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

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PLEDGE AND COVENANT AGREEMENT This Pledge and Covenant Agreement, dated as of 1, 2013 (this "Agreement"), is made by PACT Charter School, a Minnesota nonprofit corporation and public (charter) school (the "School"), for the benefit of Wells Fargo Bank, National Association, as trustee under that certain Indenture of Trust, dated as of 1, 2013, between the Trustee and the Issuer (as hereinafter defined, the "Trustee"). WHEREAS, the City of Ramsey, Minnesota, a municipal corporation (the "Issuer"), has determined to issue and sell its Lease Revenue Refunding Bonds (PACT Charter School Project), Series 2013A, and its Taxable Lease Revenue Refunding Bonds (PACT Charter School Project), Series 2013B (collectively, the "Bonds"), to: (i) advance refund the Issuer's Lease Revenue Bonds (PACT Charter School Project) Series 2004A (the "Prior Bonds"), the proceeds of which were used to finance the acquisition, construction, and equipping of an approximately 75,000 square foot public elementary and secondary schoolhouse located at 7250 Ramsey Parkway East Northwest in the City of Ramsey, Minnesota (the "City"), owned by PCS Building Company (the "Company") and leased to the School; (ii) fund a debt service reserve fund; and (iii) pay the costs of issuing the Bonds; and WHEREAS, the Issuer has loaned the proceeds derived from the sale of the Bonds to the Company pursuant to the provisions of a Loan Agreement, of even date herewith, between the Issuer and the Company (the "Loan Agreement"); and WHEREAS, the Company and the School have entered into an Amended and Restated Lease Agreement, of even date herewith (the "Lease"), pursuant to which the School has agreed to make lease payments in the amounts and at such times as shall be necessary to pay the amounts due from the Company under the Loan Agreement, which amounts are calculated to be sufficient to pay principal and interest when due on the Bonds; and WHEREAS, the School has agreed to pledge pursuant to this Agreement certain "Adjusted Pledged Revenues" (as hereinafter defined) of the School in order to provide additional security for the timely payments of amounts due under the Lease; NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: SECTION 1. Defined Terms. Capitalized terms shall have the meanings defined herein. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Lease or the Loan Agreement. SECTION 2. Pledge and Assignment. (A) The School does hereby pledge and assign to the Trustee to secure the payment of lease payments in accordance with the terms and provisions of the Lease, all funds, money, grants, or other distributions received by the School from the State of Minnesota with respect to general student funding, state building lease aid payments, state distributions of federal Title I funds, or any other funding sources, after deduction of all such operating expenses of the School required under State or federal laws to provide 5601356v1