Michigan Public Educational Facilities Authority
Policy Regarding the Selection of the
BOND FINANCE TEAM
For Long-Term PSA Financings

SELECTION OF UNDERWRITING/PLACEMENT AGENTS

ROLE OF UNDERWRITER/PLACEMENT AGENT
Underwriters or placement agents are responsible for sale or placement of bonds. They usually assist the public school academy in preparing a financing plan, determining the least costly method of financing and completing a disclosure and sales document to be sent to potential investors. Sometimes their role is finished when the bond issue is completed; in other cases, the underwriter has an ongoing role with the PSA as an advisor regarding a broad range of finance and capital market related matters.

AUTHORITY POLICY
Subject to approval by the MPEFA Board, Public School Academies will select underwriters or placement agents.

SELECTION OF BOND COUNSEL

ROLE OF BOND COUNSEL
Bond Counsel for the deal has the role of an independent expert who provides an objective legal opinion concerning the issuance and sale of bonds. Bond Counsel are specialized attorneys who have developed necessary expertise in a broad range of practice areas. Generally, bonds are not marketable without an opinion of nationally recognized bond counsel stating that the bonds are valid and binding obligations, stating the sources of payment and security for the bonds and if applicable the bonds are exempt from State and Federal income taxes.

AUTHORITY POLICY
Bond counsel is selected by the public school academy provided the firm is listed as a municipal bond attorney in The Bond Buyer's Municipal Marketplace Directory (the "Red Book"), knowledgeable regarding current Michigan charter school law and statutes and does not act as local counsel to the academy.

SELECTION OF BOND TRUSTEE

ROLE OF BOND TRUSTEE
The bond trustee is responsible for the collection and investment of loan payments and the registration, transfer and payment of bonds. The bond trustee is required to maintain separate accounts, monitor bond document requirements and provide monthly statements. The bond trustee approves amendments to some documents and acts on behalf of the bondholders if the public school academy violates certain bond documents. A bond trustee must have adequate staff and systems to efficiently perform its duties and comply with the various Federal, State and bond issue requirements.

AUTHORITY POLICY
Public School Academies will select bond trustee, provided that the MPEFA Board approves the selection.

ADOPTED: November 6, 2003