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04LOAN AGREEMENT THJS AGREEMENT datedas ofthe lst day of June 2013 between theAlaska Municipal BondBank the Bank body corporate and politic constituted asan instrumentality of theState of Alaska the State exercisingpublic and essential governmental functions created pursuant to the provisions of Chapter 85 Title 44 Alaska Statutes as amended the Act having its principal place of business at Juneau Alaska and Kodiak Island Borough duly constituted and existing second class borough of theState the Borough WITNESSETH WHEREAS pursuant to the Act the Bank is authorized to loan money the Loan or Loans to governmental units and WHEREAS the Borough is Governmental Unit asdefined in theGeneral Bond Resolution ofthe Bank hereinafter mentioned and pursuant to theAct is authorized to accept Loan from the Bank to be evidenced by its municipal bond and WHEREAS the Borough desires to borrow money from the Bank in the amount of not to exceed $20000000 andhas submitted an application to the Bank for Loan in the amount of not to exceed $20000000 and the Borough has duly authorized the issuance of its fully registered bond in the aggregate principal amount of $17110000 the Municipal Bond whichbond is to be purchased by the Bank as evidence ofthe Loan in accordance with this Agreement and WHEREAS the application of the Borough contains the information requested by the Bank and WHEREAS to provide for theissuance of bonds of the Bank in order toobtain fromtime to time money with which to make Loans the Bankhas adopted the General Obligation Bond Resolution on July 13 2005 as amended August 19 2009 the General Bond Resolution and Series Resolution No 2013-03 approved on May 2013 together with the General Bond Resolution the Bond Resolution authorizing the making of such Loan to the Borough and the purchase of the Municipal Bond WHEREAS the Board approved certain modifications to theGeneral Bond Resolution effective on thedate when all bonds issuedunder the terms ofthe General Bond Resolution prior to February 19 2013 cease to be outstanding NOW THEREFORE the parties agree The Bank hereby makes the Loanand the Borough accepts the Loan in the aggregate principal amount of $17110000 As evidence ofthe Loan made to the Borough and such money borrowed from the Bank by the Borough the Borough hereby selis to the Bank the Municipal Bond in the principal amount with the principal installment payments and bearing interest from its date at the rate or rates per annum stated in Exhibit appended heretoFor purposes of this Loan Agreement the interest on tho Municipal Bond will be computed without regard to the provision in Section hereof for the Borough to make funds available to theTrustee acting undertheGeneral Bond Resolution for the payment of principal and interest due atleast seven business days prior to each respective principal and interest payment date The Borough represents that it has dulyadopted or will adopt ah necessary ordinances or resolutions including Resolution No 2013-13 approved on February 2013 the Borough Legislation andhas taken or will take ah proceedings requiredby law to enable it to enter into this Loan Agreement and issue its Municipal Bond to the Bank and that the Municipal Bond will constitute nonrecourse revenue bond special and himited obligation ofthe Borough secured by security interest in and lien and claim against thelease payments of ProvidenceHealth Services Washington d/b/a Providence Health Services in Alaska Providence as described in thatcertain lease agreement by andbetween the Borough and Providence and entitled Long-Term Care Center Lease Agreement with an effective date of May 2013 the Lease The Borough hereby represents the proceeds ofthe Loan will beused by the Borough to financetheconstruction of long-term care facihity on property owned by the Borough the Project Once completed the Project will be operated by Providence pursuant to the terms of the Lease The Borough represents that it has taken ah necessary action as required by law to enable it to enter into the Lease and that the Lease hasbeen duly executed and vahidly dehivered by boththe Borough and Providence Subject to any apphicable legal himitations the amounts to be paid by the Borough pursuant to this Loan Agreement representing interest due on its Municipal Bond the Municipal Bond lnterest Payments shall be computed at the same rate or rates of interest borne by the corresponding maturities of the bonds sold by the Bank in order toobtain the money with which to make the Loan and to purchase the Municipal Bond the Loan Obligations and shall be paidby the Borough at Ieast seven business days beforethe interest payment datesoas to provide funds sufficientto pay interest as the same becomes dueon the Loan Obhigation Theamounts to be paidby the Borough pursuant to this Loan Agreement representing principal due on its Municipal Bond the Municipal Bond Principal Payments shahl be paid atleast seven business days beforethe payment date stated in the Municipal Bond soas to provide funds sufficientto pay the principal of the AMBBIGeneraI Obligation and Refunding Bonds 2013 Series Two Loan Agreement Page I\Docs\37421734\Loan Agreement Kodiak Revenue Bond.Docx Loan Obligations as the same matures based upon the maturity schedule stated in Exhibit appended hereto In theeventthe amounts referred to in Sections and hereof to be paid by the Borough pursuant to this Loan Agreement are not made available at any time specified herein the Borough agrees that any money payable to it by any department or agency of theState may be withheld from it and paid over directly to the Trustee acting under theGeneral Bond Resolution and this Loan Agreement shafl be fuil warrant authority and direction to make such payment upon noticeto such department or agency by the Bank with copy provided to the Borough asprovided in the Act ln theevent Loan Obligations have been refunded and the interestrates the Bank is required to pay on its refunding bonds in any year are less thanthe interest rates payableby the Borough on the Municipal Bond for the corresponding year pursuant to the terms of the Municipal Bond thenboththe Municipal Bond lnterest Payments and the Municipal Bond Principal Payments will be adjusted in such manner that the interest rate paidby the Borough on any principal installment ofthe Municipal Bond is equal to the interest rate paid by the Bank on the corresponding principal installment of the Banks refunding bonds and on present value basis the sum of the adjusted Municipal Bond lnterest Payments and Municipal Bond Principal Payments is equal toor less thanthe sum of the Municipal Bond lnterest Payments and Municipal Bond Principal Payments due over the remaining term of the Municipal Bond as previously established under this Loan Agreement In theevent of such refunding of Loan Obligations the Bank shall present to the Borough for the Boroughs approval revised schedule of principal nstallment amountsand interest ratos for the Municipal Bond If approved by the Borough the revised schedule shall be attachedheretoas Exhibit and incorporated herein in replacement of the previous Exhibit detailing said principal installment amounts and interest rates The Borough is obligated to pay to the Bank Feesand Charges Such Feesand Charges actually collected from the Borough shall be in an amount sufficient together with the Boroughs Allocable Proportion as defined below of other money available therefor under the provisions of the Bond Resolution and other money availabe therefor including any specific grants made by theUnited States of America or anyagency or instrumentality thereof or by theState or anyagency or instrumentality thereof and amounts applied therefor from amounts transferred to the Operating Fund pursuant to Section 606 of theGeneral Bond Resolution to pay as the same become due the Boroughs Allocable Proportion of the Administrative Expenses of the Bank and AMBB/General Obligation and Refunding Bonds 2013 Series Two Loan Agreement Page I\Docs\37421734\Loan Agreement Kodik Revenue Bond.00cx to pay as the samebecome due the Boroughs Allocable Proportion ofthe fees and expenses of theTrustee and payingagent for the Loan Obligations The Boroughs Allocable Proportion as used herein shall mean the proportionate amount of the total requirement in respect lo which the term is used determíned by the ratio that the principal amount of the Municipal Bond outstanding bears to the total of alt Loans then outstanding to ah Governmental Units under the General Bond Resolution ascer ified by the Bank The waiver by the Bank of any fees payablepursuant to this Section shaH not constitute subsequent waiver thereof The Borough is obligated to make the Municipal Bond Principal Payments scheduled by the Bank The first such Municipal Bond Principal Payment is due atleast seven business days prior to thedate indicated on Exhibit appended hereto and thereafter on the anniversary thereof each year The Borough is obhigated to make the Municipal Bond lnterest Payments scheduled by the Bank on semi-annual basis commencing seven business days prior to thedate indicated on Exhibit appended hereto and to payany Feesand Charges imposed by the Bank within 30 days of receiving the invoice of the Bank therefor 10 TheBank shall not set and the Borough shall not redeem prior to maturity any portion of the Municipal Bond in an amount greater than the Loan Obligations which arethen outstanding and whichare then redeemable and in theevent of any such sale or redemption the same shall be in an amount not less than the aggregate of the principal amount of the Municipal Bond or portion thereof to be redeemed Ii the interest to accrue on the Municipal Bond or portion thereof to beredeemed to thenext redemption date thereofnot previously paid iii the applicable premium if any payable on the Municipal Bond or portion thereof to be redeemed and iv thecost and expenses of the Bank in effecting the redemption of the Municipal Bond or portion thereof to be redeemed The Borough shall give the Bank atleast 50 days noticeof intentionto redeem its Municipal Bond In theeventthe Loan Obligations with respect to whichthe sale or redemption prior to maturity of such Municipal Bond is being made have been refunded and the refundig bonds of the Bank issued for the purpose of refunding such Loan Obhigations weresued in principal amount in excess of or less thanthe principal amount of the Municipal Bond remaining unpaid at thedate of issuance of such refunding bonds the amount whichthe Borough shall be obligated to pay or the Bank shall receiveunder item aboye shall be the principal amount of such refunding bonds outstanding In theeventthe Loan Obhigations have been refunded and the interest the Bank is required to pay on the refundíng bonds is hess than the interest the Bank was required AMBB/General Obligation and Refundirig Bonds 2013 Series Two Loan Agreement Page I1Docs\37421734\Loan AgreementKodiak Revenue BondD0CX to pay on the Loan Obligations the amount whichthe Borough shafl be obligated to pay or the Bank shall receive under item ji aboye shall be the amount ofinterestto accrue on such refunding bonds outstanding In theeventthe Loan Obligations have been refunded the amount whichthe Borough shall be obligated to pay or the Bank shall receiveunderitem iii aboye when therefunded Loan Obligations are to be redeemed shall be the applicable premium if any on the Loan Obligations to be redeemed Nothing in this Section shall be construedas preventing the Borough from refunding the Municipal Bond in exchange for new Municipal Bond in conjunction with refunding of the Loan Obligations 11 Sim ultaneousiy with the delivery of the Municipal Bond to the Bank the Borough shall furnish to the Bank evidence satisfactory to the Bank which shail set forth among other things that the Municipal Bond will constitute valid and binding speciai and limited obligation of the Borough secured by Lease revenues derived from the operation of the Project 12 lnvoices for payments under this Loan Agreement shall be addressed to theKodiak Island Borough Finance Department Attention Finance Director 710 Mill Bay Road Kodiak Alaska 99615 The Borough shall give the Bank and the corporate trust office of the TrusteeundertheGeneral Bond Resolution atleast 30 days written notice of any change in such address 13 The Borough herebyagrees that it shall fully fund at the time ofloan funding its debtservicereserve fund in an amount equal to $1346687.50 which securas payment of principal and interest on its Municipal Bond that such fund shall be held in the name of the Borough with the Trustee and that the yield on amounts held in such fund shall be restrictedto yield not in excess of 2.81942 percent The Borough further agrees to maintainthe debt service reserve fund for the term of the Municipal Bond in an amount equal to the lesser of 10%of the proceeds of the Municipal Bond the maximum annualdebt service on the outstandingMunicipal Bond or 125%of average annual debtservice for the outstandingMunicipal Bond 14 The Borough hereby agrees to keep and retain until thedate six years after the retirement of the Municipal Bond or any bond issued to refund the Municipal Bond or such longerperiod as may be requiredby the Boroughs record retention policies and procedures records with respect to the investment expenditure and use of the proceeds derived from the saleof its Municipal Bond including without limitation records schedules bilis invoices check registers cancelled checks and supporting documentation evidencing use of proceeds and investments and/orreinvestments of AMBB/General Obligation and Refunding I3onds 2013 Series Twa Loan Agreement Page I\Docs37421734\Loan AgreementKodiak Revenue Bond.Docx proceeds The Borough agrees that alt records requiredby the preceding sentence shall be made availabletothe Bond Bank upon request 15 Prior to paymentof the amount of the Loan or any portion thereof and the delivery of the Municipal Bond to the Bank or its designee the Bank shall have the right to cancel alt or any part of its obligations hereunder if Any representation warranty or other statement made by the Borough to the Bank in connection with its application tothe Bank for Loan shall be incorrect or incomplete in any material respect The Borough has violated commitments made by it under the terms ofthis Loan Agreement the Lease or any related agreement The financial position of Providence has in the opínion of the Bank suifered materially adverse change between thedate of this Loan Agreement and the scheduled time of delivery of the Municipal Bond to the Bank The Borough hereby represents and covenants that the proceeds of the Loan shall only beused to construct long term care facility the Project on land owned by the Borough and located in the Borough The Borough further represents and covenants that it shall be the owner ofthe Project and that it shall leasethe Project to Providence federaily recognized 501c3 organization 16 The obligation of the Bank under this Loan Agreement is contingent upon delivery of its General Obligation Bonds 2013B Series Two Qualified 501c3 the 2013 Series Two Bonds and receipt of the proceeds thereof 17 The Borough agrees that it will provide the Bank withwrittennoticeof any default in covenants under the Boroughs Legislation within 30 days from thedate thereof The Borough further agrees that it will provide the Bank with writer notice of any default in thecovenants or agreements by the Borough or Providence under the terms of the Lease within 30 days from thedate thereof 18 The Borough shall not take or omit to take any lawful action which action or omission would cause interest on the Municipal Bond to become subject tofederal income taxes in additionto federal income taxes to which interest on such Municipal Bond is subject on thedate of original issuance thereof The Borough shallnot permit any of the proceeds of the Municipal Bond or the Project financed with such proceeds to beused in any manner that would cause the Municipal Bond to constitute private activity bond other than Qualified 501c3 Bond within the meaning of Section 141 of the Code AMBB/General Obligation and Refunding Bonds 2013 Series Two Loan Agreement Page I\Docs\37421734\Loan Agreement Kodiak Revenue Bond.Docx The Borough shall make no use or investment of the proceeds of the Municipal Bond which will cause the Municipal Bond to be an t1arbitrage bond under Section 148 of the Code So long as the Municipal Bond is outstanding the Borough shall comply or cause compliance with ah requirements ofsaid Section 148and ah regulations of the UnitedStates Department of Treasury ssued thereunder to theextent that such requirements are at the time apphicable and in effect The Borough shall indemnify and hoid harmless the Bank from any obligation of the Borough to make rebate payments to the UnitedStatesunder said Section 148 arising from the Boroughs use or investment of the proceeds of the Municipal Bond 19 The Borough agrees that itit is one of the Governmental Unitsthat has ten percent or greater amount of outstanding bonds heid by the Bank under ts General Bond Resolution it shall execute continuing disclosure agreement for purposes of Securities and Exchange Commission Rule 15c2-12 adopted underthe Securities and Exchangc Act of 1934 and provide the Bank for inclusion in future official statements upon request financial information generahly of the type included in Appendix under the heading Summaries of Borrowers Representing 10%or More of Outstanding Principal of Bonds tssued Under the 2005 General Bond Resolution to the Official Statement and attachedhereto as Exhibit 20 The Borough agrees that if there shall be an event of default under the terms of the Lease set forth in paragraph 28 thereof and the Borough declares all instaltments ofrent payable underthe terms of the Lease to be immediately due and payable the Borough shati deposit alt such amounts in yield restricted fund and applied to the payment of principal of and interest on the Municipal Bond as such paymenís become dueunder the terms of this Loan Agreement or ji defease the Municip Bond Amounts heid in the yield restricted funddescribed in this paragraph 20 shahl restricted to yiehd not in excess of 2.81942 percent 21 The Borough agrees that if the Lease is terminated excluding Providence from possession of the Project the Borough shall use its best effortsto leaseandlor rent the Project to another qualified tenant an organization described in Section 501 c3 of the Internal Revenue Code and that alt leaseand/or rental payments received from such tenant shall be used to pay the principal of and nterest on the Municipal Bond 22 If any provision of this Loan Agreement shallfor any reason be heid to be invahid or unenforceable the invalidity or unenforceability of such provision shahl not affect ar.J of the remaining provisions of this Loan Agreement and this Loan Agreement shall bo construed and enforcedas it such invalid or unenforceable provision had not been cciained herein AMBB/General Obhigation and Refunding Bonds 2013 Series Two Loan Agreement Page I\Dos\37421 734\Loan Agreement odiak Revenue Bond.00cX 23 This Loan Agreement may be executed in one or more counterparts any of which shall be regarded for alt purposes as an original and all of which constitute but one and the same instrument Each party agrees that it will execute any and alt documents or other instruments and take such otheractionsasare necessary to give effectto the termsofthis Loan Agreement 24 No waiver by either party of any term or conditionof this Loan Agreement shall be deemed or construedas waiver of any other term or condition hereof nor shall waiver of any breach of this Loan Agreement be deemed to constitute waiver of any subsequent breach whether of the same or of different section subsection paragraph clause phrase or other provision of this Loan Agreement 25 In this Loan Agreement unlessotherwisedefined herein ah capitahized terms whch aredefined in Article of theGeneral Bond Resolution shaH have the same meanins respectively as such terms are given in Articteof theGeneral Bond Resolution 26 This Loan Agreementmerges and supersedes aH prior negotiations representations and agreements between the parties hereto relating to the subject matter hereof and constitutes the entire agreement between the parties hereto respect thereof of page intentionally left blank AMBB/Gerieral Obligation and Refunding Bonds 2013 Series Two Loan Ageement Page I\Docs\374734\Loan AgreementKodiak Revenue Bond.Docx IN WITNESS WHEREOF the parties hereto have executed this Agreement the day and year first aboye written AMBB/Gerjeral Obligation and Refunding Bonds 2013 Series Two Loan Agreement L\Docs\37421734\Loan AgreementKodiak Revenue Eond.Docx ALASKA MUNICIPA Executive Director KODIAKISLAND BOROUGH ALASKA By KARLETON SHORT Finance Director Page9 EXHIBIT $17110000 Kodiak Island Borough Alaska Long -TermCare Center Revenue Bonds 2013 Providence Kodiak Island Medical Center Municipal Bond Due Principal lnterest June Amount Rate 2015 $605000 3.000% 2016 625000 3.000 2017 645000 4.000 2018 670000 3.000 2019 690000 3.000 2020 71 5000 4.000 2021 745000 4.000 2022 775000 5.000 2023 815000 5.000 2024 860000 5.000 2025 900000 5.000 2026 950000 5.000 2027 995000 5.000 2Ó28 1050000 5.000 2029 1100000 5.000 2030 1160000 5.000 2031 1220000 5.000 2032 1270000 3.625 2033 1320000 3.750 Principal installmentsshall be payable on June in each of the years and in the amounts setforth aboye lnterest on the Municipal Bond shall be payable on December 12013 and thereafteron JuneandDecember of each year Optional Prepayment The Municipal Bond principal payments due in years 2025202620272028 2029and2030 are subject to prepayment in whole or in part at the option of the Borough on any date on or after June 2018 at price of 100%of the principal amount thereof to be prepaid plus accrued interest to the date of prepayment AMBB/General Obflgation and Refunding Bonds 2013 Series Twa Loan Agi eement Exhibit Page A-1 IDocs\3i i734Loan Agreement Kodiak Revenue Sond.Docx The Municipa Bond principal payments due in years 20242031 2032 and 2033 are subject to prepayment in whole or in part at the option of the Borough on any date on or after June 2023 at price of 100%of the principal amount thereofto be prepaid plus accrued interestto thedate of prepayment AMBB/General ObligaUon and Refundrig Bonds 2013 Series Two Loan Agreernent Exhibit Page A-2 IDocs37421734\Loan AgreementKodiak Revenue Bond.Docx