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A PROFESSIONAL CORPORATION One North Central Avenue, Suite 1200 Phoenix, Arizona 85004-4417 ') 602.440.4800 F 602.257.9582 Offices in Arizona & Colorado www,rccaaw,com William F. Wilder Direct Line: 602-440-4802 Direct Fax: 602-257-6902 E-mail: wwilder@rcalaw.com July 17, 2018 To: Board of Supervisors Board of Directors of Maricopa County, Arizona The Industrial Development Authority of the County of Maricopa Re: Not to Exceed $20,000,000 The Industrial Development Authority of the County of Maricopa Educational Facilities Revenue Bonds (Ottawa University-O'Dell Athletic Complex), Series 2018A and Series 2018B Ladies and Gentlemen: At the Authority Board meeting on August 14, 2018, the Authority Board will be asked to grant final approval to the financing for the Ottawa University - O'Dell Athletic Complex and other facilities owned by Ottawa University and to adopt a resolution authorizing the issuance and sale of the bonds as described above (the "Bonds"). The purpose of this letter is to provide a summary review 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 for financing is Ottawa University, a Kansas nonprofit corporation designated as a 501(c)(3) organization under the Internal Revenue Code of 1986, as amended (the "Code"), and a liberal arts college with its main campus located in Ottawa, Kansas, and a satellite campus in Surprise, Arizona, which opened in 2017. THE PROJECT The "Project" consists of using bond proceeds, together with other funds available to Ottawa University to: 4415957.1 07/19/18 Board of Supervisors Marieopa County, Arizona Board of Directors of The Industrial Development Authority of the County of Maricopa July 17, 2018 Page 2 (a) finance or refinance, as applicable, construction of and improvements to the athletic facilities on its Surprise campus located at 14440 West Tierra Buena Lane, Surprise, Arizona 85374 (the "Athletic Facilities"); (b) refinance the acquisition and renovation of a building located at 9414 N. 25th Ave in Phoenix, Arizona 85021 (the "Phoenix Building"); (c) fund any required reserve funds; (d) pay capitalized interest on a portion of the Bonds; and (e) pay costs incurred in connection with the authorization, issuance and sale 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. PUBLIC HEARING A public hearing pursuant to Section 147(f) of the Internal Revenue Code of 1986, as amended, was held by a representative of the Authority on July 17, 2018. and a Report of Public Hearing will be delivered to the Maricopa County Board of Supervisors. ALLOCATION FOR TAX EXEMPT FINANCING No allocation of the Arizona "volume cap" is required for the issuance of the Bonds since the Applicant/Borrower is a nonprofit corporation designated as a 501(c)(3) organization under the Code. 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 Board of Supervisors Maricopa County, Arizona Board of Directors of The Industrial Development Authority of the County of Maricopa July 17, 2018 Page 3 Applicant/Borrower: Ottawa University Bond Purchaser: Arizona Bank & Trust Bond Purchaser Counsel: Kutak Rock LLP Bond/Borrower Counsel: Engelman Berger, P.C. PRINCIPAL FINANCING DOCUMENTS Document Parties Financing Agreement Issuer, Borrower and Bond Purchaser Tax Certificate and Agreement Issuer and Borrower Various assignment of contract instruments Borrower Continuing Covenant Agreement Borrower and Bond Purchaser PLAN OF FINANCING The Bonds will be issued under and pursuant to the Financing Agreement and will be purchased in their entirety by Arizona Bank & Trust, which will be purchasing the Bonds for its own account and which will execute an acceptable investor letter. It is anticipated that the Bonds will be issued in two series, one being for tax- exempt bonds and the second being for taxable bonds. The obligation of Ottawa University to pay the Bonds will be secured by the "Improvements" identified in the Financing Agreement. Arizona Bank & Trust and Ottawa University will enter into a Continuing Covenant Agreement containing the covenants and agreements of Ottawa University and Arizona Bank & Trust. Finally, the Issuer and Borrower will enter into a Tax Certificate and Agreement in a form prescribed by the Bond Counsel. Board of Supervisors Maricopa County, Arizona Board of Directors of The Industrial Development Authority of the County of Maricopa July 17, 2018 Page 4 FINAL APPROVAL At the Authority Board meeting on August 14, 2018, 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 15, 2018, 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 Maricopa 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 late August 2018. 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 federal and Arizona income taxation and that as to the portion of the Bonds which 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 Board of Supervisors Maricopa County, Arizona Board of Directors of The Industrial Development Authority of the County of Maricopa July 17, 2018 Page 5 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.