1983-26 Authorizing $7,400,000 Principal Amount of General Obligation Variable Rate Bonds, Series AA13446 -B
5/9/83
LG:maj
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ORDINANCE NO. 83 - -
AN ORDINANCE OF THE KODIAK ISLAND BOROUGH
ASSEMBLY AUTHORIZING $7,400,000 PRINCIPAL
AMOUNT OF GENERAL OBLIGATION VARIABLE RATE
DEMAND BONDS, SERIES A, OF KODIAK ISLAND
BOROUGH, ALASKA, THE EXECUTION OF A CREDIT
AGREEMENT AND A SALES AGENCY AGREEMENT WITH
RESPECT TO THE BONDS, RESCINDING ORDINANCE
83 -4 -0 ADOPTED FEBRUARY 3, 1983 AND PROVIDING
FOR AN EFFECTIVE DATE.
ADOPTED: May 12 , 1983
Kodiak Island Borough
Kodiak, Alaska
RECEIVED
MAY 121983
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R10110111d120.1
4
Recitals
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ORDINANCE
TABLE OF CONTENTS
(This Table is only Contents
conveniencea Ordinance
of reference.)
ARTICLE I
Definitions
Section 1.01 Definitions 2
Section 1.02 Use of Defined Terms 6
Section 1.03 References to Assembly and Officers . 6
Section 1.04 Singular, Plural and Reference to 6
Ordinance
ARTICLE II
Authorization and Terms of Bonds
Section 2.01 Authorization of Bonds 6
Section 2.02 Redemption Fund 8
Section 2.03 Payment of Bonds 9
Section 2.04 Authorization to Draw Under Letter of 12
Credit 12
Section 2.05 Pledge Effected by Ordinance 12
Section 2.06 Ordinance to Constitute Contract
Section 2.07 Obligation and Authentication of Bonds. 12
Section 2.08 Registration of Bonds 14
Section 2.09 Form of Bonds
ARTICLE III
General Provisions
Section 3.01 Execution of Bonds 21
Section 3.02 Medium and Place of Payment
Section 3.03 Lost, Destroyed or Improperly Cancelled 21
Bonds 21
Section 3.04 Cancellation of Bonds
ARTICLE IV
Page
1
Concerning the Trustee
Section 4.01 Appointment 22
Section 4.02 Investments 22
Section 4.03 Responsibility of Trustee 22
Section 4.04 Evidence on Which Trustee May Act . . . 22
Section 4.05 Compensation 23
Section 4.06 Resignation and Removal; Appointment of 23
Successor Trustee
Section 4.07 Acceptance of Appointment by Successor 23
Trustee 24
Section 4.08 Permitted Acts and Functions
ARTICLE V
Covenants
Section 5.01 Punctual Payment 24
Section 5.02 Power to Issue and Secure Bonds 24
Section 5.03 Tax Covenants 24
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ARTICLE VI
Events of Default
Section 6.01 Events of Default 25
Section 6.02 Application of Moneys Upon Acceleration 25
Section 6.03 Remedies Cumulative 26
Section 6.04 Notification of Default 26
ARTICLE VII
Amendment to Ordinance and Agreement;
With and Without Holders' Consent
Section 7.01 Without Holders' Consent 27
Section 7.02 Unanimous Consent Required 27
Section 7.03 Procedure 27
Section 8.01 Appointment of Indexing Agent 28
Section 8.02 Execution of Documents 28
Section 8.03 Severability 28
Section 8.04 Non- Business Days 28
Section 8.05 Headings 29
Section 8.06 Notices 29
Section 8.07 Repeal of Prior Ordinance 29
Section 8.08 Effective Date 29
ARTICLE VIII
Miscellaneous
Page
AN ORDINANCE OF THE KODIAK ISLAND BOROUGH ASSEMBLY
AUTHORIZING $7,400,000 PRINCIPAL AMOUNT OF GENERAL
OBLIGATION VARIABLE RATE DEMAND BONDS, SERIES A, OF
KODIAK ISLAND BOROUGH, ALASKA, THE EXECUTION OF A
CREDIT AGREEMENT AND A SALES AGENCY AGREEMENT WITH
RESPECT TO THE BONDS, RESCINDING ORDINANCE 83 -4 -0
ADOPTED FEBRUARY 3, 1983 AND PROVIDING FOR AN EFFECTIVE
DATE.
WHEREAS, pursuant to Ordinance No. 79 -28 -OA of the
Borough passed and approved on November 7, 1979, the following
question:
PROPOSITION NO. 1
Shall the Kodiak Island Borough incur indebtedness
and issue general obligation bonds in an amount
not to exceed $29,000,000 for the purpose of ac-
quiring property for planning, designing, equipping,
improving, and constructing the following school
and related capital improvements in the Borough
pursuant to Ordinance No. 79- 28 -OA:
Main Elementary- new or renovate;
Junior High- renovate;
Multi- Purpose Auditorium;
Maintenance Shop and Storage Space;
Physical Education Space at East Elementary;
New School at Akhiok;
Outside Physical Education and playground
Facilities for Villages; and
Major Maintenance Repair Projects.
Said general obligation bonds are to mature within
thirty (30) years from the date of issue; bear
interest at a rate not to exceed the maximum
allowed by law; and be secured by a pledge of the
full faith and credit of the Kodiak Island Borough.
(herein called the "Proposition ") was passed and approved by a
vote of 626 for and 532 against Proposition No. 1, at the special
election held in the Borough on December 11, 1979, and said
election has been duly canvassed and the results thereof certified
and confirmed in accordance with law; and
WHEREAS, the Borough Assembly of the Kodiak Island
Borough has determined and does hereby determine that it is
necessary to proceed to acquire property for planning, designing,
equipping, improving, and constructing capital improvements to
the school system of the Kodiak Island Borough (all hereinafter
collectively referred to as the "Project "); and
WHEREAS, by Ordinance No. 80 -17 -0 the Kodiak Island
Borough Assembly did, on May 1, 1980, authorize the first sale of
bonds for this purpose and such bonds in the amount of $12,100,000
were sold on August 1, 1980 to the Alaska Municipal Bond Bank;
and
WHEREAS, it is now deemed necessary and advisable and
in the best interests of the Borough and its inhabitants that
$7,400,000 principal amount of the general obligation bonds,
referred to in the Proposition, be issued at this time in a
single series, as hereinafter fixed and determined, for the
purpose of raising funds to pay the cost of constructing and
acquiring the Project;
00 - 171
NOW, THEREFORE BE IT ORDAINED BY THE BOROUGH ASSEMBLY
OF KODIAK ISLAND BOROUGH, ALASKA, AS FOLLOWS:
ARTICLE I
Definitions
Section 1.01. Definitions. The following terms as
used herein shall have the following meanings, unless the context
otherwise requires:
"Agent" shall mean John Nuveen. & Co. Incorporated, as
agent under the Sales Agency Agreement or any successor as such
Agent.
70% of the'f shall alternative
interestrate applicable to13- weekrU.S.rTreas equal to
Bills determined on the basis of the average per annum discount
rate at which such 13 -week Treasury Bills were sold at the weekly
Treasury auction for any week with respect to which such rate
applies to the Bonds. If no auction shall have been conducted
during any such week, AIR for that week shall be the same as the
most recent AIR.
"Authorized Officer" shall mean the Mayor or Manager of
the Borough and, in the case of an act to be performed or a duty
to be discharged, any member, officer, employee, agent or repre-
sentative of the Borough then duly authorized to perform such act
or discharge such duty.
"Bank" shall mean Rainier National Bank, a national
banking association having its principal office in the City of
Seattle, Washington.
"Bond Counsel" shall mean Messrs. Wohlforth & Flint of
Anchorage, Alaska, or such other nationally recognized bond
counsel as the Borough shall select:
"Bond" or. "Bonds" shall mean one or more of the $7,400,000
General Obligation Variable Rate Demand Bonds, Series A, of the
Borough authorized, authenticated and delivered pursuant to this
Ordinance.
"Borough" shall mean Kodiak Island Borough, a municipal
corporation and political subdivision of the State organized as a
second class borough pursuant to Title 29 of the Alaska Statutes.
"Business
and Sunday and l excluding any l day ewhi hyshallebeladlegalaholiday
or a day on which banking institutions in the State of Washington
or dealers located in the City of New York who are members of the
National Association of Securities Dealers, Inc. are authorized
or obligated by law or administrative order to close.
"Code" shall mean the Internal Revenue Code of 1954, as
"Cost" shall mean the cost of acquiring and developing
the Project, including interest on the Bonds prior to and during
the period of acquiring and developing the Project, and reasonable
fees of the Trustee for the payment of such interest, the cost
whether incurred by the Borough or others for field surveys and
advance planning undertaken in connection with the Project prop-
erly allocable to the Project and the cost of acquisition of any
amended.
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land or interest therein required as the site of the Project or
for use in connection therewith, the cost of preparation of the
site of the Project and of any land to be used in connection
therewith, the cost of any indemnity and surety bonds and premiums
incurred in connection with the Project prior to or during con-
struction thereof and all related direct administrative and
inspection expenses whether incurred by it or by another in
connection with the Project prior to or during construction
thereof and allocable portions of direct costs of the Borough,
legal fees, fees and expenses of the Trustee, Agent and Bank to
the extent payable by the Borough, cost of issuance of the Bonds
by the Borough and financing charges and fees and expenses of
bond counsel, financial advisors and consultants in connection
therewith, credit fees with respect to the Letter of Credit, cost
of audits, the cost of all machinery, apparatus and equipment,
cost of engineering, architectural services, design, plans,
and surveys, estimates of cost, the reimbursement
of all moneys advanced from whatever source, for the payment of
any item or items of cost of the Project, and all other expenses
necessary of incident to determining the feasibility or practi-
cability of the Project, and such other expenses not specified
herein as may be necessary or incident to the acquisition and
construction of the Project.
"Credit Agreement" shall mean the Credit Agreement by
and between the Borough and the Bank relating to the repayment of
Unpaid Drawings.
"Debt Service" shall mean, as of any particular date of
computation and with respect to a specified period, an amount of
money equal to the sum of (a) all interest payable during such
period on all Bonds Outstanding on said date of computation and
(b) all Principal Installments payable during such period with
respect to all Bonds Outstanding on said date of computation, all
calculated on the assumption that Bonds will after said date of
computation cease to be Outstanding by reason, but only by reason,
of the payment when due and application in accordance with this
Ordinance of Principal Installments payable at or after said date
of computation.
"Event of Default" shall have the meaning assigned to
that term in Article VI hereof.
"Final Payment Date" shall mean the seventh calendar
day after (but not including) the date of delivery of the Notice
and Demand provided for in Section 2.03(c) to the Agent and the
Trustee or, if such day is not a Business Day, the Business Day
next preceding such day.
"Holders" shall mean the registered holders of all
Outstanding Bonds and the Bank with respect to Unpaid Drawings.
"Interest Payment Date" shall mean, with respect to
each Bond, the first Business Day of January, April, July and
October, beginning with the first Business Day of January, 1984
and the date of maturity of such Bond.
"Indexing Agent" shall mean John Nuveen & Co. Incorpor-
ated or any successor indexing agent appointed pursuant to this
Ordinance.
"Investment Securities" shall mean and include any of
the.following investments:
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(a)• direct obligations of or obligations insured or
guaranteed by the United States
i nstrumentalities of the United StateAmerofa me agencies or or
remaining term to maturity of six othe or lest of rmles; with a
s;
(b) interest - bearing time deposits or certificates of
deposit with a maturity
eluding the Trustee) o ofs or less of a bank (in-
and collateralized by company continuously
and
(a) hereof, y ob liga bons of the type described in
secured
a market value at least equal at to the
such deposit or State having
such
io b to the extent such deposit or
Corporation or the Federal Savings F and Lo Deposit Insurance
ration, or any successors thereto; and Loan Insurance Corpo_
(c) Repurchase agreements extending not beyond 30
calendar days with banks
members of the Federa (including System the Trustee) which are
are rated not less than BAA - or res b Moo obligations
Service that are secured by by rdp to in
paragraph (a) hereof having abccunent market referred value to in
equal to 103% of the amount of sa mrr value at least
marked to market weekly, the repurchase agreement,
marked
deposited in y, and which obligations hae
ment of the Trustees collateral sec rity for for such r epuur-
chase agreements. curity such epr-
Credit � "L or "Letter of Credit" shall mean
Co the anddan Asubstitutes or renewals therefor issued pursuant
of
pursuant
Agreement, "LLohan Document Credit, mean this Ordinance
A ge Bonds. , the Sales Agency the Credit
dt
g cY Agreement and
prepared ("Offering Memorandum" shall mean
the sale of the information of Bondholders in ccnnectic dub
the Bonds.
an Authorized "O fie is Certificate" a l t
shall mean ac document
anattesting acknowledging
signed by
set forth circumstances, representations or other matters therein inst the
meat o h taken or directing that an action authorized berated or
h
by the Person to whom such document saaddressedd.
mean, as of nun tanding," when used with reference to Bonds, shall
issued except :y date of determination, all Bonds theretofore
delivered B onds theretofore cancelled by the Trustee or
the Trustee for cancellation;
but not) Bonds theretofore
presented when adequate and redeemed or Bonds due
Trustee for payment thereon doe o moneys are held by y th
(3) Bonds in lieu of which other Bonds have been
issued senpursuant to the provisions of Section 3.03 hereof
r to Bo nds destroyed, stolen or lost unless proof
sae
held b to the Trustee is presented that any such Bonds
vreih, binding and in whose hands any of such Bonds is a
9 and legal obligation of the Borough.
"Person" shall mean an individual or a corporation,
partnership, trust, incorporated or unincorporated association,
joint venture, joint stock company, government (or an agency or
political subdivision thereof) or other entity of any kind.
"Prime Rate" shall mean the rate of interest which the
Bank announces publicly from time to time at its Seattle, Washing-
ton offices as its "Prime Rate" or "Large Business Prime Rate ".
"Principal Installment" shall mean, as of any particular
date of computation, an amount of money equal to the aggregate of
(a) the principal amount of Outstanding Bonds which mature on a
single future date, reduced by the aggregate principal amount of
such Outstanding Bonds which would at or before said future date
be retired by reason of the payment when due and application in
accordance with this Ordinance of Sinking Fund Installments
payable at or before said future date for the retirement of such
Outstanding Bonds, plus (b) the amount of any Sinking Fund Install-
ments payable on said future date for the retirement of any
Outstanding Bonds, and said future date shall, for all purposes
hereof, be deemed to be the date when such Principal Installment
is payable and the date of such Principal Installment.
"Project" shall mean the improvements authorized by and
described in the Proposition.
"Proposition" shall mean the bond proposition passed
and approved by the voters of the Borough on December 11, 1979 as
more fully set forth in the recitals to this Ordinance.
"Redemption Fund" shall mean the fund created pursuant
to Section 2.02.
"Redemption Fund Requirement" shall mean, as of any
particular date of computation, an amount of money equal to the
Debt Service payable during the 125 day period next ensuing,
calculated on the assumption that interest will accrue on the
Outstanding Bonds during all of such period at the rate of twenty
percent (20 %) per annum.
"Sales Agency Agreement" shall mean the Sales Agency
Agreement by and between the Borough and the Agent, or any succes-
sor to such agreement.
"Sinking Fund Installment" shall mean, as of any particu-
lar date of determination and with respect to the Outstanding
Bonds, the amount required by Section 2.03(b) to be paid by the
Borough on a single future date for the retirement of Bonds which
mature after said future date, but does not include any amount
payable by the Borough by reason only of the maturity of a Bond.
"State" shall mean the State of Alaska.
"Stated Amount" shall mean the stated amount of the
Letter of Credit.
"STIR" shall mean the Short-Term Interest Rate as
announced from time to time by the Indexing Agent reflecting
current bid -side yields on short -term tax - exempt paper (U.S.
government- guaranteed housing project bonds, other high - quality
municipal bonds, and tax - exempt commercial paper) under prevailing
market conditions.
"Trustee" shall mean Seattle -First National Bank, a
national banking association having its principal office in the
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City of Seattle, Washington, or any successor trustee appointed
pursuant to this Ordinance.
determination thereof is be made, the ex if the time any
the Stated Amount minus (ii) all Unpaid Drawings. y, of (i)
"Unpaid Drawings" shall mean the aggregate amount of
each payment or disbursement made by the Bank under the Letter of
Credit honoring any demand for payment made by the Trustee there-
under, to the extent not theretofore reimbursed by the Borough
pursuant hereto and to the Credit Agreement.
herein
Section tT ed eani w Terms. ed Ain ll any certifi
cates, reports or other documents made or delivered pursuant
hereto unless the context otherwise requires.
Section 1.03. References to Assembl and Officers.
Any reference rein to an o{1 e s of e Bozo or
Assembly of the Borough shall include those succeedi ng�ts rough
functions, duties or responsibilities pursuant to or by operation
of law or those who are lawfully performing their functions.
Section 1.04. Sin lar Plural and Reference to Ordi-
nance. Un ess a context s a of erwise indica e, words i port-
inq a singular shall include the plural, and vice versa, and
��
the terms "herein," "hereof," "hereby," "" „
similar terms refer to this Ordinance. hereto, hereunder" and
ARTICLE II
Authorization and Terms of Bonds
Section 2.01. Authorization of Bonds. Of the $16,900,000
principal amount of genera o igation Sandi the Borough
remaining unissued of the $29,000,000 rincipount
bonds authorized by virtue of the adoption byathevotersfofuthe
Borough of the Proposition; $7,400,000 are hereby authorized to
be issued under and pursuant to the provisions of AS 29.58 and
this Ordinance for the purpose of financing school capital improve-
ments of the Borough as described in the Proposition. The proceeds
of sale of the Bonds are hereby appropriated for the payment of
Costs of said improvements. Each Bond shall be designated "General
Obligation Variable Rate Demand Bond, Series A ".
Upon their execution in the form and manner as herein
provided, the Bonds to be issued initially shall be delivered to
the Trustee for authentication, but before such Bonds shall be
authenticated and delivered by the Trustee there shall be filed
with or delivered to the Trustee the following:
issuance of such 1Bondscopy of this Ordinance authorizing the
(b) An Officer's Certificate directing the authenti-
cation and delivery of such Bonds to the purchasers named
therein, upon payment to the Trustee of the purchase price
stated therein;
(c) Bond Counsel's opinion to the effect that such
'Bonds are valid and binding general obligations of the
Borough, enforceable in accordance with their terms and the
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terms of this Ordinance, and such Bonds have been duly and
validly authorized and issued (provided that any such opinion
may be qualified to the extent that enforcement of any
agreement or Bond may be limited by bankruptcy, insolvency,
reorganization or other laws or equitable principles affect-
ing the enforcement of creditors' rights);
The Bonds shall be dated as of the date of their initial
issuance and delivery. Each Bond shall bear interest from such
date, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, as the case may be,
payable on each Interest Payment Date, at the rate per annum
hereinafter set forth until the principal thereof is duly paid or
provided for, shall be in a form payable to the person who is the
registered. holder on the Interest Payment Date. The Bonds shall
mature on July 1, 1986.
The Bonds shall be issued in the denominations of
$50,000 or any integral multiple thereof and shall be numbered
from one consecutively upwards. The Bonds shall be executed in
the name of the Borough by the manual or facsimile signature of
its Mayor and its corporate seal shall be affixed or imprinted
thereon and attested by the manual or facsimile signature of its
Borough Clerk.
The Bonds shall bear interest at a variable rate per
annum except as otherwise provided in this Section, equal to STIR
plus one -half (1/2) of one percent (.5 %) as in effect from time
to time. Any change in STIR shall take effect on the Business
Day immediately following the day such change is announced by the
Indexing Agent. If the Indexing Agent shall fail to announce STIR
in any week, the Bonds shall continue to bear interest at STIR as
announced the immediately preceding week plus one -half (1/2) of
one percent (.5 %) and such rate shall be deemed to become effec-
tive on Thursday of such week, and if the Indexing Agent shall
fail to announce STIR for a second successive week the interest
rate for the Bonds shall be AIR, as in effect from time to time,
commencing on Thursday of such week and until the Business Day
immediately following the day the Indexing Agent next announces
STIR. Notwithstanding the foregoing, with respect to any Bond,
no adjustment in the interest rate shall be made for a change in
STIR or in AIR, or a change in the interest rate from STIR to AIR
or from AIR to STIR, if such change takes effect on a Business
Day which is less than five Business Days prior to (i) an Interest
Payment Date or (ii) a date on which such Bond is to be paid or
redeemed (including the day such change takes effect but not the
Interest Payment Date, redemption date or payment date), whether
or not interest is actually paid on such Interest Payment Date or
the Bond is paid or redeemed on such payment or redemption date.
In the event that the Trustee is required to give notice of a
mandatory purchase of Bonds by the Bank pursuant to this Section
2.01, the interest rate on the Outstanding Bonds shall be fixed.
as of the Interest Rate Revision Date (as defined below) at the
rate determined on said date and will remain fixed to and until
the data of purchase.
If any Bond is tendered for payment pursuant to Section
2.03(c), is purchased by the Bank pursuant to the Sales Agency
Agreement and remains Outstanding after the first Interest Payment
Date on which such Bond could have been selected for redemption
by application of Sinking Fund Installments pursuant to Section
2.02(b) but was not so selected because the aggregate principal
amount of Bonds held by the Bank as aforesaid at such time of
selection of Bonds for redemption exceeded the amount of such
Sinking Fund Installment; then, from and after such Interest
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Payment Date, such Bond shall bear interest at the Prime Rate
until the Bank is no longer the Holder thereof. During an
period in which the Bank is the Holder of any Bond by virtue of
the mandatory purchase of such Bond pursuant to Section 2.03(f),
such Bond shall bear interest at 120% of the Prime Rate.
Section 2.02. Redemption Fund. There is hereby created
and established with the Trustee an irrevocable trust fund in the
name of the Borough to be designated "Kodiak Island Borough
Redemption Fund," which shall be expended in accordance with the
provisions of this Ordinance. The moneys in the Redemption Fund
shall be used only for the purpose of paying principal of and
interest on the Bonds and reimbursing the Bank for Unpaid Drawings
and paying the interest thereon. The Trustee shall maintain
within the Redemption Fund a separate account for each payment
received from the Borough for deposit therein and shall expend
moneys from the Redemption Fund in the order in which such moneys
are received. The Trustee shall have the sole right of with-
drawal with respect to moneys in the Redemption Fund. Earnings
on moneys deposited in the Redemption Fund shall be deposited in
such Fund and shall be used for the same purposes and in the same
manner as other moneys in such Fund.
The Trustee shall apply money in the Redemption Fund,
together with the proceeds of the investment thereof, to the
payment of the principal of, premium, if any, and interest on the
Bonds when due, whether at their maturity or upon the redemption
thereof or by acceleration or otherwise, in the manner and at the
time specified in this Ordinance but subject to the following
- order of priority:
(1) money derived from the proceeds of the Bonds which
may be on deposit in the Redemption Fund for a period of at
least 125 days during which 125 -day period no petition has
been filed by the Borough in bankruptcy;
(2) money paid by the Borough pursuant to this Ordin-
ance which has been on deposit in the Redemption Fund for a
period of at least 125 days during which 1 25 - day - period no
petition has been filed by the Borough in bankruptcy;
(3) money received by the Trustee from the Bank as a
draw on the Letter of Credit or for the purpose of pur-
chasing the Bonds pursuant to Article VII of the Credit
Agreement;
(4) money paid by the Borough which has not been on
deposit in the Redemption Fund for a period of at least 125
days; and
( any other money on deposit in the Redemption Fund.
The money in the foregoing priorities (1) and (2) are herein
referred to as g
constituting, or being derived from "Eligible
Moneys."
In no event (other than as set forth in the next suc-
ceeding sentence) shall any money other than money derived from
Eligible Moneys or money drawn under the Letter of Credit or
received from the Bank for the purpose of purchasing Bonds pur-
suant to Article VII of the Credit Agreement be applied to the
payment of the principal of, premium, if any, or interest on the
Bonds if money is available and may be drawn under the Letter of
Credit for such purpose. If and to the extent money derived from
Eligible Moneys or drawn under the Letter of Credit or available
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from the Bank for the purchase of Bonds are insufficient or un-
available or unobtainable therefor, the Trustee shall apply any
other money which is available therefor, including money in the
foregoing priorities (4) and (5) to the payment of the principal
of, premium, if any, and interest on the Bonds.
Section 2.03. Payment of Bonds.
(a) Optional R The Bonds shall be redeemable
at any time on or after January 1, 1984, at the option of the
Borough, as a whole or in part, but only from Eligible Moneys
deposited in the Redemption Fund pursuant to Subsection 2.03(e)
at a redemption price equal to the principal amount thereof plus
accrued interest thereon to the date of redemption, upon notice
of redemption given by delivery of such notice in writing by the
Borough to the Trustee at least thirty days prior to the date of
redemption and upon not less than fifteen days notice by the
Trustee to the Holders of the Outstanding Bonds, as provided in
the form of Bond. On the redemption date, notice having been
given to the Holders of the Bonds and Eligible Moneys for the
payment of the redemption price being held irrevocably in trust
by the Trustee in the Redemption Fund, all as provided in this
Ordinance, interest on the Bonds shall cease to accrue, such
Bonds shall cease to be entitled to any lien, benefit or security
under this Ordinance, and the Holders of the Bonds shall have no
rights in respect thereof except to receive payment of the redemp-
tion price upon presentation thereof.
(b) Sinking Fund Redemption. The Bonds shall be
subject to mandatoty red — cap rt
tion, in part but only from Eligible
Moneys, at a redemption price equal to the principal amount
thereof plus accrued interest thereon to the date of redemption
on the first Business Day of the following months and in the
following amounts, each of which shall constitute a Sinking Fund
Installment for the retirement of the Bonds:
Month Sinking Fund Installment
January, 1984 $ 600,000
April, 1984 600,000
July, 1984 600,000
October, 1984 600,000
January, 1985 600,000
April, 1985 600,000
July, 1985 600,000
October, 1985 600,000
January, 1986 600,000
April, 1986 1,000,000
(c) Redemption Pursuant to Demand by Holders. Each
Holder of a Bond may, by execution and m ltane � d livery to
the Agent and the Trustee of irrevocable written notice in the
form set forth in Section 2.09 (the "Notice and Demand ") and
tender of the Bond to the Trustee, demand payment of the principal
of and accrued interest on such Bond to the settlement date for
payment of such Bond which shall be the Business Day next preced-
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ing the Final Payment Date or such earlier date mutually agreed
upon by the Borough, the Agent and such Holder. The Notice and
Demand shall constitute the appointment of the Agent to arrange
for the placement of the Bond at a purchase price not less than
par plus accrued interest to the settlement date. Upon receipt
from the Agent of notice of the placement of the Bond and an
amount of money equal to such purchase price which shall be paid
to such Holder on the settlement date, the Trustee shall deliver
a like aggregate principal amount of Bonds to or upon the order
of the Agent. If the Agent is unable to arrange a placement of a
tendered Bond by 2:00 P.M., New York time, on the Business Day
next preceding the Final Payment Date, the Trustee shall, on the
Final Payment Date, redeem the Bond at par plus accrued interest
to the Final Payment Date from moneys deposited in the Redemption
Fund pursuant to Payment 2.03(e).
mm ubsection
Debt Service P
on n from Service. e Redemption T Fund e as s the l same
shall become due and payable. The Borough shall deposit money
with the Trustee sufficient to maintain the Redemption Fund
Requirement at least 125 days prior to each and every date on
which a payment of Debt Service shall be due and payable, whether
by optional redemption, sinking fund redemption or otherwise. At
all times the Borough shall maintain on deposit in the Redemption
Fund an amount equal to the Redemption Fund Requirement. If at
any time the amount held in the Redemption Fund is less than the
Redemption Fund Requirement, the Trustee shall make demand on the
Bank for an immediate payment under the Letter of Credit for an
amount sufficient to cure such deficiency (subject to the limits
of the Letter of Credit and in accordance with the provisions of
Section 2.04) and shall deposit the proceeds of such drawings in
the Redemption Fund. If any funds remain in the Redemption Fund
after the principal of and interest on all Bonds have been paid
in full, upon written demand from an officer of the Bank specify-
ing the amount of Unpaid Drawings and the accrued interest there-
on, the Trustee shall immediately pay over such funds to the Bank
to the extent required to reimburse the Bank for such Unpaid
Drawings and to pay such accrued interest.
(e) Transfers from Redemption Fund. In the case of
Debt Service due on any Interest Payment Date or a redemption
pursuant to Section 2.03(a) or Section 2.03(b) or a mandatory
purchase pursuant to Section 6.01, the Trustee shall make demand
on the Bank for payment under the Letter of Credit on the applic-
able Interest Payment Date, redemption date or purchase date of
an amount sufficient to pay the balance required to pay in full
the Debt Service due on such Interest Payment Date or, with
respect to a redemption date or purchase date, principal of and
the interest on Bonds to be redeemed on such redemption date or
purchased on such purchase date.
In the case of a redemption pursuant to Section 2.03(c),
the Trustee shall, immediately after receiving a copy of the
Notice and Demand, make demand on the Bank for payment under the
Letter of Credit on the Final Payment Date for an amount sufficient
to pay the principal of and accrued interest on the Bond to be
redeemed. If the Trustee receives written notice from the Agent
prior to 2:00 P.M., New York time, on the last Business Day
immediately preceding the Final Payment Date that a placement of
the tendered Bond has occurred, the Trustee shall revoke the
demand for payment under the Letter of Credit as provided in the
Letter of Credit; provided, however, that the Trustee shall incur
no liability for its failure to revoke such demand in the event
of the placement of the tendered Bond.
-10-
0 0 0 0 1 3'3 9
The Trustee shall deposit the proceeds of drawings
under the Letter of Credit made pursuant to this Section 2.03 in
the Redemption Fund; provided, however, if a drawing is made
under the Letter of Credit with respect to the redemption of
tendered Bonds pursuant to Section 2.03(c) and all or any portion
of the proceeds of such drawing are not required to complete such
redemption, the Trustee shall immediately pay to the Bank, to
reimburse it for the Unpaid Drawings resulting from such drawings,
an amount equal to the proceeds thereof not required to complete
the redemption.
(f) Mandatory Purchase. Upon the declaration of an
Event of Default, the Bonds shall be purchased from moneys deposi-
ted in the Redemption Fund pursuant to Section 6.01, at a purchase
price equal to the principal amount thereof plus accrued interest
thereon to the date of purchase, upon five days notice by the
Trustee to the Holders of the Outstanding Bonds, as provided in
the form of Bond.
Whenever the Trustee is required to purchase Bonds as
provided in this Section, the Trustee shall pay on the purchase
date the purchase price to the Holders entitled thereto from
moneys deposited in the Redemption Fund and shall authenticate
and deliver to the Bank as a transferee as provided in Section
2.08, a like principal amount of Bonds which from and after the
purchase date thereof shall bear interest at 120% of the Prime
Rate.
(g) Selection of Bonds for Redemption. In selecting
the Bonds to be in part pursuant to Section 2.03(a) or
2.03(b), the Trustee shall assign a distinctive number for each
$50,000 of the principal amount of each Bond and shall select by
lot, using such method of selection as it shall deem proper in
its discretion, from the numbers so assigned of Bonds purchased
by the Bank pursuant to the Sales Agency Agreement as many numbers
as, at $50,000 for each number, shall equal the principal amount
of Bonds to be redeemed; provided that if after selecting all of
such Bonds for redemption the principal amount of Bonds so selected
is less than the principal amount of -Bonds to be redeemed, then
the Trustee shall select by lot, using such method of selection
as it shall deem proper in its discretion, from the numbers so
assigned to all other Bonds as many additional numbers as, at
$50,000 for each number shall equal (together with Bonds held by
the Bank and selected for redemption as aforesaid) the principal
amount of Bonds to be redeemed.
The Bonds to be redeemed shall be the Bonds to which
were assigned the numbers so selected, but only so much of the
principal amount thereof as shall equal $50,000 for each number
assigned to it and so selected. Notice of the redemption of the
Bonds or portions thereof so selected for redemption shall be
given not less than fifteen days prior to the date fixed for such
redemption by the Trustee to the Holders of the Outstanding
Bonds, as provided in the form of Bond. On the redemption date,
notice having been given to the Holders of the Bonds and moneys
for the payment of the redemption price being held irrevocably in
trust by the Trustee in the Redemption Fund, all as provided in
this Ordinance, interest on the Bonds or portions thereof so
called for redemption shall cease to accrue, such Bonds or por-
tions thereof shall cease to be entitled to any lien, benefit or
security under this Ordinance, and the Holders of such Bonds or
portions thereof shall have no rights in respect thereof except
to receive payment of the redemption price upon presentation
thereof.
) 1I
Section 2.04. Authorization to Draw Under Letter of
Credit. The Boroug7i"ereby au iorizes and Trustee to
rraw moneys under the Letter of Credit for payment of
of and interest on the Bonds as ancecandl as
necessary to make any such payment provided in this principal t rrtee at
i n es to
the extent moneys in the Redemption no Fudareunavailableor are
insufficient for such payment.
Section 2.05. Pled a Effected ny Ordinance. To secure
the payment o t e pr ni cipa o Merest on the Bonds the
Borough hereby pledges, for the equal benefit of the Holders of
the Bonds, all amounts held in the Redemption Fund. To secure
the payment of the principal of and interest on the Bonds and the
reimbursement of the Unpaid Drawings and interest thereon as
provided in the Credit Agreement, the Borough further hereby
pledges for the benefit of the Holders,
reimbursements by the Alaska Department of held by the
Borough and available to repay the Bonds or the Unpaid Drawings,
provided that at all times during which the Borough is not in
default under any provision of this Ordinance or the Credit
Agreement, such amounts may be expended by the Borough for an
other lawful purpose. any
Section 2.06. Ordinance to Constitute Contract. In
consideration o tie purchase an acceptan o eit� B ds by
those who shall hold the same from time to time, the provisions
of this Ordinance shall be a part of the contract of the Borough
with the Holders and shall be deemed to be and shall constitute a
contract between the Borough, the Trustee and the Holders. The
pledge effected hereby and the provisions, covenants and agreements
herein set forth to be performed by or on behalf of the Borough
shall be for the equal benefit, protection and security of the
Holders of any and all of the Bonds, each of which, regardless of
the time or times of its issue, making or maturity, shall be of
equal rank without preference, priority or distinction over any
other thereof except as expressly provided in this Ordinance.
Section 2.07. Obli ation and Authentication of Bonds.
The Bonds sha be hirect general bl gations o the Borough
and the full faith and credit of the Borough are hereby pledged
for the prompt payment of the Bonds and the interest thereon.
Unless paid from other sources, the Borough is obligated to levy
ad valorem taxes upon all taxable property in the Borough without
limitation as to rate or amount for the payment of the Bonds and
the interest thereon.
Only such Bonds as shall have endorsed thereon a certi-
ficate of authentication substantially in the form set forth duly
in Section 2.09 executed by the Trustee shall be entitled to any
right or benefit under this Ordinance. No Bond shall be valid or
obligatory for any purpose unless and until such certificate of
authentication shall have been duly executed by the Trustee, and
such executed certificate of the Trustee upon any such Bond shall
be conclusive evidence that such Bond has been authenticated and
delivered under this Ordinance. The Trustee's certificate of
authentication on any Bond shall be deemed to have been executed
by it if signed with an authorized signature of the Trustee, but
catehoflauthenticationaon alltofhthe Bondsrissuedghereundeertifi-
Section 2.08. Registration of Bonds. Title to each
Bond shall Me-Willie-Fed on books for the registration and trans-
fer of the Bonds kept by the Trustee at its principal office. A
transfer to be made r on d y
such books and d by such
Trustee.
-12-
The Bonds may be transferred only upon the books for
the registration and transfer of Bonds, upon the surrender there-
of at the principal office of the Trustee, together with a form
of transfer duly executed by the registered holder or his attor-
ney duly authorized in writing, substantially in the form set
forth in Section 2.09. Upon the transfer of any Bond, there
shall be issued in the name of the transferee or transferees a
new fully registered Bond or Bonds of any of the authorized
denominations of the same aggregate principal amount as the
surrendered Bond. The new Bond or Bonds shall bear the same date
as the date of the surrendered Bond but shall bear interest from
the immediately preceding Interest Payment Date to which interest
has been paid or duly provided for.
All Bonds shall be exchangeable for Bonds or a Bond of
other authorized denominations having the same aggregate principal
amount without payment of any charge, other than tax or other
governmental charge. The new Bond or Bonds shall bear the same
date as the date of the Bond exchanged therefor but shall bear
interest from the immediately preceding Interest Payment Date to
which interest has been paid or duly provided for. Neither the
Borough nor the Trustee shall be required to exchange or transfer
any Bond within five days of an Interest Payment Date or, in the
case of any redemption of Bonds, within five days of the redemp-
tion date.
The Trustee is hereby authorized and directed to enter
into an agreement with J. Henry Schroeder Bank &Trust Company
providing for the deposit of Bonds at the principal corporate
trust office of J. Henry Schroeder Bank & Trust Company in the
City of New York, New York, for transmission to the Trustee for
purposes of tender, payment, transfer or exchange.
Section 2.09. Form of Bonds. The Bonds shall be
substantia yin t folio iwagTorm:
0 0 1 1 1
No.
r 1 7 9
FORM OF BOND
STATE OF ALASKA
KODIAK ISLAND BOROUGH
General Obligation Variable Rate Demand Bond,
Series A
Kodiak Island Borough (the "Borough "), a municipal
corporation and a political subdivision of the State of Alaska,
for value received, hereby promises to pay to
or registered assigns, on July 1, 1986, the principal sum of
"AIR" shall mean an alternative interest rate equal to
70% of the interest rate applicable to 13 -week U.S. Treasury
Bills determined on the basis of the average per annum discount
rate at which such 13 -week Treasury Bills were sold at the weekly
Treasury auction for any week with respect to which such rate
applies to the Bonds. If no auction shall have been conducted
during any such week, AIR for that week shall be the same as the
most recent AIR.
"STIR" shall mean the Short -Term Interest Rate as
announced from time to time by the Indexing Agent reflecting
current bid -side yields on short -term tax - exempt paper (U.S.
government- guaranteed housing project bonds, other high - quality
municipal bonds, and tax - exempt commercial paper) under prevail-
ing market conditions.
-14
Except as otherwise herein provided, this Bond shall
bear interest from the later of the date hereof or from the most
recent Interest Payment Date (as hereinafter defined) to which
interest has been paid or duly provided for, as the case may be,
at a variable rate equal to STIR plus one -half (1/2) of one
percent (.5 %) as in effect from time to time. If John Nuveen &
Co. Incorporated or its successor as Indexing Agent under the
Ordinance hereinafter referred to (the "Indexing Agent ") shall
fail to announce STIR in any week, this Bond shall bear interest
at STIR as announced the immediately preceding week plus one -half
(1/2) of one percent (.5 %), and if the Indexing Agent shall fail
to announce STIR for a second successive week the interest rate
for this Bond shall be AIR as in effect from time to time, commenc-
ing on Thursday of such week and continuing until the Business
Day (as defined in the Ordinance hereinafter referred to) immedi-
ately following the day the Indexing Agent next announces STIR.
Any changes in STIR shall take effect on the Business Day immedi-
ately following the day such change is announced by the Indexing
Agent, and in the case of AIR such change shall take effect on
the Thursday immediately following the Treasury auction. Notwith-
standing the foregoing, no adjustment in the interest rate on
this Bond shall be made for a change in STIR or in AIR, or a
change in the interest rate from STIR to AIR or from AIR to STIR,
if such change takes effect on a Business Day which is less than
five Business Days prior to (i) an Interest Payment Date (as
hereinafter defined) or (ii) a date on which this Bond is to be
paid or redeemed (including the day such change takes effect but
not the Interest Payment Date, payment date or redemption date),
whether or not interest is actually paid on such Interest Payment
Date or the Bond is paid or redeemed on such payment date or
redemption date.
1 1 r) 1 I -, 1 ' 9
Interest shall be paid on the maturity date of this
Bond and on the first Business Day of January, April, July and
October beginning January 1, 1984 (each such day being referred
to herein as an "Interest Payment Date ") to the registered holder
on the Interest Payment Date.
Payments of both principal and interest are to be made
in lawful money of the United States of America. Payments of
principal and interest shall be made by depositing immediately
available funds in a bank account specified by the registered
owner in duly executed instructions in the form attached hereto
delivered to the Trustee (as hereinafter defined) no less than
five Business Days prior to the date such payment is to be made.
If such instructions are not delivered to the Trustee, payment
shall be made by check mailed to the registered holder's address
as it appears on the register maintained by the Trustee. Notwith-
standing the foregoing, no payment of principal shall be made
unless and until this Bond is tendered to the Trustee for cancel-
lation.
This Bond is one of a duly authorized issue of Bonds of
the Borough designated as "Kodiak Island Borough General Obliga-
tion Variable Rate Demand Bonds, Series A (the "Bonds "), issued
under and pursuant to the Constitution and laws of the State of
Alaska, and by virtue of a proposal adopted by the voters of the
Borough at a special bond election held on December 11, 1979 and
an ordinance of the Borough adopted by its Borough Assembly on
1983 (the "Ordinance "), under which Seattle -First
Nati — 'on MBank, Seattle, Washington or a duly appointed successor
is appointed to act as trustee (the "Trustee "). Reference is
made to the Ordinance for the provisions, among others, relating
to the terms and security of the Bonds, the collection and appli-
cation of moneys pledged to the payment of the Bonds including
amounts drawn by the Trustee to pay principal and interest on the
Bonds under an irrevocable letter of credit (the "Letter of
Credit "), issued in favor of the Trustee at the request and for
the account of the Borough by Rainier National Bank, Seattle,
Washington, (the "Bank ") the custody and application of the
proceeds of the Bonds, the rights and remedies of the holders of
the Bonds, the rights, duties and obligations of the Borough and
of the Trustee, and each successive holder of this Bond, by his
acceptance hereof, irrevocably assents to all of the terms,
conditions and provisions of the Ordinance.
The Bonds are subject to redemption at any time on or
after January 1, 1984 as a whole or in part by lot as provided in
the Ordinance, at the option of the Borough, at a redemption
price equal to the principal amount thereof plus accrued interest
thereon to the date of redemption, upon notice of redemption
given by delivery of such notice in writing by the Borough to the
Trustee at least 30 days prior to the date of redemption.
The Bonds are also subject to mandatory redemption
prior to maturity, in part by lot as provided in the Ordinance,
at a redemption price equal to the principal amount thereof plus
accrued interest thereon, upon 15 days written notice by the
Trustee to the registered holders of the Bonds, on each Interest
Payment Date in the sinking fund installment amounts specified in
the Ordinance.
The registered holder of this Bond may by execution of
irrevocable written notice in the form attached to this Bond
tender this Bond to the Trustee, and demand payment, within seven
calendar days after (but not including) the date of such notice
and tender, of the principal of and accrued interest on this Bond
to the date of payment.
-15-
0 0 1 1 1 3 3 9 4
Any redemption made at the option of the Borough shall
be made as provided in the Ordinance upon not less than 15 days
notice to the registered holders of the Bonds. Notice of the
call for any such redemption, and notice of the call for a manda-
tory redemption, identifying the Bonds to be redeemed, will be
given by mailing copies of such notice to the registered holders
of Bonds to be redeemed at their addresses as they appear on the
register maintained by the Trustee. When funds sufficient to pay
the principal or redemption price of any Bonds becoming due at
maturity, by call for redemption, or otherwise, together with
interest accrued to the due date, have been deposited with, or
shall be held by, the Trustee, interest on such Bonds will cease
to accrue on the due date, and thereafter the holders will be
restricted to the funds so deposited as provided in the Ordinance.
This Bond is a direct and general obligation of the
Borough and its full faith and credit are pledged for the payment
of the principal and interest hereon.
If an Event of Default as defined in the Ordinance
occurs, the principal of and interest on all Bonds issued under
the Ordinance will be declared due and payable upon the condi-
tions and in the manner and with the effect provided in the
Ordinance. Whenever Bonds are declared due and payable as afore-
said, the Bank is obligated to purchase this Bond at a purchase
price equal to the principal amount hereof plus interest accrued
hereon to the date of purchase.
This Bond is transferable by the registered holder
hereof or his attorney duly authorized in writing at the princi-
pal corporate trust office of the Trustee upon surrender of this
Bond, accompanied by a duly executed instrument of transfer in
the form attached hereto and with guaranty of signature satis-
factory to the Trustee, subject to such reasonable regulations as
the Borough or the Trustee may prescribe, and upon payment of any
tax, fee or other governmental charge incident to such transfer.
Upon any such transfer there shall be issued in the name of the
transferee a new fully registered Bond or Bonds of authorized
denominations of the same aggregate•principal amount as this
Bond. The person in whose name this Bond is registered shall be
deemed the owner hereof for all purposes, and the Borough and the
Trustee shall not be affected by any notice to the contrary.
Bonds may be deposited at the principal corporate trust office of
J. Henry Schroeder Bank & Trust Company, in the City of New York,
New York, for transmission to the Trustee for tender, payment,
transfer or exchange.
If this Bond is purchased by the Bank pursuant to the
Sales Agency Agreement and remains outstanding after the first
Interest Payment Date on which this Bond could have been selected
for redemption by application of sinking fund installments, then
from and after such Interest Payment Date this Bond shall bear
interest at a rate per annum equal to the rate of interest which
the Bank announces publicly from time to time at its Seattle,
Washington offices as its "Prime Rate" or "Large Business Prime
Rate" (herein called the "Prime Rate "). If this Bond is purchased
by the Bank pursuant to the mandatory purchase provisions of the
Ordinance, then from and after such date of purchase this Bond
shall bear interest at 120% of the Prime Rate.
In any case where the date fixed for the payment of
principal of or interest on this Bond shall not be a Business
Day, then payment of such principal or interest need not be made
on such date but may be made on the next succeeding Business Day
with the same force and effect as if made on the date fixed for
the payment thereof.
-16-
n 7 7'' , n q 7
This Bond is not valid unless the Trustee's Certificate
of Authentication endorsed hereon is duly executed.
_ It is hereby certified, recited and declared that all
acts, conditions and things required by the Constitution and
statutes of the State of Alaska and the Ordinance to exist, to
have happened and to have been performed precedent to and in the
issuance of this Bond, exist, have happened and have been per-
formed in due time, form and manner as required by law and that
the issue of Bonds of which this Bond is one, together with all
other indebtedness of the Borough, is within every debt and other
limit prescribed by law.
IN WITNESS WHEREOF, Kodiak Island Borough has caused
this Bond to be executed in its name and on its behalf by the
manual or facsimile signature of its Mayor, attested by the
manual or facsimile signature of its Borough Clerk, and has
caused its corporate seal to be affixed hereunto.
Dated: 198_.
KODIAK ISLAND BOROUGH
(SEAL)
Attest:
Borough Clerk
By
Mayor
Trustee's Certificate of Authentication
This Bond is one of the Bonds described in the within
mentioned Ordinance and is one of the General Obligation Variable
Rate Demand Bonds, Series A, of Kodiak Island Borough.
SEATTLE -FIRST NATIONAL BANK,
as Trustee
By
Authorized Officer
r J rl 7 1
Witness:
7
A
Form of Transfer
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto
the
within General Obligation Variable Rate Demand Bond, Series A, of
Kodiak Island Borough, Alaska, No.
and al hereby iatt
cably constitutes and appoints Seatt e� F i�st National Bank attr-
ney to transfer said Bond on the registry books kept for that
purpose with full power of substitution in the premises.
Dated: , 198_.
0 0 1 '! 1 3' 9 9
Form of Irrevocable Notice and Demand for Payment
(To be delivered to Seattle -First National Bank,
Bond Trustee Services,
9th Floor
1001 Fourth Avenue
Seattle, Washington, 98124
with a copy to John Nuveen & Co. Incorporated
61 Broadway
New York, New York 10006
Attention: Public Finance Group)
and
Rainier National Bank
P.O. Box 3966
Seattle, Washington 98124
Attention: Public Finance Department
The undersigned, , is the
registered holder of the attached General Obligation Variable
Rate Demand Bond, Series A, of Kodiak Island Borough, Alaska (the
"Borough "), No. (the "Bond "). The undersigned hereby
irrevocably tenders the Bond to Seattle -First National Bank, as
trustee (the "Trustee ") under the Ordinance authorizing the Bond,
adopted on , 1983 by the Borough Assembly of the
Borough and eman s p of the principal of and accrued
interest on the Bond to the date of payment.
Payment shall be made in immediately available funds,
deposited in accordance with instructions provided by the under-
signed to the Trustee or, if no such instructions are provided,
by check mailed to the undersigned at the address appearing on
the register maintained by the Trustee. Payment shall occur not
later than the seventh calendar day after (but not including) the
date of delivery of this notice to the Trustee and simultaneous
delivery of a copy thereof to John Nuveen & Co. Incorporated, as
agent (the "Agent ") of the Borough and simultaneous delivery to
Rainier National Bank, as issuer of the Letter of Credit or, if
such day is not a Business Day (as defined in said Ordinance),
the Business Day next preceding such seventh day. Delivery shall
be made in person or by registered mail, return receipt requested,
and shall occur upon actual receipt by the Agent and the Trustee.
Date: 198_.
Authorized Signature
rj r] 7 I 1 7 4 1 (1
Form of Instructions for
Payment of Principal and Interest
Seattle -First National Bank
Bond Trustee Services,
9th Floor
1001 Fourth Avenue
Seattle, Washington, 98124
The undersigned, , is the
registered holder of General Obligation Variable Rate Demand
Bond, Series A, of Kodiak Island Borough, Alaska, No.
(the "Bond "). Until further notice or until the undersig 3
ceases to be the registered holder of the Bond, you are instructed
to make payment of all principal and interest due on the Bond on
the date due by depositing immediately available funds on such
date in the undersigned's Account No. with
Date: , 198_.
Authorized Signature
n 1 1 r -� 41 1
ARTICLE III
General Provisions
Section 3.01. Execution of Bonds. The Bonds shall be
executed bITEWTESEir or facsimile signatures of the Borough's
Mayor and Borough Clerk who are in office at the date of such
execution. Said signatures shall be effective so long as any
Bonds are Outstanding irrespective of the fact that either or
both of the persons holding such offices may no longer be in
office prior to the issuance of any Bond herein authorized.
Bonds bearing the signatures of such Mayor and Borough Clerk
shall be valid when authenticated and delivered by the Trustee in
accordance with the terms hereof.
Section 3.02. Medium and Place of Payment. Interest
on the Bonds shall pay a in any ioc n or currency which, on
the dates of payment, is lawful money of the United States of
America. Payments of principal and interest shall be made by
depositing immediately available funds in an account specified by
the registered holder in duly executed instructions in the form
set forth in Section 2.09 delivered to the Trustee no less than
five Business Days prior to the date such payment is to be made.
If such instructions are not delivered to the Trustee in accor-
dance with the immediately preceding sentence, payment shall be
made by check mailed to the registered holder's address as it
appears on the register maintained by the Trustee.
Section 3.03. Lost, Destroyed or Improperly Cancelled
Bonds. If any Bon is lost, destroyed (whether by muti ation,
damage, in whole or in part, or otherwise) or improperly cancelled,
the Borough may execute and the Trustee may authenticate a new
Bond of like date and denomination and bearing a number not
contemporaneously outstanding, provided that (a) in the case of
any mutilated Bond, such mutilated Bond shall first be surrendered
to the Trustee, and (b) in the case of any Bond lost or destroyed
in whole, there shall be first furnished to the Borough and the
Trustee evidence of such loss or destruction, together with
indemnity, satisfactory to them. In the event any lost, destroyed
or improperly cancelled Bond shall have matured or is about to
mature, or has been called for redemption, instead of issuing a
duplicate Bond the Borough may, in its discretion, pay the same
without surrender thereof if there shall be first furnished to
the Borough and the Trustee evidence of such loss, destruction or
cancellation, together with indemnity, satisfactory to them.
Upon the issuance of any substitute Bond, the Borough and the
Trustee may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation
thereto. The Trustee may charge the Holder of any such Bond with
the Trustee's reasonable fees and expenses in connection with any
transaction described in this Section 3.03.
Every substitute Bond issued pursuant to the provisions
of this Section 3.03 by virtue of the fact that any Bond is lost,
destroyed or improperly cancelled shall constitute an additional
contractual obligation of the Borough, whether or not the lost,
destroyed or improperly cancelled Bond shall be at any time
enforceable, and shall be entitled to all the benefits of this
Ordinance equally and proportionately with any and all other
Bonds duly issued hereunder.
Section 3.04. Cancellation of Bonds. All Bonds surren-
dered for 'al of payment, redemption exchange or regis-
tration of transfer shall be delivered to the Trustee and promptly
cancelled by it, or, if surrendered to the Trustee, shall be
-21-
promptly cancelled by it, and no Bonds shall be issued in lieu
thereof except as expressly permitted by any of the provisions of
this Ordinance. The Trustee shall destroy cancelled Bonds and
deliver a certificate of such destruction to the Borough.
Concerning the Trustee
Section 4.01. Appointment. Seattle -First National
Bank is hereby appoin ed as Trustee. The Trustee shall signify
its acceptance of the duties and obligations imposed upon it by
this Ordinance by executing an acceptance delivered to the Borough
upon the issuance of the Bonds.
Section 4.02. Investments. The Trustee shall invest
and reinvest amounts in the Redemption Fund in such Investment
Securities as the Borough may from time to time direct in writing
or pursuant to an investment agreement to be entered into by the
Trustee at the direction of the Borough. Investments shall be
made in such manner as shall provide cash for the payment of Debt
Service as the same becomes due and payable. The Trustee may act
as principal or agent in the acquisition or disposition of any
Investment Securities and shall not be liable for any loss result-
ing from such acquisition or disposition except for any such loss
resulting from its own negligence or default.
Section 4.03. Responsibility of Trustee. The recitals
of fact herein and Bonds containea be taken as the
statements of the Borough, and the Trustee assumes no responsibil-
ity for the correctness of the same. The Trustee makes no repre-
sentations as to the validity or sufficiency of this Ordinance or
of any Bonds issued thereunder or in respect of the security af-
forded by this Ordinance, and the Trustee shall incur no respon-
sibility in respect thereof. The Trustee shall, however, be
responsible for its representation contained in its certificate
on the Bonds. The Trustee shall be under no responsibility or
duty with respect to the application of any moneys paid to the
Borough. The Trustee shall be under no obligation or duty to
perform any act which would involve it in expense or liability or
to institute or defend any suit in respect hereof, or to advance
any of its own moneys, unless properly indemnified. The Trustee
shall not be liable in connection with the performance of its
duties hereunder except for its own negligence or bad faith.
Section 4.04. Evidence on Which Trustee May Act.
(a) The Trustee shall be protected in acting upon any
notice, resolution, request, consent, order, certificate, report,
opinion, bond 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 Trustee may consult with counsel, who may or may
not be of counsel to the Borough, and the opinion of such counsel
shall be full and complete authorization and protection in respect
of any action taken or suffered by it hereunder.. Whenever the
Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering any action
hereunder, including payment of moneys out of any fund or account,
such matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved
and established by a certificate signed by an Authorized Officer,
and such certificate shall be full warrant for any action taken
or suffered in good faith under the provisions of this Ordinance
upon the faith thereof, but in its discretion the Trustee may in
ARTICLE IV
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n n n 1 1 1 r
lieu thereof accept other evidence of such fact or matter or may
require such further or additional evidence as to it may seem
reasonable. Except as otherwise expressly provided herein, any
request, order, notice or other direction required or permitted
to be furnished pursuant to any provision hereof by the Borough
to the Trustee shall be sufficiently executed if executed in the
name of the Borough by an Authorized Officer.
(b) Whenever the Trustee shall be required hereunder,
pursuant to written demand from an officer of the Bank specifying
the amount of Unpaid Drawings and the interest accrued thereon,
to reimburse the Bank for such Unpaid Drawings and such interest,
the Trustee may conclusively rely upon the written demand from
the Bank as to the amount of any Unpaid Drawings and accrued
interest thereon.
Section 4.05. Compensation. The Borough shall pay to
the Trustee rom time to time reasonable compensation for all
services rendered under this Ordinance, and also all reasonable
expenses, charges, counsel fees and other disbursements, includ-
ing those of their attorneys, agents and employees, incurred in
and about the performance of their powers and duties under this
Ordinance, and the Trustee shall have a lien therefor on any and
all funds at any time held by it under this Ordinance. The
Borough further agrees to indemnify and save the Trustee harmless
against any loss, liabilities or expense which it may incur in
the exercise and performance of its powers and duties hereunder,
which are not due to its negligence or bad faith, including the
costs and expenses of defending itself against any claim of
liability.
Section 4.06. Resignation and Removal; Appointment of
Successor Trustee.
(a) The Trustee, or any successor trustee, may at any
time resign by giving written notice of resignation to the Borough
and by delivering by mail copies of such notice to each Holder.
Upon receiving such notice of resignation, the Borough shall
promptly appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor trustee. If no
successor trustee shall have been so appointed and have accepted
appointment within 30 days after the delivery to the Borough of
such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a
successor trustee, or any Holders may, on behalf of himself and
all others similarly situated, petition any such court for the
appointment of a successor trustee. Such court may thereupon,
after such notice, if any, as it may deem proper, appoint a
successor trustee.
(b) The Holders of a majority in aggregate principal
amount of the Bonds at the time outstanding may at any time
remove the Trustee and appoint a successor trustee.
(c) Any resignation or removal of the Trustee and
appointment of a successor trustee pursuant to any of the pro-
visions of this Section 4.06 shall become effective upon accept-
ance of appointment by the successor trustee as provided below.
Section 4.07. Acceptance of Appointment b Successor
Trustee. Any successor trustee appointed as provid in Sect n
4.06 shall execute, acknowledge and deliver to the Borough and to
its predecessor trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the prede-
cessor trustee shall become effective and such successor trustee,
-23-
without any further act, deed or conveyance, shall become vested
with all the rights, powers, duties and obligations of its prede-
cessor hereunder, with like effect as if the trustee ceasing to
_ act shall, upon payment of its charges then unpaid, execute, ac-
knowledge and deliver an instrument transferring to such succes-
sor trustee all the rights and powers of the trustee so ceasing
to act. The delivery of such instrument to the successor trustee
shall constitute a full release and discharge of the trustee
ceasing to act from all further liabilities and responsibilities,
either to the Borough or the Holders of the then outstanding
Bonds except that nothing shall relieve the resigning trustee
from liability for actions or omissions occurring prior to such
resignation. Upon request of any such successor trustee, the
Borough shall execute any and all instruments in writing for more
fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act
shall, nevertheless, retain a lien upon all property or funds
held or collected by such trustee to secure any amounts then due
it.
Upon acceptance of appointment by a successor trustee
as provided in this Section 4.07, the Borough shall deliver by
mail to each Holder notice of the succession of such trustee
hereunder.
Section 4.08. Permitted Acts and Functions. The
Trustee map become' a owner o any Bonds, with the same rights
it would have if it were not such Trustee. The Trustee may act
as depositary for, and permit any of its officers or directors to
act as a member of, or in any other capacity with respect to, any
committee formed to protect the rights of Bondholders or to
effect or aid in any reorganization growing out of the enforce-
ment of the Bonds or this Ordinance, whether or not any such
committee shall represent the holders of a majority in principal
amount of the Bonds then Outstanding.
Section 5.01. Punctual Payment. The Borough covenants
that it will duly i punctua y paid or cause to be paid the
principal of, premium, if any, and interest on the Bonds in
strict conformity with the terms of such Bonds and of this Ordi-
nance, and that it will faithfully observe and perform all of the
conditions, covenants and requirements of this Ordinance and the
Bonds.
Section 5.02. Power to Issue and Secure Bonds. The
Borough is aui autTiorized un$er alrappTi3abl laws to issue the
Bonds, to adopt this Ordinance to enter into the Loan Documents,
to pledge its full faith and credit for the prompt payment of the
Bonds and the interest thereon and to levy ad valorem taxes
without limitation as to rate or amount upon all the taxable
property in the Borough for such payment. The Bonds and the
provisions of this Ordinance are and will be valid and legally
enforceable obligations of the Borough in accordance with their
terms.
Section 5.03. Tax Covenants. The Borough shall not
issue bonds, no es or other obligations, the proceeds of which
are to be used to refund any Bonds or Unpaid Drawings, in any
manner which would cause any Bonds or Unpaid Drawings to be
ARTICLE V
Covenants
-24-
; i 4 n
"arbitrage bonds" within the meaning of Section 103(c) of the
Code, and any lawful regulations proposed or in effect there-
under.
The Borough will not take any action or permit to be
taken any action or make any use or investment of the proceeds of
the Bonds or Unpaid Drawings that would cause any of the Bonds or
Unpaid Drawings to be "arbitrage bonds" within the meaning of
Section 103(c) of the Code, and any lawful regulations proposed
or in effect thereunder.
The Borough will not take any action or permit to be
taken any action which would result in interest payable on any of
the Bonds or Unpaid Drawings being includable for Federal income
tax purposes in the gross income of the Holders.
ARTICLE VI
Events of Default
Section 6.01. Events of Default. If any of the follow-
ing events, acts or occurrences THerei n called an "Event of De-
fault") shall occur:
(A) default in the payment when due of any principal
of or interest on any Bond;
(8) an Event of Default under the Credit Agreement of
which the Trustee has received written notice from the Bank;
(C) the failure of the Borough to maintain in the
Redemption Fund an amount equal to not less than the Redemp-
tion Fund Requirement;
then, and in any such event, the Trustee shall declare all sums
then owing by the Borough on any Outstanding Bond to be forthwith
due and payable, whereupon all such sums shall become and be
immediately due and payable without presentment, demand, protest
or notice of any kind, all of which are hereby expressly waived
by the Borough.
In the event the principal of and interest on the Bonds
are declared due and payable as provided in this Section 6.01,
the Trustee shall give notice to all Holders of the mandatory
purchase of Bonds as provided in Section 2.03(f) and shall make
demand for payment under the Letter of Credit, which payment
shall be deposited in the Redemption Fund, for an amount suffi-
cient to pay all of the principal of and interest on the Out-
standing Bonds due on the purchase date specified in such notice.
Section 6.02. Application of Hone s Upon Acceleration.
In the event of acceleration as provided or in Section 6.01, the
moneys in the Redemption Fund shall be applied by the Trustee in
the following order:
(a) To the payment of costs, expenses and fees, a
reasonable compensation of the Trustee, its agents and attorneys,
and all expenses and liabilities incurred and advances made by
the Trustee.
(b) To the mandatory purchase of Bonds held by any
Holder other than the Bank.
-25-
1
! 1 n 1 5
(c) To the payment of the principal and interest then
due and unpaid upon the Bonds, without preference or priority of
principal over interest or of interest over principal, or of any
installment of interest over any other installment of interest,
or of any Bond over any other Bond, ratably according to the
amount due respectively for principal and interest, to the Holders
entitled thereto, without any discrimination or preference.
(d) The moneys remaining, if any, shall, upon written
demand from an officer of the Bank specifying the amount of
Unpaid Drawings and the accrued interest thereon, be paid to the
Bank to reimburse it for such Unpaid Drawings, if any, and to pay
such interest.
Whenever moneys are to be applied by the Trustee pur-
suant to the provisions of this Section 6.02, such moneys shall
be applied by the Trustee at such times, and from time to time,
as the Trustee in its sole discretion shall determine, having due
regard to the amount of such moneys available for application and
the likelihood of additional moneys becoming available for such
application in the future; setting aside such moneys in trust for
the proper purpose shall constitute proper application by the
Trustee; and the Trustee shall incur no liability whatsoever to
the Borough, to any Holder or to any other person for any delay
in applying any such moneys, as long as the Trustee acts with
reasonable diligence, having due regard for the circumstances,
and ultimately applies the same in accordance with such provisions
of this Ordinance as may be applicable at the time of application
by the Trustee. The Trustee shall fix the date (which shall be
an Interest Payment Date unless the Trustee shall deem another
date more suitable) upon which such application is to be made and
upon such date interest on the amounts of principal to be paid on
such date shall cease to accrue. The Trustee shall give such
notice as it may deem appropriate for the fixing of any such
date. The Trustee shall not be required to make payment to the
Holder of any unpaid Bond unless such Bond shall be presented to
the Trustee for appropriate endorsement or for cancellation if
fully paid.
Section 6.03. Remedies Cumulative. No remedy herein
conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other remedy or remedies, and
each and every such remedy shall be cumulative and shall be in
addition to any other remedy given hereunder or now or hereafter
existing at law, in equity, by statute or under the Credit.Agree-
ment.
Section 6.04. Notification of Default. The Trustee
shall give HHo 'tiers of Bonds notiEe default here-
under known to the Trustee within 3 days after the occurrence
thereof in the manner and to the extent herein provided unless
such default shall have been remedied or cured before the giving
of such notice; provided that except in the case of default in
the payment of the principal of, or interest on any of the Bonds,
the Trustee shall be protected in withholding such notice if and
so long as the board of directors, the executive committee, or a
trust committee of directors or a responsible officer of the
Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders. Each such notice of
Default shall be given by the Trustee by mailing, postage prepaid,
written notice thereof to all registered owners of Bonds, as the
names and addresses of such owners appear upon the registration
books of the Trustee.
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1 1 1 I! 1 4 1 7
ARTICLE VII
Amendment to Ordinance and Agreement;
With and Without Holders' Consent
Section 7.01. Without Holders' Consent. Without the
consent of or notice to any of the Ho ers s u j ct to Section
7.03, the Borough may amend this Ordinance, but for only one or
more of the following purposes:
A. To cure any ambiguity or defect;
B. To grant or confer upon the Holders any additional
rights, remedies, powers or Authority that may lawfully be
granted or conferred upon them;
C. To secure additional revenues or provide additional
security or reserves for payment of the Bonds and Unpaid
Drawings;
D. To preserve the exemption of the interest income
borne on the Bonds and Unpaid Drawings from federal or state
income tax and to preserve the power of the Borough to con-
tinue to issue bonds, evidences of indebtedness or other
obligations of any nature the interest income on which is
likewise exempt from federal and state income taxation;
provided that, in the opinion of Bond Counsel, any such
amendment hereto is not adverse to any Holder; and
E. To make any other change which is not adverse to
any Holder.
Section 7.02. Unanimous Consent
unanimous consent fall of the Hol ers no
cation or alteration hereof or of the Loan
made which would:
A. Reduce the principal amount
ing or alter their rates of interest,
or maturity date;
B. Prefer one Holder over any other Holder;
C. Reduce the aggregate principal amount of Bonds
then Outstanding; or
D. Amend this Section 7.02.
Section 7.03. Procedure. Notice of the proposed adop-
tion of alrargiaments hereto shall be given by the Borough to
the Trustee prior to adoption of such amendments. No such amend-
ment which affects the rights, duties or immunities of the Trustee,
Bank or the Agent shall be effective without the consent of
either the Trustee, Bank or Agent, whichever shall be affected
thereby. Amendments hereto or to the other Loan Documents other
than those permitted by Section 7.01 shall be proposed by the
Borough by ordinance of its Borough Assembly. The consent of the
Holders shall be evidenced in such manner as may be reasonably
prescribed by the Borough and the Trustee.
Required. Without the
amendment, modifi-
Documents shall be
of any Bonds Outstand-
redemption provisions
9 0 r1 1 1 3 4 r1
ARTICLE VIII
Miscellaneous
Section 8.01. Appointment of Indexin Agent. John
Nuveen & Co. Incorporated is hereby appointed as Indexing Agent
under this Ordinance. The Indexing Agent shall signify its
acceptance of the duties and obligations imposed upon it by this
Ordinance by executing an acceptance delivered to the Borough
upon the issuance of the Bonds. The Indexing Agent or any succes-
sor, may at any time resign by giving written notice of resigna-
tion to the Borough and the Trustee. Upon receiving such Notice
of resignation, the Borough shall promptly appoint a successor
Indexing Agent which shall be a member of the National Associa-
tion of Securities Dealers. Notice of such appointment shall be
given to the Trustee.
Section 8.02. Execution of Documents. The Mayor,
Borough Manager and Borough Clerk are each authorized and directed
to execute, attest and deliver, on behalf of the Borough, each of
the following documents in substantially the form set forth
herein or attached hereto with such deletions or insertions as
the Borough Manager deems necessary; approval thereof to be
conclusively evidenced by the execution and delivery, of the
following documents:
A. The Credit Agreement;
B. The Sales Agency Agreement;
C. The Bonds;
D. The Offering Memorandum;
E. Such closing documents or other documents as may
be required to be executed by Bond Counsel, by counsel to
the Bank or by counsel to the Agent;
and to deliver each document.
In addition, the Mayor and other officers of the Borough
are authorized to approve and execute any amended, revised or
supplemental Offering Memorandum.
Section 8.03. Severability. If any one or more sections,
clauses, sentences or parts hereof shall for any reason be ques-
tioned in any court of competent jurisdiction and shall be adjudged
unconstitutional or invalid, such judgment shall not affect,
impair or invalidate the remaining provisions hereof, or the
Bonds issued pursuant hereto but shall be confined to the specific
sections, clauses, sentences and parts so adjudged. All ordinances
or parts thereof in conflict herewith be and the same are hereby
repealed.
Section 8.04. Non- Business pays. When any action is
er
provided hein tom - done on a day namior within a time period
named, and the day or the last day of the period is not a Business
Day, it may be performed on the next ensuing Business Day with
effect as though performed on the appointed day or within the
specified period, except that interest on any Bond or Unpaid
Drawing will continue to run until said Bond or Unpaid Drawing is
paid.
-28-
Section 8.05. Headings. Any headings preceding por-
tions of a text Eilia and the table of contents appended
hereto shall be solely for convenience of reference, but shall
constitute a part hereof and shall not affect the meaning, con-
struction or effect hereof.
Section 8.06. Notices. All notices, demands, instruc-
tions and other communications o s required or permitted to be given
to or made upon the Trustee, the Borough, the Bank or the Agents
shall be in writing and shall be personally delivered or sent by
registered mail, postage prepaid, and shall be deemed to be given
for purposes of this Ordinance on the day that such writing is
delivered to the intended recipient thereof in accordance with
the provisions of this Section. Unless otherwise specified in a
notice sent or delivered in accordance with the foregoing provi-
sions of this Section, notices, demands, instructions and other
communications in writing shall be given to or made upon the
respective parties hereto at their respective addresses indicated
below, unless and until such address is changed by a notice,
delivered in accordance with this Section 8.06:
1 1 1
If to the Borough:
With copies to:
Attest:
Boroug. C
If to the Bank:
If to the Trustee:
If to the Agent:
Section 8.07. R�epea of Prior Ordinance. Ordinance
83 -4 -0 of a Borougbadopted February 3, 1983 is hereby res-
cinded and repealed.
Section 8.08. Effective Date. This Ordinance shall
become effective in Fe manner provided by law.
PASSED AND ADOPTED by the Boro
Island Borough, Alaska on May
Kodiak Island Borough
P. 0. Box 1246
Kodiak, Alaska 99615
Attention: Borough Manager
Wohlforth & Flint
900 West 5th Avenue
Suite 505
Anchorage, Alaska 99501
Rainier National Bank
Letter of Credit Department
22nd Floor
One Rainier Square
Seattle, Washington 98101
Seattle -First National Bank
Bond Trustee Services,
9th Floor
1001 Fourth Avenue
Seattle, Washington 98154
John Nuveen & Co. Incorporated
61 Broadway
New York, New York 10006
Attention: Public Finance Syndica-
tion Desk
-29-
Assembly of Kodi
3.
11 rl 9 1 ri 1 1 1 1 t'
The Borough Assembly of
Kodiak Island Borough
P.O. Box 1246
Kodiak, Alaska 99615
Members:
SALES AGENCY AGREEMENT
John Nuveen & Co. Incorporated,., MAY 1 2 1983
r,1
209 South LaSalle Street ; 1 I ? ! t1) l L I i, 1 l 1 2 3,4
Chicago, Illinois 60604
May 12, 1983
1
Kodiak Island Borough
Kodiak, Aioska
RECEIVED
The purpose of this letter is to confirm the agreement
between us whereby John Nuveen & Co. Incorporated (the "Sales
Agent "), will act as exclusive Sales Agent with respect to the
initial placement of $7,400,000 principal amount of General Ob-
ligation Variable Rate Demand Bonds, Series A (the "Bonds ") to be
issued by Kodiak Island Borough (the "Borough ") under and pursuant
to the Bond Ordinance of the Borough, adopted by its Borough
Assembly on May 12, 1983 (the "Bond Ordinance "). The Bond Ordi-
nance appoints Seattle -First National Bank, as trustee (the
"Trustee ") for the benefit of the holders of the Bonds.
The Sales Agent and the Borough hereby agree as follows:
1. The Bonds will be general obligations of the
Borough, will bear interest at a variable rate and will be other-
wise as described in the Bond Ordinance. The Bonds will be
issued in the denominations of 550,000 and integral multiples
thereof and will be in registered form.
2. The Sales Agent hereby accepts its appointment as
Indexing Agent under the Bond Ordinance. The Sales Agent agrees
to provide to the Trustee all necessary certifications required
pursuant to the Bond Ordinance with respect to the interest rate
on the Bonds. The Sales Agent is•hereby designated an Authorized
Officer (as defined in the Bond Ordinance) for purposes of making
such certifications. The Sales Agent agrees to use its best
efforts to ascertain and announce STIR (as defined in the Bond
Ordinance) each week during the term hereof.
3. The Sales Agent will use its best efforts to
arrange for the initial placement of the Bonds with bona fide
institutional' investors on behalf of the Borough in accordance
with the Bond Ordinance. The Sales Agent and the Borough agree
that the placement of any Bonds will be arranged on the terms and
conditions and in the amount and manner provided herein and in
the Bond Ordinance. In addition, upon written notice of demand
for payment by a holder of outstanding Bonds in accordance with
the terms thereof, the Sales Agent will, on behalf of the Borough,
also use its best efforts to arrange for the subsequent placement
of Bonds at par Rlus accrued interest with Rainier National Bank
and other bona fide institutional investors. Immediately upon
arranging such placement, the Sales Agent shall give written
notice thereof to the Trustee.. If the Sales Agent is unable to
arrange a subsequent placement, the Trustee shall redeem the
Bonds as provided in the Bond Ordinance. The Sales Agentashalln
notify the Borough and the Trustee as promptly as r
the event it decides for credit or market reasons that it cannot
arrange for the initial or subsequent sale or resale at par plus
accrued interest of the Bonds.
4. The Sales Agent shall arrange for the payment of
the purchase price for Bonds sold for the benefit of the Borough
in immediately available funds on the business day on which the
Bonds (executed, authenticated and delivered in a manner satis-
factory to the Sales Agent) are available for delivery in accor-
dance with the terms of the Bond Ordinance.
5. The Borough agrees that, while this Agreement is
in effect, John Nuveen & Co. Incorporated shall be the exclusive
Sales Agent for the Bonds.
6. The Borough agrees to pay the Sales Agent the
following fees and expenses for its services as Sales Agent:
(a) Each year the Bonds are outstanding, one - quarter
(1/4) of 1% of the average aggregate amount of Bonds outstand-
ing each year based on a year with 365 or, if applicable,
366 days. Such annual fee shall be payable for the year
1983 on the date of issuance of the Bonds and thereafter at
the beginning of each year on or before June1, in an amount
nt
equal to one - quarter (1/4) of 1% of the aggregate
amount of Bonds then outstanding. Each subsequent June 1,
the annual fee.for the prior year will be adjusted ri principal
one -queer (1/4) of 1% of the aggregate
of Bonds actually outstanding during such year, determined
ad-
on a pro rata basis according to the number of days outsta
ing. Depending on whether such adjustment is upward or
downward, the Borough will pay the Sales Agent the addi-
tional amount owing or the Sales Agent will reimburse the
Borough, as the case may be.
An amount equal to the reasonable fees (not to
exceed $20,000) and expenses of Sorge and Pitt, counsel to
the Sales Agent, for all services rendered in connection
with the sal. and issuance of the Bonds.
in con-
(c) All fees and expenses required to be paid
the Bonds
nection with any registration or qualification
(or any letter of credit r d thereto) and required by
any state regulatory
I r) r 4 r 1 .? 1 1
10111 1111'3.
(d) All fees and expenses incurred in connection with
rating of the Bonds and the printing of the Bonds and docu-
ments, including the Offering Memorandum and the Bond Ordi-
nance.
(e) An initial Sales Agent's fee of $27,750.
7. This Agreement shall be terminable by either party
upon notice given to the other party, at least 15 days prior to
such termination. Upon termination of this Agreement, the fee
paid by the Borough to the Sales Agent for the year in which such
termination occurs shall be adjusted on a prorated basis in the
same manner as provided in paragraph 6(a) hereof, and no compen-
sation shall thereafter accrue to the benefit of the Sales Agent.
8. The Sales Agent agrees that it will supply to the
Borough and the Trustee, summaries of its transactions regarding
the Bonds.
9. The Borough approves of the distribution by the
Sales Agent of the Offering Memorandum, dated May 12, 1983,
including all appendices thereto (the "Offering Memorandum ") in
connection with the sale of the Bonds.
10. The Sales Agent shall have the right to revise the
Offering Memorandum from time to time, and the approval to distrib-
ute the Offering Memorandum provided for in this Agreement shall
extend to any such revised Offering Memorandum provided that a
copy thereof is delivered to the Borough at least 10 days prior
to its distribution and the Borough does not give written notice
to the Sales Agent within such 10 day period of its objection to
the distribution of the revised Offering Memorandum. The Sales
Agent hereby agrees to revise the Offering Memorandum and any
revised Offering Memorandum in accordance with changes thereto
furnished by the Borough to the Sales Agent in writing and con-
sented to by the Sales Agent, which consent shall not be unreason-
ably withheld. The Borough hereby agrees to provide the Sales
Agent such audited financial information regarding the Borough as
may be reasonably requested by the Sales Agent.
11. The Borough agrees to indemnify and hold harmless
the Sales Agent, each of its respective directors, officers, or
employees and each person, if any, who controls the Sales Agent
within the meaning of Section 15 of the Securities Act of 1933,
as amended, from and against any and all losses, claims, damages,
liabilities or expenses whatsoever caused by (a) any untrue
statement or alleged untrue statement of a. material fact pertain-
ing to the Borough in the Offering Memorandum; or (b) any omission
or alleged omission of any material fact in the Offering Memoran-
- dun required to be stated therein or necessary in order to make
the statements pertaining to the Borough therein, in the light of
the circumstances under which they were made, not misleading, or
(c) and material adverse change in the business or financial
condition of the Borough following the date hereof, or (d) any
-3-
n 1 1 I
information supplied by the Borough in connection with the issu-
ance and sale of the Bonds including, without limitation, infor-
mation supplied to any rating agency and information set forth in
any No- Arbitrage Certificate delivered by the Borough.
12. The Sales Agent agreed that in the ev feany
claim, suit, action or proceeding against it, anyOof it respe
tive directors, officers or employees or any persons sought on
a t os aforesaid, in respect indemnity Borough
in, here -
account of f any indemnity ty agreement by
in, it will promptly give written notice thereof to the Borough.
In case such notice shall be so given, the Borough shall be
entitled to participate at its own expense in the defense or, if
it so elects, to assume the defense of such claim, suit, action
or proceeding, in which event such defense shall be conducted by
counsel chosen by the Borough and satisfactory to the indemnified
party or parties against whoa such claim, esuit,nattionaoruppr such
ing is pending:, shall if the Borough or parties for
defense, it shall reimburse such indemnified party
the reasonable fees and expenses of any vcn�tel retained et o
by em.
in The foregoing notwithstanding, or a
gies
shall assume such defense and any indemnified party a t fuesy
shall believe that counsel selected by the ough is representing
and adequately protecting such party parties indemnified
interests of such party or parties, any such
party or parties shall have the right to conduct its o n def�eo
against any such claim, suit, action or proceeding in
or in lieu of any defense conducted by the Borough, and the
Borough shall indemnify and hold harmless such indemnified party
or parties against and from any and all suits, claims, damages,
liabilities or expenses whatsoever (including'reasonabie fees
disbursements of counsel selected by such of or i o any
parties) incurred by and arising out
such claim, suit, action or proceeding.
13. Any notice or other communication rto be given the
under this Agreement shall be given by
same in writing.
(a) If to the Borough, to
Kodiak Island Borough
P.O. Box 1246
Kodiak, Alaska 99615
Attention: Borough Manager
with copies to:
Wohlforth & Flint
900 West 5th Avenue, Suite 505
Anchorage, Alaska 99501
-4-
¶J r.1 1 1 '1 1 r
(b) If to the Sales Agent, to
John Nuveen & Co. Incorporated
209 South LaSalle Street
Chicago, Illinois 60604
Attention: Anthony T. Dean, Vice President
with copies to:
Barge and Pitt
120 South LaSalle Street
Chicago, Illinois 60603
or to such other address as either party shall advise the other
• in writing.
14. The terms of our agreement as set forth herein
shall not be waived, altered, modified, amended or supplemented
in any manner whatsoever except by written instrument signed by
the parties hereto.
is. This Agreement shall be binding upon, and inure to
the benefit of, the Borough and the Sales Agent and their respec-
tive successors and assigns.
16. The provisions of this Agreement are severable and
the invalidity of any provision hereof shall not affect the
validity of the remaining provisions hereof.
17. This Agreement shall be deemed to be a contract
made under the laws of the State of Alaska and for all purposes
shall be continued in accordance with the laws of said state,
without regard to principles of conflicts of laws.
'1
If the foregoing is satisfactory to you, please sign
the enclosed copy of this letter in the blank provided for that
purpose and return it to us, whereupon this letter will become a
binding agreement between us in accordance with its terms.
Very truly yours,
JOHN NUVEEN & CO. INCORPORATED
Accepted as of the date
first above written.
A13446 -A
5/9/83
LG:maj
By
-6-
By
Title: Vice President
KODIAK ISLAND BOROUGH
Title: Borough Manager