Tab_472007 Series Three
1SJ tI',i 1 Ik I Dkt1
between
ALASKA MUNICIPAL BOND BANK
AS ISSUER
AND
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
AS ESCROW AGENT
Relating to the Defeasance and Refunding of
a Portion of:
$17,715,000
ALASKA MUNICIPAL BOND BANK
GENERAL OBLIGATION BONDS, 2007 SERIES THREE
Dated November 3, 2016
i w'i iiP, DKII atiJi1 V DI 0110
Page
Section1. Recitals .........................................................................................................1
Section 2. Application of 2016 Bond Proceeds and Other Available Funds for
Refunding and Defeasance of the Refunded Bonds ....................................1
Section 3. Payment and Redemption of the Refunded Bonds......................................3
Section 4. Payment of Principal, Interest and Redemption Price on Refunded
Bonds...........................................................................................................4
Section 5. Notice of Insufficiency ................................................................................ 4
Section 6. Custody and Safekeeping of Obligations ....................................................4
Section 7. Transfer of Funds After Redemption of Refunded Bonds...........................4
Section 8. Substitution of Different Escrow Obligations or Other Investments...........5
Section 9. Amendment of Agreement ..........................................................................5
Section 10. Compensation of Escrow Agent..................................................................6
Section 11. Limitation of Escrow Agent's Duties...........................................................6
Section 12. Remission of Funds When Refunded Bonds Paid in Full ...........................7
Section 13. Successor Escrow Agent..............................................................................7
Section 14. Merger or Consolidation of Escrow Agent..................................................8
Section 15. Notices.........................................................................................................8
Section 16. Miscellaneous ..............................................................................................8
Exhibit A— Schedule of Refunded Bonds
Exhibit B - Escrow Obligations
Exhibit C - Form of Notice of Optional Redemption
Exhibit D - Form of Notice of Defeasance
i *'rsi aswe i ai I iSI I
THIS ESCROW AGREEMENT (the "Agreement"), made and entered into as of the 3''
day of November 2016, by and between the Alaska Municipal Bond Bank (the "Bank"), and The
Bank of New York Mellon Trust Company, N.A., as escrow agent (the 'Escrow Agent").
WITNES SETH:
Section 1. Recitals. Pursuant to the 2007 Series Three Resolution defined herein, the
Bank issued $17,715,000 aggregate principal amount of Alaska Municipal Bond Bank General
Obligation Bonds, 2007 Series Three, a portion of which, in the principal amounts, maturing on
the dates and bearing interests at the rates set forth in Exhibit A attached hereto (the "Refunded
Bonds"), are to be defeased and redeemed as provided in this Agreement.
The Refunded Bonds were issued pursuant to the Bank's General Bond Resolution,
adopted by the Board of Directors of the Bank (the "Board") on July 13, 2005 and Series
Resolution No. 2007-01, adopted by the Board on June 7, 2007 (the "2007 Series Three
Resolution"). Pursuant to the 2007 Series Three Resolution, the Refunded Bonds, which are
stated to mature on or after September 1, 2018 are subject to redemption, at the option of the
Bank, on or after September 1, 2017, as a whole or in part, at a redemption price equal to 100
percent of the principal amount thereof, plus interest accrued thereon to the date fixed for
redemption and without premium.
To provide, among other purposes, for the defeasance of the Refunded Bonds, the Bank is
issuing $80,435,000 aggregate principal amount of its Alaska Municipal Bond Bank General
Obligation and Refunding Bonds, 2016 Series Three (the "2016 Bonds") pursuant to the General
Bond Resolution (as amended, the "General Bond Resolution") as supplemented by Series
Resolution No. 2016-05, adopted by the Board on September 6, 2016 (the "2016 Series Three
Resolution" and together with the General Bond Resolution, the "2016 Resolutions"). Pursuant to
the 2016 Resolutions, including Section 1301(B) of the General Bond Resolution and Section 305
of the 2016 Series Three Resolution, the Bank appointed The Bank of New Mellon Trust
Company, N.A., the Trustee (the "Trustee"), to serve as the Escrow Agent and authorized the
Bank to enter an escrow agreement.
Section 2. Application of 2016 Bond Proceeds and Other Available Funds for
Refunding and Defeasance of the Refunded Bonds. (a) To accomplish the refunding and
defeasance of the Refunded Bonds in the manner set forth in the 2016 Resolutions, the Bank
agrees that, simultaneously with the issuance and delivery of the 2016 Bonds, the Bank will cause
to be delivered to the Escrow Agent from a portion of the net proceeds received from the sale of
the 2016 Bonds for the purchase by the Escrow Agent, together with the other amounts described
in subsection 2(b), of the Government Obligations described in Exhibit B hereto (the "Escrow
Obligations") and as described below, will irrevocably deposit (or cause to be deposited) cash in
the amount described in subsection 2(b), which together with the Escrow Obligations, will be
deposited and held by the Escrow Agent in a separate account (the "2007 Series Three Escrow
Account") in trust for the security and benefit of the owners of the Refunded Bonds, separate and
apart from all other cash and investment securities held by the Escrow Agent.
(b) Deposits to the 2007 Series Three Escrow Account. The Escrow Agent agrees to
establish and maintain the 2007 Series Three Escrow Account until all of the Refunded Bonds
have been paid in full and to hold the Escrow Obligations, investments and moneys therein at all
times as a special and separate trust fund wholly segregated from all other securities, investments
or moneys on deposit with the Escrow Agent or Trustee. On November 3, 2016, an amount equal
to $2,398,647.74 (comprised of proceeds from the 2016 Bonds in the amount of $2,296,464.10;
and (ii) at the direction of the City of Bethel, Alaska (the "Borrower"), moneys transferred from
the Borrower's reserve account in the amount of $102,183.64) shall be deposited to the 2007
Series Three Escrow Account. The Escrow Agent immediately shall apply $2,398,646.00 of the
amount so deposited to acquire the Escrow Obligations described in Exhibit B and except as
provided in subsection (c), shall hold in cash, uninvested, the remainder of the amount deposited,
in the amount of $1.74.
By signing this Agreement, the Escrow Agent acknowledges and confirms receipt of the
Escrow Obligations described in Exhibit B and the funds described in this subsection (b) and
agrees to deposit and apply such Escrow Obligations and funds as provided in this Agreement.
(c) Investments of the 2007 Series Three Escrow Account. The Bank and the Escrow
Agent each shall take all remaining necessary action to have issued and registered in the name of
the Escrow Agent, for the account of the 2007 Series Three Escrow Account, the Escrow
Obligations listed in Exhibit B, and the Escrow Agent shall hold in cash (uninvested) the amount
of $1.74. Except as otherwise provided in this subsection or in Section 8, the Escrow Agent shall
not reinvest any cash portion of the 2007 Series Three Escrow Account and shall hold such cash
portion uninvested. Upon the written request of the Bank, the Escrow Agent shall reinvest any
cash portion of the 2007 Series Three Escrow Account in noncallable direct and general
obligations of the United States of America, provided that the Bank and the Escrow Agent receive
(i) a Counsel's Opinion to the effect that such reinvestment will not result in the inclusion of
interest payable on the Refunded Bonds or the 2016 Bonds in gross income for federal income tax
purposes and (ii) a report of independent certified public accountants or other financial services
firm acceptable to the Bank to the effect that such reinvestment will not adversely affect the
sufficiency of the amount of securities, investments and moneys on deposit in the 2007 Series
Three Escrow Account to pay when due the principal of and interest on the Refunded Bonds as
contemplated by this Agreement.
Except for the initial investment of the Escrow Obligations pursuant to this section, and
except as provided in Section 8 and as otherwise provided in this Section, the Escrow Agent shall
not have any power or duty to invest or reinvest any money or Escrow Obligations held
hereunder, or to make substitutions of the Escrow Obligations, or to sell, transfer, or otherwise
dispose of Escrow Obligations.
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Escrow Agreement (2007 Series Three)
Page 2
If the Escrow Agent learns that the Department of the Treasury or the Bureau of Public
Debt will not, for any reason, accept a subscription of state and local government series securities
("SLGS") that is to be submitted pursuant to this Agreement, the Escrow Agent shall promptly
request alternative written investment instructions from the Bank with respect to funds that were
to be invested in SLGS. The Escrow Agent shall follow such instructions and, upon the maturity
of any such alternative investment, the Escrow Agent shall hold such funds uninvested and
without liability for interest until receipt of further written instructions from the Bank. In the
absence of investment instructions from the Bank, the Escrow Agent shall not be responsible for
the investment of such funds or interest thereon. The Escrow Agent may conclusively rely upon
the Bank's selection of an alternative investment as a determination of the alternative
investment's legality and suitability and shall not be liable for any losses related to the alternative
investments or for compliance with any yield restriction applicable thereto.
The Escrow Agent shall not be liable or responsible for any loss resulting from any
reinvestment made pursuant to this Agreement and in full compliance with the provisions hereof.
(d) Verification Report. The Escrow Agent may rely upon the conclusion of the
Verification Agent that the Escrow Obligations listed in Exhibit A will mature and bear interest
payable in the amounts and at the times that together with cash on deposit in the 2007 Series
Three Escrow Account, will be sufficient to pay when due the interest on the Refunded Bonds to
September 1, 2017 (the "Redemption Date") and to redeem the Refunded Bonds on the
Redemption Date at a redemption price equal to 100 percent of the principal amount thereof, plus
interest to the Redemption Date and without premium (the "Redemption Price").
(e) Reports. The Bank acknowledges that to the extent that regulations of the Comptroller
of the Currency grants the Bank the right to receive brokerage confirmations of securities
transactions, the Bank waives receipt of such confirmations. The Escrow Agent shall furnish to
the Bank periodic cash transaction statements that detail all investment transactions made by the
Escrow Agent.
The Escrow Agent shall, within ten (10) days after the final redemption of the Refunded
Bonds, render a statement to the Bank setting forth the interest earned on the Escrow Obligations,
a list of any investments or reinvestments made by the Escrow Agent in other such obligations
and the interest and/or principal derived therefrom, the sums paid to the paying agent, and any
other transactions of the Escrow Agent pertaining to its duties and obligations as set forth herein.
Section 3. Payment and Redemption of the Refunded Bonds. (a) The Bank hereby
requests and irrevocably instructs the Escrow Agent, and the Escrow Agent hereby agrees, to
collect and deposit in the 2007 Series Three Escrow Account the principal of and interest on all
Escrow Obligations held for the account of the 2007 Series Three Escrow Account promptly as
such principal and interest become due and to apply, subject to the provisions of Sections 2, 7 and
8, such principal and interest, together with any other moneys and the principal of and interest on
any other securities deposited in the 2007 Series Three Escrow Account (i) to pay when due the
interest on the Refunded Bonds to the Redemption Date in the amounts and on the dates set forth
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in Appendix A and (ii) to redeem the Refunded Bonds on the Redemption Date at the Redemption
Price, together with interest accrued thereon to the Redemption Date, in each case at the places
and in the manner stipulated in the 2007 Series Three Resolution, including the notice
requirements contained therein.
(b) The Bank hereby requests, and irrevocably instructs, the Escrow Agent to give notice
of redemption of the Refunded Bonds (substantially in the form included in Exhibit C) to be
redeemed as required by and in accordance with the provisions of the 2007 Series Three
Resolution.
In addition, the Bank hereby instructs the Escrow Agent to provide to the owners of the
Refunded Bonds and to the Municipal Securities Rulemaking Board notice of the defeasance of
the Refunded Bonds (in the form included in Exhibit D).
Section 4. Payment of Principal, Interest arid Redemption Price on Refunded Bonds.
The Escrow Agent shall present for payment on the due dates thereof any Escrow Obligations
deposited with it and shall apply the proceeds derived therefrom and the interest paid thereon, and
any cash held by it hereunder, in accordance with the provisions of the 2007 Series Three
Resolution and this Agreement. Moneys shall, in a timely manner, be transferred by the Escrow
Agent to the Trustee as paying agent for the Refunded Bonds in amounts sufficient for the
payments specified in Section 3 and in Appendix A of this Agreement.
Section 5. Notice of Insufficiency. In the event the maturing principal of and interest
on the Escrow Obligations and other money held by the Escrow Agent pursuant to this Escrow
Agreement shall be insufficient to make a payment described in Section 3, the Escrow Agent
shall, to the extent it has actual knowledge thereof, give the Bank and the Trustee prompt notice
of such insufficiency. The Escrow Agent in no event shall be liable for any such insufficiency.
Section 6. Custody and Safekeeping of Obligations. All Escrow Obligations, moneys
and investment income deposited with or received by the Escrow Agent pursuant to this
Agreement shall be subject to the trust created by this Agreement, and the Escrow Agent shall be
liable for the preservation and safekeeping thereof; provided, however, it shall not be responsible
for any depreciation in value of any of the Escrow Obligations.
Section 7. Transfer of Funds After Redemption of Refunded Bonds. The Bank hereby
requests and irrevocably instructs the Escrow Agent, and the Escrow Agent hereby agrees, to
transfer any money or securities remaining in the 2007 Series Three Escrow Account after the
payment at maturity and redemption .of the Refunded Bonds to the Bank, subject to the provisions
of Section 14 hereof.
Section S. Substitution of Different Escrow Obligations or Other Investments. The
Bank reserves the right to substitute from time to time for the Escrow Obligations initially
purchased in accordance with Section 2, or for obligations purchased under this Section, other
direct, non-callable obligations of the United States of America (the "Substitute Obligations");
provided that no Escrow Obligations may be sold or released unless the Escrow Agent has
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received, or is receiving in exchange, all of the Substitute Obligations. The amounts realized from
the disposition of the Escrow Obligations after the purchase of the Substitute Obligations, together
with earnings therein not required by the Escrow Agent to fulfill its obligations hereunder shall be
released immediately to the Bank. Prior to effecting any such substitution and release, the Bank
shall have obtained and delivered to the Escrow Agent:
(a) a letter addressed to the Bank and to the Escrow Agent from an
independent, nationally recognized firm of certified public accountants verifying the
computations that indicate that the Escrow Obligations, the Substitute Obligations and
other money to be held by the Escrow Agent for purposes of making the payments
described in Section 3 will be sufficient, after the proposed substitution, to make all
payments described in Section 3 and in Exhibit A; and
(b) an opinion addressed to the Bank and the Escrow Agent of nationally
recognized bond counsel to the effect that such disposition and substitution will not result
in the inclusion of interest payable on the Refunded Bonds in gross income for federal
income tax purposes.
Section 9. Amendment of Agreement. This Agreement is made for the benefit of the
Bank and the holders from time to time of the Refunded Bonds and it shall not be altered or
amended without the written consent of all such holders, the Escrow Agent and the Bank;
provided, however, that the Bank and the Escrow Agent may, without the consent of, or notice to,
such holders enter into such agreements supplemental to this Agreement that do not materially
adversely affect the rights of such holders (as evidenced by an opinion of counsel delivered to the
Escrow Agent) and as shall not be inconsistent with the terms and provisions of this Agreement,
for any one or more of the following purposes:
(a) to cure any ambiguity, inconsistency or formal defect or omission in this
Agreement;
(b) to grant to, or confer upon, the Escrow Agent for the benefit of the holders
of the Refunded Bonds, any additional rights, remedies, powers or authority that may
lawfully be granted to, or conferred upon, such holders or the Escrow Agent;
(c) to provide for the deposit of additional cash or securities with the Escrow
Agent; and
(d) to designate a new Escrow Agent in the event of the failure or inability of
the Escrow Agent to perform its duties hereunder.
Section 10. Compensation of Escrow Agent. The Escrow Agent hereby acknowledges
that arrangements heretofore made, pursuant to a separate fee schedule, for payment of the fees,
compensation and expenses of the Escrow Agent for services rendered by it pursuant to the
provisions of this Agreement are satisfactory to it.
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The Escrow Agent hereby agrees that in no event shall it ever assert any claim or lien
against the cash or Escrow Obligations deposited with, or other investment securities or cash
held by, the Escrow Agent for purposes of effecting the redemption or payment of the Refunded
Bonds as described above, for any fees for its services, whether regular or extraordinary, as
Escrow Agent, or in any other capacity, or for reimbursement for any of its expenses as Escrow
Agent or in any other capacity.
Section 11. Limitation of Escrow Agent's Duties. None of the provisions contained in
this Agreement shall require the Escrow Agent to risk, use or advance its own funds in the
performance of any of its duties or the exercise of any of its rights or powers hereunder. The
Escrow Agent shall be under no liability for the payment of interest on any funds or other
property received by it hereunder except to the extent the Escrow Agent does not comply with
investment instructions provided to it pursuant to the terms of this Agreement.
The Escrow Agent's liabilities and obligations in connection with this Agreement are
confined to those specifically described herein. The Escrow Agent is authorized and directed to
comply with the provisions of this Agreement and is relieved from all liability for so doing,
except in the case of negligence or willful misconduct on its part, notwithstanding any demand or
notice to the contrary by any party hereto. The Escrow Agent shall not be responsible or liable for
the sufficiency, correctness, genuineness or validity of the Escrow Obligations deposited with it;
the performance or compliance by any party other than the Escrow Agent with the terms or
conditions of any such instruments; or any loss which may occur by reason of forgeries, false
representations or the exercise of the Escrow Agent's discretion in any particular manner unless
such exercise is negligent or constitutes willful misconduct. If any controversy arises between the
Bank and any third person, the Escrow Agent shall not be required to determine the same or to
take any action in the premises, but it may institute, in its discretion, an interpleader or other
proceeding in connection therewith as it may deem proper, and in following either course, it shall
not be liable.
The Escrow Agent undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement, and no implied covenants or obligations shall be read into
this Agreement against the Escrow Agent. The Escrow Agent may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval or other paper or document
believed by it to be genuine and to have been signed or presented by the proper party or parties.
The Escrow Agent may consult with counsel and the advice or any opinion of counsel shall be full
and complete authorization and protection in respect of any action taken or omitted by it
hereunder in good faith and in accordance with such advice or opinion of counsel. The Escrow
Agent may execute any of the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, attorneys, custodians or nominees appointed with due care; the
Escrow Agent shall remain responsible for the execution of the trusts, powers, and performance of
its duties hereunder regardless of any agent, attorney, custodian or nominee so appointed although
it shall not be responsible for any willful misconduct or negligence by such agent, attorney,
custodian or nominee. The Escrow Agent shall not be liable to the parties hereto or deemed in
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Page 6
breach or default hereunder if and to the extent its performance hereunder is prevented by reason
of force majeure.
The term "force majeure" means an occurrence that is beyond the control of the Escrow
Agent and could not have been avoided by exercising due care. Force majeure shall include acts
of God, terrorism, war, riots, strikes, fire, floods, earthquakes, epidemics or other similar
occurrences.
If the Escrow Agent renders any service hereunder not provided for in this Agreement, or
the Escrow Agent is made a party to or intervenes in any litigation pertaining to this Agreement or
institutes interpleader proceedings relative hereto, the Escrow Agent shall be compensated
reasonably by the Bank for such extraordinary services and reimbursed for any and all claims,
liabilities, losses, damages, fines, penalties, and expenses, including reasonable out-of-pocket and
incidental expenses and reasonable legal fees and expenses occasioned thereby.
Section 12. Remission of Funds When Refunded Bonds Paid in Full. At such time as
the Escrow Agent shall have received the confirmation that all payments described in Sections 2
and 7 have been made by the Trustee as paying agent of the Refunded Bonds, together with such
other evidence of such payments as shall be satisfactory to the Bank and the Escrow Agent, the
Escrow Agent shall remit to the Bank any remaining amounts.
Section 13. Successor Escrow Agent. (a) If at any time the Escrow Agent or its legal
successor or successors resigns, or should become unable, through operation of law or otherwise,
to act as Escrow Agent hereunder, or if its property and affairs shall be taken under the control of
any state or federal court or administrative body because of insolvency or bankruptcy or for any
other reason, a vacancy shall forthwith exist in the office of Escrow Agent hereunder. In such
event the Bank, by appropriate action, shall appoint a successor Escrow Agent to fill such
vacancy. If such successor has not been appointed hereunder within 30 days after the Escrow
Agent's removal or resignation, the Escrow Agent shall be entitled to petition a court of competent
jurisdiction for the appointment of a successor.
(b) The obligations assumed by the Escrow Agent pursuant to this Agreement may be
transferred by the Escrow Agent to a successor if (i) the successor Escrow Agent has presented
evidence satisfactory to the Bank and its nationally recognized bond counsel that the successor is
in all respects qualified to perform the duties of Escrow Agent; (ii) the successor has assumed all
the obligations of the Escrow Agent under this Agreement; and (iii) all the Escrow Obligations
and money then held by the Escrow Agent pursuant to this Agreement have been duly transferred
to such successor, whereupon the Escrow Agent shall be discharged of all duties and
responsibilities hereunder.
Section 14. Merger or Consolidation of Escrow Agent. Any company into which the
Escrow Agent may be merged or converted or with which it may be consolidated or any company
resulting from any merger, conversion or consolidation to which it shall be a party or any
company to which the Escrow Agent may sell or transfer all or substantially all of its corporate
AMBB General Obligation and Refunding Bonds, 2016 Series Three
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trust business, provided such company shall be a bank or trust company organized under the laws
of any state of the United States of America or a national banking association and shall be
authorized by law to perform all the duties imposed upon it by this Agreement, shall be the
successor to the Escrow Agent without the execution or filing of any paper or the performance of
any further act.
Section 15. Notices. All notices, requests or reports required or permitted to be given
hereunder shall, until further notice in writing, be given in writing at the following addresses:
To The Bank: Alaska Municipal Bond Bank
Attention: Executive Director
State Office Building, 11 th Floor
333 Willoughby
Juneau, Alaska 99811
To the Escrow Agent: The Bank of New York Mellon Trust
Company, N.A.
Attention: Public Finance
100 Pine Street, Suite 3200
San Francisco, CA 94111
Section 16. Miscellaneous. This Agreement is governed by Alaska law and may not be
modified except in a writing signed by the parties. In the event any one or more of the provisions
contained in this Agreement shall for any reason be held invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any other provision of this
Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein.
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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
pursuant to due and proper authorization, all as of the date and year first above written.
ImI[JI,1iwwII
1;
J. Mitchell
ve Director
THE BANK OF NEW YORK MELLON
TRUST COMPANY, NA.,
as Escrow Agent
Authorized Officer
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