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RYLEYCARLOCK A PROFESSIONAL CORPORATION One North Central Avenue, Suite 1200 &APPLEWHITE Phoenix, Arizona 85004-4417 Attorneys P 602.440.4800 F 602.257.9582 William F. Wilder Offices in Arizona & Colorado Direct Line: 602-440-4802 www.rcalaw.com Direct Fax: 602-257-6902 E-mail: wwilder@rcalaw.com September 13, 2016 HAND DELIVERED Ms. Fran McCarroll Clerk of the Board of Supervisors Maricopa County 301 West Jefferson Street, 10 th Floor Phoenix, Arizona 85003 Re: The Industrial Development Authority of the County of Maricopa Education Revenue Bonds (Paradise Schools Projects), Series 2016 in an amount not to exceed $55,000,000 Dear Ms. McCarroll: On behalf of The Industrial Development Authority of the County of Maricopa (the "Maricopa IDA"), we have heretofore requested to be on the Board of Supervisors' Agenda for the meeting on September 21, 2016, for the purpose of requesting the Board of Supervisors adopt a Resolution, a copy of which is enclosed herewith, approving the proceedings of the Maricopa IDA taken on September 13, 2016, for the issuance of the above-referenced bonds. Enclosed for the records of Maricopa County is a copy of the Maricopa IDA approving resolution adopted September 13, 2016. No public hearing, pursuant to Section 147(f) of the Internal Revenue Code of 1986, as amended, is required for this financing. Delivered herewith are envelopes marked with the names of each of the five Supervisors which contain a letter from me (with a copy enclosed herewith for you), as well as a copy of my summary memo to the Maricopa IDA Board, dated September 8, 2016 (with a copy enclosed herewith for you), and I respectfully request you distribute each envelope to the appropriate Supervisor. If or to the extent you have any questions, please let me know. Yours very truly, Enclosures cc: Ms. Shelby Scharbach, Executive Director, w/enc. Michelle Wood, Esq. 4067213.1 09/13/16 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF MARICOPA AUTHORIZING THE ISSUANCE AND SALE OF ITS EDUCATION REVENUE BONDS (PARADISE SCHOOLS PROJECTS), SERIES 2016, IN ONE OR MORE TAX-EXEMPT AND/OR TAXABLE SERIES, IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $55,000,000, AND RELATED MATTERS WHEREAS, The Industrial Development Authority of the County of Maricopa (the "Issuer") is a nonprofit corporation designated a political subdivision of the State of Arizona (the "State") incorporated with the approval of Maricopa County, Arizona (the "County"), pursuant to the provisions of the Constitution of the State and under the Industrial Development Financing Act, A.R.S. § 35-701 et seq. (the "Act"); WHEREAS, the Issuer is authorized and empowered, among other things, (a) to issue tax-exempt and taxable revenue bonds and use the proceeds thereof in accordance with the Act, (b) to contract with and employ others to provide for and to pay compensation for professional services and other services as the Issuer shall deem necessary for the financing of "projects" as defined in the Act, and (c) to pledge its property and revenues to secure the payment of the principal of and premium, if any, and interest on its tax-exempt and taxable revenue bonds; WHEREAS, Paragon Management, Inc. (the "Borrower"), an Arizona nonprofit corporation and an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), that operates three charter schools established under Arizona Revised Statutes Title 15, Chapter 1, Article 8, as amended, previously borrowed the proceeds of $12,785,000 original principal amount of Education Revenue Bonds (Paradise Education Center Project), Series 2003A and $160,000 original principal amount of Education Revenue Bonds (Paradise Education Center Project), Series 2003A-T (together, the "Series 2003 Bonds"), $5,515,000 original principal amount of Education Revenue Bonds (Paradise Education Center Project), Series 2006 (the "Series 2006 Bonds") and $12,800,000 original principal amount of Education Revenue Bonds (Paradise Education Center Project), Series 2010 (the "Series 2010 Bonds"), issued by The Industrial Development Authority of the County of Pima to, among other things, finance the acquisition, construction, renovation, improving and equipping, as applicable, land and buildings located at 15533 West Paradise Lane in Surprise, Arizona (the "Elementary School Campus") and land and buildings located at 12775 North 175 th Avenue in Surprise, Arizona (the "High School Campus"), which are used by the Borrower in connection with its charter school operations; WHEREAS, the Borrower has requested that the Issuer issue its Education Revenue Bonds (Paradise Schools Projects), Series 2016 (the "Bonds"), in one or more tax-exempt and/or taxable series, in an aggregate principal amount not to exceed $55,000,000, and loan the proceeds thereof to the Borrower to (a)(i) refinance the costs of acquiring, constructing, renovating, improving and equipping, as applicable, the Elementary School Campus and the High School Campus by refunding, depending upon market conditions at the time of sale, all or a portion of the outstanding Series 2003 Bonds, Series 2006 Bonds and Series 2010 Bonds (collectively, the "Bonds Being Refunded"), (ii) refinance an outstanding loan incurred by the Borrower to finance the costs of acquiring land adjacent to the High School Campus (the "Middle School Site") and complete the initial design and engineering of the Middle School Campus (as defined below), (iii) finance the costs of constructing, improving and equipping, as applicable, buildings, athletic fields and related amenities on the Middle School Site (together with the Middle School Site, the "Middle School Campus" and, collectively with the Elementary School Campus and the High School Campus, the "Facilities"), and (iv) finance the costs of constructing, improving and equipping additions to the High School Campus, (b) pay capitalized interest on a portion of the Bonds, (c) fund any required reserve funds, and (d) pay the costs incurred in connection with the authorization, issuance and sale of the Bonds (collectively, the "Project"); WHEREAS, the Bonds will be issued pursuant to an Indenture of Trust, to be dated as of the first day of the month in which the Bonds are issued (the "Indenture"), between the Issuer and U.S. Bank National Association, as trustee (the "Trustee"), and the proceeds of the Bonds will be used to make a loan to the Borrower pursuant to a Loan Agreement, to be dated as of the first day of the month in which the Bonds are issued (the "Loan Agreement"), between the Issuer and the Borrower; WHEREAS, the terms, maturities, provisions for redemption, security, and sources of payment for the Bonds are set forth in the Indenture and in the forms of the Bonds; WHEREAS, the Bonds will be payable from the Trust Estate (as defined in the Indenture), which will include, among other things, payments of principal of and interest the Series 2016 Promissory Note to be executed by the Borrower (the "Promissory Note"), and a deed of trust, security agreement, assignment of rents and leases, and fixture filing with respect to the Facilities, to be delivered by the Borrower (the "Deed of Trust"), which will be for the benefit of the Trustee; WHEREAS, the Bonds will be sold by RBC Capital Markets, LLC, as underwriter (the "Underwriter") pursuant to a bond purchase agreement (the "Bond Purchase Agreement"), upon the proposed terms and conditions set forth in the Bond Purchase Agreement from the Underwriter, to be accepted and approved by the Issuer and the Borrower; WHEREAS, there have been prepared and presented to the Board of Directors of the Issuer substantially final forms of the following documents which the Issuer proposes to approve, authorize or enter into (collectively, the "Documents"): (a) the Indenture (including forms of Bonds attached thereto); (b) the Loan Agreement (including the form of the Promissory Note attached thereto); (c) the Deed of Trust; (d) the Bond Purchase Agreement; and (e) the Preliminary Limited Offering Memorandum to be circulated in connection with the sale of the Bonds (the "Preliminary Limited Offering Memorandum") which, with such modifications and insertion of final terms as shall be necessary to reflect the final terms of the Bonds, will also be the form of the final Limited Offering Memorandum in connection with the sale of the Bonds (the "Limited Offering Memorandum"); WHEREAS, the issuance of the Bonds by the Issuer and the loan of the proceeds of the Bonds to the Borrower to finance the Project will be in the furtherance of the purposes of the Act and the Issuer, and in the public interest; and 2 WHEREAS, it appears that each of the instruments above referred to as now before this meeting is in appropriate form to be approved for the purposes intended or approved; NOW, THEREFORE, BE IT RESOLVED, by The Industrial Development Authority of the County of Maricopa, as follows: Section 1. The Issuer finds and determines: (a) the Facilities constitute a "project" as defined in the Act; and (b) the issuance of the Bonds and the making of the Loan to the Borrower for the purposes of financing the Project and refunding of all or a portion of the Bonds Being Refunded are in furtherance of the purposes of the Act and the Issuer and are in the public interest. Section 2. Subject to and conditioned upon the satisfaction of the conditions listed in Section 13, the Issuer hereby finds and determines that the issuance of the Bonds as provided in the Indenture will promote the purposes of the Act and is hereby approved and authorized. Section 3. The issuance and sale of the Bonds in the aggregate principal amount of not to exceed $55,000,000 are hereby authorized and approved as revenue bonds to be designated "The Industrial Development Authority of the County of Maricopa Education Revenue Bonds (Paradise Schools Projects), Series 2016" (or as otherwise set forth in the Indenture), in one or more series or subseries from time to time, as tax-exempt and/or taxable debt. The maximum aggregate principal amount of the Bonds authorized by this Resolution shall be $55,000,000. The Bonds shall be dated, be in fully registered form, and be transferable as provided in the Indenture (as executed and delivered by and on behalf of the Issuer). The Bonds shall mature, bear interest at such rate or rates and shall be subject to the redemption at the times and at the amounts set forth in the Indenture (as executed and delivered), provided that the Bonds shall not mature later than 40 years from the date of issuance. The Bonds shall bear interest from the date thereof at the rate calculated from time to time in accordance with the Indenture, such rates not to exceed 10 percent and payable at such times as provided in the Indenture (as executed and delivered). Principal of and premium, if any, on the Bonds shall be payable at the designated principal corporate trust office of the Trustee or its successor in trust, and interest thereon shall be payable to each owner of any Bonds as otherwise provided in the Indenture. Section 4. The forms, terms and provisions of the Bonds, in the form contained in the Indenture, subject to appropriate insertion and revision in order to comply with the provisions of the Indenture, are hereby approved and, when the same are executed on behalf of the Issuer in the manner contemplated by the Indenture and this Resolution shall represent the approved form of Bonds of the Issuer. The Bonds shall be executed in the name of the Issuer with the manual or facsimile signature of its President and attested with the manual or facsimile signature of the Secretary, all as provided in the Indenture, and the President or any other officer of the Issuer shall cause the Bonds, as so executed and attested, to be delivered to the Trustee for authentication. Section 5. The form, terms and provisions of the Indenture (including exhibits and appendices thereto) are in all respects approved, and any Director of the Issuer or the Executive Director of the Issuer (each an "Authorized Officer") is hereby authorized, empowered and 3 directed to execute, attest and deliver the Indenture in the name and on behalf of the Issuer and thereupon to cause the Indenture to be delivered to the Trustee. The Indenture is to be in substantially the form now before the Issuer at this meeting and hereby approved, or with such changes therein as shall be approved by the officers of the Issuer executing the same, their execution thereof to constitute conclusive evidence of their approval of any and all changes or revisions therein from the form of Indenture now before this meeting. From and after the execution and delivery of the Indenture, the officers, Executive Director, agents and employees of the Issuer are hereby authorized, empowered and directed to do all such acts and things and to execute all such other documents, instruments and certificates as may be necessary to carry out and comply with the provisions of the Indenture (as executed and delivered). Section 6. The form, terms and provisions of the Loan Agreement (including exhibits and appendices thereto) are in all respects approved, and any Authorized Officer is hereby authorized, empowered and directed to execute, attest and deliver the Loan Agreement in the name and on behalf of the Issuer and thereupon to cause the Loan Agreement to be delivered to the Trustee. The Loan Agreement is to be in substantially the form now before the Issuer at this meeting and hereby approved, or with such changes therein as shall be approved by the Authorized Officers of the Issuer executing the same, their execution thereof to constitute conclusive evidence of their approval of any and all changes or revisions therein from the form of Loan Agreement now before this meeting. From and after the execution and delivery of the Loan Agreement, the officers, Executive Director, agents and employees of the Issuer are hereby authorized, empowered and directed to do all such acts and things and to execute all such other documents, instruments and certificates as may be necessary to carry out and comply with the provisions of the Loan Agreement (as executed and delivered). Section 7. The form, terms and provisions of the Deed of Trust (including exhibits and appendices thereto) are in all respects approved. The Deed of Trust shall be in substantially the form now before the Issuer at this meeting and hereby approved, or with such changes therein as shall be approved by legal counsel to the Issuer. From and after the execution and delivery of the Deed of Trust, the officers, Executive Director, agents and employees of the Issuer are hereby authorized, empowered and directed to do all such acts and things and to execute all such other documents, instruments and certificates as may be necessary to carry out and comply with the provisions of the Deed of Trust (as executed and delivered). Section 8. The sale of the Bonds in the aggregate principal amount of not to exceed $55,000,000 to the Underwriter, the exact principal amount of each series of the Bonds to appear in the Bond Purchase Agreement (as executed and delivered), and maturing, bearing interest and being subject to prior redemption as provided in the Indenture (as executed and delivered) is hereby authorized and approved. The form, terms and provisions of the Bond Purchase Agreement are in all respects approved, and any Authorized Officer is hereby authorized, empowered and directed to execute and deliver the Bond Purchase Agreement in the name and on behalf of the Issuer. The Bond Purchase Agreement is to be in substantially the form now before the Issuer at this meeting and hereby approved, or with such changes or revisions therein from the form of Bond Purchase Agreement now before this meeting as shall be required by legal counsel to the Issuer. From and after the execution and delivery of the Bond Purchase Agreement, the officers, Executive Director, agents and employees of the Issuer are hereby authorized, empowered and directed to do all such acts and things and to execute all such other 4 documents, instruments and certificates as may be necessary to carry out and comply with the provisions of the Bond Purchase Agreement (as executed and delivered). Section 9. The lawful use and distribution of the Preliminary Limited Offering Memorandum (and subsequent Limited Offering Memorandum) relating to the original issuance of the Bonds and any amendments thereof or supplements thereto, is hereby authorized. Except for information contained under the captions "THE ISSUER" and "LITIGATION," as such captions relate to the Issuer in the Preliminary Limited Offering Memorandum and the Limited Offering Memorandum, the Issuer has not confirmed, and assumes no responsibility for, the accuracy, sufficiency or fairness of any statements in the Preliminary Limited Offering Memorandum or the Limited Offering Memorandum or any amendments thereof or supplements thereto, or in any reports, financial information, offering or disclosure documents or other information relating to the Project, the Borrower, or the history, businesses, properties, organization, management, financial condition, market area or any other matter relating to the Borrower or otherwise contained in the Preliminary Limited Offering Memorandum and the Limited Offering Memorandum. Section 10. The Bonds shall be payable solely from the receipts and revenues received by, or on behalf of, the Issuer pursuant to the Indenture. Nothing contained in this Resolution, any of the Documents, or any other agreement, certificate, document, or instrument executed in connection with the issuance of the Bonds shall be construed as obligating the Issuer (except as a special, limited obligation to the extent provided in such documents or instruments) or obligating the County, or as incurring a charge upon the general credit of the Issuer or of the County, nor shall the breach of any agreement contemplated by this Resolution, any of the Documents, or any other instrument or documents executed in connection therewith impose any charge upon the general credit of the Issuer or of the County. The Issuer has no taxing power. Prior to the issuance of the Bonds, the Issuer has issued, and subsequent to the issuance of the Bonds, the Issuer may issue bonds in connection with the financing of other projects (such bonds together with any bonds issued by the Issuer between this date and the issuance of the Bonds shall be referred to herein as the "Other Bonds"). Any pledge, mortgage, or assignment made in connection with the Other Bonds shall be protected, and any funds pledged or assigned for payment of principal, premium, if any, or interest on the Other Bonds shall not be used for the payment of principal, premium, if any, or interest on the Bonds. Any pledge, mortgage, or assignment made in connection with the Bonds shall be protected, and no funds pledged or assigned for the payment of the Bonds shall be used for the payment of principal, premium, if any, or interest on the Other Bonds. Section 11. At the request of the Borrower, U.S. Bank National Association, is hereby designated, approved and confirmed to act as trustee, paying agent and bond registrar under the Indenture. Section 12. At the request of the Borrower, RBC Capital Markets, LLC, is hereby designated, approved and confirmed to act as underwriter under the Bond Purchase Agreement. 5 Section 13. The Bonds shall not be issued unless and until: (a) The Borrower must comply fully with all applicable provisions of the Issuer's Procedural Pamphlet, as amended through March 10, 1998 (the "Pamphlet"), relating to the issuance and sale of the Bonds, including the submission of Legal Proceedings, as required by Section 5.03 of the Pamphlet, in form and substance satisfactory to the Issuer. (b) Prior to closing, the Borrower shall make arrangements satisfactory to the Issuer as to the payment of the Issuer's annual administrative fee. (c) The Arizona Attorney General does not disapprove the issuance of the Bonds in the manner contemplated by A.R.S. § 35-721. (d) On or prior to the closing, the Issuer shall receive an opinion from Bond Counsel, in a form acceptable to the Issuer, to the effect that interest on any tax-exempt series of the Bonds will be exempt from federal and State income taxes. (e) On or prior to closing, the Borrower shall deliver an opinion or opinions, addressed and in form acceptable to the Issuer, to the effect that any offering materials distributed in connection with the offer and sale of the Bonds are correct and complete in all material respects, and do not contain any untrue statements of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (f) If the Bonds are to be privately placed, the underwriter, placement agent or ultimate purchaser of the Bonds should submit an investment letter (or the equivalent representations) to the Issuer including representations that they have performed their own due diligence of the Project, and will purchase and hold the Bonds as a private placement. Any subsequent resale of the Bonds must be restricted to "accredited investors" within the meaning of Rule 501 of Regulation D (but excluding natural persons) or "qualified institutional buyers" within the meaning of Rule 144A, promulgated under the Securities Act of 1933, as amended (the "Securities Act"). (g) If the Bonds are to be offered publicly, they must obtain an investment grade rating acceptable to the Issuer and its legal counsel from a nationally recognized rating agency. If such a rating is not obtained, (a) the offer and sale of the Bonds must be limited to "accredited investors" within the meaning of Rule 501 of Regulation D (but excluding natural persons) or "qualified institutional buyers" within the meaning of Rule 144A, promulgated under the Securities Act, (b) the Issuer must receive investment letters from such purchasers (or the equivalent representations from the Underwriter) in form and substance satisfactory to the Issuer's legal counsel, (c) any subsequent transfers and resales of the Bonds must be similarly restricted, and (d) the Bonds must be issued in minimum denominations of $25,000 and integral multiples of $5,000 in excess thereof (h) The Issuer, its officers and directors, and the County, must be provided with full indemnification in connection with the issuance and sale of the Bonds, in form 6 and substance satisfactory to the Issuer's legal counsel, from a credit-worthy source acceptable to the Issuer. (i) Legal counsel to the Issuer must receive such documents, legal opinions, certificates and other proceedings as are necessary and advisable to evidence compliance by the Borrower, the Underwriter and other financing participants with the Issuer's policies and procedures and applicable federal and State laws. (i) Prior to closing, the Borrower must submit final copies of all the required legal opinions, certificates, documents and other proceedings required herein. All legal opinions, certificates, documents and other proceedings will be in compliance with the provisions hereof only if they are in all material respects satisfactory to the Issuer's legal counsel as to which the legal counsel shall act reasonably. Section 14. From and after the execution and delivery of the Documents herein approved, Authorized Officers are hereby empowered and directed to do all such acts and things and to execute all such documents as may be necessary in connection with the issuance and sale of the Bonds or to carry out and comply with the provisions of aforesaid approved documents as executed and delivered, including, without limitation, the execution of instructions relating to the investment of funds and use of the proceeds of the Bonds and all other documents and certificates relating to the tax-exempt status of interest on the Bonds. Section 15. None of the members of the governing body of the Issuer nor any director, officer, official employee or agent of the Issuer shall be subject to any personal liability or accountability by reason of the issuance thereof. Section 16. In the event of the inability or unavailability of any official of the Issuer to perform any duty assigned to such official by the terms of this Resolution, any officer of the Issuer or the Executive Director of the Issuer authorized to act for such official is hereby authorized and directed to do so. Section 17. The liability of the Issuer with respect to the Documents or any other document executed in connection with the transactions contemplated hereby shall be limited as provided in the Act and such documents. Section 18. All actions (not inconsistent with the provisions of this Resolution) heretofore taken by or at the direction of the Issuer and its directors, officers, counsel, advisors or agents directed toward the sale and issuance of the Bonds are hereby approved and ratified. Section 19. The provisions of this Resolution are hereby declared to be separable, and if any action, phrase or provision shall for any reason be declared to be invalid, such declaration shall not affect the validity of the remainder of the sections, phrases and provisions. Section 20. It is found and determined that all formal actions of the Issuer and its Board of Directors concerning and relating to the adoption of this Resolution were adopted in an open meeting and that all deliberations that resulted in those formal actions were in meetings open to the public, in compliance with all requirements of the State and the Issuer. 7 Section 21. The provisions of this Resolution shall be in full force and effect from and after its passage as provided by law. Section 22. Any provisions of the Issuer's Bylaws, Procedural Pamphlet, or prior resolutions inconsistent herewith are waived to the extent only of such inconsistency. This waiver shall not be construed as repealing any such Bylaws, Procedural Pamphlet, or resolution or any part thereof. Section 23. Notice of A.R.S. § 38-511 is hereby given. The provisions of said statute are by this reference incorporated herein to the extent of their applicability to matters contained herein under the laws of the State. Section 24. This Resolution shall be effective immediately. [Remainder of Page Intentionally Left Blank] 8 PASSED, ADOPTED, AND APPROVED on September 13, 2016. THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF MARICOPA By: L Authorized Offie PI-1X 331767634v3 A RESOLUTION OF THE MARICOPA COUNTY BOARD OF SUPERVISORS APPROVING THE ISSUANCE BY THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF MARICOPA OF ITS EDUCATION REVENUE BONDS (PARADISE SCHOOLS PROJECTS), SERIES 2016, IN ONE OR MORE TAX-EXEMPT AND/OR TAXABLE SERIES, IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $55,000,000 WHEREAS, The Industrial Development Authority of the County of Maricopa (the "Issuer") is a nonprofit corporation designated a political subdivision of the State of Arizona incorporated with the approval of the County of Maricopa, empowered under the Industrial Development Financing Act, A.R.S. § 35-701 et seq. (the "Act"), to issue revenue bonds for the purposes set forth in the Act, including the making of secured or unsecured loans for the purpose of financing or refinancing the acquisition, construction, improvement or equipping of a "project" (as defined in the Act); WHEREAS, Paragon Management, Inc. (the "Borrower"), an Arizona nonprofit corporation and an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), that operates charter schools established under Arizona Revised Statutes Title 15, Chapter 1, Article 8, as amended, previously borrowed the proceeds of $12,785,000 original principal amount of Education Revenue Bonds (Paradise Education Center Project), Series 2003A and $160,000 original principal amount of Education Revenue Bonds (Paradise Education Center Project), Series 2003A-T (together, the "Series 2003 Bonds"), $5,515,000 original principal amount of Education Revenue Bonds (Paradise Education Center Project), Series 2006 (the "Series 2006 Bonds") and $12,800,000 original principal amount of Education Revenue Bonds (Paradise Education Center Project), Series 2010 (the "Series 2010 Bonds"), issued by The Industrial Development Authority of the County of Pima to, among other things, finance the acquisition, construction, renovation, improving and equipping, as applicable, land and buildings located at 15533 West Paradise Lane in Surprise, Arizona (the "Elementary School Campus") and land and buildings located at 12775 North 175 th Avenue in Surprise, Arizona (the "High School Campus"), which are used by the Borrower in connection with its charter school operations; WHEREAS, the Issuer proposes to issue its Education Revenue Bonds (Paradise Schools Projects), Series 2016 (the "Bonds"), in one or more tax-exempt and/or taxable series, in an aggregate principal amount not to exceed $55,000,000, for the benefit of the Borrower; WHEREAS, the proceeds of the Bonds will be loaned by the Issuer to the Borrower to (a)(i) refinance the costs of acquiring, constructing, renovating, improving and equipping, as applicable, the Elementary School Campus and the High School Campus by refunding, depending upon market conditions at the time of sale, all or a portion of the outstanding Series 2003 Bonds, Series 2006 Bonds and Series 2010 Bonds (collectively, the "Bonds Being Refunded"), (ii) refinance an outstanding loan incurred by the Borrower to finance the costs of acquiring land adjacent to the High School Campus (the "Middle School Site") and complete the initial design and engineering of the Middle School Campus (as defined below), (iii) finance the costs of constructing, improving and equipping, as applicable, buildings, athletic fields and related amenities on the Middle School Site (together with the Middle School Site, the "Middle School Campus" and, collectively with the Elementary School Campus and the High School Campus, the "Facilities"), and (iv) finance the costs of constructing, improving and equipping additions to the High School Campus, (b) pay capitalized interest on a portion of the Bonds, (c) fund any required reserve funds, and (d) pay the costs incurred in connection with the authorization, issuance and sale of the Bonds (the "Project"); WHEREAS, on September 13, 2016, the Issuer resolved (the "Issuer's Resolution") to issue the Bonds, the Issuer's Resolution being conditioned upon, among other things, the granting of approval to the issuance of the Bonds by the Maricopa County Board of Supervisors; WHEREAS, the Issuer's Resolution has been made available to the Maricopa County Board of Supervisors, and the Issuer's Resolution has been duly considered this date; WHEREAS, the Issuer's Resolution authorizes, among other things, the issuance and sale of the Bonds, the execution and delivery of a Indenture, and related financing documents as well as such other documents as required for the issuance of the Bonds; WHEREAS, the terms, maturities, provisions for redemption, security, and sources of payment for the Bonds are set forth in the Indenture and in the form of the Bonds; WHEREAS, copies of the documents providing for the issuance of the Bonds have been made available to the Maricopa County Board of Supervisors, together with the Issuer's Resolution; WHEREAS, the Maricopa County Board of Supervisors have been informed that the documents have been reviewed by competent Bond Counsel, Greenberg Traurig, LLP, and Bond Counsel has determined that the documents adequately meet the requirements of the Act and the Internal Revenue Code of 1986 (the "Code"); WHEREAS, pursuant to Section 35-721.B of the Act, the proceedings of the Issuer under which the Bonds are to be issued require the approval of the Maricopa County Board of Supervisors for the issuance of the Bonds; WHEREAS, it is intended that this Resolution shall constitute approval by the Maricopa County Board of Supervisors with respect to the issuance of the Bonds pursuant to Section 35-721.B of the Act; NOW, THEREFORE, BE IT RESOLVED BY THE MARICOPA COUNTY BOARD OF SUPERVISORS, as follows: 1. The issuance by the Issuer of the Bonds in an aggregate principal amount not to exceed $55,000,000 is approved for all purposes under the Act, including specifically Section 35-721.B. 2. The appropriate officers of the Maricopa County Board of Supervisors are hereby authorized and directed to do all such things to execute and deliver all such documents on behalf of the Maricopa County Board of Supervisors as may be necessary or desirable to effectuate the intent of this Resolution and the Issuer's Resolution in connection with the issuance of the Bonds. 2 ADOPTED AND APPROVED on September 21, 2016. Chairman, Maricopa County Board of Supervisors ATTEST: Clerk, Maricopa County Board of Supervisors PHX 331767635v3 RYLEYCARLOCK MEMORANDUM &APPLEWHITE Attorneys Date: September 8, 2016 To: Members of Board of Directors of The Industrial Development Authority of the County of Maricopa From: William F. Wilder Subject: Not to Exceed $55,000,000 — The Industrial Development Authority of the County of Maricopa Education Revenue Bonds (Paradise Schools Projects), Series 2016 At the Authority Board meeting on September 13, 2016, you will be asked to grant final approval to the financing for the Paradise Schools Projects 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 you with a summary review of the proposed financing. THE APPLICANT/BORROWER The Applicant/Borrower for financing is Paragon Management, Inc. (sometimes "Paragon"), an Arizona nonprofit corporation doing business as Paradise Schools, designated as a 501(c)(3) organization under the Internal Revenue Code of 1986, as amended (the "Code"). THE PROJECT Paragon is a nonprofit corporation designated as a 501(c)(3) organization under the Code. Paragon holds a charter school contract with the Arizona Board of Charter Schools pursuant to which it operates three charter schools known as the Paradise Education Center (the "Elementary School"), serving grades K through 5; the Paradise Education Center Middle School (the "Middle School"), serving grades 6 through 8; and Paradise Honors High School (the "High School"), serving grades 9 through 12. The Elementary School, the Middle School and the High School are sometimes collectively referred to as the "Schools." The Schools are located in Surprise, Arizona. In 2003, Paragon obtained a loan from The Industrial Development Authority of the County of Pima (the "Pima IDA") from the sale of its Series 2003A Bonds and Series 2003 A-T Bonds (collectively, the "Series 2003 Bonds") in the amount of $12,945,000, and applied the loan proceeds to the acquisition construction, improvement and equipping of the Elementary School Campus at 15533 West Paradise Lane, Surprise, Arizona. In 2006, Paragon secured the issuance of bonds through the Pima IDA (the "Series 2006 Bonds") and a loan of the bond proceeds in the amount of $5,515,000 and applied the proceeds of this loan to make capital improvements to the Elementary School Campus. 4054394.2 09/02/16 Members of Board of Directors of The Industrial Development Authority of the County of Maricopa September 8, 2016 Page 2 In 2010, Paragon secured the issuance of bonds through the Pima IDA (the "Series 2010 Bonds") and a loan of the bond proceeds in the amount of $12,800,000 and applied the proceeds of this loan to acquire and make capital improvements to the High School Campus at 12775 North 175th Avenue, Surprise, Arizona, and to expand the Elementary School Campus. In 2015, Paragon obtained a $2,100,000 loan from CLI Capital (the "CLI Loan") to finance various capital costs and expenditures to acquire a site for the Middle School Campus and make a series of improvements thereto. Paragon proposes that the Authority issue not to exceed $55,000,000 of Bonds and loan the proceeds received from the sale of the Bonds to Paragon to enable it to refund/refinance the Series 2003 Bonds, the Series 2006 Bonds, the Series 2010 Bonds and the CLI Loan and to use a portion of the proceeds of the new series of Bonds, fund various capital improvements to the Middle School Campus and the High School Campus. NOTIFICATION TO ARIZONA ATTORNEY GENERAL As required by the provisions of Arizona Revised Statutes, Section 35-721.F, the Authority will notify the Arizona Attorney General of the Authority's intention to issue the Bonds. PUBLIC HEARING No public hearing pursuant to Section 147(f) of the Internal Revenue Code of 1986 is required for this financing. ALLOCATION FOR TAX EXEMPT FINANCING No allocation of the Arizona "volume cap" is required for the issuance of the Bonds as this financing is for a nonprofit 501(c)(3) entity and is a refunding of previously issued bonds. 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: Paragon Management, Inc. Members of Board of Directors of The Industrial Development Authority of the County of Maricopa September 8, 2016 Page 3 Bond Trustee: U.S. Bank National Association Bond Underwriter: RBC Capital Markets, LLC Bond Counsel: Greenberg Traurig, LLP Applicant/Borrower Counsel: Warren Charter Law PLC Bond Underwriter Counsel: Ballard Spahr, LLP PRINCIPAL FINANCING DOCUMENTS Document Parties Indenture of Trust dated as of October 1, 2016 Issuer and Trustee Loan Agreement dated as of October 1, 2016 (the Issuer and Borrower "Loan Agreement") Deed of Trust, Security Agreement, Assignment of Borrower Rents and Leases and Fixture Filing dated as of October 1, 2016 (the "Deed of Trust") Offering Documents (Preliminary and Final) Borrower and Bond Underwriter Tax Certificate and Agreement dated as of its date of Issuer and Borrower execution (the "Tax Certificate") Bond Purchase Agreement dated as of the date of Borrower, Issuer and Bond execution Underwriter PLAN OF FINANCING The Bonds will be issued under and pursuant to the Indenture of Trust and the proceeds received from the sale of the Bonds will be loaned to Paragon and applied to refund the Series 2003 Bonds, the Series 2006 Bonds, the Series 2010 Bonds and the CLI Loan (all as identified above) and to finance capital improvements to the Middle School and High School campuses. The Bonds will be issued in authorized denominations of $25,000 each and placed by RBC Capital Markets, LLC with qualified institutional buyers or accredited investors (RBC will, at closing, provide written confirmation that the Bonds have been placed with qualified institutional buyers or accredited investors and the Bloomberg Screen that brokers use to effect Members of Board of Directors of The Industrial Development Authority of the County of Maricopa September 8, 2016 Page 4 trades of bonds will be noted to show that transfer of the Bonds is restricted to qualified institutional buyers or accredited investors). FINAL APPROVAL At the Authority Board meeting on September 13, 2016, the 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. A copy of the proposed form of resolution to be adopted is included in the Board packages. NO LIABILITY ON THE COUNTY OF MARICOPA Under the provisions of A.R.S. § 35-742, the County of Maricopa shall not in any event be liable for the payment of the principal or interest on the bonds of the Authority or for the performance by the Authority of any of its obligations with respect to its bonds nor shall any agreements or obligations of the Authority constitute an indebtedness of the County of Maricopa within the meaning of any constitutional or statutory provision whatsoever. 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 September 21, 2016, to act as required by law to adopt a resolution approving the proceedings of the Authority for the issuance of the Bonds. TRANSACTION CLOSING If the required approvals of the Authority and the Maricopa County Board of Supervisors are received, it is currently anticipated that the Bonds will be issued in October, 2016. 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 of the Authority 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 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, is in form and substance acceptable for the Authority Board to adopt.