1999 SUPPLEMENTAL LEASE

                        BY AND BETWEEN

                CITY OF SOUTH HUTCHINSON, KANSAS

                              AND

                    COLLINS BUS CORPORATION


                    DATED AS OF JUNE 1, 1999



                    1999 SUPPLEMENTAL LEASE


     This  1999 Supplemental Lease dated as of  June 1, 1999 (the
"1999  Supplemental  Lease") by and between  the  City  of  South
Hutchinson,  Kansas,  a municipal corporation  of  the  State  of
Kansas  (the  "Issuer"), and Collins Bus  Corporation,  a  Kansas
corporation organized under the laws of the State of Kansas  (the
"Tenant")  and supplements a Lease between the same parties  made
as  of  August  1,  1984, and a 1997 Amended and  Restated  Lease
between the same parties made as of November 15, 1997.

                      W I T N E S S E T H:

     WHEREAS,  the parties have heretofore entered into  a  Lease
dated  as of August 1, 1984 (hereafter called the "Lease") and  a
1997  Amended  and Restated Lease dated as of November  15,  1997
(the  "1997  Amended and Restated Lease") covering the  property,
both  real and personal, set forth in Schedule I attached  hereto
and incorporated herein by reference; and

     WHEREAS,  the  Existing Facilities (as hereinafter  defined)
and all rentals due under the Lease are pledged to secure payment
of  a  series  of  City of South Hutchinson,  Kansas,  Industrial
Revenue  Bonds,  being  Series 1984A, in the  original  aggregate
principal amount of $1,750,000 (hereinafter sometimes called  the
"1984  Bonds") which were issued to pay the cost of  acquiring  a
site  and  purchasing, constructing and equipping a manufacturing
facility (hereinafter the "1984  Project"); and

     WHEREAS,  the Existing Facilities and all rentals due  under
the  1997  Amended and Restated Lease are also pledged to  secure
payment  of  a  series  of  City  of  South  Hutchinson,  Kansas,
Industrial  Revenue  Bonds, Series 1997 issued  in  the  original
principal  amount of $3,500,000 (the "1997 Bonds"),  to  pay  the
cost of acquiring, purchasing, constructing and equipping certain
facilities (the "1997 Improvements"), which the 1984 Project  and
the 1997 Improvements are hereinafter referred to collectively as
the "Existing Facilities"; and

     WHEREAS, Issuer is an existing municipality, a city  of  the
third  class,  with full power and authority to enter  into  this
1999  Supplemental  Lease, acting by and  through  its  governing
body,  in  the  public  interest and for  a  public  purpose,  by
providing  for  additional commercial development and  employment
opportunities  for  its citizens and for  the  citizens  of  Reno
County, Kansas, to promote the economic stability of the State of
Kansas,   all  as  authorized  by  K.S.A.  12-1740  to  12-1749d,
inclusive, as amended; and

     WHEREAS, to provide funds to pay the costs of acquiring  and
installing  certain  additions to the  Existing  Facilities  (the
"1999 Improvements"), as described in Schedule I attached hereto,
Issuer  intends  to issue and sell its Industrial Revenue  Bonds,
Series   1999-A  (Collins  Bus  Corporation)  in  the   aggregate
principal amount of $1,250,000 (the "1999-A Bonds") which  1999-A
Bonds shall be equal in priority to the 1984 Bonds and 1997 Bonds
outstanding.  The 1984 Bonds, the 1997 Bonds and the 1999-A Bonds
are hereinafter collectively referred to as the "Bonds".

     WHEREAS,  payment of the Bonds shall be secured by a  pledge
of the Issuer's interests in the Existing Facilities and the 1999
Improvements (collectively the "Project") and by a pledge of  all
rentals under the Lease, the 1997 Amended and Restated Lease  and
this 1999 Supplemental Lease; and

     WHEREAS, Ordinance No. 99-659 of the Issuer, authorizing the
1999-A  Bonds  (the "1999  Ordinance") authorizes a certain  1999
Supplemental  Indenture, dated as of June 1,  1999,  between  the
City  of South Hutchinson, Kansas and The First National Bank  of
Hutchinson,  Hutchinson,   Kansas, as  Trustee  (hereinafter  the
"1999 Supplemental Indenture"), which 1999 Supplemental Indenture
supplements  a  certain Indenture, dated as of  August  1,  1984,
executed   with respect to the issuance of the 1984 Bonds  and  a
certain  1997 Amended and Restated Indenture dated as of November
15,  1997,  executed  with respect to the issuance  of  the  1997
Bonds; and

      NOW,  THEREFORE, in consideration of the premises, of other
good  and  valuable considerations, and of the  mutual  benefits,
covenants  and  agreements herein contained, the  parties  hereto
supplement the Lease and agree as follows:

     Section  1.   Definitions.  Capitalized terms not  otherwise
defined  in this 1999 Supplemental Lease shall have the  meanings
set  forth in Appendix B to the 1999 Supplemental Indenture.   In
addition to the words, terms and phrases defined in Appendix B to
the  1999  Supplemental  Indenture and  elsewhere  in  this  1999
Supplemental Lease, the capitalized words, terms and  phrases  as
used  herein shall have the following meanings, unless some other
meaning is plainly intended:

     "Basic  Rent  Credits" means all funds  on  deposit  in  the
Principal  and  Interest Payment Account and  available  for  the
payment of principal of, redemption premium, if any, and interest
on the 1999-A Bonds on any Payment Date.

     "Improvements"  means  the structures, machinery,  equipment
and  other  property  purchased in whole  or  in  part  from  the
proceeds of the Bonds and were specifically described in Schedule
I hereto and made a part hereof.

     "1984 Project" means and includes the interest of Issuer  in
the  Land and the Improvements acquired, constructed or installed
with  the  proceeds  of  the  1984 Bonds,  as  more  specifically
described in the Lease..

     "1997  Ordinance" means Ordinance No. 97-634 of  the  Issuer
adopted November 18, 1997.

     "1997  Improvements"  means and  includes  the  interest  of
Issuer in the Land and the Improvements acquired, constructed  or
installed  with  the  proceeds  of  the  1997  Bonds,   as   more
specifically described in the 1997 Amended and Restated Lease.

     "1999  Project  Fund"  means  the  account  authorized   and
established  with the Trustee pursuant to this 1999  Supplemental
Indenture  and  designated the "City of South Hutchinson,  Kansas
1999 Project Fund (Collins Bus Corporation)".

     "Owner"  means the registered owner of any fully  registered
1999-A Bond.

     "Supplemental   Basic   Rent"   means,   collectively,   the
Supplemental Basic Rent and any  Additional Rent required by  the
1997 Amended and Restated Lease.

     "State" means the State of Kansas.

     "Tenant"  means Collins Bus Corporation, its successors  and
assigns.

     "Term"   means,  collectively,  the  Basic  Term   and   any
Additional Term of the 1999 Supplemental Lease.

     "Yield"  shall mean the yield which when used  in  computing
the present worth of all payments of principal and interest to be
paid on the Bonds produces an amount equal to the issue price  as
described in Treas. Reg. 1.103-15AT(b)(3).

     Section  2.  Representations and Covenants Relating  to  the
Code.

        (i)     The Tenant will not make or cause or permit to be
made,  whether  by  the  Trustee or otherwise,  any  use  of  the
proceeds  (as  defined in Section 103 of the Code) of  the  Bonds
which,  if such use had been reasonably expected on the  date  of
issuance  of  the  Bonds,  would have  caused  the  Bonds  to  be
"arbitrage  bonds"  within the meaning of the  Code  and  further
covenants and agrees that it will comply with and will  take  all
action  reasonably required to insure that the  Trustee  complies
with  all  applicable requirements of the Code and the rules  and
regulations  of the United States Treasury Department  thereunder
until  all  of  the  bonds, including interest  thereon  and  any
applicable redemption premium, have been paid.

       (ii)     The weighted average maturity of the 1999-A Bonds
does  not  exceed  the  120 percent  of the remaining  reasonably
anticipated  economic life of the 1984 Project financed  in  part
from proceeds of the 1984 Bonds.

     (iii)      Tenant covenants and agrees to furnish to  Issuer
prior  to  issuance  and delivery of the 1999-A  Bonds,  a  fully
completed Internal Revenue Service Form 8038 with respect to  the
Bonds  signed  by the preparer thereof.  Tenant acknowledges  and
agrees  that it shall principally be responsible, as  between  or
among  any preparers, for the information set forth in said  Form
8038.  Tenant further covenants and agrees to indemnify and  hold
harmless  the Issuer, the Trustee and their respective  officers,
agents and employees, Bond Counsel and any purchaser or owner  of
the  Bonds from and against all liability or consequences of  any
material misrepresentation or omission in the computation of Form
8038.

      (iv)     Tenant covenants and agrees to file or cause to be
filed  such periodic supplemental statements or notices with  the
Internal  Revenue  Service or such other designated  governmental
agency as may now or hereafter be required by applicable statutes
or  regulations, including the Code, if applicable, in order  for
the exemption from Federal income taxation of the interest on the
Bonds  to  continue  in  full force and effect.   Tenant  further
covenants  and agrees to do such other acts as may  be  necessary
from  time  to time to assure the continued tax exempt status  of
the Bonds, and to refrain from any or all acts, including without
limitation,  the making of capital expenditures with  respect  to
the  Project or otherwise, which may at any time adversely affect
or threaten the tax exempt status of the Bonds.

       (v)     The Project, and each portion thereof, constitutes
either  land or property of a character subject to the  allowance
for depreciation under the Code.

       (vi)      As of the date of issuance of the 1999-A  Bonds,
there  are not outstanding any obligations (other than  the  1984
Bonds  and  1997  Bonds) the interest on  which  is  exempt  from
Federal  income tax by virtue of the provisions of the  Code  and
the  proceeds  of  which  were to be used  with  respect  to  the
Existing  Project or with respect to other facilities located  in
the  City  of South Hutchinson, Kansas, or facilities  contiguous
to,  or  integrated  with, the Existing Facilities  or  any  such
facilities,  and the Principal User of which is or  will  be  the
Tenant or any other Principal User.

     (vii)      The  Tenant  will not request  or  authorize  any
disbursement by the Trustee pursuant to the Lease (other than for
costs  associated  with the issuance of the  Bonds)  which  would
result in less than substantially all of the proceeds of the 1999-
A   Bonds,  including any income thereon, being used  to  provide
land  or  property  of a character subject to the  allowance  for
depreciation  under  the Code (other than any  such  proceeds  or
income used for costs associated with the issuance of the Bonds).

     (viii)     The amount of industrial revenue bonds (including
the  1999-A  Bonds) allocable to either the Tenant or  a  Related
Person  (as  defined  in  the Code)  thereto  as  a  Test  Period
Beneficiary does not and will not exceed $40,000,000.

       (ix)     No portion of the proceeds of the 1999-A Bonds is
to  be  used  for the acquisition of land to be used for  farming
purposes.

        (x)     No portion of the proceeds of the 1999-A Bonds is
to  be  used for the acquisition of any property (or on  interest
therein) unless:

            (i)     the first use of such property is pursuant to
     such acquisition, or

            (ii)     the Rehabilitation Expenditures with respect
     to a building (and the equipment therefor) equals or exceeds
     15%  of  the portion of the cost of acquiring such  building
     (and equipment) financed with the proceeds of the issue, or

          (iii)      the Rehabilitation Expenditures with respect
     to  facilities other than a building equals or exceeds  100%
     of the portion of the cost of acquiring such facilities.

       (xi)     No portion of the proceeds of the 1999-A Bonds is
to  be  used  to  provide any airplane, skybox, or other  private
luxury box, any health club facility, any facility primarily used
for gambling, or any store the principal business of which is the
sale of alcoholic beverages for consumption off premises.

     (xii)     Tenant will not cause or permit the Project to  be
connected  with any other facility financed with the proceeds  of
industrial development bonds issued in accordance with  the  Code
through  the  use of substantial common facilities unless  Tenant
first obtains approving opinion of Bond Counsel.

     (xiii)     The  Tenant will not use or cause or  allow  more
than  25 percent of the Original Proceeds of the 1999-A Bonds  to
be  used or applied to provide a facility the primary purpose  of
which  is retail food and beverage services, automobile sales  or
service, or the provision of recreation or entertainment.

     (xiv)      The  Tenant will not use or cause  or  allow  any
portion  of the Original Proceeds of the 1999-A Bonds to be  used
or  applied  to  provide  a  private or commercial  golf  course,
country  club,  massage  parlor, tennis  club,  skating  facility
(including  roller skating, skateboard and ice skating),  racquet
sports  facility  (including any handball or racquetball  court),
hot tub facility, suntan facility or racetrack.

     Section  3.  Ratification and Confirmation of  Lease.   This
1999 Supplemental Lease is intended to supplement the 1984 Lease,
as  amended  and restated by the 1997 Amended and Restated  Lease
entered   into  between  the  Issuer  and  Tenant.    Except   as
specifically amended or modified herein, the Lease and  the  1997
Amended  and Restated Lease are hereby ratified and confirmed  by
the parties.

     Section  4.  Installation of the 1999 Improvements.   Tenant
covenants  to cause the installation of the 1999 Improvements  to
be  completed in accordance with the provisions of the  Lease  as
soon  as  practicable.  The disbursement of funds from  the  1999
Project Fund created in the 1999 Supplemental Indenture shall  be
in the same manner as provided in the Lease.

     If  the net proceeds of the 1999-A Bonds are insufficient to
fully pay all sums required to be paid to fully complete the 1999
Improvements  and  any additions and extras,  lien  free,  Tenant
hereby  agrees to pay any such deficiency by making such payments
directly  to  the contractors, subcontractors, or suppliers,  and
Tenant  shall save Issuer whole and harmless from any  obligation
to  pay  such deficiency.  In addition thereto, Tenant  covenants
that  it  will  pay  or cause to be paid any and  all  additional
expenses  reasonably  required  in  connection  with  this   1999
Supplemental  Lease,  the Bond Ordinance  and  1999  Supplemental
Indenture,  including  but  not  limited  to  architects'   fees,
attorneys'  fees,  publication expense,  bond  printing  and  all
expenses  of the City including the reasonable fees of  the  City
attorney.

     Section  5.  Delivery of Possession.  Delivery of possession
of  the Project, including the 1999 Improvements, shall be as set
out in the Lease.

     Section  6.   Basic  Rent.  In addition to  the  Basic  Rent
provided for in Section 1 of the Lease, the Tenant shall also pay
to   the   Trustee,  for  the  use  of  the  1999   Improvements,
Supplemental  Basic Rent (hereinafter called "Supplemental  Basic
Rent")  payable in monthly installments beginning as of  February
1,  2000,  and on the first day of each month thereafter  to  and
including August 1, 2009.

     Section  7.   Insurance.  The amount of  fire  and  extended
coverage  insurance  shall be increased to  the  "full  insurable
value" of the Project as said term is defined in the Lease.

     Section 8.  Term of Lease.  The term of the Lease shall  end
on  August 1, 2009, subject to prior termination as specified  in
the  Lease,  but  shall  continue thereafter  until  all  of  the
principal and interest and redemption premium, if any, are  paid,
or provision is made therefor, on all 1999-A Bonds.

     Section  9.   Tenant's Option to Purchase.   Notwithstanding
any  provision of the Lease to the contrary, the options  granted
to  Tenant  in  the Lease to purchase the Project  shall  not  be
exercisable unless and until the 1984 Bonds, the 1997  Bonds  and
the 1999 Bonds have been fully paid and retired (or provision  is
made  therefore),  including the principal thereof  and  interest
thereon and any expenses of payment and redemption.

     Section 10.  Trustee.  The Trustee referred to herein  shall
be The First National Bank of Hutchinson, Hutchinson, Kansas.

     Section  11.   Default.   In addition  to  the  elements  of
default  set  forth in the Lease, any Event of Default,  as  such
term  is  defined  by the Lease, under any of the  terms  of  the
Lease,  Amended  and  Restated Lease, or 1999 Supplemental  Lease
shall  be  deemed a default of this 1999 Supplemental Lease,  the
Amended   and   Restated  Lease  and  the  Lease,   collectively.
Remedies, notices and grace periods on default and the rights  of
the respective parties hereto are set forth in the Lease.

     Section  12.  Other  Lease Provisions.   Except  as  may  be
specifically set forth herein, all provisions of the Lease  shall
be in force and effect and shall be applicable to the Project and
to the Bonds and to this 1999 Supplemental Lease.  As used in the
Lease, the term "Bonds" shall have the meaning set forth herein.

     Section   13.  Completion  of  1999  Improvements.    Tenant
warrants  that  the  1999 Improvements, when completed,  will  be
necessary or useful in its development for use by Tenant for  its
purposes.  Upon completion of the 1999 Improvements, Tenant shall
cause   the   Authorized  Tenant  Representative  to  deliver   a
Certificate  of Completion to the Trustee, and the date  of  such
delivery shall be the Completion Date.

     Section 14.  Ad Valorem Taxes.  The parties acknowledge that
under the existing provisions of K.S.A. 79-201a, as amended,  the
property  purchased  with the proceeds of  the  1999-A  Bonds  is
entitled  to  exemption from ad valorem taxation provided  proper
application is made therefore.  Issuer covenants that it will not
voluntarily take any action which may reasonably be construed  as
tending  to cause or induce the levy or assessment of ad  valorem
taxes  on  the  Project so long as any of the  1999-A  Bonds  are
outstanding and unpaid and should any such levy or assessment  be
threatened  or  occur, issuer shall, at Tenant's  request,  fully
cooperate with Tenant in all reasonable ways to present any  such
levy  or  assessment.  Tenant covenants that it will prepare  all
necessary  filings regarding the application for such ad  valorem
tax  exemption which the Issuer shall execute for  filing  on  or
before  September 1 in the calendar year following  the  calendar
year  in  which the 1999-A Bonds were issued.  Tenant will  renew
said  application  from time to time and  the  Issuer  agrees  to
cooperate  and  take  any other action as  may  be  necessary  to
maintain such ad valorem tax exemption in full force and  effect,
in   accordance  with  K.S.A.  79-210,  et  seq.  and  the  State
Department of Revenue.

     IN  WITNESS  WHEREOF,  Issuer being hereunto  authorized  by
valid and existing ordinances duly adopted, has caused this  1999
Supplemental Lease to be executed and delivered in its  name  and
behalf  by  and  through its Mayor and City  Clerk,  and  Tenant,
pursuant to valid and subsisting resolutions of its partners  has
caused  this 1999 Supplemental Lease to be executed and delivered
in its name and behalf by its officers thereunto duly authorized,
all the day and year first above written.

                         City of South Hutchinson, Kansas



                              By:  /s/ Ron Hirst
                                   Ron Hirst, Mayor


By:  /s/ Cynthia Wixson
     Cynthia Wixson, City Clerk




                              Collins Bus Corporation


                              By:  /s/ Larry W. Sayre
                                   Larry W. Sayre,
                                   Vice-President of Finance
                                   and Chief Financial Officer


By:  /s/Lewis E. Ediger
     Lewis E. Ediger, Secretary


                           SCHEDULE I

SCHEDULE  I  TO THE 1999 SUPPLEMENTAL INDENTURE OF TRUST  OF  THE
CITY OF SOUTH HUTCHINSON, KANSAS, AND THE FIRST NATIONAL BANK  OF
HUTCHINSON, AS TRUSTEE, DATED AS OF JUNE 1, 1999, AND TO THE 1999
SUPPLEMENTAL  LEASE DATED AS OF JUNE 1, 1999 BY AND BETWEEN  SAID
CITY AND COLLINS BUS CORPORATION.

                   PROPERTY SUBJECT TO LEASE

     The  following  property  acquired  by  the  City  of  South
Hutchinson,  Kansas,  (the  "Issuer")  in  connection  with   the
issuance  by  the  City of its Industrial Revenue  Bonds,  Series
1997, (Collins Bus Corporation) (the "Series 1997 Bonds"):

     (a)   The  following described real estate in  Reno  County,
Kansas:

     Tract  1:  A tract of land in the West half of the Southeast
     Quarter  of Section 23, Township 23 South, Range 6  West  of
     the  6th  Principal  Meridian, all  in  the  City  of  South
     Hutchinson, Reno County, Kansas: Commencing at the Northeast
     corner  of the Southeast Quarter of said Section 23;  thence
     West  along the North line of the Southeast Quarter, Section
     23, for a distance of 1,979 feet to a point and the place of
     beginning; thence turning an angle of 90E37 minutes left and
     South  along a line for a distance of 300 feet to  a  point;
     thence  turning  West  parallel to the aforementioned  North
     section  line  a  distance of 125 feet to  a  point;  thence
     turning  South parallel to the East boundary of said Section
     23  for  a  distance of 535 feet to a point; thence  turning
     West  parallel to the said North section line of Section  23
     for  a  distance of 333 feet to a point; thence  turning  an
     angle of 90E37 minutes left and South for a distance of  100
     feet  to  a point; thence turning an angle of 90E37  minutes
     right and West for a distance of 100 feet to a point; thence
     turning  an  angle of 89E23 minutes right and  North  for  a
     distance  of  25  feet; thence turning  an  angle  of  90E37
     minutes  left  and West for a distance of  12  feet;  thence
     turning  an  angle of 89E23 minutes right and  North  for  a
     distance of 910 feet to a point; thence turning an angle  of
     89E23 minutes right and East for a distance of 570 feet to a
     point and place of beginning.

     Tract  2: Beginning at a point in the South line of  vacated
     West  6th Street, said point also being the Northeast corner
     of  Lot  167, West 6th Street, in BLANCHARD=S THIRD ADDITION
     to  the  City  of  South Hutchinson, as originally  platted;
     thence  Southerly along the East line of said Lot 167,  West
     6th  Street,  and along the East line of Lot 126,  West  5th
     Street, the East line of Lot 126, West 4th Street, and their
     extension,  a  distance of 880 feet to a point  for  corner,
     said  corner  being in the South line of  vacated  West  4th
     Street;  thence  right  at angle  of  90E37  in  a  Westerly
     direction  and  parallel with said South line  of  West  4th
     Street,  a distance of 31.76 feet, more or less, to a  point
     50.0  feet  Easterly from, measured at right angles  to  the
     center line of The Atchison, Topeka and Santa Fe Railway=s H
     & S District main track, as now located and operated; thence
     in  a  Northerly direction along a line 50.0  feet  Easterly
     from  and  parallel  with said main  track  center  line,  a
     distance  of  880.0 feet, more or less, to a  point  in  the
     North  line  of  Lot 169, West 6th Street, said  point  also
     being  in the South line of vacated West 6th Street;  thence
     East  along  the North line of said Lots 169 and  167,  said
     line also being the South line of vacated West 6th Street, a
     distance  of  36.45  feet, more or  less  to  the  point  of
     beginning;

said real property constituting the "Land" as referred to in  the
Indenture  and the Lease entered into by the Issuer  concurrently
with  the issuance of the Series 1997 Bonds (the "Indenture"  and
the "Lease").

     (b)  All  buildings,  building  additions  and  improvements
constructed or located on the Land at the date of issuance of the
Series   1997   Bonds;   all   buildings,   building   additions,
improvements,  machinery  and equipment constructed,  located  or
installed on the Land, all or any portion of the costs  of  which
were  paid from the proceeds of the Series 1997 Bonds, and  which
constitute  Improvements as defined int  eh  Indenture,  together
with  any  substitutions or replacements therefor,  the  property
described  in paragraphs (a) and (b) of this Schedule I  together
constituting  the "Project" as referred to in the  Indenture  and
the Lease.

     (c)  All  buildings,  building  additions  and  improvements
constructed or located on the Land at the date of issuance of the
Series  1999-A  Bonds;  all   building  additions,  improvements,
machinery and equipment constructed, located or installed on  the
Land, all or any portion of the costs of which were paid from the
proceeds  of  the 1999-A Bonds, and which constitute Improvements
as  defined in the Indenture, together with any substitutions  or
replacements  therefor, the property described in paragraphs  (a)
and (b) of this Schedule I together constituting the "Project" as
referred to in the Indenture and the Lease.