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

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Bondholders' Risks Certain risks associated with an investment in the Series 2013 Bonds are discussed under "BONDHOLDERS' RISKS." BONDHOLDERS' RISKS No person should purchase any Series 2013 Bonds without carefully reviewing the following information, which summarizes some, but not all factors that should be carefully considered before such purchase. Nature of Special Limited Obligations The Series 2013 Bonds are special limited obligations of the Issuer, payable solely from amounts pledged under the Indenture to the payment of principal of, interest and premium, if any, on the Series 2013 Bonds (which includes Loan Repayments from the Company, amounts in the Reserve Fund and other amounts held by the Trustee under the Indenture and proceeds realized under the Mortgage), and do not give rise to a general obligation or general liability of the Issuer or a charge against its general credit or taxing powers and shall never constitute nor give rise to a pecuniary liability of the Issuer. The Series 2013 Bonds do not constitute a debt, moral obligation, Liability or loan of creditor a pledge of the full faith and credit or taxing power of the Issuer, the City, the State, or of any political subdivision thereof. Dependence on Company's Ability to Pay Loan Repayments; Ability of School to Pay Lease Payments Payment of principal of, premium, if any, and interest on the Series 2013 Bonds is intended to be made from payments of Loan Repayments by the Company under the Loan Agreement, except to the extent payment is intended to be made from other amounts held under the Indenture such as Bond proceeds or investment earnings_ The Company has no significant assets or business other than the assets and business related to the Project. The ability of the Company to make Loan Repayments will depend on the Company's ability to generate revenues sufficient to pay the Loan Repayments from the Lease to the School. Future revenues of the Company from the Project will primarily depend on rental rates of the Project and the ability of the School to make payments under the Lcasc. The School's ability to make payments under the Lease is dependent on its revenues, which are largely dependent on enrollment. The Building Lease Aid received from the State is based on total enrollment. In addition, although the Lcasc has been approved by the State, the School must apply annually for Building Lease Aid. Not only will the amount of Building Lcasc Aid be based on enrollment, but approval of Building Lease Aid is based on the State's review of the following criteria: (1) the reasonableness of the price based on current market factors, (2) the extent to which the lease conforms to applicable State laws and rules, (3) the appropriateness of the proposed lease in the context of the space needs and financial circumstances of the charter school and (4) the continuation of the School's charter contract without termination or non - renewal. Further, the Building Lease Aid alone will be insufficient to make the total payments due under the Lease. See Appendix A: "THE COMPANY, THE SCHOOL AND THE PROJECT — 34