A:\SCOPE

SCOPE OF SERVICES FOR Financial Advisor

by and between

CITY OF LAWRENCE, KANSAS and

GEORGE K. BAUM & COMPANY

Through our engagement by the City of Lawrence hereinafter “the City”, George K. Baum & Company (“GKB”) will fulfill the traditional role of a Financial Advisor by securing the most appropriately structured financing, obtaining the lowest financing costs, and enhancing the view of the City by the financial community. In the structuring and completion of a bond issue, GKB would perform the following services as necessary or appropriate based on the issues and procedural requirements of the proposed bond issuance:

A. Basic Services

1. Calendar of Events: GKB will provide the City with a Calendar of Events leading up to the bond sale and eventual closing and delivery of bond proceeds. Said Calendar will contain critical activities required for legal authorization of the bond issue including but not limited to such issues as finalizing a plan of finance, important bond authorization events or procedures and closing and delivery of funds.

2. Alternative Financing Techniques: GKB will discuss with the City alternative ways of structuring the financing which we feel may be of benefit. Discussions will include an analysis of the concepts and merits of any innovative financing techniques proposed. We will also assist in the completion of any such techniques that meet with the City’s approval.

3. Survey of Financial Resources: GKB will make a survey of the financial resources of the City. The survey will include an analysis of the existing debt structure and proposed additional debt as compared to existing and projected sources of income available to cover payment of debt service.

4. Plan of Financing: On the basis of information developed by the survey, GKB will devise a plan of financing which will be submitted in written form to the City. The plan of financing recommended will include proposed maturities and estimated interest rates.

5. Terms of Bond Issue: GKB will submit written recommendations as to the provisions, terms and conditions of the proposed bond issue. Included will be recommendations as to the best method of sale, dating the issue, interest payment dates, schedule of principal maturities and options of prior payment. Whenever possible, we will suggest additional security provisions designed to make the issue more attractive to investors. All recommendations will be based on the best professional judgment of GKB whose objective will be to design a bond issue which can be sold at the lowest interest cost consistent with all other considerations.

6. Legal Proceedings: GKB will work with the City’s bond attorney to prepare all necessary petitions, orders, ordinances, resolutions, notices, certificates and other documents necessary to facilitate the rendering of an unqualified legal opinion as to the tax-exempt status of the bonds and the successful completion of the financing.

7. Date and Time of Sale: Considering current market conditions, we will make recommendations to the City relating to the most advantageous date and time of sale. GKB will assist the City in the comparison of bids, and coordinate delivery to the purchaser as is further described below.

8. Selecting Date of Bond Sale: In the event the bonds are to be sold at public sale, GKB will make a recommendation as to the date and hour on which bids are to be considered. Our recommendation will be based on an estimate of expected market conditions, conflict with offerings of other issuing agencies and other relevant factors.

9. Notice of Sale and Related Documents: GKB will prepare all of the following which may be required in the marketing of the bonds:

Notice of Sale: GKB will assist the City’s bond attorney in the preparation of a notice of sale which will include the time and place of the bond sale, the conditions under which the bonds shall be awarded, and the terms and conditions of delivery.

Official Statement: On a typical new municipal bond issuance the City is responsible for creation of an Official Statement which contains an accurate disclosure of the credit features and terms of the bond offering. On this issuance the City, together with its legal counsel will be primarily responsible for drafting of the Preliminary and Final Official Statements. GKB will be an active participant in the review and subsequent finalization of the Official Statement which will be fully descriptive of the bonds offered and will, to the extent ordinarily required by municipal securities dealers in bidding on bonds of this type, contain economic and demographic information on the City. Upon completion, GKB will assist the City with distribution of the Preliminary Official Statements to potential bidders on the bonds and the Final Official Statement to the purchasers of the bonds.

Bond Insurance (Bidders Option): If advisable, GKB will submit to the municipal insurance providers financial and economic data necessary to explore the possibility of obtaining insurance on the issue. This form of insurance is paid for by the firm bidding on the Bonds and will not be an expense of the City. The insurance will make the Bonds "AAA" rated and will lower the interest cost to the City.

GKB will be responsible for distributing the notice of sale and preliminary official statement to all prospective bidders and will assist the City in answering any questions or requests for additional information. Upon request, a list of such bidders will be submitted to the City.

B. SRF Program and Refinancing Activities

1. Cashflow Preparation – GKB will prepare financial calculations and reports associated with the financing including those needed in evaluating the refinancing as well as a final set of detailed numbers upon completion of the financing. These schedules will include all of the schedules typically required for a transaction of this nature including but not limited to estimates of savings based on market conditions and projected interest rates for the bonds, calculations of aggregate yield on the bonds, sources and uses of funds and escrow sizing and cashflow reports. . GKB will assist the City in evaluating other potential benefits which might accrue from undertaking a refinancing effort. GKB will prepare a thorough and complete set of financing reports which accurately depict the important features of the financing needed by the City and its attorneys.

2. Coordination with EPA/KDHE/KDFA – GKB will assist the City in coordinating the repayment of the City’s prior SRF Loan currently held by KDHE. GKB will work with the City’s bond counsel, KDHE, KDFA and other relevant parties to determine the relevant steps associated with payoff and cancellation of the City’s existing SRF water system loan.

3. Escrow for Repayment of the bonds – as necessary based on the terms of the transaction, GKB will prepare escrow calculations providing for the timely repayment of the debt being refinanced. Said calculations will include identification of escrow candidate securities and the negotiation of a trust indenture designed to hold said securities until the proceeds can be used to pay and cancel the outstanding debt.

4. Delivery of Escrow Securities – GKB will assist the City in identification, payment and delivery of escrow candidate securities which are suitable investments for this purpose based on availability at the time. If necessary, GKB can create a bidding process for the purchase of “open market” government securities, however it should be noted that it is not likely such a task will be required, or advisable if other equivalent yield State and Local Government Series securities are available with the same maturity dates.

5. Rating Agency - GKB will assist the City in preparing for needed Rating Agency calls and will be available to assist in explaining potential details and benefits of the transaction to the Rating agencies. GKB will coordinate the date/time of the call and the distribution of rating materials to the rating agency. GKB will also be available to discuss the other aspects of the rating presentation and call with the City in advance and provide appropriate assistance with this important aspect of the transaction.

B. Bond Sale Activities

1. Bond Sale - Award of Bonds: GKB will be present at the time the bids are opened and will be available to assist the City in the tabulation and comparison of the bids.

2. Delivery of the Bonds: GKB will coordinate the delivery of the bonds. We will notify the purchaser of the time that payment for the bonds can be made, and will assist the [Issuer] in the completion of closing documents and utilization of bond proceeds.

3. Recordkeeping and Retention: GKB will advise the City as to its responsibilities with regard to recordkeeping for a securities issue.

4. Arbitrage Rebate and Reporting: GKB will provide guidance to the City with regard to recordkeeping for purposes of compliance with arbitrage rebate regulations.

Under this relationship, GKB will assume all out-of-pocket expenses including local travel expenses, communication expenses, cost of financial analysis and reports prepared by GKB, and other approved expenses. The City shall pay for official publication costs, preparation and printing of preliminary and final official statements, bond delivery costs, attorneys' fees, postage costs relating to the solicitation of bids, rating agencies' fees, and related travel expenses.

Fee for Services:

Advisory Fee- Our fee for the advisory services associated with the issuance of bonds and outlined above will be $35,000.

Special Projects- At the City’s request, GKB may from time to time assist the City with other types of financial planning and analysis which are not directly related to near term debt issuance. Any compensation due GKB for such services will be agreed to in advance by both the City and GKB. If GKB serves as a bidding agent for investment of bond proceeds GKB will receive a fee for said services which is in compliance with current IRS “safe harbor” rules for reasonableness for such services pursuant to federal arbitrage laws.

In the event a financing does not occur, GKB will not charge the City for services.

Unless specifically prohibited by the City, nothing in this agreement will prohibit GKB from bidding on any bonds issued at public sale. The final authorization to bid will also be will be addressed and reiterated in the Resolution of Intent to issue bonds passed by the City in advance of the bond sale. If specific permission to bid is not contained in the Resolution, GKB will not participate in the bidding process.

This letter of understanding will be in effect in this form unless modified by mutual agreement or terminated by either party. Termination of this agreement may be effected by either party giving thirty days written notice. In the event GKB has completed substantial work on a financing at the time of notice of termination is given, the City agrees to pay GKB a mutually agreeable fee for services rendered. This letter will not terminate until such payment is made.

Knowing your goals, we are excited about assisting the City in meeting its financial needs. I would appreciate your acceptance of this agreement by executing this agreement as indicated below and returning an executed copy to the undersigned.

Respectfully,

GEORGE K. BAUM & COMPANY

Roger Edgar

Executive Vice President

ACCEPTED this _______ day of_________________, 2010

for the City of Lawrence, Kansas

By _______________________________________________

ATTEST:

By ___________________________________________

Clerk