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

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Reserve Fund On the closing date for the issuance of the Series 2013 Bonds, proceeds of the Series 2013 Bonds in an amount equal to the Reserve Fund Requirement (defined in Appendix E) will be deposited in the Reserve Fund created by the Indenture. Earnings on amounts in the Reserve Fund will be deposited therein so long as the balance therein is less than the Reserve Fund Requirement. Amounts in the Reserve Fund will secure the Series 2013 Bonds and may be used by the Trustee to pay principal of and interest on the Series 2013 Bonds in the event sums in the Bond Fund are insufficient for such purpose. See "SECURITY FOR THE BONDS - Debt Service Reserve Fund" and Appendix E: "THE INDENTURE - Reserve Fund." Special Covenants of the Company and the School The Loan Agreement places certain restrictions on the incurrence of indebtedness by the Company and requires the Company to impose certain restrictions on the School pursuant to the Pledge Agreement. In particular, the Loan Agreement prohibits the Company from incurring any Indebtedness other than Additional Bonds without the prior written consent of the Majority Bondholder. See Appendix E: "THE LOAN AGREEMENT — Additional Bonds and Additional Indebtedness." The Company has also agreed in the Loan Agreement to cause the School to make certain covenants in the Pledge Agreement of the School: (a) to similarly limit additional Indebtedness without the prior written consent of the Majority Bondholder (other than (i) loans or operating or capital leases for computers and/or technology and (ii) short term working capital borrowing or sales of accounts receivable for cash flow purposes in an amount not to exceed $1,000,000), (b) to provide certain periodic financial and operating reports, to make all applications for applicable State and federal funds, (c) to operate the School such that, on a best efforts basis, the School's Income Available for Debt Service to equal to at least 110% of the principal and interest due on the Bonds, (d) to engage an Independent Consultant in the event that the School's Income Available for Debt Service is less than 110% of the principal and interest due on the Bonds in any Fiscal Year, (e) to maintain at least 45 Days Cash on Hand, (f) to maintain and replenish a separate, segregated fund balance account in an amount equal to twenty percent (20%) of the budgeted annual operating expenses of the School, net of Lease Payments, to be used solely for ordinary and necessary expenses of the School (excluding salaries and benefits), and (g) to pay rent sufficient to establish and maintain the Capital Improvement Fund with respect to the Project. See "SECURITY FOR THE BONDS — Pledge and Covenant Agreement" and Appendix E: "THE LOAN AGREEMENT — Covenants of the School" and "THE PLEDGE AGREEMENT" and "THE LEASE," Miscellaneous This Official Statement (including the Appendices hereto) contains descriptions of, among other matters, the Indenture, the Loan Agreement, the Mortgage, the Lease, the Escrow Agreement, the Pledge Agreement, the Continuing Disclosure Agreement, the Issuer, the Project, the Company, the School and the Series 2013 Bonds. Such descriptions and information do not purport to be comprehensive or definitive. All references to documents described herein are qualified in their entirety by reference to such documents, copies of which are available for inspection at the principal corporate trust office of the Trustee. 34