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Tab_233n .j November 3, 2016 UI I I 1/ ': ) Mayor and City Council Members City of Seward P.O. Box 167 Seward, AK 99664 Alaska Municipal Bond Bank P.O. Box 110405 Juneau, AK 99811-0405 Re: City of Seward, Alaska $1,055,000 Harbor Improvement Revenue Refunding Bond, 2016 Ladies and Gentlemen: We have served as bond counsel to the City of Seward, Alaska (the "City"), and have examined a transcript of proceedings taken in the matter of the issuance by the City of its Harbor Improvement Revenue Refunding Bond, 2016 (the "Bond") in the total principal amount of $1,055,000. The Bond refunds a portion of the City's Harbor Improvement Revenue Refunding Bond, 2007 (the "Refunded Bond"), issued pursuant to Resolution No. 2006-128 and Resolution No. 2000-128 (together, the "Bond Resolution"). The Bond is issued pursuant to Resolution No. 2016-052 of the City approved August 22, 2016 (the "Resolution," and together with the Bond Resolution, the "Bond Legislation"). The City entered into a loan agreement (the "Loan Agreement") with the Alaska Municipal Bond Bank (the "Bond Bank") dated September 1, 2000, as amended by an Amendatory Loan Agreement dated January 1, 2007 for the sale of the Refunded Bond. The terms of the Bond are established by an Amendatory Loan Agreement dated as of October 18, 2016, between the Bond Bank and the City (the "Amendatory Loan Agreement"). As to questions of fact material to our opinion and in connection with the issuance of the Bond, we have relied on representations of the City contained in the Bond Legislation, the Loan Agreement, the Amendatory Loan Agreement, and the federal tax certificate of the City dated the date hereof (the "Tax Certificate"), and in the certified proceedings and other certifications of public officials and others furnished to us without undertaking to verify the same by independent investigation. (00662855) November 3, 2016 Page 2 of 3 The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. Such opinions may be affected by actions taken or omitted or events occurring after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur. We disclaim any obligation to update this letter. We have assumed the genuineness of all documents and signatures presented to us (whether as originals or as copies) by any parties other than the City and the due and legal execution and delivery thereof by any parties other than the City. Furthermore, we have assumed compliance with the covenants and agreements contained in the Resolution and the Tax Certificate, including (without limitation) covenants and agreements compliance with which is necessary to assure that future actions, omissions or events will not cause interest on the Bond to be included in gross income for federal income tax purposes. We call attention to the fact that the rights and obligations under the Bond, the Resolution and the Amendatory Loan Agreement may be subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors' rights generally and to the application of equitable principles. Based upon the foregoing, we are of the opinion, as of this date and under existing law, that: 1. The City is duly organized legally existing under the laws of the State of Alaska. 2. The Bond has been duly authorized, executed, and issued in accordance with law, including the Resolution, and constitutes a valid and special obligation of the Issuer payable and enforceable in accordance with its terms and the terms of the Resolution. 3. The Amendatory Loan Agreement has been duly authorized, executed and delivered by the City and is a valid and binding agreement of the City enforceable in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting the enforcement of creditors' rights generally, general principals of equity, or the exercise of judicial discretion in appropriate cases. 4. Interest on the Bond is excludable from gross income for federal income tax purposes, and is not an item of tax preference for purposes of determining the federal alternative minimum tax imposed on individuals and corporations; however, interest on the Bond is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporation. The opinion set forth in the preceding sentence is subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986, as amended (the "Code"), that must be satisfied subsequent to the issuance of the Bond in order that interest thereon t00662855} November 3, 2016 Page 3 of 3 be, or continue to be, excludable from gross income for federal income tax purposes. The City has covenanted to comply with all applicable requirements. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bond in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bond. 5. Interest on the Bond is not included in taxable income for purposes of Alaska income tax imposed on corporations. Interest on the Bond may be indirectly subject to the Alaska alternative minimum tax imposed on corporations to the extent that interest on the Bond is subject to the federal alternative minimum tax. Except as stated herein, we express no opinion regarding any other federal, state or local tax consequences arising with respect to ownership of the Bond. This opinion is given as of the date hereof and we assume no obligation to update, revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. We have not been engaged nor have we undertaken to review the accuracy, completeness or sufficiency of the official statement or other offering material related to the Bond Bank's General Obligation and Refunding Bonds, 2016 Series Three and General Obligation and Refunding Bonds, 2016 Series Four (AMT). Sincerely, JERMAIN DUNNAGAN & OWENS, P.C. Z11, ..... (00662855)