04-14-2021 Council Packet - Laserfiche WebLink

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24 [The Corporation will transfer residents from the St. Paul Facilities to the Project.] The occupancy rates for skilled nursing facilities in the Project are also critical to the success of the Corporation. The continued viability of the Project will require sufficient revenues to meet both debt service requirements and the costs of operating and maintaining the Project, many of which costs may be beyond the control of the Corporation or may be as yet unknown or not precisely determinable. Optional Put of Senior Notes The Senior Lender, with 180 days’ written notice to the Corporation, has the option to require the Corporation to pay the remaining outstanding principal and interest on the Senior Notes, plus accrued interest thereon on [May] 1, 2031 and 2041. These terms may require the Corporation to refinance the Senior Notes on or prior to such dates. There can be no assurance that the Corporation will be able to successfully refinance the indebtedness on or before the optional put. [DESCRIBE MANDATORY REDEMPTION IF SENIOR LENDER PUTS] Effect of Federal Bankruptcy Laws on Security for the Series 2021D 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 2021D Bonds. Furthermore, if the security for the Series 2021D Bonds is inadequate for payment in full of the Series 2021D Bonds, bankruptcy proceedings and equity principles may also limit any attempt by the Trustee to seek payment from other property of the Corporation, if any. See “ENFORCEABILITY OF OBLIGATIONS.” Also federal bankruptcy law permits adoption of a reorganization plan even though it has not been accepted by the holders of a majority in aggregate principal amount of the Series 2021D 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 Corporation 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 Loan Agreement and Subordinate Mortgage that make bankruptcy and related proceedings by the Corporation an event of default thereunder. Risk of Early Call There are a number of circumstances under which all or a portion of the Series 2021D Bonds may be redeemed prior to their stated maturity. See “THE SERIES 2021D BONDS — Redemption Prior to Maturity.” Cybersecurity The Corporation’s services and systems are critical to operations or involve the storage, processing and transmission of sensitive data, including regulated data, proprietary or confidential data, and personal information of employees, patients and others. Successful breaches, employee malfeasance, or human or technological error could result in, for example, unauthorized access to, disclosure, modification, misuse, loss, or destruction of the Corporation’s or other third party data or systems; theft of sensitive, regulated, or confidential data including personal information; the loss of access to critical data or systems; service or system disruptions or denials of service. A potentially successful cyberattack on the Corporation’s operations could also disrupt the operations of the Project Facilities and home health and hospice services. While the Corporation employs professional information technology professionals and utilizes operational safeguards that are tested periodically, no assurance can be given that such measures will ensure that the Corporation is protected against all cybersecurity threats or attacks. The Corporation has been the subject of successful cyberattacks in the past and has since adopted policies and procedures, and insurance, to protect itself against cyberattacks and the risks presented thereby. Corporate Affiliations The assets and revenues of the Corporation are derived primarily from the St. Paul Facilities and will be primarily derived, upon completion of construction of the Project, from the Project. The Guarantor and the Corporation have certain corporate affiliates, but none of such affiliates has or will have any responsibility for payment of the Series 2021D Bonds, other than the obligations of the Guarantor under the specific terms of the Guaranty. EXCEPT