HIGHLAND PREP SUMMARY LETTER.PDF

A PROFESSIONAL CORPORATION
One North Central Avenue, Suite 1200
Phoenix, Arizona 85004-4417
P 602.440.4800 F 602.257.9582
Offices in Arizona & Colorado
www,re:Mavt,, ,.com
John J. Fries
Direct Line: 602-440-4819
Direct Fax: 602-257-6919
j .1"ries44rcalaw.com
August 5, 2019
To: Board of Supervisors Board of Directors
Maricopa County, Arizona The Industrial Development Authority
of the County of Maricopa
Re: Not to Exceed $13,000,000 — The Industrial Development Authority of the
County of Maricopa Education Revenue Bonds (Highland Prep Project),
Series 2019
Ladies and Gentlemen:
At the Authority Board meeting on August 13, 2019, the Authority Board will be
asked to grant final approval to the financing for the Highland Prep Project and to adopt a
resolution authorizing the issuance and sale of the bonds as described above (the "Bonds"). This
letter provides a summary of the proposed financing.
THE AUTHORITY
The Authority is an Arizona nonprofit corporation, formed with the permission of
Maricopa County and incorporated under and pursuant to the Arizona Industrial Development
Financing Act, Title 35, Chapter 5, Arizona Revised Statutes, as amended (the "Act"), and the
Authority is designated by law to be a political subdivision of the State of Arizona.
THE APPLICANT/BORROWER
The Applicant/Borrower, Highland Prep ("Highland Prep'), is an Arizona
nonprofit corporation and a tax-exempt organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended. Highland Prep holds a charter issued by the
Arizona State Board for Charter Schools, established under Title 15, Chapter 1, Article 8,
Arizona Revised Statutes, as amended, to operate a charter school located at 15600 West Hearn
Road, Surprise, Arizona. The high school currently serves grades 9 and 10, but Applicant is
planning to add one grade level each year until it serves students in grades 9-12. Highland Prep
currently leases it existing campus from an unrelated party, and wishes to purchase that campus
and expand its programs and services, to purchase additional furniture and equipment for the
school, fund required reserves, and pay certain cost of issuance.
The Applicant/Borrower will use the proceeds of the Bonds to finance a portion
of the costs of (i) acquiring the land, facilities, improvements, furniture, fixtures and equipment
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Board of Supervisors
Maricopa County, Arizona
Board of Directors
of The Industrial Development Authority
of the County of Maricopa
August 5,2019
Page 2
comprising the new campus; (ii) constructing, renovating, improving and equipping of charter
school facilities to be located on the new campus; (iii) funding a debt service reserve fund; (iv)
paying capitalized interest, if any, on a portion of the Bonds; and (v) paying, costs incurred in
connection with the issuance of the Bonds.
NOTIFICATION TO ARIZONA ATTORNEY GENERAL
As required by the provisions of Arizona Revised Statutes, Section 35-721.F, the
Authority has notified the Arizona Attorney General of the Authority's intention to issue the
Bonds. By letter dated July 31, 2019, the Arizona Attorney General has confirmed that the
Project qualifies as a financeable "project" under the Arizona statute.
ALLOCATION FOR TAX EXEMPT FINANCING
No allocation of the Arizona "volume cap - is required for the issuance of the
Bonds since the Bonds are being issued and treated as governmental bonds that are exempt from
the requirements of obtaining volume cap.
FINANCING PARTICIPANTS
The major participants in the financing are as follows:
Issuer: The Industrial Development Authority of the County of
Maricopa
Issuer Counsel: Ryley Carlock & Applewhite, a professional corporation
Applicant/Borrower: Highland Prep
Bond Trustee: BOKF, N.A.
Master Trustee: BOKF, N.A.
Bond Underwriter: B.C. Ziegler and Company
Bond Counsel: Engelman Berger, PC
Applicant/Borrower Counsel: Warren Charter Law, PLC
Bond Underwriter Counsel: Nixon Peabody LLP

Board of Supervisors
Maricopa County, Arizona
Board of Directors
of The Industrial Development Authority
of the County of Maricopa
August 5, 2019
Page 3
PRINCIPAL FINANCING DOCUMENTS
Document Parties
Bond Indenture (the "Indenture") Issuer and Trustee
Loan Agreement (the "Loan Agreement") Issuer and Borrower
Deed of Trust, Security Agreement, Assignment of Borrower
Rents and Leases and Fixture Filing (the "Deed of
Trust")
Master Indenture of Trust Borrower and Master Trustee
Supplemental Master Indenture for Obligation No. 1 Borrower and Trustee
Preliminary and Final Limited Offering Memorandum Borrower and Bond Underwriter
Tax Certificate and Agreement Issuer and Borrower
Various assignment of contract instruments Borrower
Bond Purchase Agreement Borrower, Issuer and Bond
Underwriter
PLAN OF FINANCING
The Bonds will be issued in one or more tax exempt and taxable series in an
aggregate principal amount of not to exceed $13,000,000.
The Bonds will be issued under and pursuant to the terms and provisions of the
Bond Indenture. The proceeds from the sale of the Bonds will be loaned by the Authority to the
Borrower pursuant to the terms of the Loan Agreement. The Borrower will be obligated to make
loan repayments in amounts and at such times as required to pay principal and interest on the
Bonds on their respective due dates.
The obligations of the Borrower to make periodic loan repayments as well as to
perform the other obligations of the Borrower as set forth in the Loan Agreement will be secured
by the Deed of Trust that will encumber the property being acquired and financed.
The Bonds will be underwritten by the Bond Underwriter and offered by it for
sale in a public offering.

Board of Supervisors
Maricopa County, Arizona
Board of Directors
of The Industrial Development Authority
of the County of Maricopa
August 5, 2019
Page 4
The Borrower will enter into a Master Indenture, under which the Borrower will
be the sole obligated group member and in connection with the issuance of the Bonds, the
Borrower and Master Trustee will enter into a Supplemental Master Indenture for Obligation No.
1 which, together with the Loan Agreement, will evidence the obligations of the Borrower to
make loan repayments in amounts necessary to pay the principal and interest on the Bonds.
Finally, the Tax Certificate and Agreement will be executed by the Bond Issuer
and Borrower to evidence various agreements aimed at establishing and preserving the tax
exempt status of the Bonds.
FINAL APPROVAL
At the Authority Board meeting on August 13, 2019, the Authority Board will be
asked by the Applicant/Borrower to grant final approval to the application for financing and to
adopt a resolution authorizing the issuance and sale of the Bonds.
BOARD OF SUPERVISORS APPROVAL
If the Authority Board acts to grant final approval for the financing and to adopt a
resolution authorizing the issuance and sale of the Bonds, the Maricopa County Board of
Supervisors will be requested, at its meeting on August 21, 2019, to act as required by law to
adopt a resolution approving the proceedings of the Authority for the issuance of the Bonds.
Under the provisions of the Act, specifically A.R.S. § 35-721.B., the proceedings
under which the Bonds of the Authority are to be issued require the approval of the Marieopa
County Board of Supervisors for each issuance of bonds.
Under the provisions of the Act, specifically A.R.S. § 35-742, Maricopa
County is not in any event liable for the payment of principal or interest on bonds issued by
the Authority or for the performance by the Authority of any pledge, mortgage, obligation
or agreement of any kind undertaken by the Authority and bonds of the Authority or any
of its agreements or obligations shall not be construed to constitute an indebtedness of
Maricopa County within the meaning of any constitution or statutory provision.
TRANSACTION CLOSING
If the required approvals of the Authority Board and the Maricopa County Board
of Supervisors are received, it is currently anticipated that the Bonds will be issued in
September 2019. At the time the Bonds are issued, it is anticipated the designated Bond Counsel
will deliver its written opinion to the effect the Bonds have been validly issued and that as to the
portion of the Bonds designated as being tax-exempt, the interest on the Bonds is exempt from

Board of Supervisors
Maricopa County, Arizona
Board of Directors
of The Industrial Development Authority
of the County of Maricopa
August 5, 2019
Page 5
federal and Arizona income taxation and that as to the portion of the Bonds that are not
designated as tax-exempt, the interest on such Bonds will be exempt from Arizona income
taxation.
LEGAL COUNSEL RECOMMENDATION
As counsel to the Authority, we have reviewed drafts of the principal financing
documents, we have been advised that these documents are now in substantially final form, and
based upon our review of such and our review of the proceedings to date relating to the proposed
issuance of the Bonds, we believe the financing documents and proceedings are in substantial
conformance with the policies and guidelines of the Authority and are in both form and
substance acceptable for the Authority Board and Maricopa County Board of Supervisors to act
upon and that the Resolution presented to the Authority Board relating to authorizing the
issuance and sale of the Bonds, and related matters, and the Resolution of the Maricopa County
Board of Supervisors will be asked to adopt are in form and substance acceptable for the
adoption.