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1991-09 Providing for the Issuance of General Obligation School Refunding BondsKODIAK ISLAND BOROUGH ORDINANCE NO. 91-09 Introduced by: Requested by: Drafted by: Introduced: Public Hearing: Adopted: Mayor Selby Finance Director Bond Counsel 06/20/91 07/18/91 07/18/91 AN ORDINANCE PROVIDING FOR THE ISSUANCE OF GENERAL OBLIGATION SCHOOL REFUNDING BONDS, 1991 SERIES A OF THE BOROUGH IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $5,000,000, AND GENERAL OBLIGATION SCHOOL REFUNDING BONDS 1991, SERIES B OF THE BOROUGH IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $2,750,000, TO REFUND CERTAIN OUTSTANDING GENERAL OBLIGATION BONDS OF THE BOROUGH, FIXING CERTAIN DETAILS OF SUCH BONDS AND AUTHORIZING THEIR SALE WHEREAS, there are now outstanding $5,000,000 of General Obligation Variable Rate Demand Bonds, 1986 Series A (the "Outstanding Bonds ") of the Kodiak Island Borough (the "Borough ") issued pursuant to Ordinance No. 86 -17 -0 of the Borough; and WHEREAS, after due consideration, it appears to the Assembly that it is advisable for the Borough to provide for the refunding, including the payment of principal of all or a portion of the Outstanding Bonds as the Assembly shall hereafter determine by resolution (the "Refunded Bonds ") by the issuance of general obligation refunding bonds, consisting of two series entitled respectively "General Obligation School Refunding Bonds, 1991 Series A" in the aggregate principal amount of not to exceed $5,000,000 (the "Series A Bonds "), and "General Obligation School Refunding Bonds, 1991 Series B" in the aggregate principal amount of not to exceed $2,750,000 (the "Series B Bonds ") (the Series A Bonds and the Series B Bonds are referred to collectively as the "Bonds "), with the aggregate principal amount of the Bonds not exceeding $5,000,000; and WHEREAS, WHEREAS, Section 29.47.320 of the Alaska Statutes provides that general obligation refunding bonds may be issued without an election; and Section 29.47.410 of the Alaska Statutes provides that the Assembly by ordinance or resolution may provide for the form and manner of sale of bonds and notes; and Kodiak Island Borough, Alaska Ordinance No. 91 -09 Page 1 of 21 WHEREAS, to effect such refunding in the most economical manner, it is deemed necessary and advisable that the net proceeds of the sale of the Bonds herein authorized and any other moneys necessary and available for refunding purposes be invested in obligations to be later specified by resolution of the Assembly, maturing in such amounts and at such times as are required to redeem the principal of the Refunded Bonds on a date hereafter determined by resolution of the Assembly; and WHEREAS, because the amount of Bond proceeds and the obligations necessary to pay the redemption price of the Refunded Bonds depends, in part, on the interest rate to be bome by the obligations acquired with such proceeds, the principal amount of the Refunded Bonds and the date of redemption of the Refunded Bonds, the exact amount and maturities of the Bonds to be issued and the specific obligations to be acquired shall be determined hereafter by resolution of the Assembly. NOW, THEREFORE, BE IT ORDAINED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THAT: Section 1. Purpose. The purpose of this Ordinance is to authorize the issuance and sale of not to exceed $5,000,000 aggregate principal of general obligation refunding bonds to provide a portion of the funds to refund the Outstanding Bonds, to pay the costs of issuance of the Bonds, including the bond insurance premium, if any, and to fix certain details of said Bonds to be issued. Section 2. Definitions. The following terms shall have the following meanings in this Ordinance: (a) "Assembly" means the Assembly of the Borough, as the general legislative authority of the Borough, as the same shall be duly and regularly constituted from time to time. (b) "Bond" or 'Bonds" means any of the Series A bonds or the Series B Bonds. (c) "Bond insurer" means, with respect to the Bonds, any insurance company which issues a policy of insurance with respect to payment of the interest on and principal of the Bonds, as designated by resolution of the Assembly. (d) " egister" means the registration books maintained by the Paying Agent (as bond registrar), as agent of the Borough, which include the names and addresses of the owners or nominees of the owners of the Bonds. (e) "Borough" means the Kodiak Island Borough, a municipal corporation of the State of Alaska, organized as a second class Borough under Title 29 of the Alaska Statutes. Kodiak Island Borough, Alaska Ordinance No. 91 -09 Page 2 of 21 (f) "Code" means the Internal Revenue Code of 1986, as amended from time to time, together with all regulations effective or promulgated and applicable thereto. (g) "DTC" means The Depository Trust Company, New York, New York, a limited purpose trust company organized under the laws of the state of New York, as depository for the Bonds pursuant to section 6 hereof. (h) "Indenture" means the Indenture dated as of May 1, 1986 between the Borough and Seattle —First National Bank as trustee, securing the Borough's General Obligation Variable Rate Demand Bonds, 1986 Series A. (i) "Letter of Representation" means the letter of representation from the Paying Agent and the Borough to DTC, in substantially the form thereof attached hereto as Exhibit A. (j) "Ordinance" means this Ordinance of the Borough. (k) "Outstanding Bonds" means the General Obligation Variable Rate Demand Bonds, 1986 Series A of the Borough which have not previously been redeemed, defeased or advance refunded. (1) "Paying Agent" means Seattle —First National Bank, Seattle, Washington. The Paying Agent shall also act as bond registrar pursuant to section 12 of this Ordinance. (m) "Principal and Interest Fund" means the Principal and Interest Fund established under the indenture. (n) "Refunded Bonds" means the Outstanding Bonds to be refunded, as hereafter determined by resolution of the Assembly. (o) "Series A Bonds" means any of the "General Obligation School Refunding Bonds, 1991 Series A" of the Borough, the issuance and sale of which are authorized herein. (p) "Series R Bonds" means any of the "General Obligation School Refunding Bonds, 1991 Series B" of the Borough, the issuance and sale of which are authorized herein. (co "Trustee" means Seattle —First National Banc, as trustee under the Indenture. Section 3: Authority for Ordinance The Borough has ascertained and hereby determines that each and every matter and thing as to which provision is made in this Ordinance is necessary in Kodiak Island Borough, Alaska Ordinance No. 91 -09 Page 3 of 21 order to carry out and effect the purposes of the Borough in accordance with the constitution and statutes of the State of Alaska, and to incur the indebtedness and issue the Bonds. Section 4: Obligation of Bonds. The bonds shall be direct and general obligations of the Borough and the full faith and credit of the Borough are hereby pledged to the payment of the principal of and interest on the Bonds. Section 5: Authorization of Bonds and Purpose of issuance. For the purpose of providing the funds required to effect the refunding of the Refunded Bonds in the manner and at the times hereinafter set forth, and to provide for original issue discount, if any, and to pay all costs incidental thereto and to the issuance of the Bonds, including but not limited to any bond insurance premium, the Borough hereby authorizes and determines to issue and sell the Bonds in the aggregate principal amount of not to exceed $5,000,000, consisting of Series A Bonds in the aggregate principal amount of $5,000,000 and Series B Bonds in the aggregate principal amount of not to exceed $2,750,000, or so much thereof as is required as hereafter determined by resolution of the Assembly, together with other moneys available and used for such purpose, to effect the refunding of the Refunded Bonds. Section 6: a • t u - I D • - , . i • 1 - ' , • to • : s , .. The Series A Bonds shall be designated "Kodiak Island Borough, Alaska, General Obligation School Refunding Bonds, 1991 Series A, and shall mature on June 1 and December 1 of such years in such principal amounts as shall be established by resolution. The Series A Bonds shall bear interest from their dates payable on June 1 and December 1 of each year at such rates as shall be established by resolution. The Series B Bonds shall be designated "Kodiak Island Borough, Alaska, General Obligation School Refunding Bonds, 1991 Series B, and shall mature on March 1 and September 1 of such years in such principal amounts as shall be established by resolution. The Series B Bonds shall bear interest from their dates payable on March 1 and September 1 of each year at such rates as shall be established by resolution. Interest on the Bonds shall be calculated on the basis of a 360 —day year consisting of twelve 30— day months. In any case where a maturity date or interest payment date for the Bonds shall be a Saturday or Sunday, a legal holiday or a day on which banking institutions in the city of payment are authorized by law to close, then payment of interest or principal 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 maturity date or the interest payment date, and no interest on such payment shall accrue for the period after such date. The Bonds shall be registered as to principal and interest as herein provided. The Bonds shall each be of the denomination of $5,000 or any integral multiple thereof of the same series, interest rate and maturity approved by the Borough, such approval to be evidenced by the execution of such Bonds. The Bonds shall be numbered separately in the manner and with such additional designation as the Paying Agent deems necessary for purposes of identification. The Bonds may be delivered in typewritten, printed or lithographed form. The Bonds shall be substantially in Kodiak Island Borough, Alaska Ordinance No. 91 -09 Page 4 of 21 the form of such Bonds hereinafter set forth, with such appropriate variations, omissions or insertions as are permitted or required by this Ordinance, and may have endorsed thereon such legends or text as may be necessary or appropriate to conform to the rules and regulations of any governmental authority or any usage or requirement of law with respect thereto. Each Bond shall bear a number or letter or a number and letter, distinguishing it from every other Bond. In order to induce DTC to accept the Bonds as eligible for deposit at DTC, the Borough shall execute and deliver the Letter of Representation. The Borough Finance Director is hereby authorized to execute the Letter of Representation and such approval shall be conclusively presumed by the Borough Finance Director's execution thereof. Unless the Assembly shall otherwise determine by resolution, the Bonds initially issued shall be held in fully immobilized form by DTC acting as depository pursuant to the terms and conditions set forth in the Letter of Representation, shall be issued in denominations equal to the aggregate principal amount of each maturity, and initially shall be registered in the name of Cede & Co. as the nominee of DTC. Neither the Borough nor the Paying Agent will have any responsibility or obligation to DTC participants or the persons for whom they act as nominees with respect to the Bonds in respect to the accuracy of any records maintained by DTC or any DTC participant, the payment by DTC or any DTC participant of any amount in respect of the principal or redemption price of or interest on the Bonds, any notice which is permitted or required to be given to owners of the Bonds under this Ordinance (except such notices as shall be required to be given by the Borough to the Paying Agent or to DTC), the selection by DTC or any DTC participant of any person to receive payment in the event of a partial redemption of the Bonds or any consent given or other action taken by DTC as the owner of the Bonds. For so long as any Bonds are held in fully immobilized form hereunder, DTC or its successor depository shall be deemed to be the owner of the Bonds for all purposes hereunder, and all references herein to the owner of the Bonds or similar terms shall mean DTC or its nominee and shall not mean the owners of any beneficial interest in the Bonds. Section 7: Details of Bonds. Bach of the bonds shall be signed by the manual or facsimile signature of the Mayor and the official seal of the Borough (or a facsimile thereof) shall be affixed, imprinted or otherwise reproduced on the Bonds and attested by the manual or facsimile signature of the Borough Clerk. In case any officer signing such Bonds or whose facsimile signature appears thereon shall have ceased to hold office at the time of issuance or authentication or shall not have held office at the date of the Bond, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes. In the event both the signature of the Mayor and the signature of the Borough Clerk are in facsimile form, the Bonds shall contain a certificate of the Paying Agent in the following form: Kodiak Island Borough, Alaska Ordinance No. 91 -09 Page 5 of 21 This Bond Obligation described Ordinance. PAYING AGENT'S CERTIFICATE OF AUTHENTICATION is one of the Kodiak Island Borough, Alaska, General School Refunding Bonds, 1991 Series [A or B] in and issued pursuant to the within mentioned Seattle —First National Bank as paying agent By Authorized Officer The principal of and the interest on the Bonds shall be payable in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. For so long as all outstanding Bonds are held in fully immobilized form by DTC and are registered in the name of Cede & Co. or its registered assigns, payments of principal and interest thereon shall be made as provided in the Letter of Representation. In the event that the Bonds are not or are no longer held in fully immobilized form by DTC and registered in the name of Cede & Co. or its registered assigns, the principal of all Bonds shall be payable at the corporate trust office of the Paying Agent. Payment of interest on the Bonds shall be made by check or draft mailed on each interest payment date by first class mail to the registered owner of record as of the 15th day of the month preceding such interest payment date at the address appearing on the Bond Register of the Borough kept at the corporate trust office of the Paying Agent, provided that any owner of Bonds in an aggregate principal amount of $1,000,000 or more may, at its option, receive interest payments by wire transfer at any location within the United States of America upon notice delivered to the Paying Agent not later than the 15th day of the month preceding any interest payment date. Section 8: Redemption of Bonds. The bonds shall not be subject to redemption prior to maturity. Section 9: Form of Bond. Each Bond shall be in substantially the following form, with such variations, omissions and insertions as may be required or permitted by this Ordinance or by resolution of the Assembly: Kodiak Island Borough, Alaska Ordinance No. 91 -09 Page 6 of 21 UNITED STATES OF AMERICA STATE OF ALASKA KODIAK ISLAND BOROUGH (A Municipal Corporation of the State of Alaska) GENERAL OBLIGATION SCHOOL REFUNDING BOND, 1991 SERIES [A or B] INTEREST RATE MATURITY DATE CUSIP NO. Registered Owner Principal Amount DOLLARS The Kodiak Island Borough, a municipal corporation of the State of Alaska (the "Borough "), for value received, acknowledges itself indebted and hereby promises to pay to the registered owner identified above, or registered assigns, on the maturity date identified above, upon presentation and surrender hereof, the principal amount shown above, and to pay interest on such principal sum from the date hereof until its obligation with respect to the payment of such principal sum shall be discharged, at the interest rate per annum shown above, payable on the first days of (Month) and (Month) in each year beginning (Monthl, 192x. The principal of and the interest on this Bond shall be payable in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. Principal shall be paid to the registered owner or assigns upon presentation and surrender of the Bond at the corporate trust office of Seattle —First National Bank, Seattle, Washington (hereinafter called the "Paying Agent "), or its successors. Payment of interest shall be made by check or draft mailed on each interest payment date to the registered owner as of the 15th day of the month preceding such interest payment date at the address appearing on the Bond Register of the Borough kept at the corporate trust office of the Paying Agent; provided that interest to be paid to the registered owner of Bonds in the aggregate principal amount of $1,000,000 or more may be made by wire transfer to any location in the United States of America as provided in the hereinafter defined Ordinance, and, provided further, that if this Bond is held in fully immobilized form, payment of interest shall be made by wire transfer. Interest on the Bonds shall be calculated on the basis of a 360 —day year consisting of twelve 30— day months. In any case where a maturity date or interest payment date for the Bonds shall be a Saturday or Sunday, a legal holiday or a day on which banking institutions in the city of payment are authorized by law to close, then payment of interest or principal need not be made on such date but may be made on the next succeeding business day with the same force and Kodiak Island Borough, Alaska Ordinance No. 91 -09 Page 7 of 21 effect as if made on the maturity date or the interest payment date, and no interest on such payment shall accrue for the period after such date. This Bond is one of the General Obligation School Refunding Bonds, 1991 Series (A or B) of the Kodiak Island Borough, Alaska, of like tenor and effect except as to interest rate, serial number and maturity, aggregating $(amount' in principal amount, and constituting bonds authorized for the purpose of refunding certain general obligation Bonds issued by the Borough, and is issued pursuant to Ordinance No. 91 -09 of the Borough entitled: AN ORDINANCE PROVIDING FOR THE ISSUANCE OF GENERAL OBLIGATION SCHOOL REFUNDING BONDS, 1991 SERIES A OF THE BOROUGH IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $5,000,000, AND GENERAL OBLIGATION SCHOOL REFUNDING BONDS 1991, SERIES B OF THE BOROUGH IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $2,750,000, TO REFUND CERTAIN OUTSTANDING GENERAL OBLIGATION BONDS OF THE BOROUGH, FIXING CERTAIN DETAILS OF SUCH BONDS AND AUTHORIZING THEIR SALE. (together with Resolution No. 91 -36 of the Borough herein called the "Ordinance "). The Bonds are not subject to redemption prior to maturity. This Bond is transferable as provided in the Ordinance, (i) only upon the Bond Register of the Borough kept for that purpose at the corporate trust office of the Paying Agent, and (ii) upon surrender of this Bond together with a written instrument of transfer duly executed by the registered owner or the attorney of the registered owner duly authorized in writing, and thereupon a new fully registered Bond or Bonds in the same aggregate principal amount and maturity shall be issued to the transferee in exchange therefor as provided in the Ordinance and upon the payment of charges, if any, as therein prescribed. The Borough and the Paying Agent may treat and consider the person in whose name this Bond is registered as the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal or redemption price, if any, hereof and interest due hereon and for all other purposes whatsoever. This Bond is a general obligation of the Kodiak Island Borough, and the full faith and credit of the Borough are pledged for the payment of the principal of and interest on this Bond. The Borough hereby irrevocably pledges and covenants that it will levy and collect taxes upon all taxable property within the Borough without limitation as to rate or amount, in amounts sufficient, together with other funds legally available therefor, to pay the principal of and interest on the Bonds as the same become due and payable. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts or things required by the Constitution or statutes of the State of Alaska to exist, to have happened or to have been performed precedent to or in the issuance of this Bond exist, have happened and have been performed, and that the series of Bonds of which this is one, together with all other indebtedness Kodiak Island Borough, Alaska Ordinance No. 91 -09 Page 8 of 21 f of the Borough, is within every debt and other limit prescribed by said Constitution or statutes. IN WITNESS WHEREOF, THE KODIAK ISLAND BOROUGH, ALASKA, has caused this Bond to be signed in its name and on its behalf by the manual or facsimile signature of its mayor and its corporate seal (or a facsimile thereof) to be hereunto affixed, imprinted or otherwise reproduced and attested by the manual or facsimile signature of its clerk, all as of the (Day) day of f Monthl, 192x. ATTEST: DONNA F. SMITH Clerk JEROME M. SELBY Mayor In the event the Bonds are not or are no longer registered in the name of Cede & Co., or its assigns, the form of the Bonds may be modified to conform to printing requirements and the terms of this Ordinance. Section 10: Disposition of the Proceeds of Sale of the Bonds. The proceeds received from the sale of the Bonds shall be applied in the amounts hereafter determined by resolution of the Assembly (i) to make a deposit in the Principal and Interest Fund under the Indenture to provide for the payment of all or a portion of the redemption price of the Refunded Bonds; (ii) to pay accrued interest on the Bonds; and (iii) to pay all costs incidental to the issuance of the Bonds. Section 11: Call of the Outstanding Bonds for Redemption. The Borough hereby elects to redeem the Outstanding Bonds on a date hereafter determined by resolution of the Assembly. Notice of redemption of the Outstanding Bonds shall be given in the manner set forth in the Indenture. The election to make such call for redemption shall be subject to the delivery of the Bonds to the initial purchaser thereof and shall become irrevocable upon such deliver. Section 12: Paying Agent: Registration. (a) Seattle —First National Bank, Seattle, Washington, is hereby appointed Paying Agent for the Bonds and the term "Paying Agent" shall include any successor or successors thereto. The Paying Agent as bonds registrar shall maintain at its corporate trust office a Bond Register which shall include the names and addresses of the owners or nominees of the owners of the Bonds and which shall provide for the registration, transfer and exchange of bonds. The Paying Agent may become the owner of or may deal in Bonds as fully and with the same rights as if it was not the paying Agent. The Mayor and the Finance Director are each authorized to execute on behalf of the Borough the paying Agent/Registrar Agreement Kodiak Island Borough, Alaska Ordinance No. 91 -09 Page 9 of 21 with Seattle —First National Bank, substantially in the form on file with the Borough Clerk. (b) Concerning the use of DTC, (1) Unless otherwise provided by resolution of the Assembly, the Bonds shall be registered initially in the name of "Cede & Co. ", as nominee of DTC, with one Bond maturing on each of the maturity dates established by resolution in a denomination corresponding to the total principal therein designated to mature on such date Registered ownership of such immobilized Bonds, or any portions thereof, may not thereafter be transferred except (i) to any successor of DTC or its nominee, provided that any such successor shall be qualified under any applicable laws to provide the service proposed to be provided by it; (ii)_ to any substitute depository appointed by the Assembly pursuant to (2) below or such substitute depository's successor; or (iii) to any person as provided in (4) below. (2) Upon resignation of DTC or its successor (or any substitute depository or its successor) from its functions as depository or a determination by the Assembly that it is no longer in the best interests of owners of beneficial interest of the Bonds to continue the system of book entry transfers through DTC or its successors (or any substitute depository or its successor), the Assembly may hereafter appoint a substitute depository. Any such substitute depository shall be qualified under any applicable laws to provide the services proposed to be provided by it. (3) In the case of any transfer pursuant to clause (i) or (ii) or (1) above, the Paying Agent shall, upon receipt of all outstanding Bonds, together with a written request on behalf of the Assembly, issue a single new Bond for each maturity of such Bonds then outstanding, registered in the name of such successor or such substitute depository, or their nominees, as the case may be, all as specified in such written request of the Assembly. (4) In the event that (i) DTC or its successor (or substitute depository or its successor) resigns from its functions as depository, and no substitute depository can be obtained, or (ii) the Assembly determines that it is in the best interest of the beneficial owners of the Bonds that they be able to obtain bond certificates, the ownership of Bonds may then be transferred to any person or entity as herein provided and the Bonds shall no longer be held in fully immobilized form. The Assembly shall deliver a written request to the Paying Agent, together with a supply of definitive Bonds, to issue Bonds as herein provided in any authorized denomination. Upon receipt of all then outstanding Bonds by the Paying Agent, together with a written request on behalf of the Assembly to the Paying Agent, new Bonds shall be issued in such denominations and registered in the names of such persons as are requested in such written request. (c) The Borough and the Paying Agent shall be entitled to treat the person in whose name any Kodiak Island Borough, Alaska Ordinance No. 91 -09 Page 10 of 21 Bond is registered as the absolute owner thereof for all purpose of this Ordinance and any applicable laws, notwithstanding any notice to the contrary received by the Paying Agent or the Borough. Neither the Borough nor the Paying Agent will have any responsibility or obligations, legal or otherwise, to any other party including DTC or its successor (or substitute depository or its successor), except to the owners of the Bonds. (d) The Borough covenants that, until all Bonds have been surrendered and canceled, it will maintain a system for recording the ownership of each Bond that complies with the provisions of Section 149 of the Code. Section 13. Mutilated Destroyed. Stolen or T nst Bonds. In case any Bond shall become mutilate or be destroyed, stolen or lost, the Borough shall cause to be executed, and shall deliver, a new Bond of like interest rate, principal amount, maturity and series in exchange and substitution for and upon cancellation of such mutilated Bond, or in lieu of and in substitution for such Bond destroyed, stolen or lost, in each case upon the owner thereof paying the reasonable expenses and charges of the Borough and the Paying Agent in connection therewith and in the case of a Bond destroyed, stolen or lost, filing by the owner with the Paying Agent evidence satisfactory to the Paying Agent and the Borough that such Bond was destroyed, stolen or Lost and the owner's ownership thereof, and furnishing the Borough and the Paying Agent with indemnity satisfactory to them. Any new Bond so delivered may bear a number differing from the number of the Bond it replaces. Section 14. Transfer of Bonds and Delivery of New Bonds. Any Bond may be transferred only upon the books kept for the registration and transfer of Bonds by the Paying Agent, as bond registrar, upon surrender thereof at the corporate trust office of the Paying Agent, together with an assignment duly executed by the registered owner or his attorney in such form as shall be satisfactory to the Paying Agent. Upon the transfer of any such Bond, there shall be executed in the name of the transferee, and the Borough shall cause to be authenticated and delivered, a new registered Bond or Bonds of the same maturity, series and aggregate principal amount in any of the authorized denominations. In all cases in which Bonds may be transferred under this Ordinance, there shall be executed, and the Borough shall authenticate and deliver, Bonds in accordance with the provisions of the Ordinance. Any such transfer shall be without cost to the registered owner, except that the Borough and the Paying Agent may make a charge for every such registration, exchange or transfer of Bonds sufficient to reimburse them for any tax, fee or other governmental charge required to be paid with respect to such registration, exchange or transfer and such charge or charges shall be paid before any such new Bond shall be delivered. Neither the Borough nor the Paying Agents shall be required to make any such registration, exchange or transfer of a Bond (i) during a period of 15 clays preceding any selection of Bonds to be redeemed or thereafter until after the mailing of any notice of redemption, or (ii) following any mailing of notice of redemption of such Bond. Section 15. Ownership of Bonds. As to any Bond, the person in whose name the same shall be registered on the Bond Register shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal on such Bond and the interest on such Bonds shall be made only to or upon the order of the registered owner thereof or his legal Kodiak Island Borough, Alaska Ordinance No. 91 -09 Page 11 of 21 representative, but such registration may be changed as hereinabove provided. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond, including the interest thereon to the extent of the sum or sums so paid. Section 16. Pledge The Borough hereby irrevocably pledges and covenants that it will levy and collect taxes upon all taxable property within the Borough without limitation as to rate or amount, in amounts sufficient, together with other funds legally available therefor, to pay the principal of and interest on the Bonds as the same become due and payable. In the event that any Bond Insurer makes any payment under a bond insurance policy with respect to the Bonds, such payment shall not be deemed a payment of the Borough and such payment amounts shall continue to be due and payable by the Borough under this Ordinance. Section 17. Arbitrage Covenant The Borough covenants with the registered owners of all Bonds at any time outstanding that it will make no use of the proceeds of the Bonds which will cause the Bonds to be "arbitrage bonds" subject to federal income taxation by reason of Section 148 of the Code. To that end, so long as any of the Bonds are outstanding, the Borough, with respect to the proceeds of the Bonds, shall comply with all requirements of said Section 148 and of all regulations of the United States Department of Treasury issued thereunder, to the extent that such requirements are, at the time, applicable and in effect. Section 18 Compliance with Code. The Borough hereby covenants to comply with any and all applicable requirements set forth in the Code in effect from time to time to the extent that such compliance shall be necessary for the exemption from federal income taxes of the interest on the Bonds. The covenant of this section shall also be deemed to have been made for the benefit of any Bond Insurer for so long as the Bond Insurer maintains a policy of insurance with respect to the Bonds. Section 19. Designation of Bonds as Oualified Tax Exempt Obli • tions. The Bonds hereby are designated "qualified tax exempt obligations" in accordance with Section 265(b)(3) of the Code, and the Borough hereby covenants that it shall not issue during the calendar year 1991 more than $10,000,000 in aggregate principal amount of tax exempt obligations other than tax exempt obligations described in Section 265(b)(3)(c)(ii) of the Code. Section 20. Sale of Bonds and Approval of Official Statement. The Bonds shall be sold at negotiated sale. The Mayor and Finance Director of the Borough are hereby authorized to solicit an offer for the purchase of the Bonds from John Nuveen & Co. Incorporated in such manner as they deem appropriate and thereafter to negotiate a contract for the purchase of the Bonds which is in the best interest of the Borough, said contract to be approved by the Assembly by resolution. The Mayor and Finance Director of the Borough are each authorized to review and to approve, on behalf of the Borough, the official statement (and any preliminary official statement) relating to the issuance and sale of the Bonds with such changes, if any, as may be deemed by them to be appropriate. Kodiak Island Borough, Alaska Ordinance No. 91 -09 Page 12 of 21 Section 21. Amount. Dates and Maturities. Sale and Other Details of Bonds: Date of Redemption of Refunded Bonds The Assembly shall by resolution establish the total amount of the Bonds of each series to be issued, the date of the Bonds, numbers, interest rates, maturities and any other details of the Bonds, and the principal amount and date of redemption of the Refunded Bonds. Section 22. Authority of Officers. The Mayor, the acting Mayor from time to time, the Borough Finance Director, the acting Borough Finance Director, the Borough Clerk and the acting Borough Clerk from time to time, are, and each of them hereby is, authorized and directed to do and perform all things and determine all matters not determined by this Ordinance, or to be determined by a subsequent Ordinance or resolution of the Borough, to the end that the Borough may carry out its obligations under the Bonds and this Ordinance. Section 23. Amendatory and Supplemental Ordinances (a) The Assembly from time to time and at any time may adopt an ordinance or ordinances supplemental hereof, which ordinance or ordinances thereafter shall become a part of this Ordinance, for any one or more of the following purposes: (1) To add to the covenants and agreements of the Borough in this Ordinance contained, other covenants and agreements thereafter to be observed or to surrender any right or power herein reserved to or conferred upon the Borough. (2) To make such provisions for the purpose of curing any ambiguities or of curing, correcting or supplementing any defective provision contained in this Ordinance or in regard to matters or questions arising under this Ordinance as the Assembly may deem necessary or desirable and not inconsistent with this Ordinance and which shall not adversely affect the interest of the registered owners of the Bonds. Any such supplemental ordinance of the Assembly may be adopted without the consent of the registered owner of any of the Bonds at any time outstanding, notwithstanding any of the provisions of subsection (b) of this section. (b) With the consent of the owners of not less that 60 percent in aggregate principal amount of the Bonds at the time outstanding, the Assembly may adopt an ordinance or ordinances supplemented hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Ordinance or of any supplemental ordinance; provided, however, that no such supplemental ordinance shall: (1) extend the fixed maturity of any of the Bonds, or reduce the rate of interest hereon, or reduce the amount or change the date of any sinking fund installed, or extend the time of payments of interest from their due date, or reduce the amount of the principal thereof, or reduce any premium payable on the redemption hereof, without the consent of the owners of each Bonds so affected; or (2) reduce the aforesaid percentage of owners of Bonds required to approve any such Kodiak Island Borough, Alaska Ordinance No. 91 -09 Page 13 of 21 supplemental ordinance without the consent of the owners of all of the Bonds then outstanding; and provide further, that if the Bonds are insured any such supplemental ordinance shall not be adopted without the prior written consent of the Bond Insurer. It shall not be necessary for the consent of the owners of the Bonds under this subsection to approve the particular form of any proposed supplemental ordinance, but it shall be sufficient if such consent approves the substance thereof. (c) Upon the adoption of any supplemental ordinance pursuant to the provisions of this section, this Ordinance shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations of the Borough under this Ordinance and all owners of Bonds outstanding hereunder shall thereafter be determined, exercised and enforced thereunder, subject in all respects to such modification and amendment, and all the terms and conditions of any such supplemental ordinance shall be deemed to be part of the terms and conditions of this Ordinance for any and all purposes. (d) Bonds executed and delivered after the executions of any supplemental ordinance adopted pursuant to the provisions of this section may bear a notation as to any matter provided for in such supplemental ordinance, and if such supplemental ordinance shall so provide, new Bonds so modified so as to conform, in the opinion of the Borough, to any modification of this Ordinance contained in any such supplemental ordinance may be prepared by the Borough and delivered without cost to the registered owners of the Bonds then outstanding, upon surrender for cancellation of such Bonds in equal aggregate principal amounts. Section 24. Prohibited Sale of Bonds. No person, firm or corporation, or any agent or employee threof, acting as financial consultant to the Borough under an agreement for payment in connection with the sale of the Bonds is eligible to pruchase the Bonds as a member of the original underwriting syndicate either at public or private sale. Section 25. Miscellaneous (a) All payments made by the Borough of, or on account of, the principal of or interest on the Bonds shall be made on the several Bonds ratable and in proportion to the amount due thereon, respectively, for principal or interest as the case may be. (b) No recourse shall be had for the payment of the principal of or the interest on the Bonds or for any claim based thereon or on this Ordinance against any member of the Assembly or officer of the Borough or any person executing the Bonds. The Bonds are not and shall not be in any way a debt or liability of the State of Alaska or of any political subdivision thereof, except the Borough, and do not and shall not create or constitute an indebtedness or obligation, either legal, moral or otherwise, of said state or of any political subdivision thereof, except the Borough. Section 26. Severability. If any one or more of the covenants and agreements provided in this Ordinance to be performed on the part of the Borough shall be declared by any court of competent jurisdiction to be contrary to law, then such covenant or covenants, agreement or Kodiak Island Borough, Alaska Ordinance No. 91 -09 Page 14 of 21 agreements shall be null and void and shall be deemed separable from the remaining covenants and agreements in this Ordinance and shall in no way affect the validity of the other provisions of this Ordinance or of the Bonds. Section 27: Effective Date. This Ordinance shall take effect upon adoption by the Kodiak Island Borough Assembly. PASSED AND APPROVED THIS 18th DAY OF JULY, 1991. ATTEST: h 421 i_t orough Clerk KODIAK ISLAND BOROUGH Kodiak Island Borough, Alaska Ordinance No. 91 -09 Page 15 of 21