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Tab_61I i aii D 'i iD1$Jhl ii] I 1 I ak'A I II I Between City of Kodiak, Alaska and The Bank of New York Mellon Trust Company, N.A., as Depositary Dated November 3, 2016 Re: City of Kodiak, Alaska Harbor Revenue Refunding Bond, Series 2016A This Reserve Account Depositary Agreement, dated November 3, 2016 (this "Agreement"), is entered into between the City of Kodiak, Alaska, a duly constituted home rule city of the State of Alaska (the "City"), and The Bank of New York Mellon Trust Company, N.A., a national banking association duly established and validly existing under and by virtue of the laws of the United States, with its corporate trust office located in San Francisco, California, as Depositary (the "Depositary"), and WITNESSETH: WHEREAS, the City of Kodiak, Alaska (the "City"), issued and sold its Harbor Revenue Bond, 2007A, in the original principal amount of $2,000,000 (the "2007 Bond"), to the Alaska Municipal Bond Bank (the "Bond Bank"), as authorized by Resolution Number 07-30 and Resolution Number 07-31, each adopted by the City Council on October 25, 2007 (the "2007 Bond Resolution"), on the terms and conditions set forth in the 2007 Bond Resolution and in a loan agreement between the City and the Bond Bank, dated December 1, 2007 (the "2007 Loan Agreement"); and WHEREAS, the Bond Bank issued and sold its General Obligation Bonds, 2007 Series Five (the "2007 Bond Bank Bonds"), to provide funds to purchase the 2007 Bond, as provided in the 2007 Loan Agreement; and WHEREAS, to refinance the 2007 Bond Bank Bonds to achieve debt service savings for borrowers including the City, the Bond Bank is issuing a series of its General Obligation and Refunding Bonds, 2016 Series Three (the "2016 Bond Bank Bonds") to advance refund the outstanding 2007 Bond Bank Bonds; and WHEREAS, in connection with the issuance of the 2016 Bond Bank Bonds to refund the 2007 Bond Bank Bonds, the City and the Bond Bank have entered into an Amendatory Loan Agreement dated October 18, 2016, under which the City is required to issue to the Bond Bank its Harbor Revenue Refunding Bond, Series 2016A (the "2016 Refunding Bond"), in exchange for the 2007 Bond, as authorized by the City's Resolution Number 2016-32, adopted by the City Council on September 22, 2016 (the "2016 Bond Resolution"); and WHEREAS, as required by the 2016 Bond Resolution, the City established, and is required to fund and maintain a debt service reserve account (the "2016A Reserve Account") to secure payment of debt service on the 2016 Refunding Bond in a special fund of the City (the "2016A Bond Fund") held separate and apart from all other funds and accounts of the City; and WHEREAS, the Bond Bank now requires that debt service reserves for the bonds of any borrowers be held by the Depositary as the trustee for the Bond Bank; and WHEREAS, to comply with this requirement, the City wishes to transfer to the Depositary a portion of the proceeds of the sale of its 2016 Refunding Bond that is required to be deposited in the 2016A Reserve Account by the 2016 Bond Resolution; and NOW, THEREFORE, in consideration of the covenants and agreements herein contained, the parties hereto agree as follows, intending to be legally bound: Section 1. Establishment of Account; Deposits The Depositary agrees to establish and maintain a separate account (the "Account") in its capacity as Depositary, acting as a custodian for the benefit of the City, under the terms of this Agreement. The Account established hereby shall remain the property of the City. Sub-accounts may be established within the Account when deemed necessary or convenient by the City or the Depositary. The Depositary shall have custody of the Account, which shall be held on behalf of and for the benefit of the City and kept separate from the other assets of the Depositary, and the money on deposit in the Account shall be held, invested, and disbursed as directed by the City pursuant to this Agreement. The City hereby deposits with the Depositary, in trust, the sum of $119,556.26 to be held by the Depositary. Section 2. Investments (a) The Depositary agrees to invest and reinvest funds in the Account in Permitted Investments (as defined below), as directed in writing by the Authorized Representative of the City. Authorized Representative of the City means the City Manager and the City Manager's designee, if any. Permitted Investment means securities in which the City may invest under the laws of the State of Alaska, as amended from time to time, and subject to the limitations and procedures set forth therein. (b) The City recognizes and agrees that the Depositary will not provide supervision, recommendations or advice relating to either the investment of money held in the Account or the purchase, sale, retention or other disposition of Permitted Investments. Earnings on Permitted Investments shall be added to the Account. The Depositary shall be under no obligation to invest money in the Account other than as directed by an Authorized Representative of the City and shall be entitled to rely on such direction as to the legality of the directed investment. Any loss or expense incurred as a result of an investment shall be borne by the Account. (c) The Depositary is hereby authorized to trade, with disclosure to the Authorized Representative of the City, with itself and any affiliated entity in the purchase and sale of securities for investment, and is authorized to execute purchases and sales of Permitted Investments through the facilities of its own trading or capital markets operations or those of any affiliated entity. The Depositary shall send statements to the City on a monthly basis reflecting activity in the Account for the preceding month. Although the City recognizes that it may obtain a broker confirmation or written statement containing comparable information at no additional cost, the City hereby agrees that confirmations of Permitted Investments are not required to be issued by the Depositary for each month in which a monthly statement is rendered. -2- (d) The City acknowledges and agrees that any delivery to the City of the funds held hereunder is subject to the sale and final settlement of Permitted Investments. Proceeds of a sale of Permitted Investments shall be delivered on the business day on which the appropriate instructions are delivered to the Depositary if received prior to the deadline for same day sale of such Permitted Investments. If such instructions are received after the applicable deadline, proceeds shall be delivered on the next succeeding business day. (e) The Depositary shall cooperate and provide records as reasonably requested by the Authorized Representative of the City in order to comply with the City's requirements to compute and pay arbitrage rebate with respect to the funds held hereunder. Section 3. Disbursement of Account Money deposited in the Account shall be paid out from time to time by the Depositary within one business day after receipt (not later than noon local time in San Francisco, California, or the second business day thereafter, if received after noon local time) by the Depositary of a direction from the Authorized Representative of the City, properly completed and executed in substantially the form of Exhibit A attached hereto. Section 4. Concerning the Depositary Notwithstanding any provision contained herein to the contrary, the Depositary, including its officers, directors, employees and agents: (a) is not liable for any action taken or omitted under this Agreement so long as it shall have acted in good faith and without negligence; (b) has no responsibility to inquire into or determine the genuineness, or sufficiency of any securities, checks, or other documents or instruments submitted to it in connection with its duties hereunder; (c) is entitled to deem the signatories of any documents or instruments submitted to it hereunder as being those purported to be authorized to sign such documents or instruments on behalf of the City, and is entitled to rely on the genuineness of the signatures of such signatories without inquiry and without requiring substantiating evidence of any kind; (d) has no responsibility or liability for any diminution in value of any assets held hereunder that may result from any investments or reinvestment made in accordance with any provision which may be contained herein; (e) is entitled to compensation for its services hereunder as per Exhibit B attached hereto, which is made a part hereof, and for reimbursement of its out-of-pocket expenses including, but not by way of limitation, the fees and costs of attorneys or agents that it may find necessary to engage in performance of its duties hereunder, all to be paid by the City; (f) if the Depositary renders any service hereunder not provided for in this Agreement, or the Depositary is made a party to or intervenes in any litigation pertaining to this Agreement or institutes interpleader proceedings relative hereto, the Depositary shall be -3- compensated reasonably by the City for such extraordinary services and reimbursed for any and all claims, liabilities, losses, damages, fines, penalties, and expenses, including out-of-pocket and incidental expenses and legal fees and expenses occasioned thereby; (g) is under no obligation to institute any suit or action or other proceeding under this Agreement or to enter any appearance in any suit, action or proceeding in which it may be a defendant or to take any steps in the enforcement of its rights and powers hereunder, nor shall be deemed to have failed to take any such action, unless and until it has been indemnified by the City to its satisfaction against any and all costs and expenses, outlays, counsel fees and expenses, and other disbursements, including its own reasonable fees, and if any judgment, decree or recovery be obtained by the Depositary, payment of all sums due it, as aforesaid, shall be a first charge against the amount of any such judgment, decree or recovery. No provision of this Agreement requires the Depositary to risk or expend its own funds; (h) has only those duties as are specifically provided herein and is neither responsible for, nor chargeable with, knowledge of the terms and conditions of any other agreement, instrument or document of the City. This Agreement sets forth all matters pertinent to the Account, and no additional obligations of the Depositary may be inferred from the terms of this Agreement or any other agreement. IN NO EVENT SHALL THE DEPOSITARY BE LIABLE, DIRECTLY OR INDIRECTLY, FOR ANY (i) DAMAGES OR EXPENSES ARISING OUT OF THE SERVICES PROVIDED HEREUNDER, OTHER THAN DAMAGES THAT RESULT FROM THE DEPOSITARY'S FAILURE TO ACT IN ACCORDANCE WITH THE STANDARDS SET FORTH IN THIS AGREEMENT, OR (ii) SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, EVEN IF THE DEPOSITARY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; (i) has the right, but not the obligation, to consult with counsel of choice and shall not be liable for action taken or omitted to be taken by Depositary either in accordance with the advice of such counsel or in accordance with any opinion of counsel to the City addressed and delivered to the Depositary; (j) has no liability or obligation with respect to any failure or delay in the performance of its obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God; earthquakes; fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots; interruptions; labor disputes; acts of civil or military authority or governmental actions; it being understood that the Depositary shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances; and (k) has the right to perform any of its duties hereunder through agents, attorneys, custodians or nominees chosen with reasonable care. The Depositary shall have the right to accept and act upon instructions, including funds transfer instructions ("Instructions") given pursuant to this Agreement and delivered using Electronic Means; provided, however, that the City shall provide to the Depositary an incumbency certificate listing officers with the authority to provide such Instructions Kim ("Authorized Officers") and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the City whenever a person is to be added or deleted from the listing. If the City elects to give the Depositary Instructions using Electronic Means and the Depositary in its discretion elects to act upon such Instructions, the Depositary's understanding of such Instructions shall be deemed controlling. The City understands and agrees that the Depositary cannot determine the identity of the actual sender of such Instructions and that the Depositary shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Depositary have been sent by such Authorized Officer. The City shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Depositary and that the City and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the City. The Depositary shall not be liable for any losses, costs or expenses arising directly or indirectly from the Depositary's reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The City agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Depositary, including without limitation the risk of the Depositary acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Depositary and that there may be more secure methods of transmitting Instructions than the method(s) selected by the City; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Depositary immediately upon learning of any compromise or unauthorized use of the security procedures. "Electronic Means" shall mean the following communications methods: e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Depositary, or another method or system specified by the Depositary as available for use in connection with its services hereunder. Any banking association or corporation into which the Depositary may be merged, converted or with which the Depositary may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Depositary shall be a party, or any banking association or corporation to which all or substantially all of the corporate trust business of the Depositary shall be transferred, shall succeed to all the Depositary's rights, obligations and immunities hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. Section 5. Resignation or Removal of Depositary Each of the City and the Depositary may terminate this Agreement by giving 30 days' prior written notice to the other party. In that event, the duties of the Depositary shall terminate 30 days after receipt of such notice (or as of such earlier date as may be mutually agreeable) and the Depositary shall then deliver the balance of the money or assets then in its possession to the City as the City shall direct. -5- Section 6. Notices Any notice, direction or request to be given in connection with any of the terms or provisions of this Agreement must be in writing and be given in person, by facsimile transmission, courier delivery service or by mail, and shall become effective (a) on delivery if given in person, (b) on the date of delivery if sent by facsimile or by courier delivery service, or (c) four business days after being deposited in the mails, with proper postage for first-class registered or certified mail, prepaid. Until notified in writing by the appropriate party of a change to a different address, notices shall be addressed as follows: (i) if to the City: City of Kodiak Attention: City Manager 710 Mill Bay Road Kodiak, AK 99615 Fax Number: (907) 486-8600 (ii) if to the Depositary: The Bank of New York Mellon Trust Company, N.A. Attention: Corporate Trust Public Finance Group 100 Pine Street, Suite 3200 San Francisco, CA 94111 Fax: (415) 399-1647 Section 7. Governing Law, Counterparts This Agreement shall be construed in accordance with the laws of the State of Alaska. It may be executed in several counterparts, each one of which shall constitute an original and all collectively shall constitute but one instrument. Section 8. Amendment, Modification or Waiver This Agreement may be amended or modified and any term of this Agreement may be waived if such amendment, modification or waiver is in writing and signed by both parties. Section 9. Assignments of Interests No assignment of the interest of either of the parties hereto shall be binding in the absence of the written consent of the other party; provided, however, that the Depositary may assign its interest under the circumstances set forth in the last paragraph of Section 4 hereof without such written consent. Section 10. Waiver of Trial by Jury Each party hereto hereby agrees not to elect a trial by jury of any issue triable of right by jury, and waives any right to trial by jury fully to the extent that any such right shall now or hereafter exist with regard to this Agreement, or any claim, counterclaim or other action arising in connection herewith. This waiver of right to trial by jury is given knowingly and voluntarily by each party, and is intended to encompass individually each instance and each issue as to which the right to a trial by jury would otherwise accrue. IN WITNESS WHEREOF, the parties have duly executed this Depositary Agreement as of the date first above written. City of Kodiak, Alaska / 1 By - Name: Aimée 1Kniaziows1i Title: City Manager The Bank of New York Mellon Trust Company, N.A., as Depositary By Name: Title: Authorized Officer Signature Page to City of Kodiak (2007-5 (Harbor)) Reserve Depositary Agreement I *'i_: ii :i N Disbursement Direction To: The Bank of New York Mellon Trust Company, N.A. Attention: Corporate Trust, Public Finance Group Re: Reserve Account Depositary Agreement dated November 3, 2016 by and between the City of Kodiak, Alaska, and The Bank of New York Mellon Trust Company, N.A., as Depositary (the "Depositary Agreement") Ladies and Gentlemen: You are hereby authorized and directed as Depositary under the above-referenced Depositary Agreement to wire $__________________ to City of Kodiak, Alaska By:_ Name: Title: A-i I W14 I I I1 I I Fee Waived M.