AGENDA€¦ · 2020-06-13 · wilmington trust, national association, as escrow agent and blue ridge acadmey (formerly known as inspire charter school – kern), yosemite valley

HEARTLAND CHARTER SCHOOL

955 Stanislaus St. Maricopa, CA 93252

Phone (661) 525-1178 * Fax (661) 465-4544

Special Board Meeting

Heartland Charter School

June 13, 2020 –1pm

5060 California Avenue #420

Bakersfield, CA 93309

Through Teleconference

Public Comment via Zoom: https://zoom.us/j/95684469157

AGENDA Item Description Action

1. Call to Order

2. Approval of the Agenda

3. Public Comments Information

4. Discussion and Potential Action on the Factoring Proposals from Charter Asset Management and Charter School Capital to Facilitate Early RAN Takeout

5. Discussion and Potential Action on the Revenue Note Defeasance and Related Escrow Agreement

6. Board of Directors’ Requests and Comments

7. Announcement of Next Regular Scheduled Board Meeting

8. Adjournment This meeting will be by teleconference pursuant to Executive Orders N-25-20 and N-29-20. Access to Board Materials: A copy of the written materials which will be submitted to the Heartland school board may be reviewed by any interested persons on Heartland’s website along with this agenda. The posting of the agenda will occur at least 72 hours in advance of this meeting.

Public comment rules: Members of the public may address the Board on agenda or non-agenda items through the teleconference platform, Zoom. Zoom does not require the members of the public to have an account or login. Please either utilize the chat option to communicate with the administrative team your desire to address the board or simply communicate orally your desire to address the board when the board asks for public comments. Speakers may be called in the order that requests are received. We ask that comments are limited to 2 minutes each, with no more than 15 minutes per single topic so that as many people as possible may be heard. By law, the Board is allowed to take action only on items on the agenda. The Board may, at its discretion, refer a matter to district staff or calendar the issue for future discussion.

Note: Heartland Charter Governing Board encourages those with disabilities to participate fully in the public meeting process. If you need a disability-related modification or accommodation, including auxiliary aids or services, to participate in the public meeting, please contact the Governing Board Office at 559-313-3112 at least 24 hours before the scheduled board meeting so that we may make every reasonable effort to accommodate you. (Government Code § 54954.2; Americans with Disabilities Act of 1990, § 202 (42 U.S.C. § 12132)).

https://zoom.us/j/95684469157

4138-0619-3701.3

WILMINGTON TRUST, NATIONAL ASSOCIATION,

as Escrow Agent

and

BLUE RIDGE ACADMEY (FORMERLY KNOWN

AS INSPIRE CHARTER SCHOOL – KERN),

YOSEMITE VALLEY CHARTER SCHOOL (FORMERLY KNOWN AS INSPIRE

CHARTER SCHOOL – CENTRAL),

PACIFIC COAST ACADEMY, and


ESCROW AGREEMENT

Dated June __, 2020

Relating to

CALIFORNIA SCHOOL FINANCE AUTHORITY

REVENUE NOTES

(INSPIRE CHARTER SCHOOLS)

SERIES 2019B (TAX-EXEMPT)

And


REVENUE NOTES


SERIES 2019C (TAXABLE)

4138-0619-3701.3

ESCROW AGREEMENT

THIS ESCROW AGREEMENT, made and entered into June __, 2020, by and

among WILMINGTON TRUST, NATIONAL ASSOCIATION, a national banking

association organized and existing under and by virtue of the laws of the United States of

America, being qualified to accept and administer the trusts hereby created, in its capacity as

trustee (the “Escrow Agent”) under the Prior Indenture (capitalized terms used herein shall have

the meanings given such terms pursuant to Section 1 hereof), and BLUE RIDGE ACADEMY

(formerly known as INSPIRE CHARTER SCHOOL – KERN), YOSEMITE VALLEY

CHARTER SCHOOL (formerly known as Inspire Charter School – Central), PACIFIC

COAST ACADEMY, and HEARTLAND CHARTER SCHOOL, each a nonprofit public

benefit corporation organized and existing under the laws of the State of California (each a

“Borrower” and together, the “Borrowers”),

W I T N E S S E T H:

WHEREAS, pursuant to the Prior Indenture, the California School Finance

Authority (the “Authority”) has previously authorized and issued its (a) Revenue Notes (Inspire

Charter Schools) Series 2019B (Tax-Exempt) on behalf of the Borrowers in the aggregate

principal amount of $26,420,000 and (b) Revenue Notes (Inspire Charter Schools) Series 2019C

(Taxable) on behalf of the Borrowers in the aggregate principal amount of $19,300,000

(together, the “Prior Notes”); and

WHEREAS, $45,720,000 aggregate principal amount of the Prior Notes remain

Outstanding; and

WHEREAS, for the purpose of providing for the payment of the Prior Notes in

accordance with Article X of the Prior Indenture, the Borrowers have caused certain funds, to be

deposited into the Escrow Fund as provided in Section 2 hereof; and

WHEREAS, the amounts to be held by the Escrow Agent in the Escrow Fund,

has been certified in the Verification Report to be sufficient to pay the Escrow Requirements;

NOW, THEREFORE, the Borrowers and the Escrow Agent hereby agree as

follows:

Section 1. Definitions. Capitalized terms used in this Escrow Agreement and not

otherwise defined herein shall have the meanings given such terms in the Indenture, dated as of

July 1, 2019, between the Authority and the Escrow Agent. The following shall have the

meanings set forth below for all purposes of this Escrow Agreement.

“Escrow Fund” means the Inspire Charter Schools Series 2019BC Escrow Fund

established pursuant to Section 2 hereof.

“Escrow Securities” means noncallable bonds, bills and bonds issued by the

Department of the Treasury (including without limitation (1) obligations issued or held in book-

entry form on the books of the Department of the Treasury and (2) the interest component of

Resolution Funding Corporation strips for which separation of principal and interest is made by

-2- 4138-0619-3701.3

request to the Federal Reserve Bank of New York in book-entry form), United States Treasury

Obligations State and Local Government Series and Zero Coupon United States Treasury Bonds.

“Escrow Requirements” means the moneys required to pay the principal amount

of the Prior Notes and all unpaid interest thereon to the Maturity Date. The schedule of Escrow

Requirements due is set forth in Exhibit B hereto.

“Maturity Date” means July 15, 2020.

“Opinion of Note Counsel” means an opinion of Orrick, Herrington & Sutcliffe

LLP.

“Prior Notes” means the (a) California School Finance Authority Revenue Notes

(Inspire Charter Schools), Series 2019B (Tax-Exempt) and (b) California School Finance

Authority Revenue Notes (Inspire Charter Schools), Series 2019C (Taxable), issued pursuant to

the Prior Indenture.

“Prior Indenture” means the Indenture, dated as of July 1, 2019, by and between

the Authority and the Escrow Agent.

“Prior Loan Agreement” means the Loan Agreement, dated as of July 1, 2019,

between the Authority and the Borrowers.

“Verification Agent” means ___________.

“Verification Report” means the verification report, dated June __, 2020, prepared

by the Verification Agent in connection with the deposit of certain proceeds in the Escrow Fund.

Section 2. Establishment, Funding and Maintenance of Escrow Fund.

(a) The Escrow Agent agrees to establish a separate irrevocable fund

designated as the “Inspire Charter Schools Series 2019BC Escrow Fund.” The Escrow Agent

shall maintain the Escrow Fund until the termination of this Escrow Agreement pursuant to

Section 10 hereof and hold the Escrow Securities and moneys therein at all times as a special and

separate fund wholly segregated from all other securities, investments or moneys on deposit with

or otherwise held by the Escrow Agent in accordance with Section 10.01(a)(ii) of the Prior

Indenture.

(b) The Borrowers have deposited with the Escrow Agent the sum of

$15,242,768.32 (consisting of $1,759,444.13 from Yosemite Valley Charter School,

$6,108,846.05 from Blue Ridge Academy, $4,412,024.65 from Heartland Charter School, and

$2,962,453.49 from Pacific Coast Academy), which amounts are to be deposited in the Escrow

Fund and invested and disbursed in accordance with this Escrow Agreement.

(c) The Borrowers hereby direct the Escrow Agent to transfer any funds held

in, and in any accounts of, the Revenue Fund to be transferred to and deposited in the Escrow

Fund and invested and disbursed in accordance with this Escrow Agreement.

-3- 4138-0619-3701.3

(d) All Escrow Securities and moneys in the Escrow Fund are hereby

irrevocably transferred to the Escrow Agent on behalf of the owners of the Prior Notes to be

applied, as provided herein, to the payment of the Escrow Requirements when due in accordance

with this Escrow Agreement.

(e) Each Borrower hereby waives any rights that it may have under the Prior

Indenture, the Prior Loan Agreement or any other document or agreement relating to the Prior

Notes (i) to give instructions as to the investment of the amounts deposited in the Escrow Fund

except as provided in Section 4, below, or (ii) to any of the moneys that remain in the Escrow

Fund after the payment of the Escrow Requirements; provided however, if any funds are

provided to the Prior Trustee from the State Controller’s Office deposited into the Revenue Fund

pursuant to the intercepts relating to the Prior Notes after the date hereof, the Prior Trustee, as

soon as practicable, shall transfer such amounts from the Revenue Fund to the appropriate

Borrower using the instructions set forth in Exhibit E, free and clear from the lien of the Prior

Indenture.

(f) Each Borrower acknowledges that it has no right, title or interest in or to

any money, Escrow Securities, or other property held in the Escrow Fund, notwithstanding any

provision of the Prior Indenture, the Prior Loan Agreement or any other document or agreement

relating to the Prior Notes to the contrary. Under no circumstances shall any such money,

securities, or other property be paid or delivered to or for the order of any Borrower, except as

set forth in Section 5 hereof; provided however, if any funds are provided to the Prior Trustee

from the State Controller’s Office deposited into the Revenue Fund pursuant to the intercepts

relating to the Prior Notes after the date hereof, the Prior Trustee, as soon as practicable, shall

transfer such amounts from the Revenue Fund to the appropriate Borrower using the instructions

set forth in Exhibit E, free and clear from the lien of the Prior Indenture.

(g) The Escrow Agent acknowledge receipt of the Opinion of Note Counsel

referred to in Section 10.03 of the Prior Indenture and the Verification Report, in satisfaction of

such requirements of Section 10.03 of the Prior Indenture.

(h) The Escrow Agent acknowledges that this Escrow Agreement shall serve

as a Certificate of the Borrowers evidencing the election of the Borrowers to discharge all

indebtedness of the Prior Notes and the Prior Indenture.

(i) The Escrow Agent acknowledges that all sums payable under the Prior

Indenture have been paid.

Section 3. Investments of Moneys in the Escrow Fund.

(a) The Escrow Agent acknowledges and agrees that it has received the

amounts set forth in Section 2(b) and Section 2(c) above and hereby agrees to hold the deposit

uninvested as lawful money of the United States of America.

(b) The Escrow Agent shall not be liable or responsible for any loss resulting

from any investment made pursuant to this Escrow Agreement and in full compliance with the

provisions hereof.

-4- 4138-0619-3701.3

(c) The Escrow Agent may conclusively rely upon the conclusions of the

Verification Report to the effect that the moneys in the Escrow Fund shall be necessary and

sufficient to pay the Escrow Requirements when due.

(d) The Escrow Agent shall hold all Escrow Securities, if any, in the Escrow

Fund and the money received from time to time as principal and interest thereon or otherwise, to

be applied to the payment of the Remaining Escrow Requirements and shall collect the principal

of and interest on such Escrow Securities promptly as such principal and interest become due.

Section 4. Payment of the Prior Notes. Each Borrower hereby elects to discharge

and pay the Prior Notes as provided in this Escrow Agreement. Each Borrower hereby requests

and irrevocably instructs the Escrow Agent, and the Escrow Agent hereby agrees, to collect and

deposit in the Escrow Fund all amounts payable with respect to the Escrow Securities held to the

credit of the Escrow Fund promptly as such amounts become due and to apply, to the extent

necessary, such amounts, together with the other moneys in the Escrow Fund, to the payment of

the Escrow Requirements when due. The Escrow Agent acknowledges that this Escrow

Agreement constitutes irrevocable instructions to apply the amounts received in connection with

the Escrow Securities credited to the Escrow Fund, and the other amounts in the Escrow Fund, to

the payment of principal and interest with respect to the Prior Notes as set forth in the Escrow

Requirements.

Section 5. Transfer of Funds After Payment of Escrow Requirements. Each

Borrower hereby requests and irrevocably instructs the Escrow Agent, and the Escrow Agent

hereby agrees, to transfer any money remaining in the Escrow Fund (after the payment of the

amounts due on the Prior Notes on the Maturity Date) to the appropriate Borrowers free and

clear of the lien of the Prior Indenture.

Section 6. Notice of Defeasance. Each Borrower hereby requests and irrevocably

instructs the Escrow Agent to mail and to file with the Municipal Securities Rulemaking Board’s

Electronic Municipal Market Access System (“EMMA”) notice of defeasance of the Prior Notes.

The form of the notice of defeasance relating to the Prior Notes is attached as Exhibit D hereto.

Section 7. Fees and Costs.

(a) In consideration for the Escrow Agent to perform the services set forth in

this Escrow Agreement, the Borrowers each agree to pay the fees and charges of the Escrow

Agent in the amount of $750.00 representing a one-time fee.

(b) The Escrow Agent shall also be entitled to additional reasonable fees and

reimbursements for costs incurred, to be paid by the Borrowers, including but not limited to legal

and accountants’ services, in connection with any litigation not arising from the Escrow Agent’s

negligence or willful misconduct which may at any time be instituted involving this Escrow

Agreement. Nothing in this Escrow Agreement shall require the Escrow Agent to expend or risk

its own funds or otherwise incur any financial liability in performance of any of its duties or in

the exercise of any of its rights or its powers hereunder.

(c) The fees of and the costs incurred by the Escrow Agent shall in no event

be deducted or payable from or constitute a lien against the Escrow Fund, any Escrow Securities

-5- 4138-0619-3701.3

credited to the Escrow Fund or any moneys in the Escrow Fund, including without limitation the

Initial Escrow Securities and any proceeds thereof.

Section 8. Indemnification. The Borrowers hereby assume liability for and hereby

agrees (whether or not any of the transactions contemplated hereby are consummated) to

indemnify, protect, save and hold harmless the Escrow Agent and its directors, officers,

employees and agents (collectively, the “Indemnified Parties”) and hold the Indemnified Parties

harmless from any and against any and all liabilities, obligations, losses, damages, penalties,

claims, actions, suits, costs, expenses and disbursements (including legal fees and disbursements)

of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, at any

time, the Escrow Agent or the Borrowers (whether or not also indemnified against by any other

person under any other agreement or instrument) and in any way relating to or arising out of the

execution and delivery of this Escrow Agreement, the establishment of the Escrow Fund, the

retention of the moneys therein and any payment, transfer or other application of moneys or

securities by the Escrow Agent in accordance with the provisions of this Escrow Agreement, or

as may arise by reason of any act, omission or error of the Escrow Agent made in good faith in

the conduct of their duties; provided, however, that the Borrowers shall neither be required to

indemnify the Escrow Agent against the Escrow Agent’s own negligence or willful misconduct.

The indemnities contained in this Section shall survive the termination of this Escrow Agreement

or the resignation or removal of the Escrow Agent. Nothing in this Section shall limit the rights

of the Borrowers or the obligations of the Borrowers with respect to indemnification pursuant to

the Prior Loan Agreement.

Section 9. Resignation of Escrow Agent; Replacement of Escrow Agent.

Wilmington Trust, National Association has entered into this Escrow Agreement

in its capacity as trustee under the Prior Indenture and shall remain a party to this Escrow

Agreement until a successor trustee is appointed trustee under the Prior Indenture. If a successor

trustee is appointed as trustee under the Prior Indenture, such successor shall automatically and

without the necessity of any further act by the Borrowers, Wilmington Trust, National

Association or the successor trustee be deemed to be the Escrow Agent to this Escrow

Agreement in its capacity as trustee under the Prior Indenture. In that event Wilmington Trust,

National Association shall transfer to such successor trustee all Escrow Securities and moneys

then held by Wilmington Trust, National Association hereunder.

Section 10. Termination; Unclaimed Money. This Escrow Agreement shall

terminate when all moneys are transferred from the Escrow Fund as provided in Sections 4 and 5

hereof.

Section 11. Rights, Duties and Obligations of Escrow Agent. Subject to the

provisions of Sections 3 and 5 hereof, moneys held by the Escrow Agent hereunder are to be

held and applied for the payment of the Escrow Requirements when due in accordance with the

terms hereof. The rights, duties and obligations of the Escrow Agent shall, except as otherwise

expressly provided herein, be governed by the applicable provisions of the Prior Indenture which

by this reference are hereby incorporated into this Escrow Agreement as if set forth in full

herein.

-6- 4138-0619-3701.3

Section 12. Severability. If any section, paragraph, sentence, clause or provision of

this Escrow Agreement shall for any reason be held to be invalid or unenforceable, the invalidity

or unenforceability of such section, paragraph, sentence, clause or provision shall not affect any

of the remaining provisions of this Escrow Agreement. The provisions of this Escrow

Agreement shall be unalterable, subject to the provisions of Section 13 hereof.

Section 13. Amendment. The parties hereto may, without the consent or notice to the

holders of the Prior Notes, enter into such agreements supplemental to this Escrow Agreement as

shall not adversely affect the rights of such holders hereunder for either of the following

purposes:

(a) to cure any ambiguity or formal defect or omission in this Escrow

Agreement; and

(b) to grant or confer upon the Escrow Agent for the benefit of the holders of

the Prior Notes any additional rights, remedies, powers or Borrowers that may lawfully be

granted to or conferred upon the Escrow Agent.

The Escrow Agent shall enter into such agreements only upon receipt by the

Escrow Agent of, and shall be entitled to rely conclusively upon, an Opinion of Note Counsel to

the effect that any such agreement complies with this Section 13.

Section 14. Execution of Counterparts. This Escrow Agreement may be executed in

any number of counterparts, each of which shall for all purposes be deemed to be an original and

all of which shall together constitute but one and the same instrument.

Section 15. Notices. All notices, certificates or other communications hereunder shall

be sufficiently given and shall be deemed given (i) if hand delivered or delivered by courier,

when delivered to the appropriate notice address, or (ii) if mailed by first class mail, postage

prepaid, three business days after deposit in the United States mail addressed to the appropriate

notice address. The parties listed below may, by notice given hereunder, designate any further or

different addresses to which subsequent notices, certificates or other communications shall be

sent. Any notice required or permitted hereunder shall be directed to the following notice

address:

-7- 4138-0619-3701.3

As to the

Borrowers:

Heartland Charter School

955 Stanislaus Street

Maricopa, California 93252

Attention: Chief Financial Officer

Blue Ridge Academy

955 Stanislaus Street

Maricopa, California 93252


Yosemite Valley Charter School

1781 East Fir Avenue, Suite 1010

Fresno, California 93720


Pacific Coast Academy

13915 Danielson Street #103

Poway, California 92064


As to the

Escrow Agent:

Wilmington Trust, National Association

650 Town Center Drive, Suite 800

Costa Mesa, California 92626

Attention: Global Corporate Trust Services

Reference: CSFA (Inspire Charter Schools)

2019BC Notes

Section 16. Governing Law; Venue. This Escrow Agreement shall be construed in

accordance with and governed by the constitution and the laws of the State of California (the

“State”) applicable to contracts made and performed in the State. This Escrow Agreement shall

be enforceable in the State, and any action arising out of this Escrow Agreement shall be filed

and maintained in the Sacramento County Superior Court, Sacramento, California unless each

Borrower waives this requirement.

Section 17. Immunities and Liabilities of Escrow Agent.

(a) The Escrow Agent undertakes to perform only such duties as are expressly

and specifically set forth in this Escrow Agreement and no implied duties or obligations shall be

read into this Escrow Agreement against Escrow Agent.

(b) The Escrow Agent shall not have any liability hereunder except to the

extent of its own negligence or willful misconduct. In no event shall the Escrow Agent be liable

for any special indirect or consequential damages. The Escrow Agent shall have no duty or

responsibility under this Escrow Agreement in the case of any default in the performance of the

covenants or agreements of any other party contained in the Prior Indenture; provided that,

notwithstanding any such default, the Escrow Agent shall apply the moneys in the Escrow Fund

to the Escrow Requirements when due as provided in this Escrow Agreement. The Escrow

-8- 4138-0619-3701.3

Agent is not required to resolve conflicting demands to money or property in its possession

under this Escrow Agreement.

(c) The Escrow Agent may consult with counsel of its own choice (which

may be counsel to the Borrowers), and the written opinion of such counsel shall be full and

complete authorization to take or suffer in good faith any action hereunder in accordance with

such opinion of counsel. The Escrow Agent may act through attorneys or agents and shall not be

responsible for the acts or omissions of any such attorney or agent appointed with due care.

(d) The Escrow Agent shall not be responsible for any of the recitals or

representations contained herein, in the Prior Indenture or in the Indenture, other than recitals or

representations specifically made by the Escrow Agent.

(e) The Escrow Agent may become the owner of, or acquire any interest in,

any of the Prior Notes or any bonds or other securities of the Borrowers with the same rights that

it would have if it were not the Escrow Agent and may engage or be interested in any financial or

other transaction with the Borrowers.

(f) The Escrow Agent shall not be liable for the accuracy of any calculations

provided as to the sufficiency of the moneys or securities deposited with it to pay the Escrow

Requirements when due.

(g) The Escrow Agent shall not be liable for any action or omission of the

Borrowers under this Escrow Agreement, the Prior Loan Agreement, the Prior Indenture, or the

Indenture.

(h) Whenever in the administration of this Escrow Agreement the Escrow

Agent shall deem it necessary or desirable that a matter be proved or established prior to taking

or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein

specifically prescribed) may, in the absence of negligence or willful misconduct on the part of

the Escrow Agent, be deemed to be conclusively proved and established by a certificate of any

authorized representative of the applicable Borrower(s), and such certificate shall, in the absence

of negligence or willful misconduct on the part of the Escrow Agent, be full warrant to the

Escrow Agent for any action taken or suffered by it under the provisions of this Escrow

Agreement upon the faith thereof.

(i) The Escrow Agent may conclusively rely, as to the truth and accuracy of

the statements and correctness of the opinions and the calculations provided to it in connection

with this Escrow Agreement and shall be protected in acting, or refraining from acting, upon any

written notice, instruction, request, certificate, document or opinion furnished to the Escrow

Agent in connection with this Escrow Agreement and reasonably believed by the Escrow Agent

to have been signed or presented by the proper party, and it need not investigate any fact or

matter stated in such notice, instruction, request, certificate or opinion.

(j) The Escrow Agent shall not be responsible or liable for any failure or

delay in the performance of its obligations under this Agreement arising out of or caused,

directly or indirectly, by circumstances beyond its control, including without limitation, any act

or provision of any present or future law or regulation or governmental authority; acts of God;

-9- 4138-0619-3701.3

earthquakes; fires; floods; wars; terrorism; civil or military disturbances; sabotage; epidemics;

riots; interruptions, loss or malfunctions of utilities, computer (hardware or software) or

communications service; accidents; labor disputes; acts of civil or military authority or

governmental actions; or the unavailability of the Federal Reserve Bank wire or telex or other

wire or communication facility.

Section 18. Immunities and Liabilities of Escrow Agent. The Borrowers

acknowledges that to the extent regulations of the Comptroller of the Currency or other

applicable regulatory entity grant the Borrowers the right to receive brokerage confirmations of

security transactions as they occur, the Borrowers specifically waive receipt of such

confirmations to the extent permitted by law. The Escrow Agent will furnish the Borrowers

periodic transaction statements which shall include detail for all investment transactions made by

the Escrow Agent hereunder; provided that the Escrow Agent is not obligated to provide an

accounting for any fund or account that (a) has a balance of $0.00 and (b) has not had any

activity since the last reporting date.

S-1

4138-0619-3701.3

IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement

to be signed in their respective names by their duly authorized officers, all as of the day and year

first above written.

WILMINGTON TRUST, NATIONAL

ASSOCIATION

By:

Authorized Officer

S-2

4138-0619-3701.3

BLUE RIDGE ACADEMY,

a California nonprofit public benefit corporation

By: _______________________________________

Jessie Maron

President

S-3

4138-0619-3701.3

YOSEMITE VALLEY CHARTER SCHOOL,


By: _______________________________________

Lawrence Jarocki

President

S-4

4138-0619-3701.3

PACIFIC COAST ACADEMY,


By: _______________________________________

Kelly Durso

President

4138-0619-3701.3

HEARTLAND CHARTER SCHOOL,


By: _______________________________________

Anthony Miranda

President

A-1 4138-0619-3701.3

Exhibit A

Defeased Notes

Maturity Date Principal Amount

July 15, 2020 $45,720,000

B-1 4138-0619-3701.3

Exhibit B

Escrow Requirements

Payment Date

Maturing

Principal Interest Total

July 15, 2020 $45,720,000 $1,551,561.67 $47,271,561.67

C-1 4138-0619-3701.3

Exhibit C

[Reserved]

C-1 4138-0619-3701.3

Exhibit D

Form of Defeasance Notice


REVENUE NOTES


SERIES 2019B (TAX-EXEMPT)

And


REVENUE NOTES


SERIES 2019C (TAXABLE)

NOTICE OF DEFEASANCE

To: The Holders of the following maturities of the above-captioned notes (the “Notes”):

Series Maturity Date CUSIP No.

Principal Amount

Defeased

2019B (Tax-Exempt) July 15, 2020 13059QAB1 $26,420,000

2019C (Taxable) July 15, 2020 13059QAC9 19,300,000

In accordance with Section 4 of the Continuing Disclosure Agreement, dated as of July 1,

2019, among Inspire Charter Schools, Pacific Coast Academy, Inspire Charter School – Central

(now known as Yosemite Valley Charter School), Inspire Charter School – Kern (now known as

Blue Ridge Academy), Heartland Charter School, and Wilmington Trust, National Association,

as Trustee and as Dissemination Agent (the “Trustee”) relating to the Notes, the Trustee is

hereby providing notice of defeasance of the Notes. As of the date hereof, proceeds in the

Escrow Fund established under the Escrow Agreement, dated the date hereof (the “Escrow

Agreement”), among the Trustee, as escrow agent thereunder, Pacific Coast Academy, Blue

Ridge Academy (formerly known as Inspire Charter School – Kern), Yosemite Valley Charter

School (formerly known as Inspire Charter School – Central), and Heartland Charter School, will

be used to pay the principal and interest with respect to the Notes, as directed in the Escrow

Agreement on the Maturity Date.

Capitalized terms not otherwise defined herein and used in this notice shall have the

meanings given such terms in the Escrow Agreement.

Dated: June __, 2020 WILMINGTON TRUST, NATIONAL

CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on

behalf of the American Bankers Association by S&P Capital IQ. Copyright© 2020 CUSIP Global Services. All rights

reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and

does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of

reference only. None of the Trustee, the Authority, the Borrowers or their agents or counsel assume responsibility for the

accuracy of such numbers.

D-2 4138-0619-3701.3

ASSOCIATION, AS TRUSTEE

cc: Depository Trust Company

Municipal Securities Rulemaking Board

California School Finance Authority

E-1 4138-0619-3701.3

Exhibit E

DISBURSEMENT INSTRUCTIONS

BLUE RIDEGE ACADEMY (FORMER INSPIRE CHARTER SCHOOL – KERN)

Bank:

ABA #:

Account Name:

Account No.:

Reference:

YOSEMITE VALLEY CHARTER SCHOOL (FORMER INSPIRE CHARTER SCHOOL –

CENTRAL)

Bank:

ABA #:

Account Name:

Account No.:

Reference:

PACIFIC COAST ACAEDMY

Bank:

ABA #:

Account Name:

Account No.:

Reference:


Bank:

ABA #:

Account Name:

Account No.:

Reference:

Copyright © 2018 Charter School Capital, Inc. All Rights Reserved.

Charter School

Capital +

Heartland

Charter school

RAN Payoff

June 8, 2020

https://www.viedu.org/

2Copyright © 2018 Charter School Capital, Inc. All Rights Reserved.

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o Served more than 1,250,000 students

and their families

o Supported more than 700 charter schools

o Invested $2B in helping charter schools

better serve their communities

▪ Facilities financing arm supports charter

leaders with long-term leases

o 41 schools across the country

o Tenant improvements and energy

services

▪ More than 45 employees headquartered in Portland, OR

▪ Stellar track record with schools and

investors

COMPANY OVERVIEW


WHAT WE DO


Working capital can be accessed to:

▪ Build an athletic program

▪ Pay for buses or other transportation

▪ Implement safety and security systems

▪ Provide new technology in the classroom

▪ Train and hire staff

▪ Purchase new computers

▪ Open a new school

▪ To address budget shortfalls and delays

▪ RAN Takeout

▪ Financial Safety Net for schools in these uncertain times

WORKING

CAPITALOur receivable sales product is a reliable and

flexible process that provides access to capital for

operations, facilities, programmatic expenses, or

other obligations.

To date, we’ve invested more than $1.6 billion

in more than 700 schools and supporting the

education of more than 800,000 students.


FACILITIESWhy long-term lease financing?

▪ You can finance 100% of project costs

▪ You can retain control of your facility

▪ You can plan on long-term affordability

▪ You can enhance your existing building or finance new construction

▪ Your lease can be customized to your

school’s model – whether blended learning,

traditional, etc.

▪ Tenant improvements can be financed in

your lease

▪ Can be used as take-out financing for an existing bond or potential bridge to bond

financing

Our facilities financing product is based on

acquiring charter school real estate supporting

development and/or making facility upgrades.

We’ve invested $350 million to support a portfolio of 41 charter school facilities in 10 states.

Charter schools could save up to 20% on

monthly lease costs by financing through

Charter School Capital


ENROLLMENT

MARKETING▪ Our team is providing enrollment marketing

consulting and advertising services to boost enrollment through:

oWebsite improvements

oPaid search

oSocial media advertising

oDirect mail

oEmail, etc.

oSEO, SEM, local search

THE DETAILS

PAY-FOR-PERFORMANCE OPTION:

Schools pay for newly-enrolled students that Charter

School Capital sources and retains during

enrollment marketing efforts.


IMPROVE EDUCATIONAL ENVIRONMENT

▪ Custom lighting designs

▪ Smart lighting and controls

▪ Solar/safety window film

REDUCE COSTS AND ENVIRONMENTAL IMPACT

▪ Reduced energy costs

▪ Reduction in maintenance expenses

▪ Leasing and financing options available

▪ Charter School Capital finances the project cost, with

repayment covered by the school’s monthly energy

savings.

Partnering with BioStar Renewables, we

retrofit aging school energy systems with

new, efficient systems; reducing utility expenses

through upgraded electrical components (e.g.

LED lights, HVAC systems, and electrical controls).

THE DETAILS

CHARTER

SCHOOL

ENERGY

If any of your schools have fluorescent

fixtures with more than two bulbs, they probably

need an energy upgrade.


BUSINESS SERVICES: EXCLUSIVELY FOR OUR CLIENTS

THE DETAILS

• Recognized nationally for interim executive

leadership and operational support

• Financial services include:

– Budget analysis

– Cash flow planning

– AP/vendor management

• Capacity building

• Governance training

• Authorizer support and relationship building

• Operational systems and internal controls

• Systems and operational reviews

These are services included in ongoing working

capital and facilities client relationships.


TRUSTED BY CHARTER SCHOOL LEADERS

“Charter School Capital has

unbelievable integrity. Their

commitment to the industry

of charter schools is

unsurpassed.”

FRANK STUCKI, PALADIN ACADEMY

“Charter School Capital has

allowed us to work with a

product that is flexible in terms

of the amount and the timing so

we can focus on our students.”

RICARDO MIRALES, ACADEMIA AVANCE

“They’ve come through for us

when we needed it the most

and have done things that other

financial institutions have not

been able to do.”

PAUL OKAITEYE, NEW DESIGNS

CHARTER SCHOOLS

“We’ve served another 2000

students in the last two years

because of the availability of

cash flow financing with

Charter School Capital.”

SKIP HANSEN, LEARN4LIFE

“We couldn’t have even looked

at a building like this without

them. They were responsive,

communicative, and very much

about the kids.”

FREDDY MENDOZA, ARIZONA COLLEGE

PREP ACADEMY

“It’s a big relief to know that,

with Charter School Capital,

our organization can stand

alone. You don’t get that

feeling with a bank.”

DR. KRIS SIPPEL, SAN TAN LEARNING

CENTER


RAN Payoff

Pricing

Proposal


RAN:

REVENUE

ANTICIPATION

NOTES

RANs are a form of note, or short-term loan

that usually repays from a named revenue

source within a period of one year.

• $45mm RAN/July 2019

• Repay in April, May, June 2020

• June deferrals would short final payment

and put schools in breach

PROPOSED SOLUTION:

Receivable sale to pay June RAN payment in full and provide additional Working Capital for

operating costs

• Future funding capacity with flexibility

THE DETAILS:


RAN PAYOFF PRICING PROPOSAL

School Total Funding RAN Payoff Working Capital Total Cost Proposed Rate

Heartland Charter

School$5,017,900 $3,370,888 $1,647,012 $91,598 5.299%

July, August and

September LCFF


Prior Presentation: April Pricing

Proposal FY21 Fundings


Thank you!

CAM FACTORING PROPOSAL

June 9, 2020 Ms. Courtney McCorkle Executive Director Heartland Charter School 955 Stanislaus Street, Maricopa, CA 93252 Dear Ms. Courtney McCorkle, Charter Asset Management Fund, L.P. (“Purchaser”) appreciates this opportunity to begin our relationship with Heartland Charter School (“Seller”). We would like to propose the following terms and conditions for the factoring transaction under discussion. Please note that this letter is not intended to constitute a commitment to factor on the part of the Purchaser, but to summarize for discussion purposes the working capital accommodation that we are interested in considering. Notwithstanding the foregoing, the terms under the heading “Confidentiality” as set forth below in this letter shall constitute a binding and legally enforceable agreement between the parties. Factoring is a common financing transaction used in many industries where future revenues, in this case, state-aid receivables, are purchased at a discount to advance capital for use in the present. In other words, CAM will provide capital to your charter school now by purchasing a portion of the state-aid due to your school in the future.

Purchaser Charter Asset Management Fund, L.P.

Seller Heartland Charter School

Funding Amount $5,331,400.00

Funding Date June 22, 2020

Funding Options

Option School Total Funding RAN Takeout Working Capital Total Cost

Proposed Annualized

Rate

1 Heartland $5,331,400.00 $3,370,888.00 $1,960,512.00 $56,288.88 4.80%

2 Heartland $5,331,400.00 $3,370,888.00 $1,960,512.00 $87,634.03 4.80%

Repayment Schedule Pursuant to Repayment Schedule Below

Offer Expiration June 12, 2020

Receivables Schedule

Option 1

Account Authority / Payor Account Receivable Amount Purchased Admin Fee Discount % Discount Amount Funded

Kern County Office of Education

FY 20-21 Advance Apportionment Jul PMT - LCFF State Aid. CDS#

15-63628-0138131 $1,550,000.00 - 0.59% $9,145.00 -$1,540,855.00


FY 20-21 Advance Apportionment Aug PMT - LCFF State Aid. CDS#

15-63628-0138131 $1,550,000.00 - 0.99% $15,345.00 -$1,534,655.00


FY 20-21 Advance Apportionment Sep PMT - LCFF State Aid. CDS#

15-63628-0138131 $2,287,688.88 - 1.39% $31,798.88 -$2,255,890.00

Total $5,387,688.88 - $56,288.88 -$5,331,400.00

Option 2

Account Authority / Payor Account Receivable Amount Purchased Admin Fee Discount % Discount Amount Funded


FY 20-21 Advance Apportionment Sep PMT - LCFF State Aid. CDS#

15-63628-0138131 $2,800,000.00 - 1.39% $38,920.00 -$2,761,080.00


FY 20-21 Advance Apportionment Oct PMT - LCFF State Aid. CDS#

15-63628-0138131 $2,619,034.03 - 1.86% $48,714.03 -$2,570,320.00

Total $5,419,034.03 - $87,634.03 -$5,331,400.00

Repayment Schedule

Option 1

Account Receivable Repayment Date

FY 20-21 Advance Apportionment Jul PMT - LCFF State Aid. CDS# 15-63628-0138131 *Circa early August 2020

FY 20-21 Advance Apportionment Aug PMT - LCFF State Aid. CDS# 15-63628-0138131 *Circa early September 2020

FY 20-21 Advance Apportionment Sep PMT - LCFF State Aid. CDS# 15-63628-0138131 *Circa early October 2020

Option 2

Account Receivable Repayment Date

FY 20-21 Advance Apportionment Sep PMT - LCFF State Aid. CDS# 15-63628-0138131 *Circa early October 2020

FY 20-21 Advance Apportionment Oct PMT - LCFF State Aid. CDS# 15-63628-0138131 *Circa early November 2020

*Disbursement timing for federal, state, county, and local state aid can vary. Account receivables sold to CAM are due when disbursed. Thank you for choosing to fund with Charter Asset Management.

This proposal letter is provided solely for the purpose described herein and may not be disclosed to or relied upon by any other party without the Purchaser's prior written consent. This proposal is intended to form the basis for a discussion of a working capital accommodation, and further negotiations adding to or modifying the general scope of the major terms shall not be precluded by the issuance of this Proposal Letter. This proposal is confidential and proprietary for the sole purpose of discussions between the parties hereunder.

Purchaser reserves the right to issue press releases, advertisements, and other promotional materials describing any successful outcome of services provided on your behalf. The Seller agrees that Purchaser shall have the right to identify the Borrower by name in those materials.

Whether or not the transaction contemplated herein is consummated, by your acceptance hereof: (a) you agree to bear all reasonable out-of-pocket expenses of Purchaser and all fees and disbursements of Purchaser's counsel (including the allocated costs of inside counsel) relating to the preparation of this letter and of the proposed financing documentation and to the transaction contemplated hereby and thereby, if applicable, and (b) you agree to indemnify Purchaser, its affiliates, and their respective directors, officers and employees and to defend and hold Purchaser, its affiliates and such other persons harmless from and against all losses, claims, damages, liabilities and expenses (including expenses of litigation or preparation thereof) which Purchaser or any such affiliates or such other persons in connection with or arising out of the matters referred to herein, except for damages resulting from the gross negligence or willful misconduct of the Lender.

http://t.yesware.com/tt/334abfb848bd4bea55751f204bfd38d86d650d33/2587e6a74ae1ef31da37a231c9ca3947/0123db5622c6fc54c937c974383e4a12/www.charterassetmanagement.com

CAM Bid/ CSC BidCAM bid

CSC Bid

July, August, September

October, November

Documents

AGENDA€¦ · 2020-06-13 · wilmington trust, national association, as escrow agent and blue ridge acadmey (formerly known as inspire charter school – kern), yosemite valley