title
INDUSTRIAL DEVELOPMENT REVENUE BOND SERIES 2009 - HEAT PIPE TECHNOLOGY (B)
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF GAINESVILLE, FLORIDA AUTHORIZING THE ISSUANCE OF THE CITY OF GAINESVILLE, FLORIDA INDUSTRIAL DEVELOPMENT REVENUE BOND, SERIES 2009 (HEAT PIPE TECHNOLOGY , INC. PROJECT) IN THE PRINCIPAL AMOUNT OF NOT EXCEEDING $1,225,000 (THE "2009 BOND") FOR THE PURPOSE OF PROVIDING FUNDS TO MAKE A LOAN TO HEAT-PIPE TECHNOLOGY, INC. (THE "BORROWER") TO PROVIDE FUNDS TO FINANCE THE COST OF REFINANCING OBLIGATIONS OF THE BORROWER RELATED TO THE CITY OF GAINESVILLE, FLORIDA INDUSTRIAL DEVELOPMENT BONDS (HEAT-PIPE TECHNOLOGY, INC. PROJECT), SERIES 1998; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION OF A LOAN AGREEMENT, A BOND PURCHASE AGREEMENT, AN ASSIGNMENT OF LOAN AGREEMENT, MORTGAGE, PROMISSORY NOTE AND OTHER COLLATERAL, THE 2009 BOND AND THE TAX REGULATORY AGREEMENT AND APPROVING THE FORM OF A MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT; AWARDING THE SALE OF THE 2009 BOND BY A NEGOTIATED SALE; AUTHORIZING CERTAIN OFFICIALS OF THE CITY OF GAINESVILLE, FLORIDA TO TAKE CERTAIN ACTION IN CONNECTION WITH THE ISSUANCE OF THE 2009 BOND; MAKING CERTAIN OTHER COVENANTS AND AGREEMENTS IN CONNECTION WITH THE ISSUANCE OF THE BOND; AND PROVIDING AN EFFECTIVE DATE.
recommendation
The City Commission adopt the proposed Resolution.
explanation
This Resolution approves the issuance of Industrial Development Revenue Bond, Series 2009 (Heat-Pipe Technology, Inc. Project) (the "2009 Bond"), in an principal amount of not exceeding $1,225,000, for the purpose of making a loan of funds to Heat-Pipe Technology, Inc. (the "Borrower") in order to refinance certain obligations of the Borrower and thereby currently refund the City's Industrial Development Revenue Bonds (Heat-Pipe Technology, Inc. Project), Series 1998. The 2009 Bond shall not constitute a debt, liability of obligation of the City of Gainesville, Florida or the State of Florida or any political subdivision thereof, but shall be payable solely from the amounts paid by the Borrower to the City under the terms of a Loan Agreement. This Resolution approves the form of and authorizes: (i) the execution of the 2009 Bond, (ii) the execution and delivery of a Loan Agreement between the City and the Borrower, (iii) the execution and delivery of a Mortgage, Assignment of Rents and Security Agreement from the Borrower to the City, to be assigned by the City to provide security for the 2009 Bond, (iv) the execution and delivery of an Assignment of Loan Agreement, Mortgage, Promissory Note and Other Collateral from the City to the Bank of America, N.A., the holder of the 2009 Bond, (v) the execution and delivery of a Bond Purchase Agreement among the City, the Borrower and Bank of America, N.A., and (vi) the execution of a Tax Regulatory Agreement and No Arbitrage Certificate between the City and the Borrower.
The Resolution also waives the requirements of the City's Industrial Development Revenue Bond Policy requiring credit enhancement of the 2009 Bond, a rating on the 2009 Bond from a credit rating agency and the appointment of an independent trustee for the 2009 Bond and utilization of an indenture of trust because the 2009 Bond is refunding already existing obligations of the City and is in effect to keep the costs of issuance commensurate with the small principal amount of the 2009 Bond.
This matter has been reviewed by the City Manager who also recommends the adoption of this Resolution and issuance of the 2009 Bond.
FISCAL IMPACT: All costs and expenses associated with the issuance of these bonds will be paid by the Borrower, Heat Pipe Technology, Inc.