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CCR2013042-Northern Gear-Final COMMON COUNCIL OF CITY OF MUSKEGO, WISCONSIN RESOLUTION NO. 2013-042 FINAL RESOLUTION REGARDING INDUSTRIAL DEVELOPMENT REVENUE BOND FINANCING FOR NORTHERN GEAR, LLC PROJECT BE IT RESOLVED by the Common Council of the City of Muskego, Wisconsin (the “Issuer”), as follows: Section 1 Recitals. 1.01 Under Wisconsin Statutes, Section 66.1103, as amended (the “Act”), the Issuer is authorized and empowered to issue revenue bonds to finance eligible costs of qualified “projects” (as defined in the Act), and to enter into “revenue agreements” (as defined in the Act) with “eligible participants” (as defined in the Act). 1.02 Pursuant to an Initial Resolution duly adopted on March 26, 2013, the Issuer expressed its intention to issue industrial development revenue bonds of the Issuer in an amount not to exceed $7,200,000 (the “Bonds”) to finance a project on behalf of Northern Gear, LLC, a Wisconsin limited liability company, and/or a limited liability entity to be formed consisting of financing the (i) purchase of land, (ii) construction of an approximately 98,000 square foot facility to be located at W160 S6609 Commerce Drive in the City of Muskego, Wisconsin (the “Facility”) to be used by Northern Gear, LLC to manufacture precision machined parts, gears, shafts and other components, (iii) acquisition and installation of equipment at the Facility and (iv) payment of certain professional costs and costs of issuance (collectively, the “Project”). Notice of adoption of the initial resolution adopted on March 26, 2013 was published as provided in the Act, and no petition requesting a referendum upon the question of issuance of the revenue bonds has been filed. 1.03 Pursuant to Wisconsin Statutes, Section 66.1103, as amended, the Issuer may finance a project which is located entirely within the geographic limits of the Issuer. 1.04 Drafts of the following documents have been submitted to this Common Council and are ordered filed in the office of the City Clerk: (a) a Bond Agreement (the “Bond Agreement”), proposed to be entered into among the Issuer, Lion Properties, LLC, a Wisconsin limited liability company (the “Borrower”), U.S. Bank National Association, as trustee (the “Trustee”) and BMO Harris Bank N.A., as original purchaser (the “Original Purchaser”); (b) a Promissory Note from the Borrower to the Issuer, and assigned to the Trustee; and WHD/9393081.2 (c) a No Arbitrage Certificate. Section 2 Findings and Determinations. It is hereby found and determined that: (a) based on representations of the Borrower, the Project constitutes a “project” authorized by the Act; (b) a public hearing has been duly held on May 14, 2013 in accordance with the provisions of Section 147(f) of the Internal Revenue Code of 1986, as amended, at which residents of the City of Muskego, Wisconsin were given an opportunity to be heard in regard to the proposed issuance of the Bonds and the nature and location of the proposed Project; (c) the purpose of the Issuer's financing costs of the Project is and the effect thereof will be to promote the public purposes set forth in the Act; (d) it is desirable that a series of revenue bonds in the aggregate principal amount not to exceed $6,825,000 be issued by the Issuer upon the terms set forth in the Bond Agreement, under the provisions of which the Issuer's interest in the Bond Agreement (except for certain rights as provided therein) and the loan repayments will be assigned to the Trustee as security for the payment of principal of and interest on and premium, if any, on all the Bonds outstanding under the Bond Agreement; (e) the loan payments provided for in the Bond Agreement, and the formula set out for revising those payments under the Bond Agreement as required under the Act, are sufficient to produce income and revenue to provide for prompt payment of principal of and interest on and premium, if any, on Bonds issued under the Bond Agreement when due; the amount necessary in each year to pay the principal of and interest on the Bonds is the sum of the principal and interest on the Bonds due in such year, whether on a stated payment date, a redemption date, or otherwise; the Bond Agreement provides that the Borrower shall provide for the maintenance of the Project in good repair, keeping it properly insured; and (f) under the provisions of the Act, the Bonds shall be limited obligations of the Issuer and the Bonds do not constitute an indebtedness of the Issuer, within the meaning of any state constitutional or statutory provision, and do not constitute nor give rise to a charge against the Issuer's general credit or taxing powers or a pecuniary liability of the Issuer. Section 3 Approvals and Authorizations; Authentication of Transcript. 3.01 This resolution shall constitute the approval of the Bonds within the meaning of Section 147 (f) of the Internal Revenue Code of 1986, as amended, and the Bonds are hereby approved. There is hereby approved the issuance by the Issuer of its industrial development revenue bonds (specifically, the Bonds) in an aggregate principal amount not to exceed $6,825,000 for the purpose of financing the Project. The Issuer shall proceed to issue its Industrial Development Revenue Bonds, Series 2013 (Northern Gear, LLC Project), in the aggregate principal amount not to exceed $6,825,000, in the form and upon the terms set forth in the Bond Agreement, which terms, including without 2 WHD/9393081.2 limitation, interest rates, redemption provisions and maturity, are for this purpose incorporated in this resolution and made a part hereof. The terms are hereby approved without further action by the Issuer, and the Mayor and City Clerk are authorized and directed to execute and deliver the documents listed in Section 1.04 herein which are hereby approved, together with such subsequent changes as may be requested and approved by bond counsel and the Issuer’s attorney, and such other documents, agreements, instruments or certificates as are deemed necessary or desirable by the Issuer's attorney and bond counsel, including an Internal Revenue Service Form 8038. The Mayor and the City Clerk are authorized and directed to execute and seal the Bonds as prescribed in the Bond Agreement and to deliver them to the Trustee (together with a certified copy of this resolution and any other documents required by the Bond Agreement) for authentication and delivery to the original purchaser. 3.02 The publication in the official newspaper of the Issuer of the notice for the public hearing referred to in Section 2(b) of this resolution, and such notice of public hearing as so published, are hereby ratified. 3.03 The Issuer hereby elects to have the provisions of Section 144(a)(4)(A) of the Internal Revenue Code of 1986, as amended, apply to the Bonds. 3.04 The Mayor and the City Clerk and other officers of the Issuer are authorized to prepare and furnish to the Trustee and bond counsel certified copies of all proceedings and records of the Issuer relating to the Bonds, and such other affidavits and certificates as may be required by the Trustee and bond counsel to show the facts relating to the legality and marketability of the Bonds as such facts appear from the books and records in the officers' custody and control or as otherwise known to them. 3.05 The approval hereby given to the various documents referred to in this resolution includes the approval of such additional details therein as may be necessary and appropriate for their completion and such modifications thereto, deletions therefrom and additions thereto as may be approved by the Issuer’s attorney and bond counsel. The execution of any document by the appropriate officer or officers of the Issuer herein authorized shall be conclusive evidence of the approval by the Issuer of such document in accordance with the terms hereof. 3.06 U.S. Bank National Association shall initially assume and perform the duties of Trustee. 3.07 Notice of sale of the Bonds, in the form attached hereto as Exhibit A, shall be published in the official newspaper of the Issuer as a class 1 notice under Chapter 985 of the Wisconsin Statutes. 3.08 The Bonds shall be limited obligations of the Issuer payable by it solely from revenues and income derived by or for the account of the Issuer from or for the account of the Borrower pursuant to the Bond Agreement. As security for the payment of the principal of, premium, if any, and interest on the Bonds, the Issuer shall pledge and assign to the Trustee all of its right, title and interest in and to the trust estate described in the Bond Agreement. 3 WHD/9393081.2 3.09 All out-of-pocket costs of the Issuer, including attorneys’ fees, in connection with the issuance and sale of the Bonds shall be paid from the proceeds of the Bonds or by the Borrower. Passed and adopted at a regular meeting of the Common Council of the City of Muskego th this 14 day of May, 2013. APPROVED: Kathy Chiaverotti, Mayor ATTEST: Sharon Mueller, City Clerk 4 WHD/9393081.2 CERTIFICATION BY CITY CLERK I, Sharon Mueller, being first duly sworn, hereby certify that I am the duly qualified and acting City Clerk of the City of Muskego, Wisconsin (the “Issuer”), and as such I have in my possession, or have access to, the complete corporate records of the Issuer and of its Common Council; that I have carefully compared the transcript attached hereto with the aforesaid records; and that said transcript attached hereto is a true, correct and complete copy of all the records in relation to the adoption of Resolution No. 2013-042 entitled: FINAL RESOLUTION REGARDING INDUSTRIAL DEVELOPMENT REVENUE BOND FINANCING FOR NORTHERN GEAR, LLC PROJECT I hereby further certify as follows: 1. Said Resolution was considered for adoption by the Common Council of the Issuer at a meeting held at City Hall, W182 S8200 Racine Avenue, Muskego, Wisconsin at 7:00 p.m. on May 14, 2013 at a regular meeting of the Common Council and was held in open session. 2. Said Resolution was on the agenda for said meeting and public notice thereof was given not less than twenty-four (24) hours prior to the commencement of said meeting in compliance with Section 19.84 of the Wisconsin Statutes, including, without limitation, by posting on the bulletin board in the City Hall, by notice to those news media who have filed a written request for notice of meetings, and by notice to the official newspaper of the Issuer. 3. Said meeting was called to order by Mayor Kathy Chiaverotti, who chaired the meeting. Upon roll, I noted and recorded that the following alderpersons were present: Ald. Bob Hammel Ald. Neil Borgman Ald. Rob Glazier Ald. Kevin Kubacki Ald. Eileen Madden and that the following alderpersons were absent: Ald. Rob Wolfe Ald. Dan Soltysiak I noted and recorded that a quorum was present. Various matters and business were taken up during the course of the meeting without intervention of any closed session. One of the matters taken up was said Resolution, which was introduced, and its adoption was moved by Ald. Neil Borgman and seconded by Ald. Kevin Kubacki. Following discussion and after all alderpersons who desired to do so had expressed their views for or against said Resolution, the question was called, and upon roll being called and the continued presence of a quorum being noted, the recorded vote was as follows: 5 WHD/9393081.2 AYE: Ald. Bob Hammel Ald. Neil Borgman Ald. Rob Glazier Ald. Kevin Kubacki Ald. Eileen Madden NAY: None ABSTAINED: None Whereupon the meeting chair declared said Resolution adopted, and I so recorded it. IN WITNESS WHEREOF, I have signed my name and affixed the seal of the Issuer hereto th on this 14 day of May, 2013. CITY OF MUSKEGO, WISCONSIN \[SEAL\] By: Jill Blenski, Deputy City Clerk 6 WHD/9393081.2 EXHIBIT A NOTICE TO THE ELECTORS On May 14, 2013, a resolution was offered, read, approved and adopted whereby the City of Muskego, Wisconsin authorized the issuance and sale of its Industrial Development Revenue Bonds, Series 2013 (Northern Gear, LLC Project) in an amount not to exceed $6,825,000 (the “Bonds”). The closing of this bond sale was held on May _____, 2013. A copy of all proceedings had to date with respect to the authorization and sale of said Bonds is on file and may be examined in the office of the City Clerk, W182 S8200 Racine Avenue, Muskego, Wisconsin. This notice is given pursuant to Section 893.77, Wisconsin Statutes, which provides that an action or proceeding to contest the validity of such financing, for other than constitutional reasons, must be commenced within 30 days after the date of publication of this notice. Sharon Mueller, City Clerk City of Muskego, Wisconsin WHD/9393081.2