Securing Our Future

QUESTIONS AND ANSWERS Q: What does this mean for the school?

A: The consensual restructuring of our bond debt means that CJHS is in a much better position to fulfill its mission, now and in the future. Our agreement with the institutional bondholders puts the school on a solid financial footing by substantially reducing the principal amount of its long-term bond debt and setting annual payments at a level that can be met on an ongoing basis.

Q: Will the daily life of CJHS be affected by the bond restructuring?

A: No. The daily life of the school will proceed uninterrupted. We will continue to teach our students, pay our faculty, staff and vendors, engage in fundraising, and build our enrollment. Only the legal obligations to the bondholders are being adjusted.

Q: Why was a consensual Chapter 11 filing needed?

A: Our current bonds require the approval of 100% of our numerous bondholders for any material change in terms. This would be difficult, if not impossible, to accomplish.

The institutional bondholders therefore determined that the best alternative for implementing their agreement with us was through court confirmation (the term for approval) of a consensual Chapter 11 filing.

Q: Will a bankruptcy trustee be appointed?

A: No. The consensual Chapter 11 plan will be presented for confirmation at the soonest date possible, and CJHS, through its board, officers and professional staff, will remain in control of all of its assets and operations throughout the process and after.

Q: What are the basic terms of the agreement with bondholders?

A: The $27.5 million of outstanding bonds will be replaced by two new bond issuances having an initial aggregate principal amount of $14.41 million. The first issuance will be a 31-year bond in the aggregate principal amount of $12.42 million, on which interest at the rate of 6% will be paid currently; and the second will be a 20-year zero coupon bond, starting in the principal amount of $1.99 million and increasing annually at the rate of 6% up to a maximum principal amount of $6.5 million (due in 2031), if not retired early. The assets of the school and of the separate endowment fund (with certain restrictions) will serve as collateral for the new bonds.

Q: Could more details have been made public sooner?

A: CJHS’ bonds trade on the open market, and security laws substantially limited what could be communicated. Moreover, the exploration of options and discussions with

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institutional bondholders required maintenance of confidentiality. We are sharing this information with you at the earliest opportunity that our legal counsel deemed appropriate.

Q: What events led to the need for CJHS to restructure its debt?

A: Until 2008, CJHS consistently met its projections in fundraising. The severe economic downturn that began in late 2007 affected CJHS in the following ways: • The loss of $4.5 million of pledge commitments; • A substantial decrease in new charitable donations; • A decrease in the value of the Endowment Fund’s investment portfolio; and • An increase of more than 20% in tuition assistance.

Q: What is the status of CJHS fundraising activities?

A: As you have likely seen, fundraising continued even as the negotiations with bondholders were taking place, which enabled the school to continue meeting its operating requirements. The Development Committee has several initiatives planned in addition to the Parents and Annual Campaigns. Please respond with your support when you are contacted.

Q: What impact will restructuring the bonds have on current and future education at CJHS? A: The proactive steps that CJHS has taken and the restructuring of its bond obligations will ensure the long-term financial strength of our school. Even greater energy can now be devoted to the growth of our enrollment and the continued excellence of our curriculum and faculty.

Q: As a member of CJHS’ community, what can I do to help?

A: We continue to depend on you to serve as an ambassador for the school and to support our recruitment and fundraising efforts. You can donate money, make a multi-year pledge, or speak to your friends about the accomplishments and achievements of our students.

Q: To whom should I address additional questions?

A: We invite your questions or comments at questions@cjhs.org or at 877-690-1810. *****

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