Agenda - Council - 07/12/2022 - Laserfiche WebLink

Home

Company will lease the Upper School Campus to the Charter School. The Charter School shall use the School Facilities for the charitable purpose of operating a public charter school in accordance with Minnesota Statutes, Chapter 124E. The term of each of the Leases is equal to the term of the Series 2022 Bonds. Payments due under the Leases shall be withdrawn by the Trustee from the Sweep Account(defined herein) for deposit in the Revenue Fund, and shall, in the aggregate, be equal to the amount necessary for the Company to pay semi-annual debt service on the Series 2022 Bonds and certain other fees and costs in connection with the Series 2022 Bonds. Lease payments made by the Charter School shall be paid,in part,from building lease aid received by the Charter School from the State of Minnesota (the "State") pursuant to Minnesota Statutes, Section 124E.22, as amended. See "APPENDIX F — DEFINITIONS OF CERTAIN TERMS AND SUMMARIES OF DOCUMENTS—THE LEASES"in this Official Statement. Pledge Agreement and Account Control Agreement As additional security on the Series 2022 Bonds, the Charter School will pledge certain of its revenues to the Trustee for payments on the Series 2022 Bonds as necessary, pursuant to a Pledge and Covenant Agreement, dated as of August 1, 2022 (the "Pledge Agreement"), from the Charter School to the Trustee. The Pledge Agreement also provides that in the event Building Lease Aid is insufficient to make lease payments under the Leases,general education funding from the State,and other State and federal pass-through education funding sources shall be applied to the payment of such insufficiency. See "APPENDIX F—DEFINITIONS OF CERTAIN TERMS AND SUMMARIES OF DOCUMENTS—THE INDENTURE" and"—THE PLEDGE AGREEMENT"in this Official Statement. The Trustee and the Charter School will also enter into one or more Account Control Agreements, dated as of August 1, 2022 (collectively, the "Account Control Agreement"),between the Charter School, the Trustee, and [ ], as depository bank (and along with any successor depository bank, the "Depository Bank")relating to the Charter School's accounts held at the Depository Bank. Under the Pledge Agreement,the education revenues received by the Charter School from the State will be deposited into a Sweep Account, from which the Trustee shall withdraw the payments due from the Charter School under the Leases. The Pledge Agreement requires that all banking accounts of the Charter School be subject to the Account Control Agreement. Reserve Fund On the date of issuance of the Series 2022 Bonds,proceeds of the Series 2022 Bonds in an amount equal to the Reserve Fund Requirement($ *)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 2022 Bonds and may be used by the Trustee to pay principal of and interest on the Series 2022 Bonds in the event sums in the Bond Fund are insufficient for such purpose. See"SECURITY FOR THE SERIES 2022 BONDS— Reserve Fund" and "APPENDIX F — DEFINITIONS OF CERTAIN TERMS AND SUMMARIES OF DOCUMENTS—THE INDENTURE—The Reserve Fund"in this Official Statement. Special Covenants of the Company and the Charter 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 Charter School pursuant to the Leases or the Pledge Agreement. In particular, the Loan Agreement prohibits the Company from issuing any Additional Bonds or incurring additional Indebtedness(defined in APPENDIX F)unless the Company can satisfy certain covenants or obtain approval of the Majority Bondholder, an amendment to the Pledge Agreement and to the Mortgage providing coverage for such additional Indebtedness. See"APPENDIX F *Preliminary, subject to change. 3