Bonds, Stern Brothers & Co. as Remarketing Agent for the Series 2006B Bonds and Oppenheimer & Company Inc., Piper Jaffray & Co. and Harvestons Securities, Inc., as co-underwriters for the conversion to fixed rate of the Series 2005A Bonds are further authorized and directed to execute such documents, instruments and certificates and to take such further actions on behalf of the City as shall be necessary or desirable to effect the terms and provisions of this Ordinance.

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Approved as to form and legality:

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Heather A. Brown

Assistant City Attorney