Agenda - Council - 08/13/2013 - Laserfiche WebLink

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Use of Proceeds The Company and the School Security for the Bonds Proceeds of the Series 2013 Bonds will be loaned pursuant to a Loan Agreement to the Company to: (i) refund the Issuer's Lease Revenue Refunding Bonds (PACT Charter School Project), Series 2004 which previously financed the existing school facility at (the "Schoolhouse") in the City of Ramsey, Minnesota (the "City") operated by the PACT Charter School, a Minnesota nonprofit corporation (the "School"); (ii) fund a debt service reserve fund; and (iii) pay the costs of issuing the Bonds (the "Project"). The Schoolhouse will be owned by the Borrower and leased to and operated by the School. Sec "SOURCES AND USES OF FUNDS" The borrower under the Loan Agreement is PCS Building Company, a Minnesota nonprofit corporation and 501(c)(3) organization formed for the purpose of owning and leasing the Project to PACT Charter School, a Minnesota nonprofit corporation and 501(c)(3) organization. See Appendix A: "THE COMPANY, THE SCHOOL AND THE PROJECT" The Bonds will be secured by and payable from an assignment and pledge of (i) all moneys held under the Indenture, including Series 2013 Bond proceeds initially deposited in the Reserve Fund, (ii) the interest of the Issuer in the Loan Agreement (except for certain rights to indemnification and payments of fees and expenses), (iii) amounts realized pursuant to a mortgage on the Schoolhouse or an assignment of leases, (iv) insurance benefits and condemnation awards payable with respect thereto, (v) Lease Payments due from the School, which shall be automatically withdrawn by the Trustee from the Sweep Account pursuant to a Pledge Agreement, and (vi) investment earnings on the foregoing. Pursuant to the Loan Agreement and the Pledge Agreement, the School has agreed to maintain and replenish as necessary, on a best- efforts basis, a separate, segregated fund balance in an amount equal to twenty percent (20%) of the budgeted annual operating expenses (net of Lease Payments) of the School. The Pledge Agreement also contains certain on -going covenants and agreements of the School to the Trustee to provide financial and operating reports, to comply with the requirements of the Minnesota Department of Education, not to incur new additional indebtedness (with certain exceptions), to maintain not less than 45 Days Cash on Hand, and to operate the School with a surplus of Income Available for Debt Service over the principal and interest due on the Series 2013 Bonds and any Additional Bonds. See Appendix E: "THE LOAN AGREEMENT — Covenants of the School." and "THE PLEDGE AGREEMENT." The Bonds are limited obligations of the Issuer and do not constitute general obligations or a debt, liability, or pledge of the full faith and credit of the Issuer, the State or of any political subdivision or agency thereof. The Bonds are not secured by or payable from any taxes, revenues or assets of the Issuer, except for the Issuer's interest in the Loan Agreement and amounts held pursuant to the Indenture as described * Preliminary, subject to change iii