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

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Damage or Destruction Although the Company and Charter School will be required to obtain certain insurance,as set forth in the Indenture, the Loan Agreement and the Leases, there can be no assurance that the School Facilities will not suffer losses for which insurance cannot be or has not been obtained or that the amount of any such loss,or the period during which the School Facilities cannot generate revenues,will not exceed the coverage of such insurance policies. Effect of Federal Bankruptcy Laws on Security for the Series 2022 Bonds Bankruptcy proceedings and equity principles may delay or otherwise adversely affect the enforcement of Bondholders' rights in the property granted as security for the Series 2022 Bonds. Furthermore, if the security for the Series 2022 Bonds is inadequate for payment in full of the Series 2022 Bonds, bankruptcy proceedings and equity principles may also limit any attempt by the Trustee to seek payment from other property of the Company, if any. See "ENFORCEABILITY OF OBLIGATIONS" in this Official Statement.Also,federal bankruptcy law permits adoption of a reorganization plan,even though it has not been accepted by the holders of a majority, in the aggregate principal amount of the Series 2022 Bonds if the Bondholders are provided with the benefit of their original lien or the"indubitable equivalent." In addition, if the bankruptcy court concludes that the Bondholders have "adequate protection," it may (i) substitute other security subject to the lien of the Bondholders, and (ii) subordinate the lien of the Bondholders (a) to claims by persons supplying goods and services to the Company after bankruptcy and (b) to the administrative expenses of the bankruptcy proceeding. The bankruptcy court may also have the power to invalidate certain provisions of the Mortgage that make bankruptcy and related proceedings by the Company an event of default thereunder. Enforcement of Remedies The remedies available to the Trustee or the Bondholders of the Series 2022 Bonds upon an Event of Default under the Indenture or the Loan Agreement are in many respects dependent upon judicial actions which are often subject to discretion and delay.Under existing constitutional and statutory law and judicial decisions, the remedies provided in the Indenture and the Loan Agreement may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Series 2022 Bonds will be qualified as to the enforceability of the various legal instruments by limitations imposed by the valid exercise of the sovereign powers of the State and the constitutional powers of the United States of America, bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally. Secondary Market The Underwriter expects to effect secondary market trading in the Series 2022 Bonds. However, the Underwriter is not obligated to repurchase any Series 2022 Bonds at the request of the holders thereof and cannot assure that there will be a continuing secondary market in the Series 2022 Bonds. In addition, adverse developments, including insufficient cash flow, non-renewal of the Charter Contract and other factors may have an unfavorable effect upon prices for the Series 2022 Bonds in the secondary market. Maintenance of Credit Rating S&P Global Ratings("S&P"or the"Rating Agency"),has assigned a rating of"[ ]"to the Series 2022 Bonds. Certain information was supplied by the Company and the Charter School to the Rating Agency to be considered in evaluating the Series 2022 Bonds, including information regarding State and federal funding sources and the operations of the Charter School,which are subject to change. See"BOND RATING." Such rating expresses only the views of the Rating Agency. There is no assurance that such 33