MINUTES

Kansas Bioscience Authority
Executive Committee of the
Board of Directors

Friday, April 24, 2009

Call to Order: A quorum being present, a special meeting of the Executive Committee of the Board of Directors of the Kansas Bioscience Authority was called to order at 10:02 a.m. by Chairwoman Sandra Lawrence. Other members of the Executive Committee present by telephone were John Carlin, Ed McKechnie, Bill Sanford, and Dr. Ray Smilor. Others attending were Tom Thornton, Jan Katterhenry, Chad Bettes, Marsh LoScalzo from KBA staff and Jeff Ellis, legal counsel from Lathrop & Gage.

Review of the Minutes: Ms. Lawrence asked for a motion to approve the minutes of the April 20, 2009, meeting. Dr. Smilor moved to approve the minutes, Mr. McKechnie seconded and the minutes were unanimously approved by the Committee.

Mr. Thornton gave a brief update on the Kansas budget decision pending before the Kansas Legislature. The Legislature will go back for a veto session next week. The House and Senate Ways and Means Committees have met this week to discuss further budget reductions contemplated and required under a worsening budget scenario presented last Friday in the consensus revenue estimates. It appears both the House and Senate favor maintaining the $40 million cap that Governor Sebelius proposed and the Legislature approved and signed in the initial FY 2010 budget. The Senate Ways and Means Committee asked Mr. Thornton to come before the Committee on April 23, 2009 to testify about the progress that KBA is making. Mr. Thornton stressed that the funding mechanism is intact and the outcomes associated with KBA are driving KBA to the goal to create the fourth leg of the state’s economy. Further reductions would adversely affect areas like the Centers of Innovation, Drug Discovery and the Cancer initiative. The Ways and Means voted unanimously to maintain the $40 million cap. The recommendation of the Committee will be going to the Senate next week, and it appears the cap will be maintained..

Executive Session: Chairwoman Lawrence asked that the Committee recess into executive session to discuss legal action contemplated by the state of Texas regarding the NBAF site selection process and to consult with counsel regarding matters that would be deemed privileged.

Mr. McKechnie moved that the Executive Committee recess into executive session to discuss legal action contemplated by the state of Texas regarding the NBAF site selection process and to consult with the Authority's attorney regarding matters that would be deemed privileged in the attorney-client relationship pursuant to K.S.A. 75-4319(b)(2). The Executive session will commence at 10:14 a.m. and conclude at 10:44 a.m. The meeting will be attended by members of the Executive Committee of the Authority, plus Mr. Thornton, Ms. Katterhenry, and Mr. Ellis. Ian Shavitz; Akin Gump Strauss Hauer & Feld and Dr. Ron Trewyn; Kansas State University. The motion was seconded by Mr. Carlin and unanimously approved.

Mr. Sanford and Mr. Shavitz left the meeting at 10:35 a.m.

Return to Open Session: Upon motion made by Dr. Smilor, seconded by Mr. Carlin and unanimously approved, the Committee reconvened in open session at 10:44 a.m. Discussion: Mr. Thornton then reported on the lawsuit filed by the State of Texas pertaining to the NBAF decision. Included in the lawsuit is an allegation that Mr. Thornton had a prior relationship with then Navy Admiral Jay Cohen while Mr. Thornton served on the staff of House Speaker Dennis Hastert, and that the relationship was used to lobby Admiral Cohen when he later became DHS Undersecretary with responsibility for the NBAF site selection. Mr. Thornton asked that the minutes reflect that he had never met with Admiral Cohen prior to his visit to Manhattan and had no contact with him during his tenure on the staff of Speaker Hastert.

The Committee discussed the need to retain counsel and to intervene in the Texas lawsuit to protect the interests of Kansas and the Heartland BioAgro Consortium. It was noted that the law firm of Akin Gump Strauss Hauer & Feld in Washington, D.C. knew the history of the entire application process and could rapidly bring legal resources to bear.

Mr. Carlin moved that the KBA retain the law firm of Akin Gum Strauss Hauer & Feld to intervene in the Texas lawsuit on behalf of the Heartland BioAgro Consortium and authorize the President and the Treasurer to negotiate an appropriate engagement with that firm and expend the funds necessary to protect the interests of Kansas in the suit. Dr. Smilor seconded the motion. After further discussion, the motion passed unanimously.

Mr. Thornton indicated that he would report to the NBAF Steering Committee on the status of the case during a scheduled 3:00 p.m. conference call.

Adjournment: There being no further business to come before the meeting, the meeting adjourned at 10:50 a.m.