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HomeMy WebLinkAbout07-54 FEBRUARY 13, 2007 07 -54 RESOLUTION (CARRIED 6-0 LOST LAID OVER WITHDRAWN PURPOSE: AUTHORIZE INDUSTRIAL DEVELOPMENT REVENUE BONDS (MUZA METAL PRODUCTS CORP. PROJECT) INITIATED BY: CITY ADMINISTRATION WHEREAS, in a resolution adopted May 9,2006, by the Common Council of the City of Oshkosh, Winnebago County, Wisconsin (sometimes herein called the "City" or "Issuer"), the Issuer expressed its intent, and authorized and directed its officers, to work toward the consummation of a financing agreement with Muza Metal Products Corp., a Wisconsin corporation, pursuant to which the City would issue its industrial development revenue bonds pursuant to Section 66.1103, Wisconsin Statutes, as amended (the "Act"), in an amount not to exceed Three Million Dollars ($3,000,000) for the purpose of financing costs related to the expansion, improvement, construction, and/or equipping of a manufacturing facility located in the City, to be owned and used by the Eligible Participant (defined infra) (hereinafter referred to as the "Project"); and WHEREAS, in reliance upon such resolution Muza Metal Products Corp. (referred to herein as the "Eligible Participant") has commenced such expansion, improvement, construction and/or equipping, and the payment of related costs, has entered into negotiations with Associated Bank, National Association, Oshkosh, Wisconsin, as the initial purchaser (the "Purchaser") for purchase of the Bonds to be so issued, and has caused to be prepared and herewith submitted to this Common Council (through the City's attorney) forms of the following documents: (a) Mortgage, Loan and Revenue Agreement among the Issuer and the Eligible Participant pursuant to which the Issuer agrees to loan the proceeds of the Bonds to the Eligible Participant to finance the Project and related costs, together with the Eligible Participant's Note containing its promise to repay such loan with interest as set forth therein, which documents are referred to herein as the "Mortgage, Loan and Revenue Agreement" and "Note", respectively; and (b) Indenture between the Issuer and Associated Bank, National Association, Oshkosh, Wisconsin, as Servicer, referred to herein as the "Indenture"; and (c) Project Financing Agreement among the Issuer, the Eligible Participant and the Purchaser, referred to as the "Project Financing Agreement"; and WHEREAS, the issuance of the Bonds by the Issuer, the creation of a security interest in the Pledged Property, as defined in the Mortgage, Loan and Revenue Agreement, and the pledge of the Mortgage, Loan and Revenue Agreement and its revenues to the Servicer -1- under the Indenture, as herein recited and provided, in the judgment of this Common Council, will serve the intended accomplishments and in all respects conform to the provisions and requirements of the Act; and WHEREAS, the Eligible Participant has made representations to the Issuer (to be supported by appropriate documentation) that the estimated cost of the Project, together with related bond issuance costs, is an amount which will be at least Three Million Dollars ($3,000,000) and that the average weighted useful life of the Project is generally estimated to be at least twenty five (25) years; and WHEREAS, the Eligible Participant represents and agrees that it will enter into the Mortgage, Loan and Revenue Agreement with respect to the Project as described above, issue the Note, pay all expenses with respect thereto, and comply with all the terms and provisions of the Note and Mortgage, Loan and Revenue Agreement so that full debt service will be provided in order to meet payments of principal of and interest on the Bonds and the Eligible Participant agrees that its representations have been expressly relied upon by the Issuer in the adoption of this Resolution; NOW, THEREFORE, BE IT RESOLVED BY THE COMMON COUNCIL OF THE CITY OF OSHKOSH, WISCONSIN THAT: 1. Definitions. The terms "Code," "Series 2007 Bonds," "Bondholder," "Pledged Property," "Project," "Project Fund," and "Servicer" shall have the same meanings as defined in the Indenture. The term "Bonds" when used herein shall refer to the Series 2007 Bonds, unless the context otherwise requires. 2. Determination. This Common Council hereby finds and determines that: (a) the estimated cost of the Project as more particularly defined in the Indenture including all costs in connection therewith permitted to be financed with the Bonds under the Act is at least Three Million Dollars ($3,000,000); (b) the average weighted useful life of the Project is generally not less than twenty-five (25) years; (c) the loan payments to be made in each year as specified in Section 3.8 of the Mortgage, Loan and Revenue Agreement are sufficient to pay the principal of and interest on the Bonds; and (d) no reserve fund need be established in connection with the retirement of the Bonds or maintenance of the Project or the Pledged Property; AND, (e) the Project qualifies to be financed with Industrial Development Revenue Bonds pursuant to Wisconsin Statute 66.11 03(2)(k)1. as a manufacturing facility. 3. Issue of Series 2007 Bonds. The Issuer shall issue its Bonds in the amount of Three Million Dollars ($3,000,000) for the purpose of financing the Project. The Bonds shall -2- be sold to the Purchasers in accordance with the terms and conditions set forth in the Agreement. The Bonds shall be issued pursuant to the Act, shall be designated, dated, in the form, and have the maturities and bear interest as provided in the Indenture. All details pertaining to the Bonds as provided in the Indenture are hereby adopted as and for the details approved by this Issuer. THE BONDS SHALL NOT BE A GENERAL OBLIGATION OR INDEBTEDNESS OF THE ISSUER WITHIN THE MEANING OF ANY STATE CONSTITUTIONAL PROVISION OR STATUTORY LIMITATION AND SHALL NOT CONSTITUTE NOR GIVE RISE TO A PECUNIARY LIABILITY OF THE ISSUER OR A CHARGE AGAINST ITS GENERAL CREDIT OR TAXING POWERS, BUT SHALL BE PAYABLE SOLELY FROM THE PAYMENTS AND OTHER REVENUES THAT MAY BE AVAILABLE THEREFOR FROM THE MORTGAGE, LOAN AND REVENUE AGREEMENT AND NOTE OR IN THE EVENT OF DEFAULT THEREON AS OTHERWISE PROVIDED HEREIN OR IN THE INDENTURE AND PERMITTED BY LAW, AND IN NO EVENT SHALL THE BONDS OR THE INTEREST THEREON OR ANY OTHER COSTS OR EXPENSES IN CONNECTION THEREWITH OR WITH THE PROJECT EVER BE PAYABLE FROM ANY FUNDS OF THE ISSUER OTHER THAN THE PAYMENTS AND OTHER REVENUES TO BE RECEIVED BY THE ISSUER UNDER THE MORTGAGE, LOAN AND REVENUE AGREEMENT AND NOTE. The payments when paid by the Eligible Participant, pursuant to the Mortgage, Loan and Revenue Agreement and Note, shall be paid directly to the Servicer for the account of the Issuer so long as any of the Bonds shall be outstanding and unpaid. The Bonds shall be executed on behalf of the Issuer by its City Manager and City Clerk, or their authorized deputies in their absence, and shall have its corporate seal impressed or imprinted thereon. 4. Approval and Execution of Documents. Subject to such changes or revisions therein as Nelson & Schmeling as Bond Counsel ("Bond Counsel") or the City Attorney shall require or approve, the Indenture, Note, Mortgage, Loan and Revenue Agreement, and Project Financing Agreement, in substantially their respective forms presented to this Common Council are hereby approved. The City Manager and Clerk, or any of their authorized deputies if necessary, are authorized on behalf of the Issuer to execute and deliver the Indenture, Mortgage, Loan and Revenue Agreement, Project Financing Agreement, and the endorsement of the Note to the Servicer, with such revisions, changes, or deletions as may be approved by the signatories thereto, which approval shall be conclusively proved by their execution of such documents with the approval as to form by the City Attorney. Said City Manager and City Clerk, and their authorized deputies and other officials of the Issuer, are hereby authorized to prepare or to have prepared and to execute, file and deliver, as appropriate all such documents, financing statements, opinions, certificates, affidavits, and closing or post-closing instruments (including but not limited to amendments of the Indenture and Mortgage, Loan and Revenue Agreement not requiring the consent of the Bondholders pursuant to Sections X-1 and IX-1 of the Indenture) as may be required by this resolution or deemed necessary by said officials, the City Attorney or by Bond Counsel. 5. Appointment of Servicer: Project Funds: Pledqe of Payments. Associated Bank, National Association, Oshkosh, Wisconsin is hereby designated as Servicer under the Indenture. There is hereby created by the Issuer and ordered established with the Servicer the Project Fund as described in Section 111-2 of the Indenture to be used solely to pay costs -3- of the Project and such other costs as are provided to be paid therefrom in the Indenture. The Issuer hereby authorizes and directs the Servicer to withdraw sufficient funds from said Project Fund to make the aforesaid payments as the same become due and payable. The Bondholders shall have a first lien on the payments in connection with the Project required to be paid by the Eligible Participant for the payment of principal and interest on the Bonds under the Mortgage, Loan and Revenue Agreement, Note, and Indenture. Said payments received under the Mortgage, Loan and Revenue Agreement and Note with respect to the Project are hereby irrevocably pledged for the payment of the Bonds and interest thereon. The Issuer authorizes and directs the Servicer to invest and reinvest monies, if any, in the Project Fund as set forth in Article III of the Indenture. 6. Additional Security. The Bonds and the interest thereon shall be additionally secured by a security interest covering the Pledged Property to the extent provided in the Mortgage, Loan and Revenue Agreement and Indenture. 7. Certain Provisions of the Mortqaqe, Loan and Revenue Aqreement. The Mortgage, Loan and Revenue Agreement provides, inter alia, that: (a) The maintenance and repair costs of the Project and the Pledged Property, taxes in connection therewith, if any, and other charges and insurance with respect to the Project and the Pledged Property will be taken out, assumed and paid by the Eligible Participant. The Issuer has no obligation with respect thereto. The proceeds of any recovery under the foregoing insurance policies shall be used and disposed of in the manner provided in the Mortgage, Loan and Revenue Agreement and the Indenture. (b) The Eligible Participant shall make payments pursuant to the Note and Mortgage, Loan and Revenue Agreement (directly to the Servicer for the account of the Issuer) in the amounts sufficient for payment, when due, of the principal and interest on the Bonds. 8. Public Approval Requirement. The Bonds will be used to help finance the Project located at 606 E. Murdock Avenue in the City. The Project will be used in connection with custom metal fabrication services to original equipment manufacturers in many industries including motors and generators, lawn and garden, hand and power tools, medical equipment and many others. The real estate and equipment included in the Project will be owned and used by the Eligible Participant. This Resolution constitutes public approval by the Common Council, which is an elected legislative body of the City as referred to in Section 147(f) of the Code, after a public hearing held on August 8, 2006 following reasonable public notice. 9. Covenants Bindinq Upon Issuer. All covenants, stipulations, obligations and agreements of the Issuer contained in this resolution and in the Bonds, the Mortgage, Loan and Revenue Agreement, the Indenture, and the Project Financing Agreement shall be -4- deemed to be the covenants, stipulations, obligations and agreements of the Issuer to the full extent authorized or permitted by law, and such covenants, stipulations, obligations, and agreements shall be binding upon the Issuer and its successors from time to time and upon any body to which any powers or duties affecting such covenants, stipulations, obligations and agreements shall be transferred by or in accordance with law. Except as otherwise provided in this resolution, all rights, powers, and privileges conferred and duties and liabilities imposed upon the Issuer or the officers thereof by the provisions of the resolution, the Bonds, the Mortgage, Loan and Revenue Agreement, the Indenture, or Project Financing Agreement shall be exercised or performed by the Issuer or by such officers, board or body as may be required by law to exercise such powers and to perform such duties. 10. Statement of Election. The City hereby elects to issue Bonds in an aggregate principal amount exceeding One Million Dollars ($1,000,000) but not exceeding Ten Million Dollars ($10,000,000) as provided in Section 144(a) (4) of the Code with respect to the issuance of the Bonds. No covenant, stipulation, obligation, or agreement herein contained or contained in the Bonds, the Mortgage, Loan and Revenue Agreement, the Indenture, or the Project Financing Agreement shall be deemed to be a covenant, stipulation, obligation, or agreement of any officer, agent or employee of the Issuer or of this Common Council in his or her individual capacity and neither the members of this Common Council nor any officer executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. Adopted: FEBRUARY 13, 2007 Approved: FEBRUARY 13, 2007 Pamela R. Ubrig, City Clerk William Castle, Mayor -5-