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1991-36 Relating to the Issuance and Sale of General Obligation School Refunding Bonds, 1991, Series A and of General Obligation School Refunding Bonds, 1991 Series B Authorized by Ordinance No. 91-09.Introduced by: Mayor Selby Requested by: Finance Director Drafted by: Bond Counsel Introduced: 07/18/91 Adopted: 07/18/91 KODIAK ISLAND BOROUGH RESOLUTION NO. 91-36 A RESOLUTION RELATING TO THE ISSUANCE AND SALE OF $4,875,000 OF GENERAL OBLIGATION SCHOOL REFUNDING BONDS, 1991 SERIES A AUTHORIZED BY ORDINANCE NO. 91-09; FIXING THE DATE, TERMS, MATURITIES AND INTEREST RATES FOR SAID BONDS; PROVIDING FOR THE USE AND APPLICATION OF THE PROCEEDS OF SAID BONDS; APPROVING THE EXECUTION OF A CONTRACT OF PURCHASE AND RELATED MATTERS WHEREAS, on July 18, 1991, the Assembly of the Kodiak Island Borough (the "Borough"), adopted Ordinance No. 91-09 (the "Ordinance") authorizing the Issuance and sale of not to exceed $5,000,000 of General Obligation School refunding Bonds, 1991 Series A and not to exceed $2,750,000 of General Obligation School Refunding Bonds, 1991 Series B; and WHEREAS, pursuant to the Ordinance, the proper officials of the Borough have negotiated a contract of purchase dated July 18, 1991 (the "Purchase Contract') with John Nuveen & Co. Incorporated (the "Underwriter") which provides inter all;, for the issuance and sale by the Borough and the purchase by the Underwriter of $4,875,000 of the General Obligation School Refunding Bonds, 1991 Series A authorized by the Ordinance; and WHEREAS, the Ordinance provides that the Assembly shall by resolution establish the total amount of Bonds to be issued pursuant to the Ordinance, the date of said Bonds, numbers, interest rates, interest payment dates, maturities and other details of said bonds, and the principal amount and date of redemption of the bonds to be refunded; and WHEREAS, it is hereby found to be in the best interest of the Borough that the Purchase Contract be approved and executed and that certain matters relating to such Bonds and the use of the proceeds of such sale be established. Kodiak Island Borough, Alaska Resolution No. 91-36 Page 1 of 7 NOW, THEREFORE, BE IT RESOLVED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH: Section 1: Definitions. Terms used in this Resolution which are not otherwise defined herein shall have the same meaning as in the Ordinance. Section 2: Bond Sale and Purchase Contract. (A) The sale of $4,875,000 of the General Obligation School Refunding Bonds, 1991 Series A of the Borough, authorized by the Ordinance (the "Series A bonds"), as provided in the Purchase Contract, is hereby authorized and approved. The Underwriter has presented a Purchase Contract to the Assembly, which Purchase Contract is on file with the Borough Clerk. Under the Purchase Contract, the Underwriter has offered to purchase the Series A bonds on the terms and conditions set forth therein, and in the Ordinance and this Resolution. The Assembly finds that entering into the Purchase Contract is in the Borough's best interest and, therefore, accepts the offer contained in the Purchase Contract and authorizes the execution and delivery of the Purchase Contract by the Borough mayor on behalf of the Borough. (B) The Assembly hereby finds and determines that the plan of refunding the Refunded Bonds pursuant to the Ordinance and this Resolution may be accomplished with the proceeds of the Series A Bonds whose sale is authorized herein, and the remaining Bonds authorized by the Ordinance shall not be issued. Section 3: Issue Date. Form and Payments. The Series A bonds shall be dated July 15, 1991. The Series A Bonds shall be issued in the form of separate, single, authenticated, fully registered bonds and upon issuance, the ownership of such Series A Bonds shall be registered in the registry books kept by the Paying Agent as bond registrar in the name of Cede & Co. as nominee for DTC, the bond depository as provided in section 6 of the Ordinance. Payment of the principal of and interest on the Series A Bonds shall be as provided in the Ordinance and this Resolution. Section 4: Maturities and Interest Rates. The Series A Bonds shall be issued in the denomination of $5,000 or any integral multiple thereof, shall mature on June 1 and December 1 of the following years in the principal amounts shown, and shall bear interest from the date thereof, payable on December 1, 1991, and semiannually thereafter on June 1 and December 1 in each year, at the respective rates set opposite the maturity dates in the following table: Maturity Date Principal Amount Interest Rate December 1, 1991 $535,000 4.65% June 1, 1992 250,000 4.80 Kodiak Island Borough, Alaska Resolution No. 91-36 Page 2 of 7 December 1, 1992 795,000 5.20 June 1. 1993 250,000 5.30 December 1, 1993 780,000 5.30 June 1, 1994 250,000 5.60 December 1, 1994 765,000 5.60 June 1, 1995 250,000 5.80 December 1, 1995 750,000 5.80 June 1, 1996 250,000 5.90 Section 5: Delivery of the Series A Bonds. The proper officials of the Borough are authorized and directed to execute and deliver all documents and to do everything necessary for the preparation and delivery of a transcript of proceedings pertaining to the Series A Bonds and the printing, authentication and delivery of the Series A Bonds in definitive form to the Underwriter. Section 6: Application of Bond Proceeds: Redemotion Date for Outstandino Series A Bonds. (A) The proceeds of sale of the Series A Bonds shall be used and applied as provided in the Ordinance and in Schedule A attached hereto and by this reference made a part hereof: first, to deposit in the Principal and Interest Fund under the Indenture an amount sufficient to provide for the payment of the redemption price of Outstanding Bonds in the aggregate principal amount of $4,750,000, which are hereby designated the "Refunded Bonds" under the Ordinance; second, to pay the premium of the Bond Insurer; and, third, to pay the remaining amount over to the Borough to pay the costs of issuance of the Series A Bonds. (B) The date of redemption of the Outstanding Bonds pursuant to the Ordinance shall be August 29, 1991. Section 7: Ratification. All actions taken by the Mayor and the Finance Director relative to the sale of the Series A Bonds are hereby in all respects ratified and confirmed. Section 8. Provisions Relative to Bond Insurer. Municipal Bond Investors Assurance Corporation, a stock insurance company incorporated under the laws of the state of New York, is hereby designated as the "Bond Insurer" under the Ordinance pursuant to its commitment to issue a policy of bond insurance dated July 9, 1991 (the "Commitment"), and the term "Bond Insurer' shall include any successor thereto. The Bond Insurer has committed to issue, under the terms of its Commitment, a municipal bond insurance policy insuring the payment when due of the principal of and interest on the Series A Bonds as provided therein (the "Municipal Bond Insurance Policy"). For so long as the Bond Insurer maintains the Municipal Bond Insurance Policy: Kodiak Island Borough, Alaska Resolution No. 91-36 Page 3 of 7 to by the Bond Insurer shall be sent to Standard & Poor's Corporation. (2) The Bond Insurer shall receive notice of the resignation or removal of the Paying Agent and the appointment of a successor thereto. (3) The Bond Insurer shall receive copies of all notices required to be delivered to bondowners and, on an annual basis, copies of the Borough's audited financial and annual budget. (4) Any notice that is required to be given to an owner of the Series A Bonds or to the Paying Agent pursuant to the Ordinance shall also be provided to the Bond Insurer. All notices required to be given to the Bond Insurer under the Ordinance shall be in writing and shall be sent by registered or certified mail addressed to Municipal Bond Investors Assurance Corporation, 113 King Street, Armonk, New York 10504 Attention: Surveillance, Section 9: Payment Procedure Pursuant to Municipal Bond Insurance Policy. As long as the Municipal Bond Insurance Policy is in full force and effect, the Borough and the Paying Agent agree to comply with the following provisions: (1) In the event that, on the second business day, and again on the business day, prior to the payment date on the Series A Bonds, the paying Agent has not received sufficient moneys to pay all principal of and interest on the Series A Bonds due on the second following or following, as the case may be, business day, the Paying Agent shall immediately notify the Bond Insurer or its designee on the same business day by telephone or telegraph, confirmed in writing by registered or certified mail, of the amount of the deficiency. (2) If the deficiency is made up in whole or in part prior to or on the payment date, the Paying Agent shall so notify the Bond Insurer or its designee. (3) In addition, if the Paying Agent has notice that any bondholder has been required to disgorge payments of principal or interest on the Series A Bonds to a trustee in bankruptcy or creditors or others pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes a voidable preference to such bondholder within the meaning of any applicable bankruptcy laws, then the paying Agent shall notify the Bond Insurer or its designee of such fact by telephone or telegraphic notice, confirmed in writing by registered or certified mail. (4) The Paying Agent is hereby irrevocable designated, appointed, directed and authorized to act as attorney-in-fact for owners of the Series A Bonds as follows: (a) If and to the extent there is a deficiency in amounts required to pay interest on the Series A Bonds, the paying Agent shall (i) execute and deliver to Citibank, N.A., or its successors under the policy (the "Insurance Paying Agent"), in form satisfactory to the Insurance Paying Agent, an instrument appointing the Bond Insurer as agent for such owners in any legal proceeding related to the payment of such interest and an assignment Kodiak Island Borough, Alaska Resolution No. 91-36 Page 4 of 7 to the Bond Insurer of the claims for interest to which such deficiency relates and which are paid by the Bond Insurer, (ii) receive as designee of the respective owners (and not as Paying Agent) in accordance with the tenor of the policy payment from the Insurance Paying Agent with respect to the claims for interest so assigned, and (iii) disburse the same to such respective owners; and (b) if and to the extent of a deficiency in amounts required to pay principal of the Series A Bonds, the Paying Agent shall (i) execute and deliver to the Insurance Paying Agent in form satisfactory to the Insurance Paying Agent an instrument appointing the Bond Insurer as agent for such owner in any legal proceeding relating to the payment of such principal and an assignment to the Bond Insurer of any of the Series A Bonds surrendered to the Insurance Paying Agent or so much of the principal amount thereof as has not previously been paid or for which moneys are not held by the Paying Agent and available for such payment (but such assignment shall be delivered only if payment from the Insurance Paying Agent is received), (ii) receive as designee of the respective owners (and not as Paying Agent) in accordance with the tenor of the policy payment therefor from the Insurance Paying Agent, and (iii) disburse the same to such owners. (5) Payments with respect to claims for interest on and principal of Series A Bonds disbursed by the Paying Agent from proceeds of the policy shall not be considered to discharge the obligation of the Borough with respect to such Series A Bonds, and the Bond Insurer shall become the owner of such unpaid Series A Bonds and claims for interest in accordance with the tenor of the assignment made to it under the provisions of this section or otherwise. (6) Irrespective of whether any such assignment is executed and delivered, the Borough and the Paying Agent hereby agree for the benefit of the Bond Insurer that: (a) they recognize that to the extent the Bond Insurer makes payments, directly or indirectly (as paying through the Insurance Paying Agent), on account of principal of or interest on the Series A Bonds, the Bond Insurer will be subrogated to the rights of such owners to receive the amount of such principal and interest from the Borough, with interest thereon as provided and soled from the sources stated in the Ordinance and the Series A Bonds, and (b) they will accordingly pay to the Bond Insurer the amount of such principal and interest (including principal and interest recovered under subparagraph (ii) of the first paragraph of the policy, which principal and interest shall be deemed past due and not to have been paid), with interest thereon as provided in the Ordinance and the Series A Bonds, but only from the sources and in the manner provided therein for the payment of principal of and interest on the Series A Bonds to owners, and will otherwise treat the Bond Insurer as the owner of such rights to the amount of such principal and interest. Kodiak Island Borough, Alaska Resolution No. 91-36 Page 5 of 7 Section 10: Parties Interested Herein. Nothing in this Resolution or the Ordinance expressed or implied is intended or shall be construed to confer upon, or to give to, any person or entity, other than the Borough, the Underwriter, the paying Agent, the Bond Insurer and the registered owners of the Series A Bonds, any right, remedy or claim under or by reason of the Resolution, the Ordinance or any covenant, condition or stipulation thereof, and all covenants, stipulations, promises and agreements in this Resolution or the Ordinance contained by and on behalf of the Borough shall be for the sole and exclusive benefit of the Borough, the Underwriter, the Paying Agent, the Bond Insurer and the registered owners of the Series A Bonds. Section 11: Effective Date. This Resolution shall take effect immediately. PASSED AND APPROVED THIS 18th DAY OF JULY, 1991. ATTEST: Borough Clerk Kodiak Island Borough, Alaska KODIAK ISLAND BOROUGH �I Boro h Mayor Pr sidin fficer Resolution No. 91-36 Page 6 of 7 Schedule A ESTIMATED APPLICATION OF SERIES A BOND PROCEEDS Sources of Funds Par Amount of Series A Bonds $4,875,000.00 Original Issue Discount (10,015.45) Deposit to Principal and Interest Fund Underwriter's Discount Costs of Issuance Bond Insurance Premium Contingency Kodiak Island Borough, Alaska $4,864,984.55 $4,738,047.40 51,480.00 42,300.00 28,000.00 5,157.15 $4,864,984.55 Resolution No. 91-36 Page 7 of 7