RESOLUTION NO. 6627
RESOLUTION DETERMINING THE INTENT OF THE CITY OF LAWRENCE, KANSAS, TO ISSUE ITS INDUSTRIAL REVENUE BONDS IN THE AGGREGATE AMOUNT NOT TO EXCEED $118,000,000 TO FINANCE THE COSTS OF ACQUIRING, CONSTRUCTING AND EQUIPPING ONE OR MORE FACILITIES FOR THE BENEFIT OF PACKERWARE CORPORATION AND ITS SUCCESSORS IN INTEREST
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WHEREAS, the City of Lawrence, Kansas (the “City”), desires to promote, stimulate and develop the general welfare and economic prosperity of the City and its inhabitants and thereby to further promote, stimulate and develop the general welfare and economic prosperity of the State of Kansas; and
WHEREAS, the City is authorized and empowered under the provisions of K.S.A. 12‑1740 to 12‑1749d, inclusive (the “Act”), to issue industrial revenue bonds to pay the cost of certain facilities (as defined in the Act) for the purposes set forth in the Act and to lease such facilities to private persons, firms or corporations; and
WHEREAS, PackerWare Corporation, a Delaware corporation, has submitted to the City an Application for the Issuance of Industrial Revenue Bonds requesting that the City finance the cost of acquiring, constructing and equipping one or more facilities as more fully described in the Application (each, a “Project” and collectively, the “Projects”) through the issuance of its industrial revenue bonds in one or more series in the amount not to exceed $118,000,000, and to lease the Project to PackerWare Corporation, a Minnesota corporation, or its successors and assigns (collectively, the “Company”) in accordance with the Act; and
WHEREAS, it is hereby found and determined to be advisable and in the interest and for the welfare of the City and its inhabitants that the City finance the costs of each Project by the issuance of industrial revenue bonds in one or more series under the Act in a principal amount not to exceed $118,000,000, each series of said bonds to be payable solely out of rentals, revenues and receipts derived from the lease of the Project by the City to the Company.
NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF LAWRENCE, KANSAS, AS FOLLOWS:
Section 1. Approval of Projects. The Governing Body of the City hereby finds and determines that the acquiring, constructing and equipping of the Projects will promote the general welfare and economic prosperity of the City of Lawrence, Kansas, and the issuance of the City’s industrial revenue bonds in one or more series to pay such costs will be in furtherance of the public purposes set forth in the Act. The Governing Body of the City hereby finds and determines that the Projects will provide significant benefits to the City that warrant tax abatement in excess of an average of 50% over the term of the abatement.
Section 2. Intent to Issue Bonds. The Governing Body of the City hereby determines and declares the intent of the City to acquire, construct and equip the Projects out of the proceeds of industrial revenue bonds of the City in one or more series in a principal amount not to exceed $118,000,000 to be issued pursuant to the Act.
Section 3. Provision for the Bonds. Subject to the conditions of this Resolution, the City will (i) issue its industrial revenue bonds in one or more series to pay the costs of acquiring, constructing and equipping each Project, with such maturities, interest rates, redemption terms and other provisions as may be determined by ordinance of the City; (ii) provide for the lease (with an option to purchase) of each Project to the Company; and (iii) to effect the foregoing, adopt such resolutions and ordinances and authorize the execution and delivery of such instruments and the taking of such action as may be necessary or advisable for the authorization and issuance of said bonds by the City and take or cause to be taken such other action as may be required to implement the aforesaid.
Section 4. Conditions to Issuance. The issuance of said bonds and the execution and delivery of any documents related to the bonds are subject to (i) obtaining any necessary governmental approvals; (ii) agreement by the City, the Company and the purchaser of each series of the bonds upon (a) mutually acceptable terms for the bonds and for the sale and delivery thereof and (b) mutually acceptable terms and conditions of any documents related to the issuance of each series of the bonds and each Project; and (iii) the Company’s compliance with the City’s policies relating to the issuance of industrial revenue bonds and ad valorem tax abatement.
Section 5. Sale of the Bonds. The sale of each series of the bonds shall be the responsibility of the Company; provided, however, arrangements for the sale of each series of the bonds shall be acceptable to the City.
Section 6. Ad Valorem Tax Abatement. In consideration of the Company’s decision to acquire, construct and equip the Projects, the City hereby agrees to take all appropriate action to request the Kansas Board of Tax Appeals to approve a 100% ad valorem property tax abatement (not including special assessments) for all property (including real property, building improvements, machinery and equipment) financed with the proceeds of the bonds.
In consideration of the City’s agreement to request such 100% abatement the Company will agree to make payments in lieu of tax to the City as follows:
Percentage of
Year1 Payments in Lieu
1 10%
2 10%
3 10%
4 10%
5 10%
6 10%
7 10%
8 10%
9 10%
10 10%
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1Year refers to the first full calendar year following the issuance of the bonds.
provided, however, any agreed upon valuation for determining the amount of such payment in lieu of tax and any property for which the City shall determine the payment in lieu of tax shall be in excess of that shown above, shall be set forth in the performance based tax agreement executed by the City and the Company. Each Project financed with the proceeds of a series of bonds shall be entitled to a separate 10-year tax abatement, with the first year of the abatement being the year beginning on the January 1 following the year each series is issued. The foregoing percentages are subject to adjustment in accordance with the performance based tax abatement agreement.
Section 7. Limited Obligations of the City. Each series of bonds and the interest thereon shall be special, limited obligations of the City payable solely out of the amounts derived by the City under the Lease Agreement and as provided herein and are secured by a transfer, pledge and assignment of and a grant of a security interest in the Trust Estate to the Trustee and in favor of the Owners of such series of bonds, as provided in the Indenture. The bonds shall not constitute a general obligation of City, the State or of any other political subdivision thereof within the meaning of any State constitutional provision or statutory limitation and shall not constitute a pledge of the full faith and credit of the City, the State or of any other political subdivision thereof and shall not be payable in any manner by taxation, but shall be payable solely from the funds provided for as provided in the Indenture. The issuance of the bonds shall not, directly, indirectly or contingently, obligate the City, the State or any other political subdivision thereof to levy any form of taxation therefor or to make any appropriation for their payment.
Section 8. Required Disclosure. Any disclosure document prepared in connection with the placement or offering of any series of the bonds shall contain substantially the following disclaimer:
NONE OF THE INFORMATION IN THIS OFFICIAL STATEMENT, OTHER THAN WITH RESPECT TO INFORMATION CONCERNING THE CITY CONTAINED UNDER THE CAPTIONS “THE CITY” AND “LITIGATION ‑ THE CITY” HEREIN, HAS BEEN SUPPLIED OR VERIFIED BY THE CITY, AND THE CITY MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION.
Section 9. Authorization to Proceed. The Company is hereby authorized to proceed with the acquiring, constructing and equipping of the Projects, including the necessary planning and engineering for the Projects and entering of contracts and purchase orders in connection therewith, and to advance such funds as may be necessary to accomplish such purposes, and, to the extent permitted by law, the City will reimburse the Company for all expenditures paid or incurred therefor out of the proceeds of the bonds.
Section 10. Benefit of Resolution. This Resolution will inure to the benefit of the City and the Company. The Company may, with the prior written consent of the City, assign its interest in this Resolution to another entity, and such assignee will be entitled to the benefits of this Resolution and the proceedings related hereto.
Section 11. Further Action. Counsel to the City and Gilmore & Bell, P.C., Bond Counsel for the City, together with the officers and employees of the City, are hereby authorized to work with the purchaser(s) of the bonds, the Company, their respective counsel and others, to prepare for submission to and final action by the City all documents necessary to effect the authorization, issuance and sale of the bonds and other actions contemplated hereunder.
Section 12. Effective Date. This Resolution shall take effect and be in full force immediately after its adoption by the Governing Body of the City.
ADOPTED this 24th day of January, 2006.
CITY OF LAWRENCE, KANSAS
By: _____________________________________
[SEAL] Mayor
ATTEST:
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City Clerk
Resolution of Intent
PackerWare Corporation