$17,220,000 $230,000. (Book-Entry Only) inside front cover hereof

Transcription

1 TWO SEPARATE ISSUES (Book-Entry Only) NOT RATED In the opinion of Bond Counsel, under existing laws, regulations, rulings, and judicial decisions and assuming the accuracy of certain representations and continuing compliance with certain covenants, interest on the Series 2011A Bonds is excludable from gross income for federal income tax purposes. In addition, interest on the Series 2011A Bonds is not a specific item of tax preference for purposes of the alternative minimum tax imposed on individuals and corporations; provided, however, with respect to corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings for the purpose of computing the federal alternative minimum tax on corporations. Interest on the Series 2011B Bonds is included in gross income for federal income tax purposes. Interest on the Series 2011 Bonds is included in all taxation in the State of Wisconsin. For a more complete description, see TAX MATTERS herein. $17,450,000 PUBLIC FINANCE AUTHORITY (WISCONSIN) Charter School Revenue Bonds (Kennesaw Charter School Project) New Issue New Issue $17,220,000 $230,000 Charter School Revenue Bonds Charter School Revenue Bonds (Kennesaw Charter School Project) Series 2011A (Kennesaw Charter School Project) Taxable Series 2011B Dated: Date of Issuance Due: February 1, as shown on the inside front cover hereof The Charter School Revenue Bonds (Kennesaw Charter School Project) Series 2011A (the Series 2011A Bonds ) and the Charter School Revenue Bonds (Kennesaw Charter School Project) Taxable Series 2011B (the Series 2011B Bonds ) are being issued by the Public Finance Authority (the Authority ) to provide funds to loan to Georgia Charter Schools Inc. (the Corporation ), to finance the costs of acquiring, constructing, and installing certain educational facilities (the Facility ) to be used as the new campus of the Charter School, to initially fund approximately 16 months of interest on the Series 2011A Bonds and the Series 2011B Bonds (collectively the Series 2011 Bonds ), to fully fund the Bond Reserve Fund to be held under the Indenture, to finance working capital for the Corporation, and to finance the costs of issuing the Series 2011 Bonds, pursuant to a Loan and Security Agreement (the Loan Agreement ), dated as of April 1, 2011, between the Authority and the Corporation. See PLAN OF FINANCING herein. Interest on the Series 2011 Bonds is payable semiannually on February 1 and August 1 of each year, commencing on August 1, All Series 2011 Bonds bear interest from their date of issuance. See THE SERIES 2011 BONDS - Description herein. The Series 2011 Bonds will be issued as fully registered bonds, registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ( DTC ), to which payments of principal, premium, if any, and interest will be made. Purchasers will acquire beneficial interests in the Series 2011 Bonds in book-entry form only. DTC will remit such payments to its participants who will be responsible for remittance to beneficial owners. See THE SERIES 2011 BONDS - Book-Entry Only System herein. The Series 2011 Bonds are subject to optional, extraordinary, and mandatory sinking fund redemption prior to maturity as described herein. The Series 2011A Bonds are also subject to special mandatory redemption prior to maturity as described herein. See THE SERIES 2011 BONDS - Redemption herein. The Series 2011 Bonds are special limited obligations of the Authority payable solely from and secured by amounts pledged (the Trust Estate ) under an Indenture of Trust (the Indenture ), dated as of April 1, 2011, between the Authority and Wells Fargo Bank, National Association, as trustee, and the collateral pledged by the Corporation to the Trustee to secure its obligations under the Loan Agreement pursuant to the hereinafter defined Security Deed and Contract Assignments. The Trust Estate consists primarily of amounts to be paid to the Authority pursuant to the Loan Agreement and Gross Revenues (as defined herein) of the Corporation pledged to the Authority under the Loan Agreement (subject to Permitted Encumbrances (as defined herein)). The Loan Agreement will obligate the Corporation to make loan repayments to the Authority in amounts calculated to be sufficient to pay, when due, the principal of, premium, if any, and interest on the Series 2011 Bonds. To secure its obligations under the Loan Agreement, the Corporation (1) will pledge to and grant to the Authority a first priority security interest in all Gross Revenues of the Corporation (subject to Permitted Encumbrances), pursuant to the Loan Agreement, (2) will grant to the Trustee a first mortgage lien on and first security title to the real property portion of the Facility, assign and pledge to the Authority the rents and leases derived from the Facility, and grant to the Authority a first priority security interest in the personal property portion of the Facility and the revenues, intangible rights, and accounts receivable arising in any manner from the Corporation s ownership of the Facility (subject to Permitted Encumbrances), pursuant to a Deed to Secure Debt, Assignment of Rents and Security Agreement (the Security Deed ), dated as of April 1, 2011, from the Corporation to the Trustee, and (3) will collaterally assign to the Trustee and grant to the Trustee a first priority security interest in the construction contract relating to the Facility, pursuant to an Assignment of Agreement and Consent, dated as of April 1, 2011, from the Corporation to the Trustee, and in the architect s agreement and certain other documents relating to the Facility, pursuant to a Collateral Assignment of Contract Rights, dated as of April 1, 2011, from the Corporation to the Trustee (collectively the Contract Assignments ). See SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2011 BONDS herein. THE SERIES 2011 BONDS ARE NOT A DEBT OR LIABILITY OF ANY MEMBER OF THE AUTHORITY, THE STATE OF WISCONSIN, OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OTHER THAN THE AUTHORITY TO THE LIMITED EXTENT SET FORTH HEREIN. THE SOURCE OF PAYMENT AND SECURITY FOR THE SERIES 2011 BONDS IS MORE FULLY DESCRIBED HEREIN. THE AUTHORITY HAS NO TAXING POWER. The Series 2011 are speculative in nature, involve a high degree of risk, and should be purchased only by persons who are able to evaluate and understand such risk and who can afford to assume such risk. See RISK FACTORS herein. Each initial purchaser of the Series 2011 Bonds from the Underwriter is required to be (a) an accredited investor as that term is defined in Rule 501 of Regulation D under the Securities Act of 1933, as amended (the Securities Act ), (b) a qualified institutional buyer as that term is defined under Rule 144A under the Securities Act, or (c) a brokerdealer of securities who may only transfer the Series 2011 Bonds in compliance with (a) and (b) above. The Bondholder Representative (as defined herein) for such initial purchasers of the Series 2011 Bonds who are Qualified Hamlin Clients (as defined herein) will be required to execute a Letter of Bondholder Representative substantially in the form attached hereto as Appendix D. Such initial purchasers of the Series 2011 Bonds who are not Qualified Hamlin Clients will be required to execute an Investor Letter substantially in the form attached hereto as Appendix E. In addition, unless the Authority has received an Investment Grade Notice for the Series 2011 Bonds, the Series 2011 Bonds may be transferred only in accordance with the transfer restrictions set forth in the Indenture. For more complete information, see THE SERIES 2011 BONDS - Purchase and Transfer Restrictions; Investor Letter Requirements herein. At the time of delivery of the Series 2011 Bonds, Hamlin Capital Management, LLC will represent approximately 98.71% of the beneficial owners of the Series 2011 Bonds and will be designated the Bondholder Representative for those beneficial owners. So long as the Bondholder Representative represents beneficial owners holding at least a majority of the aggregate principal amount of the outstanding Series 2011 Bonds, such entity has substantial power, including the ability to direct remedies following the occurrence of an event of default under the Indenture or the Loan Agreement. Further, so long as the Bondholder Representative represents beneficial owners holding at least 66 2/3% of the aggregate principal amount of the outstanding Series 2011 Bonds, such entity has additional power, including the ability to modify the Indenture and the Loan Agreement. Specifically, among other powers, the Bondholder Representative, representing only 66 2/3% of the beneficial owners of the Series 2011 Bonds, has the right to approve certain modifications involving (i) an extension of the maturity of, or a reduction of the principal amount of, or a reduction of the rate of, or extension of the time of payment of interest on, or a reduction of a premium payable upon any redemption of, any Series 2011 Bond, (ii) the deprivation of the registered owner of any Series 2011 Bond then outstanding of the lien created by the Indenture other than as permitted by the Indenture when such Series 2011 Bond was initially issued, (iii) a privilege or priority of any Series 2011 Bond or Series 2011 Bonds over any other Series 2011 Bond or Series 2011 Bonds except as specifically permitted by the Indenture, or (iv) a reduction in the aggregate principal amount of the Series 2011 Bonds, if any, required for consent to such supplemental indenture or amendment to the Loan Agreement or the Security Deed. Further, purchasers of the Series 2011 Bonds will be entitled to receive notices of default only upon the prior written direction of the Bondholder Representative. See RISK FACTORS - Bondholder Representative herein and the final forms of the principal documents included herein as Appendix C. This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire Limited Offering Memorandum, and should give particular attention to the section entitled RISK FACTORS, to obtain information essential to making an informed investment decision. The Series 2011 Bonds are offered when, as, and if issued by the Authority and accepted by the Underwriter, subject to prior sale and to withdrawal or modification of the offer without notice, and are subject to the approving opinion of Kutak Rock LLP, Atlanta, Georgia, Bond Counsel. Certain legal matters will be passed on for the Authority by its counsel, Eichner & Norris PLLC, Washington, D.C., for the Corporation by its counsel, King & Yaklin, LLP, Marietta, Georgia, and for the Underwriter by its counsel, McKenna Long & Aldridge LLP, Atlanta, Georgia. The Series 2011 Bonds are expected to be available for delivery in book-entry form only through the facilities of DTC in New York, New York on or about April 29, D.A. Davidson & Co. Dated: April 27, 2011

2 MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, AND PRICES OR YIELDS $17,220,000 Charter School Revenue Bonds (Kennesaw Charter School Project) Series 2011A $1,810, % Term Bonds due February 1, 2021, Priced at 100% to Yield 6.25%, CUSIP No AC6 1 $1,850, % Term Bonds due February 1, 2026, Priced at 100% to Yield 7.00%, CUSIP No AD4 1 $2,620, % Term Bonds due February 1, 2031, Priced at 100% to Yield 7.50%, CUSIP No AE2 1 $10,940, % Term Bonds due February 1, 2041, Priced at 99% to Yield 8.088%, CUSIP No AA0 1 $230,000 Charter School Revenue Bonds (Kennesaw Charter School Project) Taxable Series 2011B $230, % Term Bonds due February 1, 2014, Priced at 100% to Yield 8.75%, CUSIP No AB8 1 1 CUSIP data herein is provided by Standard & Poor s, CUSIP Services Bureau, a division of the McGraw-Hill Companies, Inc. The Authority is not responsible for the selection of CUSIP numbers, nor is any representation made as to their correctness on the Series 2011 Bonds or as indicated above.

3 PARTICIPANTS IN FINANCING Authority PUBLIC FINANCE AUTHORITY Madison, Wisconsin Corporation GEORGIA CHARTER SCHOOLS INC. Kennesaw, Georgia Trustee WELLS FARGO BANK, NATIONAL ASSOCIATION Atlanta, Georgia Underwriter D.A. DAVIDSON & CO. Denver, Colorado Corporation s Auditors BAMBO SONAIKE CPA, LLC Marietta, Georgia Counsel to the Authority EICHNER & NORRIS PLLC Washington, D.C. Counsel to the Corporation KING & YAKLIN, LLP Marietta, Georgia Bond Counsel KUTAK ROCK LLP Atlanta, Georgia Counsel to the Underwriter MCKENNA LONG & ALDRIDGE LLP Atlanta, Georgia

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5 TABLE OF CONTENTS INTRODUCTION...1 The Authority...1 The Corporation and the Charter School...1 The Trustee...2 Purpose of the Series 2011 Bonds...2 The Facility...2 Security and Sources of Payment for the Series 2011 Bonds...2 Description of the Series 2011 Bonds...3 Bondholder Representative...4 Tax Consequences...4 Professionals Involved in the Offering...5 Legal Authority...5 Offering and Delivery of the Series 2011 Bonds...5 Continuing Disclosure...5 Bondholders Risks...5 Other Information...5 RISK FACTORS...7 Introduction...7 General...7 Bondholder Representative...7 Termination, Non-Renewal, or Expiration of Charter...8 Dependence on the Operations of the Corporation...8 Dependence on the State of Georgia...10 Dependence on the District...11 Construction Risks...12 Risks of Real Estate Investment...13 Pledge, Assignment, and Grant of Security Interest in Future Revenues...14 Distribution of Funds and Assets Under Charter Upon Ceasing Operations...15 Enforceability of Remedies; Risk of Bankruptcy...15 Inability or Delay in Liquidating the Facility at an Adequate Sale Price...16 Tax-Exempt Status of the Series 2011A Bonds...16 Tax-Exempt Status of the Corporation...16 Risk of Failure to Comply with Certain Covenants...17 State and Local Tax Exemption...17 Unrelated Business Income...17 Additional Bonds...18 Failure to Provide Ongoing Disclosure...18 Market for the Series 2011 Bonds...18 Legal Opinions...18 Conclusion...18 PLAN OF FINANCING...19 Estimated Sources and Applications of Funds...19 The Project...19 THE SERIES 2011 BONDS...22 Description...22 Purchase and Transfer Restrictions; Investor Letter Requirements...22 Redemption...23 Book-Entry Only System...25 Legal Authority...27 Investments...28 Principal and Interest Requirements...29 Page (i)

6 Page SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2011 BONDS...30 Loan Agreement...30 Indenture...30 Pledge of Gross Revenues...30 Collateral Documents...31 Funds Created By the Indenture and Flow of Funds...31 Covenants...31 Limited Obligations...31 THE AUTHORITY...32 Formation and Governance of the Authority...32 Board of Directors of the Authority...32 The Series 2011 Bonds are Limited Obligations of the Authority...33 Limited Involvement of the Authority...33 Authority Contact...33 THE SYSTEM OF CHARTER SCHOOLS IN GEORGIA...34 General...34 Definition of Charter...34 Types of Charter Schools...34 State Oversight...35 Charter Petitions...35 Charter Amendment, Renewal, and Termination...36 Operating Requirements; Control and Management...37 Admission, Enrollment, and Withdrawal of Students...37 Funding...37 Annual Report...39 FUNDING OF SCHOOL DISTRICTS IN GEORGIA...39 General...39 State Funding...40 Ad Valorem Taxation...41 THE CORPORATION AND THE CHARTER SCHOOL...42 Introduction...42 History...42 Governing Body...43 Administration...43 Employees, Employee Relations, and Labor Organizations...44 Facilities and Current Lease...44 Accreditation and Memberships...44 Enrollment; Admissions and Wait List Policy...45 Tuition and Fees...45 Academic Program...45 Student Performance and Assessment...46 Service Area...47 Competition...47 Fundraising and Volunteers...48 The District...48 CHARTER SCHOOL FINANCIAL INFORMATION...49 Accounting System and Policies...49 Historical Financial Position Data...50 Five Year General Fund History...51 Financial Forecast...52 Operating Budget...54 Employee Benefits...55 (ii)

7 Insurance Coverage and Governmental Immunity...56 COBB COUNTY...57 Introduction...57 Demographic Information...57 Economic Information...58 LEGAL MATTERS...60 Pending Litigation...60 Closing Certificates...61 TAX MATTERS...61 Opinion of Bond Counsel...61 Original Issue Discount...61 Certain Tax Consequences of Owning Series 2011B Bonds...62 State Tax Matters...64 Changes in Federal Tax Law...64 MISCELLANEOUS...65 No Rating...65 Underwriting...65 Independent Auditors...65 Additional Information...65 RESPONSIBILITY FOR LIMITED OFFERING MEMORANDUM...66 Page APPENDIX A: APPENDIX B: APPENDIX C: APPENDIX D: FINANCIAL STATEMENTS OF THE CHARTER SCHOOL...A-1 FINANCIAL FORECAST OF THE CHARTER SCHOOL...B-1 FINAL FORMS OF PRINCIPAL DOCUMENTS...C-1 FORM OF BONDHOLDER REPRESENTATIVE LETTER...D-1 APPENDIX E: FORM OF INVESTOR LETTER... E-1 APPENDIX F: FORM OF LEGAL OPINION... F-1 APPENDIX G: FORM OF DISCLOSURE AGREEMENT...G-1 (iii)

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9 LIMITED OFFERING MEMORANDUM of the PUBLIC FINANCE AUTHORITY (WISCONSIN) relating to its $17,450,000 CHARTER SCHOOL REVENUE BONDS (KENNESAW CHARTER SCHOOL PROJECT) New Issue New Issue $17,220,000 $230,000 Charter School Revenue Bonds Charter School Revenue Bonds (Kennesaw Charter School Project) (Kennesaw Charter School Project) Series 2011A Taxable Series 2011B INTRODUCTION The purpose of this Limited Offering Memorandum, which includes the cover page and the Appendices hereto, is to furnish certain information in connection with the sale by the Public Finance Authority of its Charter School Revenue Bonds (Kennesaw Charter School Project), consisting of $17,220,000 in aggregate principal amount of its Charter School Revenue Bonds (Kennesaw Charter School Project) Series 2011A (the Series 2011A Bonds ) and $230,000 in aggregate principal amount of its Charter School Revenue Bonds (Kennesaw Charter School Project) Taxable Series 2011B (the Series 2011B Bonds ). The Series 2011A Bonds and the Series 2011B Bonds are referred to collectively as the Series 2011 Bonds in this Limited Offering Memorandum, and each series of Series 2011 Bonds will be differentiated, where necessary, by reference to the Series 2011A Bonds and the Series 2011B Bonds. Definitions of certain terms used in this Limited Offering Memorandum and not otherwise defined herein are set forth in the final form of the Indenture (Section 1.01) or the final form of the Loan Agreement (Article I), each included herein as part of Appendix C. This Introduction is not a summary of this Limited Offering Memorandum and is intended only for quick reference. It is only a brief description of and guide to, and is qualified in its entirety by reference to, more complete and detailed information contained in the entire Limited Offering Memorandum, including the cover page and the Appendices, and the documents summarized or described herein. Potential investors should fully review the entire Limited Offering Memorandum. The offering of the Series 2011 Bonds to potential investors is made only by means of the entire Limited Offering Memorandum, including the Appendices hereto. No person is authorized to detach this Introduction from the Limited Offering Memorandum or to otherwise use it without the entire Limited Offering Memorandum, including the Appendices hereto. The Authority The Public Finance Authority (the Authority ), the issuer of the Series 2011 Bonds, is a body corporate and politic created and existing under the laws of the State of Wisconsin. For more complete information, see THE AUTHORITY herein. The Corporation and the Charter School Georgia Charter Schools Inc. (the Corporation ), a nonprofit corporation duly organized, validly existing, and in good standing under and by virtue of the laws of the State of Georgia and an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the Code ), will borrow the proceeds of the sale of the Series 2011 Bonds from the Authority. The Corporation was incorporated in 2000 and operates the Kennesaw Charter Science and Math Academy (the Charter School ), a public charter school, which began operating in August 2003, pursuant to Article 31 of Chapter 2 of Title 20 of the Official Code of Georgia Annotated, known as

10 the Charter Schools Act of 1998 (the Charter Schools Act ), under a charter contract granted by the Board of Education of Cobb County (the District Board ), which controls and manages the Cobb County School District (the District ), and approved by the State of Georgia Board of Education (the State Board ), an agency of the State of Georgia. The Corporation s most recent charter contract (the Charter ), among the Corporation, the District Board, and the State Board, became effective on July 1, 2010 for a five-year term expiring on June 30, The Charter School serves students in kindergarten through grade six and has a current enrollment of 520 full time equivalent ( FTE ) students. The Charter School s funding consists almost exclusively of funds received from the District pursuant to the Charter Schools Act. The District is a political subdivision of the State of Georgia. The District is coextensive with the territorial limits of Cobb County, but excludes the area within the corporate limits of the City of Marietta, Georgia. The City of Marietta, Georgia owns and operates a school system within its corporate limits that is independent of the District s school system. Cobb County is located in the northwest portion of the State of Georgia approximately 15 miles northwest of the City of Atlanta and is part of the Atlanta Standard Metropolitan Statistical Area. For more complete information, see THE CORPORATION AND THE CHARTER SCHOOL herein. The Trustee Wells Fargo Bank, National Association (the Trustee ), Atlanta, Georgia, will act as trustee, as bond registrar, and as paying agent for the Series 2011 Bonds under the hereinafter defined Indenture. Purpose of the Series 2011 Bonds The Authority is issuing the Series 2011 Bonds for the purpose of providing funds to loan to the Corporation to finance the costs of acquiring, constructing, and installing certain educational facilities to be used as the new campus of the Charter School (the Facility ), to initially fund approximately 16 months of interest on the Series 2011 Bonds, to fully fund the Bond Reserve Fund to be held under the Indenture, to finance working capital for the Corporation, and to finance the costs of issuing the Series 2011 Bonds (collectively the Project ). For more complete information, see PLAN OF FINANCING herein. The Facility The Facility will be located on an approximately 35-acre site at 3010 Cobb Parkway in the City of Kennesaw, Cobb County, Georgia. The Facility will include a combination one and two story building containing approximately 110,934 square feet and site improvements including parking, two playfields, and two storm water detention ponds. The Facility will accommodate up to 920 students in kindergarten through grade six. Croft and Associates, PC (the Architect ) is designing the Facility for the Corporation pursuant to The American Institute of Architects Standard Form of Agreement between Owner and Architect (AIA Document B ), dated as of October 14, 2010, as amended March 9, 2011 (the Architect s Agreement ), between the Architect and the Corporation. Hodges and Hicks General Contractors, LLC (the General Contractor ) will construct the Facility for the Corporation for a guaranteed maximum price pursuant to The American Institute of Architects Standard Form of Agreement Between Owner and Contractor (AIA Document A ) (the Construction Contract ), to be dated as of April 29, 2011, between the General Contractor and the Corporation. For more complete information, see PLAN OF FINANCING - The Project herein. Security and Sources of Payment for the Series 2011 Bonds The Series 2011 Bonds are special limited obligations of the Authority, payable solely from and secured by the Trust Estate (as defined in the final form of the Indenture (Section 1.01) included herein as part of Appendix C and as described below) and the collateral pledged by the Corporation to the Trustee to secure its obligations under the Loan Agreement pursuant to the hereinafter defined Security Deed and Contract Assignments. THE SERIES 2011 BONDS ARE NOT A DEBT OR LIABILITY OF ANY MEMBER OF THE AUTHORITY, THE STATE OF WISCONSIN, OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OTHER THAN THE AUTHORITY TO THE LIMITED EXTENT SET FORTH HEREIN. THE AUTHORITY HAS NO TAXING POWER. The Corporation will borrow the proceeds of the sale of the Series 2011 Bonds from the Authority pursuant to a Loan and Security Agreement (the Loan Agreement ), dated as of April 1, 2011, which will obligate the -2-

11 Corporation to make monthly Loan Payments to the Authority in amounts calculated to be sufficient to enable the Authority to pay, when due, the principal of, premium, if any, and interest on the Series 2011 Bonds. The Corporation s primary source of revenues to make its monthly Loan Payments due under the Loan Agreement will be the funding it receives from the District pursuant to the Charter Schools Act. The District s funding is derived from local, state, and federal sources. Local revenues consist primarily of ad valorem property taxes. Funds received from the State of Georgia depend upon annual appropriations funding by the General Assembly of the State of Georgia (the Georgia General Assembly ) and are determined by certain formulas, generally based upon the number of students served and the relative wealth of the school district in relation to other school districts in Georgia, established by the State of Georgia Department of Education (the State Department of Education ). Funds received from the federal government are primarily for programs for disadvantaged and handicapped students and for the school food service program. So long as the Charter remains in effect or is renewed on substantially the same terms, the Corporation will be entitled to a per-student allocation of the District s funds. The amount of the allocation is set by the District and, pursuant to the Charter Schools Act, the District must treat the Charter School no less favorably than other District schools. The funding from the District, however, for a variety of reasons, may not be sufficient to enable the Corporation to make its Loan Payments due under the Loan Agreement. Neither the State of Georgia nor the District has approved, consented to, or participated in the structuring, offering, or issuance of the Series 2011 Bonds or the financing of the Project and neither are liable or responsible for any costs associated with repayment of the Series 2011 Bonds, the Loan Agreement, the costs of operation or maintenance of the Facility, or any other expenses associated with the Facility and its financing, and the holders of the Series 2011 Bonds should not rely on any State of Georgia or District involvement in payment of such costs or other involvement within the Facility. To secure its obligations under the Loan Agreement, the Corporation (1) will pledge to and grant to the Authority a first priority security interest in all Gross Revenues of the Corporation (subject to Permitted Encumbrances), pursuant to the Loan Agreement, (2) will grant to the Trustee a first lien on and first security title to certain real property constituting the Facility, will grant to the Authority a first priority security interest in certain personal property constituting the Facility, and will assign and pledge to the Trustee the rents and leases derived from the Facility (subject to Permitted Encumbrances), pursuant to a Deed to Secure Debt, Security Agreement, and Assignment of Rents and Leases (the Security Deed ), to be dated as of April 1, 2011, from the Corporation to the Trustee, and (3) will collaterally assign to the Trustee and grant to the Trustee a first priority security interest in the construction contract relating to the Facility, pursuant to an Assignment of Agreement and Consent, dated as of April 1, 2011, from the Corporation to the Trustee, and in the architect s agreement and certain other documents relating to the Facility, pursuant to a Collateral Assignment of Contract Rights, dated as of April 1, 2011, from the Corporation to the Trustee (collectively the Contract Assignments ). To secure its obligations under the Series 2011 Bonds, the Authority will enter into an Indenture of Trust (the Indenture ), dated as of April 1, 2011, with the Trustee, pursuant to which the Authority will assign to the Trustee, and grant a first priority security interest in, all of its right, title, interest, and remedies in and to the Trust Estate, which consists primarily of (i) the rights and interests of the Authority under the Loan Agreement (except for certain rights reserved to the Authority), and all amounts to be received thereunder, (ii) the Gross Revenues of the Corporation (subject to Permitted Encumbrances), and (iii) all moneys held by the Trustee in certain funds and accounts created under the Indenture. Under the Indenture, a Bond Reserve Fund has been created and will be fully funded upon the issuance of the Series 2011 Bonds in an amount equal to the Bond Reserve Requirement (which, in the case of the Series 2011 Bonds, is equal to $1,527,800). Amounts deposited in the Bond Reserve Fund will be used to pay debt service on the Series 2011 Bonds if amounts on hand are otherwise insufficient. Under certain circumstances, the Indenture permits the Authority to issue additional bonds, which will be equally and ratably secured on a parity basis with the Series 2011 Bonds under the Indenture. For more complete and detailed information, see SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2011 BONDS herein. Description of the Series 2011 Bonds Redemption. The Series 2011 Bonds are subject to optional, extraordinary, and mandatory sinking fund redemption prior to maturity as described herein. The Series 2011A Bonds are also subject to special mandatory redemption prior to maturity as described herein. For more complete information, see THE SERIES 2011 BONDS - Redemption herein. -3-

12 Denominations. The Series 2011 Bonds are issuable in Authorized Denominations. Book-Entry Bonds. Each of the Series 2011 Bonds will be issued as fully registered bonds in the denomination of one bond per aggregate principal amount of the stated maturity thereof, and, when issued, will be registered in the name of Cede & Co., as nominee for The Depository Trust Company ( DTC ), New York, New York, an automated depository for securities and clearing house for securities transactions, which will act as securities depository for the Series 2011 Bonds. Purchasers will not receive certificates representing their ownership interest in the Series 2011 Bonds purchased. Purchases of beneficial interests in the Series 2011 Bonds will be made in book-entry only form (without certificates), in Authorized Denominations, and, under certain circumstances as more fully described in this Limited Offering Memorandum, such beneficial interests are exchangeable for one or more fully registered bonds of like principal amount and maturity in Authorized Denominations. For more complete information, see THE SERIES 2011 BONDS - Book-Entry Only System herein. Payments. So long as DTC or its nominee, Cede & Co., is the registered owner of the Series 2011 Bonds, payments of the principal of, premium, if any, and interest on the Series 2011 Bonds will be made directly to Cede & Co., which will remit such payments to the DTC participants, which will in turn remit such payments to the beneficial owners of the Series 2011 Bonds. Purchase and Transfer Restrictions; Investor Letter Requirements. Each initial purchaser of the Series 2011 Bonds from the Underwriter is required to be (a) an accredited investor as that term is defined in Rule 501 of Regulation D under the Securities Act of 1933, as amended (the Securities Act ), (b) a qualified institutional buyer as that term is defined under Rule 144A under the Securities Act, or (c) a broker-dealer of securities who may only transfer the Series 2011 Bonds in compliance with (a) and (b) above. The Bondholder Representative for such initial purchasers of the Series 2011 Bonds who are Qualified Hamlin Clients will be required to execute a Letter of Bondholder Representative substantially in the form attached hereto as Appendix D. Such initial purchasers of the Series 2011 Bonds who are not Qualified Hamlin Clients will be required to execute an Investor Letter substantially in the form attached hereto as Appendix E. In addition, unless the Authority has received an Investment Grade Notice for the Series 2011 Bonds, the Series 2011 Bonds may be transferred only in accordance with the transfer restrictions set forth in the Indenture. For more complete information, see THE SERIES 2011 BONDS - Purchase and Transfer Restrictions; Investor Letter Requirements herein. For a more complete description of the Series 2011 Bonds, see THE SERIES 2011 BONDS herein. Bondholder Representative At the time of delivery of the Series 2011 Bonds, Hamlin Capital Management, LLC will represent approximately 98.71% of the beneficial owners of the Series 2011 Bonds and will be designated the Bondholder Representative for those beneficial owners. So long as the Bondholder Representative represents beneficial owners holding at least a majority of the aggregate principal amount of the Outstanding Series 2011 Bonds, such entity has substantial power, including the ability to direct remedies following the occurrence of an Event of Default under the Indenture or the Loan Agreement. Further, so long as the Bondholder Representative represents beneficial owners holding at least 66 2/3% of the aggregate principal amount of the Outstanding Series 2011 Bonds, such entity has additional power, including the ability to modify the Indenture and the Loan Agreement. For more complete information, see RISK FACTORS - Bondholder Representative herein and the final forms of the principal documents included herein as Appendix C. Tax Consequences In the opinion of Bond Counsel, under existing laws, regulations, rulings and judicial decisions and assuming the accuracy of certain representations and continuing compliance with certain covenants, interest on the Series 2011A Bonds is excludable from gross income for federal income tax purposes. In addition, interest on the Series 2011A Bonds is not a specific item of tax preference for purposes of the alternative minimum tax imposed on individuals and corporations; provided, however, with respect to corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings for the purpose of computing the federal alternative minimum tax on corporations. Interest on the Series 2011B Bonds is included in gross income for federal income tax purposes. Interest on the Series 2011 Bonds is included in all taxation in the State of Wisconsin. See Appendix F hereto for the form of the opinion Bond Counsel proposes to deliver in connection with issuance of the Series 2011 Bonds. For a more complete discussion of such opinion and certain other tax consequences of owning the Series 2011 Bonds, including certain exceptions to the exclusion of the interest on the Series 2011A Bonds from gross income, see TAX MATTERS herein. -4-

13 Professionals Involved in the Offering Certain legal matters pertaining to the Authority and its authorization and issuance of the Series 2011 Bonds are subject to the approving opinion of Kutak Rock LLP, Atlanta, Georgia, Bond Counsel. Copies of such opinion will be available at the time of delivery of the Series 2011 Bonds, and a copy of the proposed form of such opinion is attached hereto as Appendix F. Certain legal matters will be passed upon for the Authority by its counsel, Eichner & Norris PLLC, Washington, D.C., for the Corporation by its counsel, King & Yaklin, LLP, Marietta, Georgia, and for the Underwriter by its counsel, McKenna Long & Aldridge LLP, Atlanta, Georgia. The financial statements of the Charter School as of June 30, 2010 and for the year then ended, attached hereto as Appendix A, have been audited by Bambo Sonaike CPA, LLC, Marietta, Georgia, independent certified public accountants, to the extent and for the period indicated in its report thereon which appears in Appendix A hereto. The financial forecast of the Charter School, attached hereto as Appendix B, has been examined by Bambo Sonaike CPA, LLC, independent certified public accountants. See MISCELLANEOUS - Independent Auditors herein. Legal Authority The Series 2011 Bonds are being issued and secured pursuant to the authority granted by the laws of the State of Wisconsin and under the provisions of Resolution No of the Authority, adopted by the Board of Directors of the Authority on February 16, 2011 (the Bond Resolution ). For more complete information, see THE SERIES 2011 BONDS - Legal Authority herein. Offering and Delivery of the Series 2011 Bonds The Series 2011 Bonds are offered when, as, and if issued by the Authority and accepted by the Underwriter, subject to prior sale and to withdrawal or modification of the offer without notice. The Series 2011 Bonds are expected to be available for delivery in book-entry form only through the facilities of DTC in New York, New York on or about April 29, Continuing Disclosure The Authority has determined that no financial or operating data concerning the Authority is material to any decision to purchase, hold, or sell the Series 2011 Bonds, and the Authority will not provide any such information. The Corporation has undertaken all responsibilities for any continuing disclosure to beneficial owners of the Series 2011 Bonds as described below, and the Authority will have no liability to the beneficial owners of the Series 2011 Bonds or any other person with respect to such disclosures. The Corporation has covenanted in the Loan Agreement and a Continuing Disclosure Agreement (the Disclosure Agreement ) for the benefit of the beneficial owners of the Series 2011 Bonds to provide certain financial information and operating data relating to the Charter School and the Corporation (the Annual Report ) by not later than 180 days after the end of each fiscal year of the Corporation, commencing with fiscal year 2011 and to provide notices of the occurrence of certain enumerated events. The Annual Report will be filed by the Corporation with the Municipal Securities Rulemaking Board (the MSRB ) in an electronic format as prescribed by the MSRB (which, as of the date hereof, is the Electronic Municipal Market Access ( EMMA ) system of the MSRB). The notices of certain events will be filed by the Corporation with the MSRB in an electronic format as prescribed by the MSRB (which, as of the date hereof, is EMMA). A form of the Disclosure Agreement is included herein as Appendix G. These covenants have been made in order to assist the Underwriter in complying with Securities and Exchange Commission Rule 15c2-12(b)(5) (the Rule ). Bondholders Risks There are certain considerations and risks relating to an investment in the Series 2011 Bonds, which are set forth in this Limited Offering Memorandum under the caption RISK FACTORS and which should be carefully reviewed by prospective purchasers of the Series 2011 Bonds. See RISK FACTORS herein. Other Information This Limited Offering Memorandum speaks only as of its date, and the information contained herein is subject to change without notice. This Limited Offering Memorandum contains forecasts, projections, and estimates that are based on current expectations but are not intended as representations of fact or guarantees of results. If and when included in this Limited Offering Memorandum, the words expects, forecasts, projects, intends, anticipates, estimates, and analogous expressions are intended to identify forward-looking statements as defined in the Securities Act, and -5-

14 any such statements inherently are subject to a variety of risks and uncertainties, which could cause actual results to differ materially from those contemplated in such forward-looking statements. These forward-looking statements speak only as of the date of this Limited Offering Memorandum. The Authority and the Corporation disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in the Authority s or the Corporation s expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based. This Limited Offering Memorandum and the Appendices hereto contain brief descriptions of, among other matters, the Authority, the Corporation, the Series 2011 Bonds, the Project, the Indenture, the Loan Agreement, the Security Deed, the Contract Assignments, the Disclosure Agreement, and the security and sources of payment for the Series 2011 Bonds. Such descriptions and information do not purport to be comprehensive or definitive. The summaries of various constitutional provisions and statutes, the Indenture, the Loan Agreement, the Security Deed, the Contract Assignments, the Disclosure Agreement, and other documents are intended as summaries only and are qualified in their entirety by reference to such laws and documents, and references herein to the Series 2011 Bonds are qualified in their entirety to the form thereof included in the Indenture. Copies of the Indenture, the Loan Agreement, the Security Deed, the Contract Assignments, the Disclosure Agreement, and other documents and information are available, upon request and upon payment to the Trustee of a charge for copying, mailing, and handling, from Wells Fargo Bank, National Association, 7000 Central Parkway N.E., Suite 550, Atlanta, Georgia 30328, Attention: Corporate Trust Services, telephone (770) During the period of the offering of the Series 2011 Bonds copies of such documents are available, upon request and upon payment to the Underwriter of a charge for copying, mailing, and handling, from D.A. Davidson & Co., 1600 Broadway, Suite 1100, Denver, Colorado 80202, telephone (303) The Series 2011 Bonds have not been registered under the Securities Act, and the Indenture has not been qualified under the Trust Indenture Act of 1939, in reliance on exemptions contained in such Acts. This Limited Offering Memorandum does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Series 2011 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation, or sale. No dealer, broker, salesman, or other person has been authorized by the Authority, the Corporation, or the Underwriter to give any information or to make any representations other than those contained in this Limited Offering Memorandum, and, if given or made, such other information or representations should not be relied upon as having been authorized by the Authority, the Corporation, or the Underwriter. Except where otherwise indicated, all information contained in this Limited Offering Memorandum has been provided by the Authority and the Corporation. The information set forth herein has been obtained by the Authority and the Corporation from sources that are believed to be reliable. The Authority has not provided information regarding the Corporation and does not certify as to the accuracy or sufficiency of the disclosure practices of or content of the information provided by the Corporation, and is not responsible for the information provided by the Corporation. The Underwriter has provided the following sentence for inclusion in this Limited Offering Memorandum. The Underwriter has reviewed the information in this Limited Offering Memorandum in accordance with, and as part of, its responsibilities to investors under the federal securities law as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. The information contained herein is subject to change without notice, and neither the delivery of this Limited Offering Memorandum nor any sale made hereunder shall under any circumstances create an implication that there has been no change in the affairs of the Authority or the Corporation since the date hereof or the earlier dates set forth herein as of which certain information contained herein is given. In connection with this offering, the Underwriter may over-allot or effect transactions that stabilize or maintain the market prices of the Series 2011 Bonds at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. Neither the United States Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Series 2011 Bonds or reviewed or passed upon the adequacy or accuracy of this Limited Offering Memorandum. Any representation to the contrary may be a criminal offense. The order and placement of information in this Limited Offering Memorandum, including the Appendices, are not an indication of relevance, materiality, or relative importance, and this Limited Offering Memorandum, including the Appendices, must be read in its entirety. The captions and headings in this Limited Offering Memorandum are for convenience only and in no way define, limit, or describe the scope or intent, or affect the meaning or construction, of any provision or section in this Limited Offering Memorandum. -6-

15 THIS LIMITED OFFERING MEMORANDUM IS BEING PROVIDED TO PROSPECTIVE PURCHASERS EITHER IN BOUND PRINTED FORM ( ORIGINAL BOUND FORMAT ) OR IN ELECTRONIC FORMAT ON THE FOLLOWING WEBSITE: THIS LIMITED OFFERING MEMORANDUM MAY BE RELIED UPON ONLY IF IT IS IN ITS ORIGINAL BOUND FORMAT OR IS PRINTED IN ITS ENTIRETY DIRECTLY FROM SUCH WEBSITE. Introduction RISK FACTORS Investment in the Series 2011 Bonds involves a significant degree of risk and is speculative in nature. Anyone considering investing in the Series 2011 Bonds should carefully examine this Limited Offering Memorandum, including the Appendices hereto. INVESTMENT IN THE SERIES 2011 BONDS SHOULD BE UNDERTAKEN ONLY BY PERSONS WHOSE FINANCIAL RESOURCES ARE SUFFICIENT TO ENABLE THEM TO ASSUME SUCH RISK. THIS SECTION SETS FORTH A BRIEF SUMMARY OF SOME OF THE PRINCIPAL RISK FACTORS. PROSPECTIVE INVESTORS SHOULD FULLY UNDERSTAND AND EVALUATE THESE RISKS, IN ADDITION TO THE OTHER FACTORS SET FORTH IN THIS LIMITED OFFERING MEMORANDUM, BEFORE MAKING AN INVESTMENT DECISION. This discussion of risk factors is not, and is not intended to be, exhaustive, and such risks are not necessarily presented in the order of their magnitude. General The Series 2011 Bonds do not constitute debt or indebtedness of the Authority within the meaning of any provision or limitation of the constitution or statutes of the State of Wisconsin and shall never constitute or give rise to a pecuniary liability of the Authority. The Series 2011 Bonds are special and limited obligations of the Authority. They are secured by and payable solely from funds payable by the Corporation under the terms and conditions of the Loan Agreement and as otherwise described herein. Neither the State of Georgia nor the District has approved, consented to, or participated in the structuring, offering, or issuance of the Series 2011 Bonds or the financing of the Project and neither are liable or responsible for any costs associated with repayment of the Series 2011 Bonds, the Loan Agreement, the costs of operation or maintenance of the Facility, or any other expenses associated with the Facility and its financing, and the holders of the Series 2011 Bonds should not rely on any State of Georgia or District involvement in payment of such costs or other involvement within the Facility. Bondholder Representative At the time of delivery of the Series 2011 Bonds, Hamlin Capital Management, LLC will represent approximately 98.71% of the beneficial owners of the Series 2011 Bonds and will be designated the Bondholder Representative for those beneficial owners. So long as the Bondholder Representative represents beneficial owners holding at least a majority of the aggregate principal amount of the Outstanding Series 2011 Bonds, such entity has substantial power, including the ability to direct remedies following the occurrence of an Event of Default under the Indenture or the Loan Agreement. Further, so long as the Bondholder Representative represents beneficial owners holding at least 66 2/3% of the aggregate principal amount of the Outstanding Series 2011 Bonds, such entity has additional power, including the ability to modify the Indenture and the Loan Agreement. Specifically, among other powers, the Bondholder Representative, representing only 66 2/3% of the beneficial owners of the Series 2011 Bonds, has the right to approve certain modifications involving (i) an extension of the maturity of, or a reduction of the principal amount of, or a reduction of the rate of, or extension of the time of payment of interest on, or a reduction of a premium payable upon any redemption of, any Series 2011 Bond, (ii) the deprivation of the registered owner of any Series 2011 Bond then Outstanding of the lien created by the Indenture other than as permitted by the Indenture when such Series 2011 Bond was initially issued, (iii) a privilege or priority of any Series 2011 Bond or Series 2011 Bonds over any other Series 2011 Bond or Series 2011 Bonds except as specifically permitted by the Indenture, or (iv) a reduction in the aggregate principal amount of the Series 2011 Bonds, if any, required for consent to such supplemental indenture or amendment to the Loan Agreement or the Security Deed. Further, purchasers of the Series 2011 Bonds will be entitled to receive notices of default only upon the prior written direction of the Bondholder Representative. See the final forms of the principal documents (in particular, Articles VIII and X of the Indenture) included herein as Appendix C. -7-