Agenda Item No.

IV-2 City of Wichita City Council Meeting October 8, 2013 Mayor and City Council Approval of the Development Agreement for the Exchange Place Project (District VI) Office of Urban Development New Business

TO: SUBJECT:

INITIATED BY: AGENDA:

Recommendations: Approve first reading of the home rule ordinance authorizing the execution of the Development Agreement and the issuance of bonds. Background: On May 8, 2007, the City Council adopted an ordinance establishing a redevelopment district in the area between English Street, First Street North, Broadway Avenue and Main Street, for the purpose of allowing the use of tax increment financing (TIF) to pay a portion of the costs of constructing redevelopment projects in that area. On July 24, 2007, the City Council adopted the Exchange Place Project Plan and approved the original Exchange Place Development Agreement. The Development Agreement has been amended several times without amending the TIF Project Plan, to reflect various changes. On October 1, 2013, the City Council held a public hearing to consider the adoption of a new TIF Project Plan and approved by two-thirds majority vote the first reading of an ordinance adopting the Project Plan. Final adoption of the ordinance is scheduled for consent approval on October 8, 2013. The new Developer, KS1, LLC/John McWilliams has received a loan commitment from the U.S. Department of Housing and Urban Development (HUD); however, recent increases in market interest rates have reduced the amount of funds the Developer can borrow, creating a funding gap. Staff has worked with the developer and his consultants and vendors to close the financing gap. Measures that address the gap are included in the proposed Amended and Restated Development Agreement, which is summarized below. Analysis: The current TIF Project Plan is to construct 230 apartments in two vacant buildings and a new addition, and to build a 273-car automated parking structure. The total project budget is over $66 million, of which at least $45,000,000 is to be provided by the Developer pursuant to the Amended and Restated Development Agreement. The Amended and Restated Development Agreement includes certain conditions precedent to be met, including the Developer providing evidence of a loan commitment from HUD and any necessary additional funding to provide the full $45,000,000 amount of Developer Improvement Contribution. The City will provide TIF funding in an amount not to exceed $12,500,000 for the acquisition of land and construction of the parking structure. In addition, the Amended and Restated Development Agreement states the Citys intent to issue Industrial Revenue Bonds (IRBs) in an amount not to exceed $30,000,000 in order to provide an exemption on sales tax for the costs of construction materials and furnishings for the project. The IRBs will be purchased with the proceeds of the HUD loan.

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Exchange Place Development Agreement October 8, 2013 Page 2 City funding will be paid to the HUD lender, Gershman Mortgage, to be dispersed for statutorily eligible costs as development occurs, pursuant to HUD regulations. The City will review draw requests for City funds, along with Gershman. The Developer will provide the City with a detailed accounting of final construction expenditures to ensure eligibility for TIF financing. A $1,000,000 escrow will be established from which the City may draw funds to cover any shortfall in TIF revenue needed for debt service on TIF bonds issued to fund the City contribution. The escrow will be funded with unused construction contingency funded by the HUD loan once the project is completed. The City will contract with Gershman Mortgage to serve as escrow agent, with the City having sole access to escrow funds to cover any shortfall in TIF revenue needed to pay TIF bonds. If TIF revenue exceeds 110% of the maximum annual debt service requirement for two consecutive years, any remaining escrow will be released to the Developer. The Developer will not be required to pledge project cash flow to the debt service to cover any TIF shortfall. TIF cash flow is anticipated to be strong enough to not need the pledge. The City does not covenant to restrict any additional TIF project plans within the Project Area until TIF debt for the Exchange Place is retired. Businesses with claims outstanding for payment for work previously performed on the Wichita Executive Center building will be paid one-half the amount still owed from the proceeds of the HUD loan and will receive the balance due upon completion of the construction work from funds remaining in the construction contingency fund after the Citys $1,000,000 TIF shortfall escrow has been fully funded. Financial Considerations: The City contribution in the amount of $12,500,000 will be paid to Gershman Mortgage at the HUD closing pursuant to closing instructions to be dispersed by Gershman. This payment will be financed by full faith and credit bonds paid by TIF revenue generated within the Exchange Place project area and TIF shortfall escrow funds. Any shortfall in revenue from these sources needed for debt service on the bonds will be paid from the Citys debt service fund. Legal Considerations: The Law Department has reviewed and approved as to form the attached home rule ordinance required to authorize the execution of the amended and restated development agreement and bonding authorization needed to initiate the TIF-funded improvement project. Recommendation/Action: It is recommended that the City Council: 1. Approve first reading of the home rule ordinance authorizing the execution of the Amended and Restated Development Agreement and authorizing bond issuance for the TIF funded improvements and 2. Authorize the necessary signatures. Attachment(s): x Amended and Restated Development Agreement between the City and KS1, LLC x Home Rule Ordinance authorizing the execution of the Development Agreement and bond issuance

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(PUBLISHED IN THE WICHITA EAGLE ON OCTOBER 25, 2013) ORDINANCE NO. 49-587 A HOME RULE ORDINANCE AUTHORIZING THE EXECUTION OF AN AMENDED AND RESTATED DEVELOPMENT AGREEMENT AND RELATED DOCUMENTS AND THE ISSUANCE OF BONDS OF THE CITY OF WICHITA, KANSAS TO PAY ALL OR A PORTION OF THE COSTS OF ACQUIRING REAL PROPERTY, DEMOLITION OF EXISTING STRUCTURES, AND DESIGN AND CONSTRUCTION OF A PARKING GARAGE, AND SITE IMPROVEMENTS RELATED TO THE CENTER CITY SOUTH REDEVELOPMENT DISTRICT, EXCHANGE PLACE PROJECT AREA. WHEREAS, the City of Wichita, Kansas (the City) is a municipal corporation duly organized and validly existing under the laws of the State of Kansas as a city of the first class; and WHEREAS, pursuant to K.S.A. 12-1770 et seq., as amended (the "Act") and Ordinance No. 47475, passed May 8, 2007, and published May 11, 2007, the City Council (the Governing Body) of the City of the City established a redevelopment district pursuant to the Act., as amended, known as the Center City South Redevelopment District (the District); and WHEREAS, by Ordinance No. 48-124, passed December 9, 2008, and published December 12, 2008, the City added certain property and increased the boundaries District pursuant to K.S.A. 12-1771(f) and made a substantial change to the District Plan for the District; and WHEREAS, the City has heretofore, in 2007, approved a redevelopment project plan for the Exchange Place Project Area (the Project Area) within the District, which plan has been amended on two occasions; and WHEREAS, due to economic conditions and the inability of the designated project developers to obtain financing, the redevelopment project plan has not been commenced, thus not completed and needs to be abandoned; and WHEREAS, the City has prepared a new redevelopment project plan for the Project Area, dated as of August 22, 2013 (the Project Plan), has negotiated an amended and restated redevelopment agreement with respect thereto and is considering adoption of the Project Plan and approval of such redevelopment agreement; and WHEREAS, on August 22, 2013, the Wichita Sedgwick County Metropolitan Area Planning Commission reviewed the proposed Project Plan and has adopted a resolution finding that the Project Plan is consistent with the comprehensive plan for the development of the City; and WHEREAS, pursuant to the requirements of the Act and Resolution No. 13-162, adopted August 27, 2013, the Governing Body conducted a public hearing on October 1, 2013 relating to the approval of the Project Plan; and WHEREAS, by Ordinance No. 49-[____], passed October 8, 2013, and to be published October 11, 2013, the City adopted the Project Plan, which includes, but is not limited to, the acquisition of land within the Project Area, the demolishing of certain existing structures thereon, the design and construction

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of a parking garage and making certain other site improvements, all in conjunction with development of additional housing and commercial structures by a private developer within the Project Area; and WHEREAS, the Project Plan also authorizes the issuance by the City of its full faith and credit tax increment bonds of the City in order to finance all or a portion of the redevelopment project costs to be paid by the City; and WHEREAS, the City has negotiated an amended and restated development agreement with the developer of the Project Area to implement the Project Plan, (the Development Agreement), which has been submitted to the Governing Body for consideration; and WHEREAS, pursuant to the Constitution, particularly Article 12, Section 5 thereof, and statutes of the State of Kansas, particularly of K.S.A. 12-101 et seq., as amended (collectively, the Home Rule Act), the Act and K.S.A. 13-1024a, as amended by Charter Ordinance No. 156 of the City (the Charter Ordinance), the Governing Body hereby finds and determines that it is necessary and desirable and in the interest and for the general economic welfare of the City and its inhabitants, that the City enter into the Development Agreement, authorize, in order to implement the Project Plan, the issuance of its: (a) full faith and credit tax increment bonds, in one or more series, in an aggregate principal amount necessary to finance eligible costs authorized by the Act, and related reserves and financing costs, and (b) the issuance of general obligation bonds of the City, in one or more series, in an aggregate principal amount necessary to finance costs authorized by the Home Rule Act and/or the Charter Ordinance, and related reserves and financing costs (collectively, the Bonds); and WHEREAS, in connection with the implementation of the Development Agreement and issuance of the Bonds, it is contemplated that the City will enter into various other agreements and issue various certificates and the Governing Body desires to authorize execution of such necessary documents and certificates. NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF WICHITA, KANSAS: SECTION 1. Development Agreement. The Development Agreement is hereby approved in substantially the form presented to the Governing Body, with such changes as may be approved by the City Attorney, which provides, in part that it is necessary to acquire real property located within the Project Area of the District, to demolish certain existing structures located thereon, and to design and construct a parking garage and site improvements located within the Project Area as described in the Project Plan. The Mayor is hereby authorized to execute the Development Agreement by and on behalf of the City and the City Clerk is hereby authorized to attest such signature. SECTION 2. Financing Authorization. The Governing Body hereby declares it to be its intention to issue and sell, pursuant to the Home Rule Act, the Act and the Charter Ordinance, the Bonds, to finance all or a portion of the project costs described in Section 1 hereof to be paid by the City pursuant to the Development Agreement. Project Costs allocated to the City pursuant to the Development Agreement not paid from proceeds of the Bonds may be paid from available revenues of the City. In order to temporarily finance the aforesaid project costs prior to the issuance of the Bonds as hereinbefore provided, there may be issued temporary improvement notes, in one or more series, in an aggregate principal amount not exceeding the authorization for the Bonds (the Notes). The Bonds and Notes may be issued to reimburse the City for project costs pursuant to Treasury Regulation 1.150-2. SECTION 3. Further Authority. The Mayor, City Manager, City Clerk and other City officials and legal counsel are hereby further authorized and directed to execute any and all documents as
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may be approved by the City Attorney and take such actions as they may deem necessary or advisable in order to carry out and perform the purposes of this Ordinance, and the execution or taking of such action shall be conclusive evidence of such necessity or advisability. SECTION 4. Effective Date. This Ordinance shall take effect and be in force from and after its passage and publication one time in the official City newspaper. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]

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PASSED by the Governing Body on October 22, 2013.

Carl Brewer, Mayor (Seal) ATTEST:

_______________________________ Karen Sublett, City Clerk

APPROVED AS TO FORM:

Gary Rebenstorf, City Attorney

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CERTIFICATE I, the undersigned, hereby certify that the above and foregoing is a true and correct copy of the original Ordinance No. 49-587 (the Ordinance) of the City of Wichita, Kansas (the City); that said Ordinance was passed by the City Council on October 22, 2013, that the record of the final vote on its passage is found on page ____ of journal ____; that it was published in the official newspaper of the City on October 25, 2013; and that the Ordinance has not been modified, amended or repealed and is in full force and effect as of this date. DATED: October 25, 2013.

Karen Sublett, City Clerk

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AMENDED AND RESTATED DEVELOPMENT AGREEMENT REGARDING DEVELOPMENT OF THE EXCHANGE PLACE BUILDING, MICHIGAN BUILDING BITTING BUILDING AND PARKING GARAGE

BY AND AMONG CITY OF WICHITA, KANSAS

AND

KS1 LLC

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Table of Contents Page Summary ................................................................................................................................ 3 Background and Recitals ....................................................................................................... 3 Section 1. Definitions and Exhibits ..................................................................................... 4 Section 2. Project ................................................................................................................. 7 Section 3. Construction Phase.............................................................................................. 8 Section 4. Additional Rights and Obligations....................................................................10 Section 5. Insurance, Bonding and Indemnification..........................................................11 Section 6. Term and Survival.............................................................................................13 Section 7. Representations, Warranties and Guaranties ....................................................13 Section 8. Tax Increment Shortfall Escrow & Pledge ......................................................14 Section 9. General Provisions ............................................................................................15

EXHIBITS A B C D E F G H Site Plans Development Budget Development Schedule Development Concept Schedule of Tax Projections Legal Descriptions Project Land Form of Letter of Intent to Issue Industrial Revenue Bonds Revised Non-Discrimination and Equal Employment Opportunity/Affirmative Action Program Requirements Statement for Contracts or Agreements

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AMENDED AND RESTATED DEVELOPMENT AGREEMENT for THE EXCHANGE PLACE BUILDING MICHIGAN BUILDING BITTING BUILDING AND PARKING GARAGE THIS AGREEMENT is made Effective _________, 2013 between the City of Wichita, a municipal corporation organized under the laws of the State of Kansas (the "City"), and KS1 LLC, a Kansas limited liability company ("Developer"). It amends and restates the Development Agreement for the Exchange Place Building, Michigan Building and Parking Garage dated July, 2007 and previously amended and restated December 16, 2008, April 20, 2010 and December 18, 2012. Summary This Agreement concerns plans to renovate the North side of the 200 block of East Douglas and the Northwest Corner of Douglas and Market. Exchange Place Building (110 N. Market) the Bitting Building (107 N. Market) and the new Douglas Building will be converted into a residential and commercial complex. The Project complex consists of 230 residential units on upper levels, retail on the first floors and a new 273 stall parking garage. The garage will serve the apartments at Exchange and Douglas buildings, retail businesses and adjacent office buildings. The new 6 story parking garage structure will be constructed immediately east of the Exchange Place Building (212 E. Douglas) and immediately North of the new Douglas Building. A new 25 unit apartment building will be constructed on Douglas immediately east of the Exchange Place Building (212 E. Douglas) on three levels (2-4) with retail space below on first floor. It will adjoin the south end of the new garage (210 E Douglas).

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Overall, the Project will provide: 139 residential apartments at Exchange Place Building. 66 residential apartments at the Bitting Building. 25 residential units at the new construction Douglas Building. approximately 15,000 square feet of street level retail space. approximately 273 parking spaces. A minimum of 209 spaces will be allocated for use by the apartments. The remaining 64 spaces will be for public parking. 14 parking spaces behind the Exchange Place Building.

This work with the apartments, the retail space, and the Parking Garage is collectively described as the Project. Background and Recitals The following Background and Recitals contain merely an overview of the Project and are not intended to fully describe the obligations of the City and Developer. The specific terms and obligations are more fully set forth in the Agreement itself. (i) The City will assist financing part of the Project through tax increment financing of the Parking Garage and certain of the costs related to the Exchange Place, Bitting and Michigan Buildings as allowable by state law.

(iii) Developer will develop the Exchange Place Building, Bitting Building and Douglas Building according to the Development Plan. (iv) Developer will cause the Parking Garage to be constructed according to the Development Plan. (v) The Michigan Building will be completely removed.

(vi) Developer will own the Exchange Place Building, the Bitting Building, the Douglas Building, Parking Garage and the apartments located in all of these buildings. NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties, intending to be legally bound, agree as follows: Section 1 Definitions and Exhibits 1.1 Certain Definitions. For purposes of this Agreement, each of the following terms, when used with an initial capital letter, shall have the following meaning: "Agreement" means this Development Agreement.

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Bitting Building means the Bitting Building located at the northwest corner of Douglas and Market in Wichita, Kansas, with a legal description given on Exhibit F. "City" means the City of Wichita, a municipal corporation organized under the laws of the State of Kansas, and whenever this Agreement requires "approval of the City" or words of similar intent, such approval must come from the City Council, except as otherwise expressly provided herein. City Contribution means the sum of not to exceed Twelve Million Five Hundred Thousand Dollars ($12,500,000) which the City shall fund for the City Improvement Expenditure. "City Council" means the City Council of the City of Wichita. City Improvement Expenditure means the sum of not to exceed Twelve Million Five Hundred Thousand Dollars ($12,500,000) which the City shall fund in part for land acquisition, demolition, site preparation, construction of a multi-level parking structure and such other redevelopment project costs as defined and permitted under K.S.A. 12-1770a, as amended. The City Improvement Expenditure will be funded by an escrow deposit with Gershman Mortgage or its authorized title company concurrent with the HUD loan closing required in Section 2.4.1. "City Representative" means the City Manager of the City or his or her designee. The City Representative shall have full power and authority to implement the decisions of the City Council and to act on behalf of the City in the exercise of its rights and responsibilities under this Agreement. Developer may rely on the decisions and direction of the City Representative as the directions of the City; provided, however, if any action requires an amendment to this Agreement, it shall require the approval of the City Council. "Completed" or "Completion" means, with respect to the Project when: (a) the Project Architect certifies in writing to the City and Developer that the construction of the Project is substantially completed in accordance with the Development Plan to permit use of the Project for the purposes for which it was intended, and (b) a conditional or final occupancy permit has been issued, which date may precede the full completion of all punch-list items, and nonessential landscaping and similar design and development functions. "Contractors" means the General Contractor and all other contractors, subcontractors, suppliers, persons, or entities that are engaged for construction or to provide labor, materials, supplies, or services of any kind in regard to the Project. "Developer" means KS1 LLC, a Kansas limited liability company (or its affiliate with the approval of the City Representative). "Developer Improvement Contribution" means the sum of at least Forty Five Million Dollars ($45,000,000) in equity funds and Loan proceeds that Developer shall make available to develop and construct the residential and commercial space as described in the Project and as set forth in the Development Budget, or such higher or lower figure as may be set in subsequent, mutually agreed modifications to the Development Budget. 3

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"Development Budget" means a budget or budgets, including modifications of the budget(s), for the total cost of development and construction of the Project, including design, development, financing, construction, furnishing, fixturing, landscaping, hardscaping, equipping and pre-opening, as approved by the City and attached as Exhibit B. Development Concept means the Development Concept attached as Exhibit D. "Development Plan" means the Site Plan, drawings and specifications, Development Schedule, and Development Budget for the Project as approved by the City and Developer at the time of execution of this Agreement and as the same are amended by Developer with the approval of City Representative from time to time. The Parties anticipate that the Development Plan will be amended from time to time to reflect changes in market conditions and economic demands and that such changes are within the scope and intent of this Agreement, so long as the changes are consistent with the original Development Concept. To the fullest extent permitted by applicable law and ordinance, the City Representative is authorized to approve Development Plan changes consistent with the Development Concept. Development Schedule means the development schedule for the Project attached as Exhibit C. Douglas Building means a newly constructed building located between the Exchange Place Building and the Kress Building on Douglas Avenue in Wichita, Kansas, with a legal description given on Exhibit F. Exchange Place means the apartments and street level retail space to be constructed and owned by the Developer, located in the Exchange Place Building, the Bitting Building, and the Douglas Building. Exchange Place Building means the Exchange Place Building located at the northeast corner of Douglas and Market in Wichita, Kansas, with a legal description given on Exhibit F. "Force Majeure" means war, riots, civil commotion, strikes, labor disputes, embargoes, natural disasters, Acts of God or other cause or contingency similarly beyond control of the Party whose performance is affected thereby, but shall not include weather delays caused by rain, snow, or the like, or Project cost increases due to unforeseen conditions or price increases, or the like. "General Contractor" means the general contractor(s) for the Exchange Place Building, Bitting Building and the General Contractor for the Parking Garage, as the case may be, to be selected by Developer. Industrial Revenue Bonds means revenue bonds issued by the City under the authority of K.S.A. 12-1740 et seq. to finance the cost of purchasing, acquiring, constructing, reconstructing, improving, equipping, furnishing, repairing, enlarging or remodeling certain facilities, which bonds are payable solely as to principal and interest from rental payments on financed facilities.

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Kress Building means the building currently located at the Northwest corner of Douglas and Broadway with a street address of 100 N. Broadway. "Loan" means a loan from a lender(s) to Developer in an amount sufficient to allow Developer to complete the Developer Improvement Contribution pledging some or all of the Project Land and improvements. Loan Commitment means a written loan commitment given to Developer from the United States Department of Housing and Urban Development (HUD) or other lender on terms acceptable to Developer and in an amount sufficient to allow Developer, together with other funding sources, to complete the Developer Improvement Contribution. "Michigan Building" means the property commonly known by that name and located at 206 East Douglas, Wichita, Kansas, with a legal description given on Exhibit F. Parking Facilities means and consists of two combined areas: the new 273 space Parking Garage and the existing 14 parking spaces located at the north area of Exchange Place Building. Collectively, the Parking Facilities will contain approximately 287 parking spaces. "Parking Garage" means a multilevel parking facility of approximately 273 parking spaces to be constructed by Developer on the 200 block of East Douglas, east of the Exchange Place Building and west of the Kress Building, with a legal description given on Exhibit F. "Parties" means, collectively, the City and Developer; "Party" means either of the Parties. "Project" means plans to renovate the Exchange Place Building and the Bitting Building into a residential and commercial complex, and construction of a new residential building and Parking Garage on the same block east of the Exchange Place Building and west of the Kress Building. Overall, the Project will provide: x x x x x x 139 residential apartments at Exchange Place Building. 66 residential apartments at the Bitting Building. 25 residential apartments at the Douglas Building. approximately 16,000 square feet of street level retail space. approximately 273 parking spaces. A minimum of 209 spaces will be allocated for use by the apartments. The remaining spaces will be available for public parking. 14 parking spaces behind the Exchange Place Building.

"Project Architect" means the architect for the Project, to be selected by the Developer. "Project Land" means the tracts or parcels of land upon which the Exchange Place Building, Bitting Building, Douglas Building, and Parking Garage site are located, described on Exhibit F, together with all rights, privileges, licenses and easements appurtenant to such tracts. Site Plans means the elevation, drawings and plans depicting the appearance of the Project attached as Exhibit A. 5

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"Specialists and Consultants" means the Project Architect and the Contractors, together with other planning, architectural, engineering, interior design and other specialists and consultants selected by the Developer for the design and construction of the Project. Tax Increment Shortfall means the amount equal to the difference between the amounts actually paid to the City by the Sedgwick County Treasurer as incremental property taxes collected for the Center City South Redevelopment District, pursuant to K.S.A. 12-1770 et seq., and the amount scheduled to be paid by the City as debt service on the Citys tax increment financing bonds as set forth in Exhibit E, commencing the first year in which a payment is due on the City tax increment financing bonds issued to finance the Citys costs hereunder. The attached Exhibit E is an example and will be replaced with an Exhibit E reflecting the actual interest rates and debt service after the bonds are sold. 1.2 Other Definitions. In addition to the terms defined in Section 1.1, other terms will have the definitions provided elsewhere in this Agreement. Exhibits. The exhibits identified in this Agreement and attached to it, or otherwise 1.3 identified by the signing or initialing of the Parties, are incorporated by reference and made a part of this Agreement as though they were fully set forth in the text of this Agreement. Section 2 Project 2.1 Project. Developer shall provide the Developer Improvement Contribution, and shall provide all services, equipment, materials, supplies, labor, and every article of any kind necessary or appropriate for the planning, development, construction, and furnishing of the Project, including those needed or appropriate for opening of the Project for business, all in accordance with the Development Plan. Developer shall be an independent contractor for all purposes, and nothing contained in this Agreement nor any actions of the Parties shall be construed to create a partnership, joint venture, or agency relationship between the City and Developer. No one performing work on the Project under the direction of Developer, or under the direction of any of the Contractors, shall be deemed to be an employee of the City for any reason or purpose whatsoever. 2.2 Funding of Project Land Acquisition. Subject to satisfaction of the conditions precedent herein, the City will fund an amount up to the $3,825,000 as described in the definition of City Improvement Expenditure, above, to pay DGL Investments, LLC for the Project Land upon satisfaction of environmental and title requirements and delivery of the documents in Section 3.1.1 below. 2.3 Project Use. Subject to applicable statutory requirements, Developer may convert and sell some or all of the apartments into condominiums at some point in the future. Any such sale might include a sale of the Parking Facilities to the condominium owners but shall in no way reduce the availability of public parking in the Parking Facilities pursuant to Section 4.7 below. 2.4 Conditions Precedent to Project. The following matters shall be completed prior to disbursement of any City Improvement Expenditure. 6

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2.4.1 The closing by Developer of a HUD-guaranteed loan to finance the Project. 2.4.2 Developer has previously delivered to the City Representative documentation acceptable to the City showing that all creditors with claims for payment for work done on the Wichita Executive Center have been paid in full for such claims at or prior to the HUD loan closing and/or will be paid upon Completion from remaining construction contingency, to the extent such contingency funds are available pursuant to Section 8 below

Section 3 Construction Phase Conditions Precedent to Construction. The following matters shall be completed 3.1 before construction begins on the Project. 3.1.1 Delivery of Documents. The documents listed below (or copies), as well as any other documents reasonably required prior to commencement of construction, have been delivered to the City Representative. When necessary, Developer shall also procure the requisite filings of such documents with the appropriate officials: (a) Construction permit and all other permits required before commencement of construction; (b) Policies or certificate(s) of insurance evidencing that Developer has procured all insurance required by this Agreement; (c) Satisfactory evidence to City Representative that the General Contractor selected by Developer to construct the Project is a registered contractor in good standing under the laws of Kansas and the laws of its state of its domicile; (d) The Development Budget; (e) The Development Plan; (f) Performance and labor and material payment bonds as required by City's Charter Ordinance No. 203, dated September 19, 2006; (g) Executed copies of the construction contract between Developer and the General Contractor, and the contract between the Developer and the Project Architect; (h) Such other documentation including plans and specifications, schematic drawings and renderings of the Project as may reasonably be requested by the City Representative to insure the orderly development of the Project; 7

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(i) Path of schedule for the Project; (j) All approvals from the Historic Preservation Board and all similar approvals needed for development of the Project have been obtained in writing; and (k) Developer and the City Representative have provided each other with their respective written waivers of their rights to cancel this Agreement under Section 9.20. 3.1.2 Closing. Developer closing on acquisition of the Exchange Place Building, Bitting Building and the site for the location of the Parking Garage. 3.2 Construction. Developer will cause commencement of construction of the Project to begin promptly upon completion of the conditions in Section 3.1.1 and 3.1.2 and receipt of the acquisition costs pursuant to Section 2.2, and Developer will pursue Completion of construction with due diligence thereafter. During construction Developer agrees to the following conditions and instructions (where applicable, to the respective parts of the Project): (a) To cause construction of the Project in a workmanlike manner, free of any material defects, in accordance with the final plans and specifications, and in accordance with all applicable building codes, laws, and regulations (including the Americans With Disabilities Act, the Kansas Act Against Discrimination, and all environmental laws); (b) To obtain all utility permits, certificates of occupancy, and all other licenses, permits and easements required for the operation of the Project; (c) Supervise the timely and efficient performance of the Contractors and the Specialists and Consultants under their respective contracts with Developer to enable them to perform their work in a timely, safe, professional and workmanlike manner. (d) To utilize an invitation and selection procedure for selecting the General Contractor for the Parking Garage acceptable to the City. 3.3 Disbursements for Parking Garage. The parties agree that the City Contribution will be paid to Gershman Mortgage in conjunction with the Loan closing and that Gershman will be responsible for the disbursement of the City Contribution, without restriction as to the specific costs being paid, pursuant to HUD regulations. It is the Citys expressed intent to fund the City Contribution with the proceeds of general obligation temporary notes issued pursuant to its constitutional home rule authority, and following completion of the Project to issue its full faith and credit tax interment financing bonds to permanently finance Project costs that qualify for tax increment financing pursuant to K.S.A. 12-1770a(o). The Developer agrees to provide the City with an accounting of final Project costs within ninety (90) days of Completion, in sufficient detail to identify such qualified costs. 8

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3.4 Issuance of Industrial Revenue Bonds. The City agrees to issue its Industrial Revenue Bonds in the amount not-to-exceed $45,000,000 to finance the construction of the Project for the purpose of providing a sales tax exemption on the construction materials and furnishings, fixtures and equipment acquired for the development of the Project. The Developer agrees to purchase such bonds or arrange for the direct placement of the bonds with its lender. The Industrial Revenue Bonds will be issued subject to the conditions set forth in the Citys Letter of Intent to Issue Industrial Revenue Bonds, the form of which is attached hereto as Exhibit G. Section 4 Additional Rights and Obligations 4.1 Approvals. Whenever this Agreement requires the consent or approval of the City Representative, the City Representative, in his or her sole discretion, may instead present the question to the City Council for the necessary consent or approval. Notwithstanding the foregoing, the Parties intend that City Council approval shall not be required or necessary for changes in the Development Plan which do not affect the Citys expenditures and are consistent with the Development Concept, unless otherwise required by law. 4.2 Title to Property. Developer shall own the improvements and the Project Land in fee simple, free and clear of all liens and encumbrances, subject only to: liens and encumbrances placed thereon by Developer and real estate taxes and special assessments. 4.3 Related Improvements. Developer may construct related improvements, such as landscaping and streetscaping, and the City Representative will coordinate and cooperate with Developer to accommodate those improvements within the Project schedule. 4.4 Development Assistance. The City will provide development assistance to Developer, as needed, to facilitate and expedite the issuance of building permits and compliance with other City-controlled requirements relating to completion of the Project. 4.5 Access to Site. The City will provide reasonable access to Developer for staging and work areas adjacent to the Project Land. Toward this end, the City will cooperate with Developer to close streets under established City procedure during agreed periods of demolition and construction. 4.6 Certificate and Release. Upon proper application by Developer, the City will issue a certificate and release to Developer in regard to the Gilbert and Mosley groundwater contamination in accordance with the customary process for application and issuance of those certificates. 4.7 Use of Parking Garage. A minimum of 64 parking spaces shall be set aside in the Parking Garage for public parking and the balance for the exclusive use of the residents and guests of Exchange Place Building and Douglas Building. This allocation can be revised by Developer as market experience may demonstrate a need to reallocate parking spaces with consent of the City Representative (which consent shall not be unreasonably withheld or delayed).

Comment [BA1]: Increased to ensure all costs subject to sales tax are covered.

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Section 5 Insurance, Bonding, and Indemnification 5.1 Types of Coverage. Developer shall carry, or cause the General Contractor to carry, the following insurance coverage insuring Developer, General Contractor, and City through final completion (as defined in the construction contracts): (a) Special or builder's "all risk" insurance (including theft, vandalism, boiler, and pressure vessel coverage), in an amount reasonably acceptable to the City representative, insuring Developers and City's interests in the Project and any and all furniture, equipment, supplies and other property owned, leased, held or possessed by Developer or City in the Project (insurance shall also insure against loss from collapse of any part of the building or other structural failure during construction);

(b) Comprehensive general liability insurance insuring Developer and City against all liability for injury to or death of a person or persons and for damage to property in any way occasioned by or arising out of the activities of Developer, City, and their respective agents, contractors, or employees, in connection with the design and construction of the Project, in the amount of not less than Five Hundred Thousand Dollars ($500,000) or in such other amounts as may be reasonably acceptable to Developer and the City, provided, however, such policies shall not name the City, or insure the City, for an amount of coverage in excess of the City's maximum liability pursuant to the Kansas Tort Claims Act and amendments (and any similar law limiting the liability of the City); (c) Workers' compensation insurance; (d) Performance and labor and material payment bonds for the General Contractor as required by City Charter Ordinance No. 203; (e) Automobile insurance (if applicable) with per occurrence limits of not less than $500,000; and (f) All other insurance as required by law. 5.2 Policy Requirements. The following general requirements shall apply to all insurance coverage carried by Developer and General Contractor pursuant to Section 5.1: (a) To the extent available, each policy shall contain a clause whereby the insurer waives all rights of subrogation against General Contractor, Developer, and City, as the case may be; (b) Subject to the limitations on general liability insurance in Section 5.1(b), the City shall be named as its interests appear in all policies obtained by Developer and General Contractor;

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(c) Such policies shall be with reputable insurance companies reasonably acceptable to Developer, City, and General Contractor and licensed to do business in Kansas; (d) Developer shall provide the City Representative with policies or certificates of insurance evidencing such coverage prior to the start of construction; (e) Within thirty (30) days prior to expiration of coverage, or as soon as practicable, renewal policies or certificates of insurance evidencing renewal and payment of premium shall be provided by Developer to the City Representative; and (f) The policies must be non-cancelable unless the carrier provides to the City Representative thirty (30) days' prior written notice of cancellation. 5.3 Indemnification. Developer agrees to indemnify, hold harmless, and defend City and members of the City Council, officers, agents, and employees (collectively referred to as the "City Indemnified Parties") from and against all loss, damage, liability, cost or expense including, but not limited to, attorneys' fees and court costs incurred or suffered by or claimed against any of the City Indemnified Parties by any person or entity by reason of injury, death, loss, or damage to any person, property, or business which arises, or is alleged to have arisen, from the negligence or willful misconduct of Developer, its officers, directors, agents, or employees, or the accuracy or incompleteness of information furnished by these persons to the City. The Citys liability for any claims asserted by any person or entity by reason of injury, death, loss, or damage to any person, property, or business which arises, or is alleged to have arisen, from the negligence of willful misconduct of the City, its officers, directors, agents, or employees, shall be governed by the Kansas Tort Claims Act and other applicable laws of the State of Kansas. Section 6 Term and Survival The term of this Agreement shall commence upon the date of this Agreement and, unless terminated sooner as provided in this Agreement, shall end on the date that all of the following have occurred: the City Improvement Expenditure have been released to Developer or otherwise paid; the Project is Completed; the Project is open to the public; and, any balance remaining in the Tax Increment Shortfall Escrow has been released to Developer. However, the following provisions of this Agreement shall survive beyond the end of the term: all representations and warranties; all agreements of indemnification; all obligations of conveyance of title; parking allocations under Section 4.7; limitations on assignment under Section 9.16; and limitations concerning the Cash Basis and Budget Laws.

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Section 7 Representations, Warranties, and Guaranties 7.1 City. The City warrants and represents to Developer as follows:

(a) It is a municipal corporation, duly incorporated and validly existing under the laws of the State of Kansas. (b) To the best of its knowledge, it has full power and authority to execute this Agreement and consummate the transactions contemplated hereby subject to the limitations expressed herein or otherwise imposed by law. (c) Neither the execution and delivery of this Agreement and the other documents contemplated herein nor the making of the City Improvement Expenditure will conflict with or result in a breach of any of the terms, covenants and provisions of any judgment, order, injunction, decree or ruling of any court or governmental agency, body or authority to which it is subject or of any material provision of any agreement, contract, indenture or instrument to which it is a party or by which it is bound, or constitutes a material breach thereunder. 7.2 Developer. The Developer warrants and represents to City as follows: (a) It is a limited liability company duly organized, validly existing, and in good standing under the laws of Kansas. (b) It has the requisite power through John McWilliams Jr. to execute the documents under this Agreement and to consummate the transactions contemplated thereby. (c) Neither the execution and delivery of the documents on its part, nor the making of the Developer Improvement Contribution, nor the construction of the Project will conflict with or result in a breach of any of the terms, covenants and provisions of any judgment, order, injunction, decree or ruling of any court or governmental agency, body or authority to which it is subject or of any material provision of any agreement, contract, indenture or instrument to which it is a party or by which it is bound, or constitutes a material breach thereunder. (d) It is duly authorized and registered to carry on business in Kansas pursuant to the laws of Kansas. (e) Before commencement of construction, Developer will have examined the Project Land, the Exchange Place Building and the Bitting Building and made all other investigations it deems necessary to perform its duties under this Agreement and satisfy itself that there exists no condition on or about the Project Land or said buildings that would materially hinder or prohibit development of the Project as described in the Development Plan. The warranty under this subparagraph (e) does not restrict Developers right to cancel this Agreement as provided in Section 9.20. 12

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(f) All contracts with Contractors shall warrant that the work performed or material supplied by that Contractor to the Project will be free from any defects in materials and workmanship for a period of at least one (1) year from the date of Completion, and that such warranty does not restrict or otherwise limit that Contractor's obligation to construct the Project in a workmanlike manner and in accordance with the Development Plan as it pertains to that Contractor's work. (g) It shall use reasonable care to insure that all Specialists and Consultants selected in connection with the design and construction of the Project shall be highly qualified to do the work they are engaged to perform and Developer shall make reasonable inquiries as to such persons' background, experience and reputation to assure they are well qualified to undertake such work. Section 8 Tax Increment Shortfall Escrow Upon Completion of the Project, any funds held by Gershman Mortgage as construction contingency funds will be deposited in a separate Tax Increment Shortfall Escrow account to be held by Gershman for the benefit of the City, up to the amount of One Million Dollars ($1,000,000). In the event there is Tax Increment Shortfall, as defined above, the City may draw such sums as may be available in the Tax Increment Shortfall Escrow. The Developer acknowledges that the City shall enter into a separate agreement with Gershman for the administration of the Tax Increment Shortfall Escrow and that the Tax Increment Shortfall Escrow shall not be used as security for the HUD Loan. When all Tax Increment Shortfall has been paid and the amounts actually paid to the City by the Sedgwick County Treasurer as incremental property taxes collected for the Center City South Redevelopment District, pursuant to K.S.A. 12-1770 et seq., exceed 110% of the maximum amount projected to be paid by the City as annual debt service on the Citys tax increment financing bonds as set forth in Exhibit E for two consecutive years, as documented to the satisfaction of the City, any remaining balance in the Tax Increment Shortfall Escrow will be released to Developer. Section 9 General Provisions 9.1 Governing Law. This Agreement and the legal relations between the Parties shall be governed by, construed and interpreted under the laws of the State of Kansas, and exclusive venue for all disputes and litigation shall be in Wichita, Kansas only. 9.2 No Waiver. No failure of a Party to exercise any power given under this Agreement or to insist upon strict compliance of another Party with its obligations hereunder, and no custom or practice of the Parties at variance with the terms hereof, shall constitute a waiver of either Party's right to demand exact compliance with the terms of this Agreement.

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9.3 Entire Agreement. This Agreement contains the entire agreement of the Parties with respect to the subject matter hereof, and no representations, inducements, promises, or agreements, oral or otherwise, between the Parties not embodied herein shall be of any force or effect. 9.4 Written Amendments. Any amendment to this Agreement shall not be binding on any of the Parties unless the amendment is in writing, is duly authorized, and is duly executed by the Parties to this Agreement. 9.5 Time of Essence. Time is of the essence of this Agreement.

9.6 Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original, and all such counterparts together shall constitute one and the same instrument. Headings. The headings of the sections and subsections of this Agreement are 9.7 inserted for convenience only and do not constitute a part of this Agreement. 9.8 Notices. All notices required to be given under this Agreement shall be delivered in writing and delivered either by (a) hand delivery, and considered delivered upon receipt, (b) telefacsimile, and considered delivered upon completion of transmittal, (c) certified mail, and considered delivered upon signed receipt or refusal to accept notice, or (d) nationally-recognized overnight delivery service, and considered delivered the next business day after the notice is deposited with that service for delivery. For notice purposes, the Parties agree to keep each other informed at all times of their current addresses. For purposes of notices or other written communications, the addresses of the Parties shall be as follows: (a) If to the City: City Manager City Hall, 13th Floor 455 North Main Street Wichita, Kansas 67202 Fax # (316) 268-4519 and City Clerk City Hall, 13th Floor 455 North Main Street Wichita, Kansas 67202 and City Attorney City Hall, 13th Floor 455 North Main Street Wichita, Kansas 67202 Fax # (316) 268-4335 (b) If to Developer: 14

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John K. McWilliams, Manager KS1 LLC 7979 East Princess Drive, Suite 17 Scottsdale, Arizona 85255 Fax # (435) 575-0143 9.9 Nondiscrimination and Equal Economic Opportunity. The Parties covenant and agree that in the performance of their duties and obligations under this Agreement and any other document, instrument, or agreement in connection with the transactions contemplated by this Agreement, neither of the Parties, nor their respective agents, employees, officers, directors, consultants, contractors or subcontractors, will discriminate against any applicant for employment or employee because of race, color, religion, sex, national origin, age, handicapped or disability status, or veterans status. The Parties agree to adhere to the Citys standard contracting requirements as they relate to Nondiscrimination and Equal Employment Opportunity as set forth in Exhibit H. 9.10 Severability. If any clause or provision of this Agreement is or becomes invalid or unenforceable because of present or future laws or any rule or regulation of any governmental body or entity, then the remaining parts of this Agreement shall not be affected by such invalidity or unenforceability, and the remainder of this Agreement shall be enforced to the greatest extent permitted by law. 9.11 Licenses and Permits. It shall be the ultimate responsibility of Developer to secure all local licenses and permits required to be obtained by Developer or City with respect to construction, completion and occupancy of the Project, including any necessary building, occupancy, sewer and utility permits. The City shall cooperate with Developer and all Contractors to the extent permitted by law in connection with the issuance of these licenses and permits. 9.12 Documents. All as-built drawings, plans, specifications, and other documents prepared for the Project pursuant to this Agreement shall become or remain the property of Developer whether or not the Project is Completed. 9.13 Approvals. Whenever the approval or consent of a Party is required in this Agreement, such approval or consent shall not be unreasonably withheld, delayed or conditioned. 9.14 "Including." Whenever general words or terms are followed by the word "including" (or other forms of the word "include") and words of particular and specific meaning, the words "including without limitation," and the general words shall be construed in their widest extent, and shall not be limited to persons or things of the same general kind or class as those specifically mentioned in the words of particular and specific meaning. 9.15 Binding Effect. Subject to the limitations of Section 9.16, this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and assigns. 9.16 Assignment. Except as provided herein, no Party may assign all or any part of its interest in this Agreement without the prior written consent of the other Parties, and any such 15

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assignment without such consent shall be void. The City may assign all or part of its interest to a city-established entity without approval of the other Parties so long as such assignee has the legal authority to fulfill the City's obligations under this Agreement and, to the extent that it does not have such authority, the assignment shall continue in effect but the City will remain obligated for such nonassignable or unauthorized obligations. Members of the Developer may pledge their membership interests in the Developer entity to the lender holding the primary Loan on the Project if so required by such lender. Developer may transfer membership interests to other parties without the consent of the City; provided however, no such transfer may occur unless John McWilliams remains the manager of the Developer and unless John McWilliams retains at least a 75% ownership interest in the Developer, either personally or through ownership in an entity that is a member of the Developer. 9.17 Brokerage Commissions. Except as noted below, both Parties represent to the other that they have not discussed this Agreement or the subject matter thereof with any real estate broker, agent or salesperson so as to create any legal right in any such broker, agent or salesperson to claim a real estate commission or similar fee with respect to the transactions contemplated by this Agreement. Both Parties hereby indemnify the other Party against and agree to hold the other harmless from any and all claims, suits, or judgments (including, without limitation, court costs and attorneys' fees incurred in connection with any such claims, suits or judgments) for any real estate commissions or similar fees arising out of or in any way connected with any claimed agency relationship with the indemnitor and relating to the transactions contemplated by this Agreement. 9.18 Cash Basis and Budget Laws. It is the intent of the Parties that the provisions of this Agreement are not intended to violate the Kansas Cash Basis Law (K.S.A. 10-1101, et seq.) (the "Cash Basis Law") or the Kansas Budget Law (K.S.A. 79-2925) (the "Budget Law"). Therefore, notwithstanding anything to the contrary herein contained, the City's obligations under this Agreement are to be construed in a manner that assures that the City is at all times not in violation of the Cash Basis Law or the Budget Law. 9.19 Other Agreements. The Parties also covenant to negotiate and execute such additional documents as may be reasonably necessary to provide for the coordinated construction and operation of the Project. Cancellation. In addition to other cancellation provisions under this Agreement, 9.20 this Agreement may be cancelled by Developer before payment of costs for acquisition of the Project Land if:  the improvements to the Project contemplated by this Agreement cannot be made within the Development Budget; or  Developer is unable to obtain financing and equity sufficient to make the Developer Improvement Contribution. If Developer cancels this Agreement under the terms of this Section 9.20, then the Parties will pay their own expenses incurred to date, without seeking compensation from each other, and they shall have no further obligations toward each other. 16

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9.21 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall comprise but a single document. 9.22 Force Majeure. If an act of Force Majeure so damages the Project that it cannot be Completed within the Development Budget, then either Party may terminate this Agreement by giving written notice to the other. In that event, the Parties will pay their own respective costs and expenses incurred and thereafter have no further obligation to Complete construction and development of the Project. CITY: City of Wichita

By: _________________________________ Carl Brewer, Mayor Attest:_______________________________ Karen Sublett, City Clerk Approved as to Form: _____________________________________ Gary Rebenstorf, City Attorney

DEVELOPER: KS1 LLC

By:__________________________________ John K. McWilliams, Manager Exchange Place LLC executes this Development Agreement for the purpose of consenting to the substitution of KS1 LLC for Exchange Place LLC as Developer. Exchange Place LLC

By: _________________________________ Michael Elzufon, Manager

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EXHIBIT A Site Plans

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EXHIBIT B Development Budget:

Sources and Uses of Funds per HUD Form 92013

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EXHIBIT C Development Schedule

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EXHIBIT D Development Concept March 24, 2010 The Project consists of two major components: (1) creation of 230 residential units and retail space in the downtown core by renovation of the Exchange Place Building and the Bitting Building and construction of a new Douglas Building and (2) construction of a new 273 stall Parking Garage. Residential Units and Retail. The Exchange Place Building and the Bitting Buildings are located on the Northeast and Northwest corners of East Douglas and Market. The new Douglas Building will be located east of the Exchange Place Building. They will be converted and constructed into a residential and commercial complex which the Developer will convert and sell as condominiums. Any such sale might include a sale of the Parking Facilities to the condominium owners. Overall, the Project will provide: x x 230 residential apartments; and Approximately 15,000 square feet of street level retail space.

The collective apartments for all three buildings will be called Exchange Place apartments. Retail space will be located on the ground floor and serve occupants of the buildings as well as enhancing the availability of services for other workers and residents in the Downtown core area. Construction will begin after closing of the construction loan, and is anticipated to begin in the 3rd quarter of 2010 and be completed in eighteen months with an estimated cost of improvements of not less than $34,000,000. Parking Facilities. Developer will construct a multilevel Parking Garage on the 200 block of East Douglas, west of the Kress Building and north / behind the new Douglas Building to contain 273 parking spaces. Additional parking spaces (14) will be located behind (north of) the Exchange Place Building. These two facilities are collectively described as the Parking Facilities and will contain approximately 287 parking spaces And, because of the automated system in the Parking Garage, can provide parking for over 500 residential and retail/office users. A minimum of 64 of these spaces will be available for daily and monthly public use. Construction is anticipated to begin in the 3rd quarter of 2010 and be complete in the 2nd quarter of 2011 at an estimated cost of approximately $7,801,557 which the City will fund up to the amount available under the City Contribution. Compatible Facing. The Douglas Avenue sides of The Exchange Place Building/ and the Douglas Building will be designed to have compatible facing. The Projects exterior facades have already been reviewed and approved by the Citys Historic Preservation Board. Plans will also be submitted for review by the Design Council.

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EXHIBIT E Projected Debt Service Schedule City of Wichita, Kansas Tax Increment Financing Bonds
City of Wichita, Kansas Center City South Redevelopment District Exchange Place Project Annual Period Ending (1) 9/1/2016 9/1/2017 9/1/2018 9/1/2019 9/1/2020 9/1/2021 9/1/2022 9/1/2023 9/1/2024 9/1/2025 9/1/2026 9/1/2027 9/1/2028 9/1/2029 9/1/2030 9/1/2031 9/1/2032 9/1/2033 G.O. Taxable Rate (3) 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% Projected Revenue Available (7) 418,424 638,797 832,000 851,338 873,678 896,459 919,688 943,375 967,529 992,159 1,017,273 1,042,883 1,068,997 1,095,625 1,122,778 1,150,466 1,178,700 1,207,489 17,217,659

Principal (2) 360,000 380,000 575,000 620,000 650,000 600,000 585,000 580,000 630,000 680,000 730,000 770,000 830,000 870,000 940,000 1,000,000 1,070,000 1,130,000 13,000,000

Interest (4) 227,500 442,400 429,100 408,975 387,275 364,525 343,525 323,050 302,750 280,700 256,900 231,350 204,400 175,350 144,900 112,000 77,000 39,550 4,751,250

P&I (5) 587,500 822,400 1,004,100 1,028,975 1,037,275 964,525 928,525 903,050 932,750 960,700 986,900 1,001,350 1,034,400 1,045,350 1,084,900 1,112,000 1,147,000 1,169,550 17,751,250

$1M Escrow (8) 169,076 183,603 172,100 177,637 163,597 68,066 65,921

Annual Cumulative Balance Balance (9) (10) 57,084 57,084 40,325 97,410 34,779 132,189 31,459 163,648 30,373 194,021 41,533 235,554 34,597 270,151 50,275 320,426 37,878 358,304 38,466 396,771 31,700 428,470 37,939 466,409 466,409

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EXHIBIT F Legal Descriptions Project Land (General legal descriptions to be finalized prior to conveyance) Exchange Place Building Lot 110 on Douglas Avenue, in Greiffensteins Original Town, now City of Wichita, Sedgwick County, Kansas, together with the vacated airspace above a height of 13.5 feet over the South Half of the East and West alley adjoining said Lot on the North. Lot 112 on Douglas Avenue, in Greiffensteins Original Town, now City of Wichita, Sedgwick County, Kansas, together with the vacated airspace above a height of 13.5 feet over the South Half of the East and West alley adjoining said Lot on the North. Lot 114 on Douglas Avenue, in Greiffensteins Original Town, now City of Wichita, Sedgwick County, Kansas, together with the vacated airspace above a height of 13.5 feet over the South Half of the East and West alley adjoining said Lot on the North. Lots 14 and 16, on Market Street, in Greiffensteins Original Town, now City of Wichita, Sedgwick County, Kansas, together with the vacated airspace above a height of 13.5 feet over the West 70 1/10 feet of the North Half of the East and West alley adjoining said Lot 14 on the South. Lot 18 and the South 0.20 feet of Lot 20, on Market Street, in Greiffensteins Original Town, now City of Wichita, Sedgwick County, Kansas. Bitting Building East 20 Feet of Lot 106 and all of Lot 108 on Douglas Avenue, in Greiffensteins Original Town, Wichita, Sedgwick County, Kansas. Michigan Building Lot 116 and the West one Foot of Lot 118, on Douglas Avenue in Greiffensteins Original Town, now City of Wichita, Sedgwick County, Kansas. Parking Garage Douglas Building-200 block of East Douglas, West of the Kress Building Lot 118, except the West one Foot and all of Lot 120 on Douglas Avenue, in Greiffensteins Original Town, now City of Wichita, Sedgwick County, Kansas, AND a tract described as follows: Beginning 175 feet East from the Monument on Market Street on the North side of Douglas Avenue, said point being on the West side of alley; thence West 3 feet 1 inches; thence North 130 Feet to the alley; thence East 3 Feet 1 inches to alley; thence South 130 Feet to the place of beginning. Lots 122, 124, and 126 on Douglas Avenue in Greiffensteins Original Town, Wichita, Sedgwick County, Kansas. 23

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EXHIBIT G Form of Letter of Intent to Issue Industrial Revenue Bonds

October __, 2013 Mr. John K. McWilliams, Manager KS1 LLC 7979 East Princess Drive, Suite 17 Scottsdale, Arizona 85255 Dear Mr. McWilliams: In accordance with the action taken at a regular meeting held on October __, 2013, the Mayor of the City of Wichita, Kansas, on behalf of the governing body of such City, hereby tenders its written intent to issue an amount not to exceed $45,000,000 in City of Wichita Taxable Industrial Revenue Bonds. Absent subsequent rescission or extension by action of the governing body, this intent to issue bonds will remain in effect for a period of one year, ending December 31, 2014. This letter of intent is an indication of the intent of the City to issue the proposed bonds, and is subject in all respects to the governing bodys final approval of the terms of the Bond Ordinance, Trust Indenture, Lease Agreement, Guaranty Agreement and other related documents. In the event that the proposed Taxable Industrial Revenue Bonds are not ultimately issued for any reason, the City of Wichita, Kansas shall not be deemed to have assumed or incurred any liability or obligation to KS1 LLC or any other party by virtue of any proceedings or actions taken in connection therewith. The purpose of the bond issue will be to enable KS1 LLC to construct and equip two the Exchange Place Project, a mixed-use residential/commercial development located at the intersection of Douglas Avenue and Market Street, in the City of Wichita, to be leased to KS1 LLC. KS1 LLC has represented that it will make a total capital investment in the project of approximately $45,000,000. The Citys governing body has also approved sales tax exemption, with an estimated value of $1,000,000. The sales tax exemption is within the description of public incentives in the Citys Economic Development Incentive Policy, and will be fully subject to the ongoing compliance and repayment provisions of such policy. This intent to issue bonds is given subject to the following conditions:

1. Negotiation of a Lease Agreement, which will preclude assignments or subleases made without the Citys consent, and which will also contain requirements for completion of the capital investment referred to above, timely payment of all property taxes, compliance with all applicable governmental laws, rules and regulations (including ordinances of the City, as they exist or may hereafter be adopted, pertaining to civil rights and equal employment 25

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2.

3. 4. 5.

6.

opportunity, as required by Section 2.12.950 of the Code of the City of Wichita), and provision for payment to the City of any amounts necessary to recapture from KS1 LLC, the financial benefit conferred by the sales tax exemption associated with the issuance of the bonds, in the event that KS1 LLC fails to comply (or cause its sublessees to comply) with any of the conditions referenced in this paragraph. Preparation of an appropriate Bond Ordinance, which will contain a provision pledging the financed property and net earnings therefrom as security for payment of the bonds, pursuant to K.S.A. 12-1744. Execution of guarantees for the payment of the bonds (which, for the tenant, may be in the form of an unconditional guaranty incorporated in the Lease). Agreement to pay all costs incurred by the City for processing the application and issuance of the bonds. Agreement to enter into the City's Administrative Service Fee Agreement providing for annual payments of $2,500 each year for the time period in which the bonds are outstanding. Agreement that, prior to the issuance of the bonds, the applicant and any proposed sublessees will have an approved Equal Employment Opportunity/Affirmative Action Plan on File with the City.

7. An agreement that, prior to the issuance of the bonds, the applicant will have obtained approval from City staff of a proposed water conservation plan. 8. An agreement to make any payment required as a condition of the letter of intent, or which may be required as a contingent payment in the Lease in the event that certain conditions (including failure to comply with other conditions of the letter of intent or the Citys Economic Development Incentive Policy) occur during the time period in which the bonds are outstanding. 9. An agreement to provide the City, at the time the proposed Lease agreement is submitted, an Environmental Site Assessment ("ESA"), performed by an independent consultant recognized as an expert in the area, that documents the environmental condition of the property; bonds generally will not be issued if the ESA discloses environmental conditions that might lead to monetary liability for owners or operators of the property. 10. An agreement, to be incorporated in the Lease agreement, that the applicant will use and operate the project in accordance with all applicable environmental laws and regulations, and will indemnify and hold the City harmless from any and all liabilities (other than liabilities resulting from environmental contamination primarily caused by the City's own agents or employees) arising under any environmental law or regulation. 11. An agreement to furnish copies of any annual financial audits to the City. 12. An agreement to cooperate with any annual compliance audit procedure(s) the City may adopt to monitor compliance with conditions, including any annual reports required of the applicant and any inspections of the applicant's premises or interviews with the applicant's staff. 26

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13. An agreement to obtain all insurance the City may require in connection with the construction, maintenance or operation of the project, or liabilities arising out of the operation of the project, including (without limitation) a performance bond sufficient to secure completion of the project. 14. An agreement that, prior to issuance of the bonds, the applicant will provide proof that all ad valorem property taxes on the project property due and owing up to the proposed date of issuance have been paid. 15. Arrangement (such as a Bond Placement Agreement) for the sale of the bonds, which shall contain suitable indemnification agreements from the prospective tenant indemnifying and holding the City harmless from liabilities arising from disclosure or registration provisions of state or federal securities laws. 16. An agreement that the tenant will not, while any of the bonds are outstanding, have a commercial banking relationship with the trustee of the bond issue, unless the bondholders shall first acknowledge in writing the existence of the relationship and waive any conflict that might exist as a result of such relationship. 17. An agreement that prior to the issuance of the bonds, the prospective tenant will obtain a suitable commitment for a policy of title insurance insuring the title of any real property conveyed to the City in connection with the financing. As a guide for developing the Lease Agreement and Bond Ordinance, the Exchange Place Development Agreement dated October __, 2013, to the extent not inconsistent herewith, is incorporated as a part of this letter. A copy of this letter is enclosed for your records. Please sign and return the original to the Citys Office of Urban Development, 455 N. Main Street 13th Floor, Wichita, Kansas 67202, to evidence KS1 LLCs acceptance of the terms and conditions hereof. Sincerely,

Carl Brewer Mayor ATTEST:

__________________________________ Karen Sublett, City Clerk

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ACCEPTED: KS1 LLC

____________________________________ John K. McWilliams, Manager

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EXHIBIT H REVISED NON-DISCRIMINATION AND EQUAL EMPLOYMENT OPPORTUNITY/AFFIRMATIVE ACTION PROGRAM REQUIREMENTS STATEMENT FOR CONTRACTS OR AGREEMENTS
During the term of this contract, the contractor or subcontractor, vendor or supplier of the City, by whatever term identified herein, shall comply with the following Non-Discrimination -- Equal Employment Opportunity/Affirmative Action Program Requirements: A. During the performance of this contract, the contractor, subcontractor, vendor or supplier of the City, or any of its agencies, shall comply with all the provisions of the Civil Rights Act of 1964, as amended: The Equal Employment Opportunity Act of 1972; Presidential Executive Orders 11246, 11375, 11131; Part 60 of Title 41 of the Code of Federal Regulations; the Age Discrimination in Employment Act of 1967; the Americans with Disabilities Act of 1990 and laws, regulations or amendments as may be promulgated thereunder. Requirements of the State of Kansas: 1. The contractor shall observe the provisions of the Kansas Act against Discrimination (Kansas Statutes Annotated 44-1001, et seq.) and shall not discriminate against any person in the performance of work under the present contract because of race, religion, color, sex, disability, and age except where age is a bona fide occupational qualification, national origin or ancestry; In all solicitations or advertisements for employees, the contractor shall include the phrase, "Equal Opportunity Employer", or a similar phrase to be approved by the "Kansas Human Rights Commission"; If the contractor fails to comply with the manner in which the contractor reports to the "Kansas Human Rights Commission" in accordance with the provisions of K.S.A. 1976 Supp. 44-1031, as amended, the contractor shall be deemed to have breached this contract and it may be canceled, terminated or suspended in whole or in part by the contracting agency; If the contractor is found guilty of a violation of the Kansas Act against Discrimination under a decision or order of the "Kansas Human Rights Commission" which has become final, the contractor shall be deemed to have breached the present contract, and it may be canceled, terminated or suspended in whole or in part by the contracting agency; The contractor shall include the provisions of Paragraphs 1 through 4 inclusive, of this Subsection B, in every subcontract or purchase so that such provisions will be binding upon such subcontractor or vendor.

B.

2.

3.

4.

5.

C.

Requirements of the City of Wichita, Kansas, relating to Non-Discrimination -- Equal Employment Opportunity/Affirmative Action Program Requirements: 1. The vendor, supplier, contractor or subcontractor shall practice Non-Discrimination --

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Equal Employment Opportunity in all employment relations, including but not limited to employment, upgrading, demotion or transfer, recruitment or recruitment advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship. The vendor, supplier, contractor or subcontractor shall submit an Equal Employment Opportunity or Affirmative Action Program, when required, to the Department of Finance of the City of Wichita, Kansas, in accordance with the guidelines established for review and evaluation; 2. The vendor, supplier, contractor or subcontractor will, in all solicitations or advertisements for employees placed by or on behalf of the vendor, supplier, contractor or subcontractor, state that all qualified applicants will receive consideration for employment without regard to race, religion, color, sex, "disability, and age except where age is a bona fide occupational qualification", national origin or ancestry. In all solicitations or advertisements for employees the vendor, supplier, contractor or subcontractor shall include the phrase, "Equal Opportunity Employer", or a similar phrase; The vendor, supplier, contractor or subcontractor will furnish all information and reports required by the Department of Finance of said City for the purpose of investigation to ascertain compliance with Non-Discrimination -- Equal Employment Opportunity Requirements. If the vendor, supplier, contractor, or subcontractor fails to comply with the manner in which he/she or it reports to the City in accordance with the provisions hereof, the vendor, supplier, contractor or subcontractor shall be deemed to have breached the present contract, purchase order or agreement and it may be canceled, terminated or suspended in whole or in part by the City or its agency; and further Civil Rights complaints, or investigations may be referred to the State; The vendor, supplier, contractor or subcontractor shall include the provisions of Subsections 1 through 3 inclusive, of this present section in every subcontract, subpurchase order or subagreement so that such provisions will be binding upon each subcontractor, subvendor or subsupplier. If the contractor fails to comply with the manner in which the contractor reports to the Department of Finance as stated above, the contractor shall be deemed to have breached this contract and it may be canceled, terminated or suspended in whole or in part by the contracting agency;

3.

4.

5.

D.

Exempted from these requirements are: 1. Those contractors, subcontractors, vendors or suppliers who have less than four (4) employees, whose contracts, purchase orders or agreements cumulatively total less than five thousand dollars ($5,000) during the fiscal year of said City are exempt from any further Equal Employment Opportunity or Affirmative Action Program submittal. Those vendors, suppliers, contractors or subcontractors who have already complied with the provisions set forth in this section by reason of holding a contract with the Federal government or contract involving Federal funds; provided that such contractor, subcontractor, vendor or supplier provides written notification of a compliance review and determination of an acceptable compliance posture within a preceding forty-five (45) day period from the Federal agency involved. 30

2.

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