05-13-2020 Council Packet - Laserfiche WebLink

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14 SUMMARY OF CERTAIN PRINCIPAL DOCUMENTS – THE MORTGAGE” in this Official Statement. Special Covenants Debt Service Coverage Covenant. In the Loan Agreement, the Borrower covenants and agrees, commencing with its fiscal year ending September 30, 2023, to conduct its overall operations in such a manner as to provide (A) Income Available for Debt Service at least equal to 120% of Total Principal and Interest Requirements in each fiscal year of the Borrower, and (B) gross revenues which will be sufficient to pay promptly all expenses of operation, maintenance and repair of the Borrower and to provide all other payments required to be made by the Borrower under the Loan Agreement, including payment of all principal of, premium, if any, and interest on the Series 2020 Bonds. To the extent permitted by law, the Borrower further agrees to revise its rates, fees and charges as may be necessary or proper to comply with this provision. Notwithstanding the foregoing, in any case where additional long-term indebtedness is incurred by the Borrower in the future to acquire, renovate, or construct capital improvements, principal and interest with respect to such additional indebtedness shall not be included in the Borrower’s Total Principal and Interest Requirements until the first fiscal year in which any cash to pay debt service, funded by such indebtedness, is no longer available to the Borrower. If, in any fiscal year of the Borrower, commencing with its fiscal year ending September 30, 2023, Income Available for Debt Service for such fiscal year has been less than 120% of its Total Principal and Interest Requirements for such fiscal year, then the Borrower at its expense shall retain an Independent consultant selected by it (which consultant may consist of a recognized senior housing, assisted living and nursing home consulting firm or a firm of certified public accountants) to make recommendations with respect to the Borrower’s rates, fees and charges and other matters relating to or affecting said Income Available for Debt Service, provided that if the Borrower shall have employed an Independent consultant pursuant to this provision on a continuing basis, the Borrower shall not be required to employ a new Independent consultant or obtain new recommendations. A copy of the Independent consultant’s report and recommendations and any supplements thereto shall be filed with the Borrower and the Trustee. The recommendations of the Independent consultant and any supplements thereto shall be presented by the Independent consultant in writing to the Board of Directors of the Borrower. The Borrower agrees that it will, to the extent permitted by law, follow the recommendations of the Independent consultant unless the Board of Directors of the Borrower in good faith resolves in a writing delivered to the Trustee on or before 45 days of receipt of the recommendations of the Independent consultant that such recommendations are not in the best interests of the Borrower and that a proposed alternate set of recommendations of management are likely to achieve the 120% debt service coverage ratio set forth above. So long as an Independent consultant shall be employed and the Borrower accepts and follows the recommendations of the Independent consultant or such alternate recommendations of the Board of Directors of the Borrower, the Borrower shall be deemed to be in compliance with this covenant with respect to the fiscal year in which the recommendations shall have been presented and all prior fiscal years, notwithstanding that Income Available for Debt Service realized may be less than 120% of its Total Principal and Interest Requirements; and if the Borrower shall also employ the Independent consultant on a continuing basis, to monitor the effect of the recommendations on the Borrower’s Income Available for Debt Service in future fiscal years and to supplement the recommendations (if needed, in the opinion of the Independent consultant), then (so long as the Borrower shall continue to accept and follow the recommendations of the Independent consultant and any supplements thereto, or alternate recommendations for any fiscal year from the Board of Directors of the Borrower issued in the manner set forth above), the Borrower shall be deemed in compliance with the covenant above in such future fiscal years, notwithstanding that the Borrower’s Income Available for Debt Service realized with respect to such future fiscal years may be less than 120% of its Total Principal