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Transcript AMBB GO Bonds 2011 Series One
Alaska Municipal Bond Bank $8,635,000 General Obligation Bonds, 2011 Series One Dated and Delivered: March 1, 2011 TABLE OF CONTENTS BANK PROCEEDINGS 1. Certificate of Lieutenant Governor as to Legislation with Respect to the Bank and as to Appointment of Members of the Bank Board of Directors 2. General Certificate of the Bank 3. Certified Minutes of the Meeting of the Bank Board of Directors held on February 1, 2011, showing adoption of Series Resolution No. 2011-01 authorizing the issuance of General Obligation Bonds, 2011 Series One 4. Copies of: a. Certified Copy of General Obligation Bond Resolution b. Certified Copy of Series Resolution 2011-01 c. Preliminary Official Statement d. Official Statement e. Loan Agreement with the Kodiak Island Borough, Alaska f. Loan Agreement with the City and Borough of Wrangell, Alaska GOVERNMENTAL UNIT PROCEEDINGS 5. Kodiak Island Borough, Alaska a. Certified Copy of Resolution No. FY 2011-18 b. Certificate as to Arbitrage and Tax Exemption c. Certificate of Delivery Delivery and Payment and Receipt for Bonds d. Certificate of Borough Manager e. Signature Certificate AMBB/General Obligation Bonds, 2011 Series One Table of Contents 1:\Docs\37421723\TOC.wpd Page 1 f. No Litigation Certificate of Borough Attorney g. Specimen Bond h. Final Approving Opinion of Birch Horton Bittner & Cherot i. IRS Form 8038-G 6. City and Borough of Wrangell, Alaska a. Certified Copy of Resolution No. 01-11-1216 b. Signature Identification Certificate c. No Litigation Certificate of Borough Attorney d. Certificate Regarding Compliance with Rule 15c2-12 e. Certificate of Payment and Delivery and Receipt for the Bonds f. Specimen Bond g. Final Approving Opinion of K&L Gates LLP h. IRS Form 8038-G CLOSING DOCUMENTS 7. Bond Purchase Contract 8. Requisition and Certificate of the Alaska Municipal Bond Bank Pursuant to Section 502(B) of the General Bond Resolution 9. Written Order to Trustee as to Delivery of the Bonds under Section 202 of the General Bond Resolution 10. Certificate as to Signatures, Execution of Bonds and Specimen Bonds 11. Evidence of Trustee's Authority to Accept Trust and Trustee's Officers' Authority to Act a. Trustee's Certificate as Required by Section 7(c)(x) of the Bond Purchase Contract 12. Trustee's Certificate of Authentication and Receipt of Documents and Funds 13. Certificate of Executive Director as to Delivery and Payment for the Bonds and Underwriter's Receipt of the Bonds AMBB/General Obligation Bonds, 2011 Series One Table of Contents 1:\Docs\37421723\TOC.wpd Page 2 14. Certificate of Executive Director Concerning Litigation, Official Statement and Other Matters 15. Continuing Disclosure Certificate -Alaska Municipal Bond Bank 16. Copy of Continuing Disclosure Certificate -City of Ketchikan 17. Copy of Continuing Disclosure Certificate -City and Borough of Sitka 18. Federal Tax Certificate 19. Certificate of Financial Advisor 20. Underwriter Representations 21. Opinions: a. Final Approving Opinion of Wohlforth, Johnson, Brecht, Cartledge & Brooking b. Supplemental Opinion of Wohlforth, Johnson, Brecht, Cartledge & Brooking c. Trust Opinion of Wohlforth, Johnson, Brecht, Cartledge & Brooking d. Attorney General's Certificate 22. Rating Agency Letters 23. DTC Letter of Representations 24. IRS Form 8038-G and Proof of Mailing 25. Closing Memorandum 26. Pricing Information AMBB/General Obligation Bonds, 2011 Series One Table of Contents 1:\Docs\37421723\TOC.wpd Page 3 Transcripts Delivered Following Closing To: Alaska Municipal Bond Bank (1 original, 1 CD) Kodiak Island Borough, Alaska (1 CD) City and Borough of Wrangell, Alaska (1 CD) Birch Horton Bittner and Cherot (1 CD) K&L Gates LLP (1 CD) The Bank of New York Mellon Trust Company, N.A. (1 CD) Piper Jaffray & Co. (1 CD) Western Financial Group (1 CD) Wohlforth, Johnson, Brecht, Cartledge & Brooking (1 original, 1 CD) AMBBIGeneral Obligation Bonds, 2011 Series One Table of Contents I:\Docs\37421723\TOC.wpd Page 4 STATE OF ALASKA LIEUTENANT GOVERNOR JUNEAU CERTIFICATE I, MEAD TREADWELL, LIEUTENANT GOVERNOR FOR THE STATE OF ALASKA, HEREBY CERTIFY THAT: Each of the following persons was appointed by the Governor of the State of Alaska as a member of the Board of Directors of the Alaska Municipal Bond Bank Authority on the date shown opposite his or her name below, and is qualified in accordance with the provisions of AS 44.85 (formerly AS 44.58) for a term of office commencing on the date set forth below and continuing as of the date of this certificate: Date of Date of Name Appointment Reappointment Expiration Luke Welles OS/21/08 07/15/11 Mark E. Pfeffer 10/1% 1 09/04/09 07/15/13 Gregory J. Gursey 06/22/09 12/01/1 0 07/15/14 1. Bryan Butcher was duly appointed Commissioner of the Department of Revenue, State of Alaska, on December 6, 2010, and pursuant to Chapter 85, Title 44, Alaska Statutes (the "Act"), is a duly named, qualified and acting member of the Board of Directors of the Bank. Jerry Burnett has been duly appointed as designee in Mr. Butcher's absence. 2. Susan Bell was duly appointed Commissioner of the Department of Commerce, Community and Economic Development, State of Alaska, on July 12, 20 I0, and pursuant to the Act, is a duly named, qualified and acting member of the Board of Directors of the Bank. Ted M. Leonard has been duly appointed as designee in Ms. Bell's absence. I, MEAD TREADWELL, LIEUTENANT GOVERNOR FOR THE STATE OF ALASKA, ALSO HEREBY CERTIFY THAT Alaska Statutes 44.85.005-44.85.420 are published by the Alaska Legislative Council and annotated and printed by LexisNexis (the "Alaska Municipal Bond Bank Authority Statutes"); that the current version of the Alaska Municipal Bond Bank Authority Statutes is set out in Volume 9 of the November 2010 publication of the Alaska Statutes. IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed hereto the Seal of the State of Alaska, at Juneau, the Capital, This •• !~t day of . Mqr9l). ••••••••••••••••, A. D.•:?QU . /%t.~~ . . .. :: . LIEUTENANT GOV ERNORGENERAL CERTIFICATE I, DEVEN J. MITCHELL, Executive Director of the Alaska Municipal Bond Bank (the "Bank"), HEREBY CERTIFY as follows: 1. I am the duly appointed, qualified and acting Executive Director of the Bank authorized to do and perform all things and execute all documents in the name of the Bank necessary and convenient to the issuance of the Bank's $8,635,000 General Obligation Bonds, 2011 Series One. 2. Bryan Butcher was duly appointed Commissioner of the Department of Revenue, State of Alaska, on December 6, 2010, and pursuant to Chapter 85, Title 44, Alaska Statutes (the "Act"), is a duly named, qualified and acting member of the Board of Directors of the Bank. Jerry D. Burnett is the duly appointed designee in Mr. Butcher's absence. 3. Susan Bell was duly appointed Commissioner of the Department of Commerce Community and Economic Development, State of Alaska, on July 8, 2010, and pursuant to the Act, is a duly named, qualified and acting member of the Board of Directors of the Bank. Ted Leonard is the duly appointed designee in Ms. Bell's absence. 4. The following named persons were duly appointed by the Governor of the State of Alaska as members of the Board of Directors of the Bank pursuant to the Act and are now, and at all times since the commencement of their most recent terms of office set forth below have been, duly qualified and acting members of said Board, and the date of commencement and expiration of their most recent respective terms of office are as set forth below: Name Mark E. Pfeffer Luke Welles Gregory J. Gursey Date of Appointment 10/10/01 OS/21/08 06/22/09 Reappointed 07/27/05 and 09/04/09 12/01/10 Expiration of Term 07/15/13 07/15/11 07/15/14 5. All the members and officers of the Bank have executed and do maintain in force surety bonds in compliance with the provisions ofAS 44.85 and, before entering their duties, have subscribed to an oath in accordance with AS 44.85.030. 6. As of February 1, 2011, the outstanding indebtedness of the Bank under the Bank's 2005 General Obligation Bond Resolution was $443,970,000. 7. The Alaska Statutes 44.85.005-44.85.420 are published by the Alaska Legislative Council and annotated and printed by LexisNexis (the "Alaska Municipal Bond Bank Authority Statutes"); the current version of the Alaska Municipal Bond Bank Authority Statutes is in Volume 9 of the November 2010 publication of the Alaska Statutes. 8. No authority or proceedings for the authorization, execution, issuance or delivery of the Bonds has or have been repealed, rescinded or revoked and no further approval or consents from any other government body or agency are required in connection therewith. 9. Attached as Exhibit A hereto is a true, complete and correct copy of the Administrative Regulations of the Bank amended to the date hereof and now in effect. 10. Attached as Exhibit B hereto is a true, complete and correct copy of the bylaws of the Bank as amended to the date hereof and now in effect. 11. Attached as Exhibit C hereto is a true, correct and complete copy of the notice of the meeting of the Bank of February 1, 2011, as posted on the State of Alaska website "Online Public Notices" on January 14, 2011. IN WITNESS WHEREOF, I have hereunto set my hand thi~ 1rYof March March 2011. ~ ~ DEVEN J. TCHELL Executive Director AMBB/General Obligation Bonds, 2011 Series One General Certificate 1:\Docs\37421723\General Certificate.wpd Page 2 EXHIBIT A CHAPTER 144 MUNICIPAL BOND BANK AUTHORITY 15 AAC 144.010 SCOPE OF REGULATIONS. This chapter applies to all applications by a municipality for a loan from the Alaska Municipal Bond Bank Authority through the purchase by the authority of municipal bonds of the municipality under AS 44.85. History-EIT. 4/1/76, Register 58; am 10/19/94, Register 132 Authority-AS 44.85.080 AS 44.85.095 15 AAC 144.020 ELIGffiILITY. (a) The authority will, in its discretion, approve a loan to a municipality only if the loan meets the following criteria: (1) the authority determines the municipality to be creditworthy after evaluating the municipality's loan application and any other information the authority considers relevant; and (2) the authority determines, on the basis of the completed application and other information, that the municipality would have to pay unnecessarily high borrowing costs in an offering of its municipal bonds to investors because ofone or more of the following factors: (A) the municipality has not issued municipal bonds or the municipality has little outstanding debt; (B) investors are unfamiliar with the municipality because it has been newly incorporated or has experienced recent rapid growth; Page 1 of 8 EXHIBIT A (C) the distance of the state from capital markets makes the municipality's bonds less attractive than bonds of a comparable municipality elsewhere in the United States; or (D) investors consider the municipality's bonds to have an element of risk because of apprehension of possible temporary economic dislocation due to the loss or prospective loss of a major employer in the municipality. (b) The authority will, in its discretion, approve a loan not eligible under (a) of this section ifthe authority determines that the loan will improve the marketability of authority bonds issued to make loans under (a) of this section. History-Eff. 4/1/76, Register 58; am 10/19/94, Register 132 Authority -AS 44.85.005 AS 44.85.080 AS 44.85.095 15 AAC 144.030 PREFERRED PURPOSES. The authority will consider the following capital improvements, listed in order of preference, as preferred purposes for loans to municipalities: (1) school facilities; (2) waste water treatment facilities; (3) fire protection and public safety facilities; (4) deleted; (5) public health facilities; (6) public transportation facilities; (7) other capital improvements. Page 2 of 8 EXHIBIT A History -Ef£. 4/1/76, Register 58; am 10/19/94, Register 132 Authority. AS 44.85.080 AS 44.85.095 AS 44.85.180 Editor's Notes -Effective Register 132, January 1994, the regulations attorney consolidated 15 AAC 144.030 (4) in 15 AAC 144.030 (3) to conform to AS 44.85. 180(d). 15 AAC 144.030 (4) was deleted to reflect that change. 15 AAC 144.040 APPLICATION. Each application by a municipality for a loan from the authority shall be in a form approved by the authority, and must include: (1) evidence ofthe municipality's eligibility under 15 AAC 144.020 ; (2) a complete description of the purposes of the loan; (3) unless waived by the authority based upon a finding that a substantially reliable financial statement has been prepared, a financial statement certified by an independent certified public accountant for the last fiscal year of the municipality; (4) identification ofthe amount and sources of all financing required to complete the project; and (5) any additional information or documentation requested by the executive director to determine the municipality's eligibility under this chapter or AS 44.85. History -Eff. 4/1/76, Register 58; am 10/19/94, Register 132 Authority -Page 3 of 8 EXHIBIT A AS 44.85.080 AS 44.85.095 15 AAC 144.050 ACCEPTANCE OF COMPLETED APPLICATIONS. When the infonnation required by IS AAC 144.040 is received by the executive director, the application is completed. The completed application wiII be evaluated by the executive director to detennine whether the eligibility criteria set out in IS AAC 144.020 have been met. History -Eff. 4/1/76, Register 58; am 10/19/94, Register 132 Authority -AS 44.85.080 AS 44.85.095 15 AAC 144.060 BOARD REVIEW. (a) The completed application along with the recommendation of the executive director and any other relevant infonnation shall be transmitted to the board of directors for its review. (b) The board will, in its discretion, request that the executive director obtain additional infonnation and postpone immediate action on the application. (c) The authority will approve a loan application for a project whose completion requires financing in addition to the loan from the authority, only upon the condition that before the authority authority issues bonds or disburses funds for the loan, the municipality demonstrates to the authority's satisfaction that all financing required to complete the project has been committed. (d) The authority may not approve a loan application from a municipality with an obligation in default unless (1) the municipality has undertaken to cure the default in a manner approved by all parties to the obligation; and Page 4 of 8 EXHIBIT A (2) the authority finds that approval ofthe loan application will not have an adverse effect on the authority's credit rating. (e) lfthe board approves an application, the board will instruct the executive director to enter into a loan agreement to purchase the municipal bonds of the municipality at the time or times the authority is able to sell its own bonds in amounts, at rates ofinterest, and on other tenns and conditions that would enable the authority to purchase the municipal bonds. The loan agreement must require, as a condition ofclosing the loan, evidence satisfactory to the authority that the municipality has authorized the borrowing. History -Eff. 4/1/76, Register 58; am 10/19/94, Register 132 Authority -AS 44.85.080 AS 44.85.095 15 AAC 144.070 EFFECT OF LETTER OF COMMITMENT Repealed or Renumbered Repealed. History -Eff. 4/1/76, Register 58; repealed 10/19/94, Register 132 15 AAC 144.075 METHOD OF BOND SALE. The board ofdirectors of the authority shall detennine the method ofsale for each bond issue. In its report on each loan application, the authority's financial advisor shall recommend, based on the factors set out in (1) -(7) of this section, the method by which the authority should sell bonds to finance the loan. The authority will sell bonds at competitive sale unless the board detennines that a negotiated sale is in the interest of the authority and the borrowing municipalities. In detennining the method of sale, the board shall consider the following factors: Page 5 of 8 EXHIBIT A (1) size of the authority's bond issue; (2) schedule for issuance ofthe authority's bonds; (3) market conditions, including interest rate volatility; (4) market familiarity with bond structure; (5) whether the issue is a new money or a refunding issue; (6) expected credit rating ofthe issue; and (7) preference of a borrowing municipality for a particular method ofsale, and the municipality's reasons for that preference, as stated in its loan application. History-Eff. 10/19/94, Register 132 Authority -AS 44.85.080 AS 44.85.095 AS 44.85.200 15 AAC 144.080 CONDITIONS. (a) A municipality that submits a loan application shall make its books and records available for inspection by the authority or its agents upon the receipt of a reasonable request to inspect them. (b) The authority will, in its discretion, request that the municipality pay in advance for the direct cost of evaluating its application and no application will be considered until the requested payment has been made. (c) The authority will, will, in its discretion, require that the applicant agree that in the event ofa postponement of the date of purchase ofmunicipal bonds, the applicant will hold the authority harmless from any liability arising out of reliance by the applicant or any third party upon approval of the loan application. (d) The authority will, in its discretion, require that the loan agreement to be Page 6 of 8 EXHIBIT A entered into provide terms, conditions and limitations with respect to the amount of bonds that the municipality may issue after execution ofthe agreement, the pledging of municipal revenues to the municipal bonds purchased by the authority, and otherwise as in the opinion ofthe authority are proper for the purposes and security of the authority and the holders of its bonds and notes. History -Eff. 4/1/76, Register 58; am 10/19/94, Register 132 Authority-AS 44.85.080 AS 44.85.095 AS 44.85.170 15 AAe 144.090 DEFINlTIONS. In this chapter (I) "authority" means the Alaska Municipal Bond Bank Authority created by AS 44.85; (2) "executive director" means the executive secretary for the authority appointed under AS 44.85.070; (3) "creditworthy" means that, in the opinion of the authority, the current financial position of a municipality is such that the municipality will be able to service its authorized and outstanding municipal bonds without expectation of subsidy from state money not currently available under state law and without imposing financial burdens upon its residents that would create the expectation that its ability to service its municipal bonds in the future will be impaired, and that there is no other reason to expect that in the future the municipality will not be able to meet its debt service obligations as they become due; (4) "municipal bond" means municipal bond as that term is defined in AS 44.85.410; (5) "facilities" means capital improvements, including both real and personal property. Page 7 of 8 EXHIBIT A History -Eff. 4/1/76, Register 58; am 10/19/94, Register 132 Authority -AS 44.85.010 AS 44.85.080 AS 44.85.095 AS 44.85.410 Page 8 of 8 EXHIBIT B Adopted April 22, 1976 /!Js, Amended through May 20, 1998 ALASKA MUNICIPAL BOND BANK AUTHORITY BY-LAWS ARTICLE I -DEFINITIONS Authority means the Alaska Municipal Bond Bank Authority. Board means the Board of Directors of the Alaska Municipal Bond Bank Authority. Chairman means the Chairman ofthe Board of Directors of the Alaska Municipal Bond Bank Authority. Executive Secretary means the Executive Secretary ofthe Alaska Municipal Bond Bank Authority. ARTICLE II-IDENTIFICATION AND OFFICES Section 1. The name of the Authority is Alaska Municipal Bond Bank Authority (hereinafter called the "Authority"). Section 2. The seal of the Authority shall be circular in form and mounted upon a metal disk suitable for impressing the same upon paper. The design of the seal shall be as set forth in Exhibit A to these bylaws. Section 3. The fiscal year of the Authority shall be the same as the fiscal year of the State of Alaska. Section 4. Offices. The principal office of the Authority shall be located in the Municipality of Anchorage, Alaska or the City and Borough of Juneau, Alaska. The Authority may have such other offices as the Board of Directors may designate or as the business of the Authority may require from time to time. ARTICLE III -BOARD OF DIRECTORS Section 1. The Board of Directors shall manage the business affairs of the Authority. 1:\lloc$\37420001\Amendedllylaws.WPS.wpd Page 1 of 4 Page 1 EXHIBIT B Section 2. Number of Directors, tenure and qualifications. The board shall consist of the following five directors: The Commissioner of Revenue, the Commissioner of Community & Regional Affairs, who shall be Directors ex-officio with voting privileges, and three directors appointed by the governor. The appointment of each Director other than the Commissioner of Revenue and the Commissioner of Community & Regional Affairs is subject to confirmation by the legislature. If otherwise authorized by law, in the absence of the Commissioner of Revenue or the Commissioner of Community & Regional Affairs, their deputies or other authority to act in that capacity shall serve as members of the Board ex-officio. They must be residents of the State and qualified voters at the time of appointment and shall comply with the requirements ofAS 39.50. The Directors first appointed shall have terms of two, three, and four years respectively. Each Director shall hold office for the terms of his appointment and until his successor has been appointed and qualified. A Director is eligible for reappointment. A vacancy in the directorship occurring other than by expiration of term shall be filled in the same manner as the original but for the unexpired term only. Each Director before entering upon his duties shall take and subscribe to an oath to perform the duties of his office faithfully, impartially and justly to the best of his ability. A record of the oath shall be filed in the office of the governor. Section 3. Officers and quorum. During the first meeting occurring after July 15 of each year, the Directors shall elect one of their members as Chairman, one of their members as Vice-Chairman. and a secretary and a treasurer. The secretary and treasurer need not be directors, and the same person may be elected to serve as both secretary and treasurer. Other offices may be established by resolution of the Board. An officer of the Authority serve until the first Board meeting occurring after the next July 15. or until a successor has been elected and qualified. unless otherwise fixed by resolution of the Board. The powers of the Authority are vested in the Directors. and three Directors of the Authority constitute a quorum. Action may be taken and motions and resolutions adopted by the Authority at any meeting by the affirmative vote of at least three directors. A vacancy in the directorship of the Authority does not impair the right of a quorum to exercise all the powers and perform all the duties of the Authority. The Directors and the treasurer of the Authority shall execute surety bonds in accordance with the provisions of AS 44.85.050. Section 4. Voting. Each member of the Board in attendance shall have the right to cast one vote on any question voted upon during the course of a meeting. Only those members present may vote. No vote on a question of approving or denying an application for a loan shall be taken in a closed session. Section 5. Manner of acting. The act of a majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. Section 6. All votes shall be recorded in a manner which reflects how each director votes unless the Chair determines that any particular vote may be taken by unanimous 1:1Oocs\J7~20001\AmQndellBylaws.WP5.wpd Page 2 of 4 Page 2 EXHIBIT B consent. By roll call vote, a majority of the members of the Authority may overrule a determination of the Chair under this Section. ARTICLE IV -MEETINGS Section 1. Meetings. The Board shall hold meetings at a time and place to be established by the Chairperson of the Board. Section 2. Special meetings. Special meetings may be called upon request of the Chairman or upon request of any two members of the Board. Notice of special meetings shall be given at least five days in advance of the date of the meeting. The notice shall be in writing and shall contain the time and place of the meeting as well as the proposed agenda for the meeting. Section 3. Waiver of notice. The requirement of notice of a special meeting may be waived by unanimous consent of the members of the Board. Each member's consent should be communicated to the Executive Secretary in writing before the start of the meeting or read into the minutes at the start of the meeting by those members in attendance. Section 4. Publication of notice of meetings. Reasonable public notice shall be given for all meetings of the Authority as provided by Alaska Statute 44.62.310(e). Section 5. Executive sessions. Executive sessions may be held in accordance with the procedures and with respect to the excepted subjects as set forth, and in accordance with, AS 44.62.310. ARTICLE V -ORDER OF BUSINESS The order of business at a meeting of the Board shall be determined by the Chairman. ARTICLE VI -EXECUTIVE SECRETARY The executive secretary shall be the principal operating officer of the Authority and sUbject to the control of the Board of Directors, shall in general supervise and control all of the business and affairs of the corporation. The executive secretary may also be elected secretary-treasurer. The secretary of the Board shall keep the minutes of the meeting of the Board of Directors and retain custody of such other records as the Authority shall obtain. The treasurer shall have charge of the custody and be responsible for all funds and securities of the corporation. The Executive Secretary may function under the title of Executive Director. 1:\Oocs137420001IAmondl!llBylaws.WPS.wpd Page 3 of 4 Page 3 EXHIBIT B ARTICLE VII -CONTRACTS, LOANS, CHECKS, AND DEPOSITS Section 1. Contracts. The Board may authorize the Executive Secretary to enter into any contract or execute and delivery any instrument in the name and on behalf of the Authority, and his authority to do so may be general or confined to specific instances. Section 2. Loans. No loans shall be contracted on behalf of the Authority and no evidence of indebtedness shall be issued in its name unless authorized by a resolution of the Board. Such authority may be general or confined to specific instances. Section 3. Checks, drafts, etc. All checks, or other orders for the payment of money, notes, or other evidences of indebtedness issued in the name of the Authority shall be signed by the Executive Secretary or agents of the Authority. Section 4. Deposits. All funds of the Authority not otherwise employed shall be deposited from time to time to the credit of the corporation in such financial institutions as the Board may select or invested as the Board may select. ARTICLE VIII -AMENDMENTS These by-laws may be altered, or repealed and new by-laws adopted by the Board at any regular or special meeting of the Board. ARTICLE IX -PROCEDURES Section 1. Unless otherwise expressly provided in these bylaws, questions regarding internal procedures of the Authority shall be determined by ruling of the Chair which may be overturned by a majority vote of the Board of Directors present at the meeting. l:\llclcs13742ll001IAsrend ed8y1awsWPS.wpd Page 4 of 4 Page 4 Home Go Back EXHIBIT C Online Public Notice State of Al.asb Category: Agency Meetings Publish Date: 01/1412011 Body of Notice: Public Notices AMBBA Notice of Meeting Submitted by: mdruane/04 Date Submitted: 01/14/2011 02:50 PM Date Modified: Ak Admin Journal: [not printed] Attachments: No files attached AMBBA Notice of Meeting Department: Administration Location: Statewide Coastal District: N/A The Alaska Municipal Bond Bank Authority will hold a meeting in the Alaska Department of Revenue Commissioner's Conference Room located at 333 Willoughby, 11th floor, on February 1, 2011 at 10:00 a.m. The meeting will include, but is not limited to, the following agenda items: Kodiak Island Borough Loan Request City & Borough of Wrangell Loan Request Resolution 2011-01 Authorizing the Issuance of Bonds Executive Directors Report The public is invited to attend. Individuals who may need special modifications to participate should call 907-465-3678 (TTY/TDD) three days prior to the meeting. Dated January 14, 2011 Deven Deven Mitchell, Executive Director Revision History: 01/14/2011 02:50:30 PM by mdruane/04/State/Alaska/US $$WebClient [Anon] Home Page Notices by: Department I Category [ Publish Date Page 1 of 1 CERTIFICATE I, DEVEN J. MITCHELL, Executive Director of the Alaska Municipal Bond Bank (the "Bank"), HEREBY CERTIFY that the document attached is a true, complete, and correct copy of the unapproved minutes of a meeting of the Board of Directors of the Bank duly called and held on February 1,2011. Notice of the meeting was duly given by posting, on the State of Alaska website "Online Public Notices," as evidenced by Transcript Item 2, timely on the date stated thereon. IN WITNESS WHEREOF, I have hereunto set,my hand this 1std1arCh 2011. ~ Ii DEVEN J. MITCHELL Ex~cutive Director AMBB/General Obligation Bonds, 2011 Series One Certificate of Minutes 1:\Docs\37421723\Certificate of Minutes of Mtg 2-1-11.wpd 333 Willoughby Avenue, 11th floor P.O. Box 110405 Juneau, Alaska 99811-0405 Tel (907) 465-2388 FAX (907) 465-2902 E-mail: ambba@revenue.state.ak.us UNOFFICIAL MINUTES for the BOARD OF DIRECTORS MEETING ALASKA MUNICIPAL BOND BANK AUTHORITY February 1, 2011 I. CALL TO ORDER Vice-Chair Welles called the meeting to order on Tuesday, February 1, 2011 at 10:04 a.m. Members participated at the Department of Revenue Commissioner's Conference Room at 333 Willoughby Avenue, 11th Floor, Juneau, Alaska and via telephone. II. ROLL CALL Present Jerry Burnett Mark Pfeffer -Absent Luke Welles Gregory Gursey Ted Leonard OTHERS IN ATTENDANCE Deven Mitchell, Executive Director, Alaska Municipal Bond Bank Authority Eric Wohlforth, Bond Counsel, Wohlforth, Johnson, Brecht, Cartledge &Brooking Clyde Hutchins, Bond Counsel, Wohlforth, Johnson, Brecht, Cartledge &Brooking Chip Pierce, Financial Advisor, Western Financial Group Kathy Graves, The Bank of New York Mellon Trust, N.A. Jane Towery -Underwriter, Pipper Jaffray Tom Klinkner -Community Counsel, Birch, Horton, Bittner & Cherot Jeff Jabush -Finance Director, City of Wrangell David Thompson -Community Counsel, K&L Gates Karl Short -Finance Director, Kodiak Island Borough AMBBA Minutes February 1, 2011 Page 2 III. PUBLIC MEETING NOTICE A copy of the Online Public Notice concerning the date, location, and purpose of the meeting was reviewed for the record. IV. APPROVAL OF AGENDA The agenda was approved as presented. V. MINUTES OF October 19, 2010 and November 2,2010 Board of Directors Meetings Greg Gursey moved and Jerry Burnett seconded that the minutes of November 29 be approved. The motion was approved without objection. VI. GENERAL BUSINESS Kodiak Island Borough Loan Application Mr. Pierce explained the Kodiak Island Borough has applied for an $8 million general obligation loan for partial funding of the renovation and expansion of the Kodiak High School. The Borough plans to issue additional series of bonds over the life of the project up to the total authorized amount of $76.31 million. Mr. Pierce indicated that the Borough has a solid financial position and summarized the general fund sources, tax collection history, general fund ending balances, and Borough fund trends. The Borough receives significant amounts of state revenues that currently equal over 7 times total debt service. The bonds are also eligible for reimbursement from the School Debt Reimbursement Program of the State of Alaska at the rate of at least 60 percent. Mr. Pierce concluded that while the letter of no litigation has not been received, he recommended approval of the loan contingent upon such a letter being provided. Greg Gursey made the motion to approve the loan application contingent upon receipt of the no litigation letter and Jerry Burnett seconded the motion. Mr. Mitchell called roll and the motion passed with four yes votes. City & Borough ofWrangell Loan Application Mr. Pierce explained the City & Borough of Wrangell has applied for a $225,000 general obligation loan for partial funding of the renovation and improvement of the Evergreen Elementary School Playground. Mr. Pierce summarized the Borough's financial position and detailed the general fund sources, tax collection history, general fund ending balances, and Borough fund trends. The Borough receives significant amounts of state revenues that currently equal over 36 times total debt service. The bonds are not eligible for reimbursement from the School Debt Reimbursement Program of the State of Alaska as the AMBBA Minutes February 1, 2011 Page 3funds are being used to match a state grant. The letter of no litigation has been received. Mr. Pierce recommended approval of the loan. Greg Gursey made the motion to approve the loan application and Jerry Burnett seconded the motion. Mr. Mitchell called roll and the motion passed with four yes votes. Resolution 2011-11 Mr. Wohlforth introduced the resolution authorizing the 2011 Series One Bonds in a principal amount of not to exceed $8,635,000. He explained that the bonds will be general obligation bonds of the Bond Bank sold on a tax exempt basis. That the Executive Director is delegated authority to accept the pricing of the bonds as well as to take action in regard to certain other matters. Mr. Mitchell stated that the resolution provides for a negotiated sale using Piper Jaffray. The board packet contains the resolution, the form of loan agreement, the preliminary official statement, the financing schedule, and the distribution list of the transaction. He continued that the bonds would be sold as tax exempt as the Build America Bond Program and Recovery Zone bond programs ended on December 31, 2010. Ted Leonard made the motion to approve the loan application and Jerry Burnett seconded the motion. Mr. Mitchell called roll and the motion passed with four yes votes. Post Sale Summary Mr. Pierce directed the board to the post sale reports in their board packets for the 2010 Series Four A and Band 2010 Series A One and Two bonds. The 2010 Four bonds continued a trend of pricing more tightly to the MMD scale for the Bond Bank and was generally well received in a very busy month. The 2010 A bonds were sold as the month of December rush was in full swing through a new indenture. The 2010 A issuance's spreads to MMD were wider than recent sales. Gross Savings for the 2010 Four bonds were estimated at $10,092 and for the 2010 A bonds at 1,579,000 or on a present value basis $7,346,000. Executive Director's Report Mr. Mitchell reported that the $6 million loan from the State of of Alaska general fund had been initiated on December 1, 2010. The transfer went smoothly and is anticipated to benefit the Bond Bank's liquidity position. The Recovery Zone Economic Development Bond allocation was 97.52% utilized. Based on the late start and required statutory change to allow the allocations to flow the use rate is quite an achievement. It is uncertain if there will be any future allocations, but the means of redistributing cap to those that can use it are now in place. AMBBA Minutes February 1, 2011 Page 4Mr. Mitchell also reported that the 2nd quarter ethics report was filed with the Department of Law. No violations were reported. On January 15, 2011 Chair Mark Pfeffer signed the reserve sufficiency letters and declarations for the Bond Bank as required by statute. The signed letters were delivered to the Governor, the Speaker of the Alaska House of Representatives, and the President of the Alaska Senate. Mr. Mitchell also discussed proposed SEC rules that would designate board members as financial advisors. This designation would result in increased disclosure requirements beyond the level currently required. If the rules move forward Mr. Mitchell will advise the Board. Mr. Mitchell will lend support to any organization that opposes the proposed rules. Greg Gursey was reappointed on December 1,2010. Congratulations. Luke Welles term expires July 15, 2011. VII. PUBLIC COMMENTS None. VIII. BOARD COMMENTS None. IX. ADJOURNMENT Jerry Burnett moved to adjourn. There being no no objection, the meeting was adjourned at 11:02 a.m. CERTIFICATE I, DEVEN J. MITCHELL, Executive Director of the Alaska Municipal Bond Bank (the "Bank"), HEREBY CERTIFY that the General Obligation Bond Resolution adopted July 13, 2005, as amended August 19, 2009, by the Board of Directors of the Bank has not been superseded or repealed, but is in full force and effect as of the date hereof. IN WITNESS WHEREOF, I have hereunto set my hand this 1st day of March 2011. ~//J'/!f' ~ AMBB/General Obligation Bonds, 2011 Series One Certificate of Bond Resolution 1:\Docs\37421723\Certificate of Bond Resolution.wpd GENERAL OBLIGATION BOND RESOLUTION ALASKA MUNICIPAL BOND BANK Adopted July 13, 2005 TABLE OF CONTENTS ARTICLE I STATUTORY AUTHORITY AND DEFINITIONS Section 101 -Authority for This Resolution 1 Section 102 -Resolution Constitutes Contract. . . . . . . . . . . . . . . . . . . . . . . . . . .. 1 Section 103 -Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 1 ARTICLE II AUTHORIZATION AND ISSUANCE OF BONDS Section 201 -Authorization of Bonds and Interest Rate Exchange Agreements 15 Section 202 -Issuance and Delivery of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . .. 16 Section 203 -Provisions for Issuance of Bonds . . . . . . . . . . . . . . . . . . . . . . . . .. 16 Section 204 -Provisions for Refunding Bonds . . . . . . . . . . . . . . . . . . . . . . . . . .. 19 ARTICLE III GENERAL TERMS AND PROVISIONS OF BONDS Section 301 -Description of Bonds; Payment 21 Section 302 -Legends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 23 Section 303 -Execution and Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 23 Section 304 -Interchangeability of Bonds 24 Section 305 -Negotiability, Transfer and Registry . . . . . . . . . . . . . . . . . . . . . . .. 24 Section 306 -Regulations with Respect to Exchanges and Transfers . . . . . . . .. 25 Section 307 -Bonds Mutilated, Destroyed, Stolen or Lost. . . . . . . . . . . . . . . . .. 25 Section 308 -Preparation of Definitive Bonds; Temporary Bonds. . . . . . . . . . .. 26 Section 309 -Cancellation and Destruction of Bonds 27 ARTICLE IV REDEMPTION OF BONDS Section 401 -Redemption Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 28 Section 402 -Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 28 Section 403 -Partially Redeemed Fully Registered Bonds 30 ARTICLE V CUSTODY AND APPLICATION OF CERTAIN PROCEEDS OF BONDS Section 501 -Application of Certain Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . .. 31 Section 502 -Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 31 Section 503 -Retention and Inspection of Documents 32 ARTICLE VI ESTABLISHMENT OF FUNDS AND ACCOUNTS AND APPLICATION THEREOF Section 601 -Pledge 33 Section 602 -Establishment of Funds and Accounts . . . . . . . . . . . . . . . . . . . . .. 33 ALASKA MUNICIPAL BOND BANK Table of Contents (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 1 Section 603 -Reserve Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 34 Section 604 -Interest Account, Principal Account and Redemption Account ... 36 Section 605 -Rebate Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 39 Section 606 -Operating Fund 41 Section 607 -Reduction of Required Debt Service Reserve 42 Section 608 -Trustee's Maintenance of Records on Payment of Bonds . . . . . .. 42 Section 609 -Obtaining Credit Enhancements and Interest Rate Exchange Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 42 Section 610 -Creation of Additional Funds, Accounts and Subaccounts; Separate Credit Enhancement Funds; Pledge with Respect to Credit Enhancements and Interest Rate Exchange Agreements 43 ARTICLE VII SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS Section 701 -Security for Deposits 44 Section 702 -Investment of Funds and Accounts Held by the Trustee 44 Section 703 -Liability of Trustee for Investments. . . . . . . . . . . . . . . . . . . . . . . .. 46 ARTICLE VIII THE TRUSTEE AND THE PAYING AGENTS Section 801 -Appointment and Acceptance of Duties of Trustee 46 Section 802 -Appointment and Acceptance of Duties of Paying Agents . . . . . .. 46 Section 803 -Responsibilities of Fiduciaries 47 Section 804 -Evidence on Which Fiduciaries May Act 49 Section 805 -Compensation 50 Section 806 -Permitted Acts and Functions. . . . . . . . . . . . . . . . . . . . . . . . . . . .. 50 Section 807 -Resignation of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 50 Section 808 -Removal of Trustee 51 Section 809 -Appointment of Successor Trustee 51 Section 810 -Transfer of Rights and Property to Successor Trustee 52 Section 811 -Merger or Consolidation ., . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 52 Section 812 -Resignation or Removal of the Paying Agents and Appointment of Successors 53 Section 813 -Evidence of Signatures of Bondholders and Ownership of Bonds. 53 ARTICLE IX COVENANTSOFTHEBANK Section 901 -Payment of Bonds 55 Section 902 -Extension of Payment of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . .. 55 Section 903 -Offices for Servicing Bonds 55 Section 904 -Further Assurances 56 Section 905 -Power to Issue Bonds and Make Pledges 56 Section 906 -General Covenants of the Bank . . . . . . . . . . . . . . . . . . . . . . . . . .. 57 ALASKA MUNICIPAL BOND BANK Table of Contents (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 2 Section 907 -Accounts and Reports 58 Section 908 -Personnel and Servicing of Programs 59 Section 909 -Waiver of Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 59 Section 910-Fees and Charges 59 Section 911 -Administration of Reserve Fund . . . . . . . . . . . . . . . . . . . . . . . . . .. 60 Section 912 -Issuance of Additional Obligations . . . . . . . . . . . . . . . . . . . . . . . .. 61 Section 913 -Loan Agreement Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 62 Section 914 -Modification of Loan Agreement Terms . . . . . . . . . . . . . . . . . . . .. 64 Section 915 -Sale of Municipal Bonds by Bank. . . . . . . . . . . . . . . . . . . . . . . . .. 65 Section 916 -Disposition of the Proceeds of Sale or Redemption of Municipal Bonds 65 Section 917 -Enforcement of Municipal Bonds 65 Section 918 -Continuing Disclosure; Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . .. 66 Section 919 -Tax Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 66 ARTICLE X SERIES RESOLUTION AND SUPPLEMENTAL RESOLUTIONS Section 1001 -Modification and Amendment without Consent 67 Section 1002 -Supplemental Resolutions Effective with Consent of Bondholders 68 Section 1003 -General Provisions Relating to Series Resolutions and Supplemental Resolutions 68 ARTICLE XI AMENDMENTS Section 1101 -Powers of Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 69 Section 1102 -Consent of Bondholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 70 Section 1103 -Modifications by Unanimous Consent 72 Section 1104 -Mailing and Publication. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 72 Section 1105 -Exclusion of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 72 Section 1106 -Notation on Bonds 73 ARTICLE XII DEFAULTS AND REMEDIES Section 1201 -Trustee to Exercise Powers of Statutory Trustee . . . . . . . . . . . .. 73 Section 1202 -Events of Default 73 Section 1203 -Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 74 Section 1204 -Priority of Payments After Default 76 Section 1205 -Termination of Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . .. 78 Section 1206 -Bondholders' Direction of Proceedings. . . . . . . . . . . . . . . . . . . .. 78 Section 1207 -Limitation on Rights of Bondholders. . . . . . . . . . . . . . . . . . . . . .. 79 Section 1208 -Possession of Bonds by Trustee Not Required 80 Section 1209 -Remedies Not Exclusive. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 80 ALASKA MUNICIPAL BOND BANK Table of Contents (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 3 Section 1210 -No Waiver of Default 80 Section 1211 -Notice of Event of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 80 ARTICLE XIII DEFEASANCE Section 1301 -Defeasance 81 ARTICLE XIV MISCELLANEOUS Section 1401 -Preservation and Inspection of Documents 84 Section 1402 -Parties of Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 84 Section 1403 -No Recourse Under Resolution or on Bonds. . . . . . . . . . . . . . .. 84 Section 1404 -Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 85 Section 1405 -Headings 85 Section 1406 -Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 85 Section 1407 -Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 85 Section 1408 -Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 85 ALASKA MUNICIPAL BOND BANK Table of Contents (Amended) I:IOocsl374200011Resolutions12005 General Obligation Bond Resolution.wpd Page 4 GENERAL OBLIGATION BOND RESOLUTION A RESOLUTION CREATING AND ESTABLISHING AN ISSUE OF BONDS OF THE ALASKA MUNICIPAL BOND BANK; PROVIDING FOR THE ISSUANCE FROM TIME TO TIME OF SAID BONDS; PROVIDING FOR THE PAYMENT OF PRINCIPAL OF AND INTEREST ON SAID BONDS; AND PROVIDING FOR THE RIGHTS OF THE HOLDERS THEREOF. BE IT RESOLVED by the Board of Directors of the Alaska Municipal Bond Bank as follows: ARTICLE I STATUTORY AUTHORITY AND DEFINITIONS Section 101 -AuthorityforThis Resolution. This Resolution is adopted pursuant to the provisions of the Act. Section 102 -Resolution Constitutes Contract. In consideration of the purchase and acceptance of the Bonds by those who shall hold the same from time to time, the provisions of this Resolution shall be a part of the contract of the Bank with the Holders of Bonds and shall be deemed to be and shall constitute a contract between the Bank, the Trustee and the Holders from time to time of the Bonds. The pledge hereof and the provisions, covenants and agreements herein set forth to be performed by or on behalf of the Bank shall be for the benefit, protection and security of the Holders of any and all of such Bonds. Each Bond, Credit Enhancement facility, and Interest Rate Exchange Agreement, regardless of the time or times of its issue or maturity, shall be of equal rank without preference, priority or distinction over any other Bond, Credit Enhancement facility, or Interest Rate Exchange Agreement except as expressly provided in this Resolution. Section 103 -Definitions. The following terms shall, for all purposes of this Resolution, have the following meanings unless the context shall clearly indicate some other meaning: "Accountant's Certificate" shall mean a certificate signed by an independent certified public accountant or a firm of independent certified public accountants selected by the Bank. "Accreted Amount" shall mean, with respect to Capital Appreciation of Bonds of any Series and as of the date of calculation, the amount established pursuant to the Series Resolution authorizing such Capital Appreciation Bonds as the amount representing the initial public offering price, plus the accumulated and compounded principal and interest on such Bonds. "Act" shall mean the Alaska Municipal Bond Bank Authority Act, constituting Chapter 85, Title 44, of the Alaska Statutes, as amended to the date of adoption of this Resolution. "Administrative Expenses" shall mean the Bank's expenses of carrying out and administering its powers, duties and functions, as authorized by the Act, and shall include, without limiting the generality of the foregoing: administrative and operating expenses, legal, accounting and consultant's services and expenses, payments to pension, retirement, health and hospitalization funds, and any other expenses required or permitted to be paid by the Bank under the provisions of the Act Act or this Resolution or otherwise. "Aggregate Debt Service" for any period shall mean, as of any date of calculation and with respect to all Bonds, the sum of the amounts of Debt Service for such period. "Annual Debt Service" shall mean the total amount of Debt Service for any Outstanding Bonds in any Fiscal Year. "Authorized Denominations" with respect to any Series of Bonds issued hereunder, has the meaning specified in the related Series Resolution. "Authorized Officer" shall mean the Chairman, Vice Chairman, Executive Secretary, or Executive Director of the Bank and any other director, officer or employee of the Bank authorized by resolution of the Bank to perform such act or discharge such debt. "Bank" shall mean the Alaska Municipal Bond Bank, a public body corporate and politic constituted as a public corporation and instrumentality of the State of Alaska within the Department of Revenue but having a legal existence independent of and separate from the State exercising public and essential governmental functions and ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001 \Resolutions\2005 General Obligation Bond Resolution.wpd Page 2 created by the Act, or any body, agency or instrumentality of the State which shall hereafter succeed to the powers, duties and functions of the Bank. "Beneficial Owner" shall mean the person in whose name a Bond is recorded as the beneficial owner of such Bond by the respective systems of DTC and the DTC Participants or the Holder of the Bond if the Bond is not then held in book-entry form. "Bond" or "Bonds" shall mean any Alaska Municipal Bond Bank Bond or Bonds, or Alaska Municipal Bond Bank Authority Bond or Bonds, as the case may be, authenticated and delivered under this Resolution pursuant to a Series Resolution. "Bondholder" or "Holder" or words of similar import, when used with reference to a Bond or Bonds, shall mean any person who shall be the registered owner of any Outstanding Bond or Bonds issued in fully registered form or the bearer of any Bond or Bonds issued in bearer form or registered to bearer. When all Bonds of a Series are held by a securities depository, "Bondholder" or "Holder" shall mean the beneficial owner of the Series in question determined under the rules of that securities depository; otherwise "Bondholder" or "Holder" means owner of record on the bond register maintained by the Paying Agent. To the extent that the full payment of the interest on and principal of Bonds of a Series is secured by Credit Enhancement, the Credit Enhancement Agency shall be considered to be the "Bondholder" or "Holder" of all the Bonds of that Series for purposes of exercising any rights with respect to supplements and amendments to this Resolution ifthe Credit Enhancement Agreement so provides. "Bond Year" shall mean each one-year period that ends on an anniversary of the date of issue of the Bonds. "Book-Entry System" shall mean the system in which the Bonds (represented by one Bond certificate for each maturity of the Bonds) are delivered into the possession of DTC and are issued and fully-registered as to principal and interest in the name of Cede &Co., and whereby beneficial interests in the Bonds are purchased by investors through DTC Participants, such interests shown and transfers thereof effected only through the records maintained by the respective DTC Participants from whom each such investor acquired such beneficial interest. ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 3 "Business Day" shall mean any day other than a Saturday or Sunday or any other day on which banks in New York, Alaska, or the state or states in which any Trustee appointed hereunder performs its duties hereunder are authorized or required to be closed or are closed. "Capital Appreciation Bonds" shall mean Bonds, the interest on which (a) is compounded and accumulated at the rates and on the dates set forth in the Series Resolution authorizing the issuance of such Bonds and designating them as Capital Appreciation Bonds, and (b) is payable upon maturity or redemption of such Bonds. "Continuing Disclosure Certificate" shall mean, for each Series, the continuing disclosure certificate executed by the Bank for the purpose of satisfying the continuing disclosure requirements of Rule 15c2-12 of the Securities and Exchange Commission with respect to such Series, as such continuing disclosure certificate is originally executed and as it may be amended from time to time in accordance with its terms. "Counsel's Opinion" shall mean an opinion signed by an attorney or firm of attorneys of nationally recognized standing in the field of law relating to state and municipal financing (who may be counsel to the Bank) selected by the Bank and acceptable to the Trustee. "Credit Enhancement" shall mean a letter of credit, a line of credit, a credit facility, a surety bond, bond insurance, or any other instrument or arrangement obtained in connection with the issuance of a Series of Bonds to further secure the payment of the Bonds of such Series or to satisfy the Reserve Fund Requirement. "Credit Enhancement Agency" shall mean any bank or other institution that provides Credit Enhancement. "Current Interest Bonds" shall mean Bonds not constituting Capital Appreciation Bonds. Interest on Current Interest Bonds shall be payable periodically on the Interest Payment Dates provided therefor in a Series Resolution. "Debt Service" shall mean for any Series of Bonds Outstanding, an amount equal to the sum of (a) all interest payable during such period of calculation, plus (b) ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 4 the Principal Installments, if any, payable during such period of calculation on such Series of Bonds. "Executive Director" shall mean the Executive Director or Acting Executive Director of the Bank. "Fees and Charges" shall mean all fees and charges authorized to be charged by the Bank pursuant to section 44.85.080(8), (15) and (16) of the Act and charged by the Bank to Governmental Units pursuant to the terms and provisions of Loan Agreements. "Fiduciary" or "Fiduciaries" shall mean the Trustee, and Paying Agent, or any or all of them, as may be appropriate. "Fiscal Year" shall mean any twelve (12) consecutive calendar months commencing with the first day of July and ending on the last day of the following June or such other date as is authorized by statute and/or selected by the Bank. "Fitch" shall mean Fitch Ratings, organized and existing under the laws of the State of Delaware, its successors and their assigns, and, if such organization shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "Fitch" shall be deemed to refer to any other nationally recognized securities rating agency (other than Standard &Poor's or Moody's) designated by the Authorized Officer."Government Obligations" shall mean direct obligations of, or obligations of the payment of and interest on which are unconditionally guaranteed by, the United States of America. "Governmental Unit" shall mean a municipality or such other entity of which the Bank is authorized by law to purchase its revenue bonds, general obligation bonds, notes, or other forms of indebtedness and which otherwise satisfies conditions found herein and in the Loan Agreement. "Governmental Unit's Allocable Proportion" shall mean the proportionate amount of the total requirement in respect of which the term is used determined by the ratio that ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resoiution.wpd Page 5 the Loan then outstanding to such Governmental Unit bears to the total of all Loans then outstanding to all Governmental Units. "Interest Account" shall mean the account by that name established by Section 602. "Interest Payment Date" shall mean any date upon which interest on any Bonds is payable in accordance with the terms thereof. "Interest Rate Exchange Agreement" shall mean an agreement entered into by the Bank or the Trustee, on behalf of the Bank, providing for an interest rate cap, floor or swap with respect to any Bonds or Municipal Bonds. "Investment Securities" shall mean the following to the extent permitted by the Act and the laws of the State of Alaska: (1) Governmental Obligations; (2) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself); (a) Farmers Home Administration ("FmHA") Certificates of Ownership; (b) Federal Housing Administration ("FHA") Debentures; (c) General Services Administration Participation certificates; (d) Government National Mortgage Association ("GNMA" or "Ginnie Mae") GNMA-guaranteed mortgage-backed bonds or GNMAguaranteed pass-through obligations (participation certificates); (e) United States Maritime Administration Guaranteed Title XI financing; (f) United States Department of Housing and Urban Development ("HUD'') Project Notes Local Authority Bonds; ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:IDocs\37420001 IResolulions12005 General Obligation Bond Resolulion.wpd Page 6 (3) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following government agencies (stripped securities are only permitted if they have been stripped by the agency itself); (a) Federal Home Loan Bank System. Senior debt obligations (Consolidated debt obligations); (b) Federal Home Loan Mortgage Corporation. ("FHLMC" or "Freddie Mac") rated AM by Standard & Poor's and Aaa by Moody's Participation Certificates (Mortgage-backed securities) Senior debt obligations; (c) Federal National Mortgage Association. ("FNMA" or "Fannie Mae") rated AM by Standard & Poor's and Aaa by Moody's Mortgage-backed securities and senior debt obligations (excluded are stripped mortgage securities which are valued greater than par on the portion of unpaid principal); (d) Student Loan MarketAssociation. ("SLMA" or"Sallie Mae") Senior debt obligations; (e) Resolution Funding Corp. ("REFCORP") Only the interest component of REFCORP strips which have been stripped by request of the Federal Reserve Bank of New York in book-entry form are acceptable; and (f) Farm Credit System. Consolidated systemwide bonds. (4) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by S&P of "AMm-G," "AMm" or "AAm" or by Moody's of "Aaa" including funds from which the Trustee or its affiliates receive fees for investment advisory or other services to such fund; (5) Certificates of Deposit ("CD") secured at all times by collateral described in (a) and/or (b) above. CD's must have a one-year or less maturity. Such certificates must be issued by commercial banks, savings and loan ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 7 associations or mutual savings banks whose short-term obligations are rated "A_I+" or better by S&P, and IPrime-1" or better by Moody's. The collateral must be held by a third party and the third party must have a perfected first security interest in the collateral; (6) Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by the Federal Deposit Insurance Corporation ("FDIC"), including Bank Insurance Fund ("BIF") and Savings Association Insurance Fund ("SAIF"); (7) Commercial paper rated IPrime-1" by Moody's and "A-1 +" or better by S&P and which matures not more than 270 days after the date of purchase; (8) Bonds or notes issued by any state or municipality which are rated by Moody's and S&P in the highest long-term rating category assigned by such agencies; (9) Federal funds or bankers acceptances with a maximum term of one year of any bank which has an unsecured, uninsured and unguaranteed obligation rating of IPrime-1" by Moody's and IA_1+" by S&P; P; (10) Repurchase agreements providing for the transfer of securities from a dealer bank or securities firm (seller/borrower) to a municipal entity (buyer/lender), and the transfer of cash from a municipal entity to the dealer bank or securities firm with an agreement that the dealer bank or securities firm will repay the cash plus a yield to the municipal entity in exchange for the securities ata specified date; provided, however, that the repurchase agreement must satisfy certain criteria articulated in writing to the Bank by the Rating Agencies and such agreement must be approved in writing prior to its acquisition by each bond insurer then insuring any Series of Bonds; and (11) Investment contracts with providers the long term, unsecured debt obligations of which are rated at least "Aaa" by the Rating Agencies. ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:IDocs137420001 IResolutions12005 General Obligation Bond Resolution.wpd Page 8 "Loan" shall mean a loan heretofore or hereafter made by the Bank to a Governmental Unit pursuant to the Act and more particularly described in the applicable Series Resolution. "Loan Agreement" shall mean an agreement, and any amendments thereto, heretofore or hereafter entered into between the Bank and a Governmental Unit setting forth the terms and conditions of a Loan. "Loan Obligation" shall mean that amount of Bonds and the Bonds themselves issued by the Bank for the purchase of Municipal Bonds of a Governmental Unit. "Maximum Annual Debt Service" shall mean, with respect to any Outstanding Series of Bonds, the highest remaining Annual Debt Service for such Series of Bonds. "Moody's" shall mean Moody's Investors Service, Inc., a corporation duly organized and existing under and by virtue of the laws of the State of Delaware, and its successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency (other than Fitch or Standard & Poor's) designated by the Authorized Officer. "Municipal Bonds" shall mean general obligation bonds, revenue bonds, notes or other evidences of debt issued by any Governmental Unit as now or hereafter defined in the Act which have heretofore been or will hereafter be acquired by the Bank as evidence of a Loan to the Governmental Unit pursuant to the Act. "Municipal Bonds Interest Payment" shall mean that portion of a Municipal Bonds Payment made or required to be made by a Governmental Unit to the Bank which represents the interest due or to become due on the Governmental Unit's Municipal Bonds. "Municipal Bonds Payment" shall mean the amounts paid or required to be paid, from time to time, for principal and interest by a Governmental Unit to the Bank on the Governmental Unit's Municipal Bonds. ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\Reso lutions\2005 General Obligation Bond Resolution.wpd Page 9 "Municipal Bonds Principal Payment" shall mean that portion of a Municipal Bonds Payment made or required to be made by a Governmental Unit to the Bank which represents the principal due or to become due on the Governmental Unit's Municipal Bonds. "Notes" shall mean any obligations referred to herein issued by the Bank other than Bonds. "Operating Fund" shall mean the fund by that name established by Section 602. "Outstanding" when used with reference to Bonds, other than Bonds referred to in Section 1105 hereof, shall mean, as of any date, all Bonds theretofore or thereupon being authenticated and delivered under this Resolution except: (1) Any Bonds canceled by the Bank or the Trustee at or prior to such date; (2) Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered pursuant to this Resolution; and (3) Bonds deemed to have been paid as provided in subsection (B) of Section 1301. "Paying Agent" for the Bonds of any Series shall mean the bank or trust company and its successor or successors, which may include the Trustee, designated by the Bank as Paying Agent pursuant to the provisions of this Resolution and a Series Resolution or any other resolution of the Bank adopted prior to authentication and delivery of Bonds for which such Paying Agent or Paying Agents shall be so appointed. "Principal Account" shall mean the account by that name established by Section 602. "Principal Installment" shall mean, as of any date of calculation and with respect to the Outstanding Bonds of any Series, (i) the principal amount of such Bonds which are due on a certain future date, reduced by the aggregate principal amount of such Bonds which would be retired by reason of the payment when due and application in accordance with this Resolution of Sinking Fund Payments payable before such future date for the retirement of such Bonds or (ii) the unsatisfied balance of any Sinking Fund ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) I:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 10 Payment due on a certain future date for such Bonds, plus the aggregate amount of the premiums, if any, which would be applicable on such future date upon the redemption of such Bonds by application of such Sinking Fund Payments in a principal amount equal to said unsatisfied balance or (iii) if such future dates coincide as to different Bonds of such Series, the sum of such principal amount of Bonds, unsatisfied balance and applicable premiums, if any or (iv) for any particular Series of Bonds the amount specified in the Supplemental Resolution authorizing such Series of Bonds. "Put Bond" shall mean any Bond that is part of a Series of Bonds subject to mandatory purchase by the Bank, its agent or a third party from the Owner of the Bond pursuant to provisions of the Series Resolution authorizing the issuance of the Bond. "Rating Agencies" shall mean Moody's, Standard & Poor's and Fitch or their respective successors and assigns and/or such other securities rating agency selected by the Bank to provide a rating with respect to a Series of Bonds, or any portion thereof, which Rating Agency, as of the applicable date, shall have assigned a rating to any Series of Bonds or any portion thereof. "Rebate Calculation Date" shall mean, with respect to each Series of Bonds, the interest payment date next preceding the fifth anniversary of the issue date of such Series of Bonds, each fifth anniversary of the initial Rebate Calculation Date for such Series of Bonds, and the date of retirement of the last bond for such Series. "Rebate Fund" shall mean the fund by that name established by Section 602. "Rebate Requirement" shall mean the amount of arbitrage profits earned from the investment of gross proceeds of the Bonds in nonpurpose investments described in Section 148(f)(2) of the Code and defined as "Rebate Amount" in Section 1.148-3 of the Treasury Regulations, which are payable to the United States at the times and in the amounts specified in Section 148(0)(3) of the Code and Section 1.148-3 of the Treasury Regulations. "Record Date" shall have the meaning set forth in the Series Resolution authorizing the particular Series of Bonds. ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 11 "Redemption Account" shall mean the account by that name established by Section 602. "Redemption Price" shall mean, with respect to any Bond, the principal amount thereof, plus the applicable premium, of any, payable upon redemption thereof pursuant to the provisions of such Bond, this Resolution and the Series Resolution pursuant to which the same was issued. "Refunding Bonds" shall mean all Bonds, whether issued in one or more series, authenticated and delivered on original issuance for the purpose of refunding Bonds or other obligations of the Bank and all Bonds thereafter authenticated and delivered upon the transfer or exchange of or in lieu of or in substitution for such Bond pursuant to this Resolution. "Regular Record Date" shall mean, unless otherwise provided in a Series Resolution, with respect to the Bonds, the fifteenth (15th) day immediately preceding each Interest Payment Date (orthe Business Day immediately preceding such fifteenth (15th) day, if such fifteenth (15th) day is not a Business Day). "Required Debt Service Reserve" shall mean as of any date of calculation, the amount required to be on deposit in the Reserve Fund which amount shall be at least equal to the Reserve Fund Requirement. "Reserve Fund" shall mean the 2005 General Obligation Bond Resolution Reserve Account established by Section 602 within the Alaska Municipal Bond Bank Reserve Fund created by Section 44.85.270 of the Act. "Reserve Fund Obligations" shall mean the amount of Bonds issued by the Bank to obtain funds deposited in the Reserve Fund. "Reserve Fund Requirement" shall mean the least of (i) Maximum Annual Debt Service with respect to all Bonds Outstanding; (ii) 125% of Average Annual Debt Service with respect to all Bonds Outstanding; (iii) 10% of the initial principal amount of each Series of Bonds then Outstanding, or (iv) such lower amount as may be required by law. The Reserve Fund Requirement may be satisfied entirely, or in part, by Credit Enhancement as provided for herein; provided, however, any Credit ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001 \Resolutionsl2005 General Obligation Bond Resolution.wpd Page 12 Enhancement satisfying all or any part ofthe Reserve Fund Requirement after the initial issuance of Bonds or issued in substitution for any prior Credit Enhancement previously issued shall not, by itself, cause a withdrawal or a downward revision of the ratings maintained by any Rating Agency with respect to the Bonds. "Resolution" shall mean this General Obligation Bond Resolution as from time to time amended or supplemented by Supplemental Resolutions or Series Resolutions in accordance with the terms and provisions hereof. "Security Instrument" shall mean an instrument or other device issued by a Security Instrument Issuer to pay, or to provide security or liquidity for, a Series of Bonds. The term "Security Instrument" includes, by way of example and not of limitation, letters of credit, bond insurance policies, standby bond purchase agreements, lines of credit and other security instruments and credit enhancement or liquidity devices; provided, however, that no such device or instrument shall be a "Security Instrument" for purposes of this Resolution unless specifically so designated in a Series Resolution authorizing the use of such device or instrument. "Security Instrument Agreement" shall mean any agreement entered into by the Bank and a Security Instrument Issuer pursuant to a Series Resolution and/or the applicable portions of a Series Resolution providing for the issuance by such Security Instrument Issuer of a Security Instrument. "Security Instrument Costs" shall mean, with respect to any Security Instrument, all fees, premiums, expenses and similar costs, other than Security Instrument Repayment Obligations, required to be paid to a Security Instrument Issuer pursuant to a Security Instrument Agreement or the Series Resolution authorizing the use of such Security Instrument. Such Security Instrument Agreement or Series Resolution shall specify any fees, premiums, expenses and costs constituting Security Instrument Costs. "Security Instrument Issuer" shall mean any bank or other financial institution, insurance company, surety company or other institution issuing a Security Instrument. ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\Resolutions I2005 General Obligation Bond Resolution.wpd Page 13 "Security Instrument Repayment Obligations" shall mean, as of any date of calculation and with respect to any Security Instrument Agreement, any outstanding amounts payable by the Bank under the Security Instrument Agreement or the Series Resolution authorizing the use of such Security Instrument to repay the Security Instrument Issuer for payments previously or concurrently made by the Security Instrument Issuer pursuant to a Security Instrument. There shall not be included in the calculation of the amount of Security Instrument Repayment Obligations any Security Instrument Costs. Each Security Instrument Agreement or the Series Resolution authorizing the use of such Security Instrument shall specify any amounts payable under it which, when outstanding, shall constitute Security Instrument Repayment Obligations and shall specify the portions of any such amounts that are allocable as principal of and as interest on such Security Instrument Repayment Obligations. "Series of Bonds" or "Bonds of a Series" orwords of similar meaning shall mean the Series of Bonds authorized by a Series Resolution. "Series Resolution" shall mean a resolution ofthe Bank authorizing the issuance of a Series of Bonds in accordance with the terms and provisions hereof and adopted in accordance with Article X. "Sinking Fund Installment" shall mean, as of any particular date of calculation and with respect to the Outstanding Bonds of any Series, the amount required to be paid at all events by the Bank on a single future date for the retirement of Bonds of such Series which mature after said future date, but does not include any amount payable by the Bank by reason only of the maturity of a Bond. "Standard &Poor's" shall mean Standard &Poor's Ratings Services, a Division of The McGraw-Hili Companies, Inc., and its successors and assigns, except that if such corporation or division shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term "Standard &Poor's" shall be deemed to refer to any other nationally recognized securities rating agency (otherthan Moody's or Fitch) designated by the Authorized Officer. "State" shall mean the State of Alaska. ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:lDocs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 14 "Supplemental Resolution" shall mean a resolution supplemental to or amendatory of this Resolution, (other than a Series Resolution) adopted by the Bank in accordance with Article X. "Trustee" shall mean the bank or trust company appointed pursuant to Section 801 to act as trustee hereunder, and its successor or successors and any other bank or trust company at any time substituted in its place pursuant to this Resolution. "Variable Rate Bonds" shall mean, as of any date of calculation, Bonds the terms of which on such date of calculation are such that interest thereon for any future period of time is expressed to be calculated at a rate which is not susceptible to a precise determination. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Unless the context shall otherwise indicate, words importing the singular number shall include the plural number and vice versa, and words importing persons shall include corporations and associations, including public bodies, as well as natural persons. The terms "hereby," "hereof," "hereto," "herein," "hereunder," and any similar terms, as used in this Resolution, refer to this Resolution. ARTICLE II AUTHORIZATION AND ISSUANCE OF BONDS Section 201 -Authorization of Bonds and Interest Rate Exchange Agreements. (A) Bonds are hereby authorized for issuance hereunder by the Bank. The Bonds may be issued in one or more Series pursuant to one or more Series Resolutions which shall state the purpose or purposes for which each Series of Bonds is being issued as hereinafter provided without limitation as to amount except as provided in this Resolution or as may be limited by law. Interest Rate Exchange Agreements may only be executed and delivered by the Bank in connection with the issuance and delivery of a Series of Bonds hereunder or in connection with the renewal, substitution or extension of an Interest Rate Exchange Agreement. ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) J:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 15 (B) There is hereby created by this Resolution, in the manner and to the extent provided herein, a continuing pledge and lien to secure the full and final payment of the principal or Redemption Price of, interest on and Sinking Fund Installments for, all of the Bonds issued pursuant to this Resolution. The Bonds shall be general obligations of the Bank payable as to principal or Redemption Price of, interest on, and Sinking Fund Installments forthe Bonds solely from the sources provided in this Resolution and any Series Resolution. The State shall not be liable on the Bonds and the Bonds shall not be a debt or liability, or constitute a pledge or loan of the faith and credit, of the State. The Bonds shall contain on the face thereof a statement to the effect that the Bank is obligated to pay the principal or Redemption Price, if any, of the Bonds and the interest thereon only from revenues or funds of the Bank and that the State is not obligated to pay such principal or Redemption Price, if any, or interest interest and that neither the faith and credit nor the taxing power of the State is pledged to the payment of the principal or Redemption Price, if any, of, or the interest on, the Bonds. Section 202 -Issuance and Delivery of Bonds. After their authorization by a Series Resolution, Bonds of a Series may be executed by or on behalf of the Bank and delivered to the Trustee for authentication and, upon compliance by the Bank with the requirements, if any, set forth in such Series Resolution and with the requirements of Section 203 or, in the case of Refunding Bonds, Section 204, the Trustee shall thereupon authenticate and deliver such Bonds to or upon the order of the Bank. Section 203 -Provisions for Issuance of Bonds. (A) The issuance of the Bonds shall be authorized by a Series Resolution or Series Resolutions of the Bank adopted subsequent hereto and the Bonds may be issued in one or more Series. The Bonds of each Series, including Refunding Bonds, shall, in addition to the title "Alaska Municipal Bond Bank General Obligation Bonds," contain such further appropriate particular designations added to such title and the appropriate Series designation as the Bank may determine in such Series Resolution. Each Bond shall bear upon its face the designations so determined for the Series to which it belongs. ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\Resolutions\2005 General Obligation Bond Resolution.wpd Page 16 (B) Each Series Resolution authorizing the issuance of a Series of Bonds shall specify:(1) The authorized principal amount of said Series of Bonds; (2) The purposes for which such Series of Bonds is being issued, which shall be one or more of the following: (i) making Loans to Governmental Units, (ii) making payments into the Reserve Fund, (iii) the funding of Notes theretofore issued by the Bank for any purposes for which Bonds may have been issued, (iv) the refunding of Bonds and related purposes, as provided in Section 204, and (v) any other purpose authorized by law; (3) The date and the maturity date or dates and amounts of each maturity of the Bonds of said Series or the method of determining the same; (4) (i) The interest rate or rates (if any) or maximum interest rate of the Bonds of such Series, or the method of determining such rate or rates (which may be determinable at one or more specified times set forth in the Series Resolution, which may accrete or compound with such frequencies or in such manner as shall be specified in such Series Resolution and which shall be as otherwise specified in the Series Resolution), and the Interest Payment Dates and Record Dates therefor and (ii) a manner of calculating accreted value or compounded principal value during all or any part of the term of the Series of Bonds being authorized, if interest is not payable currently and the Bank determines that it is necessary or appropriate; (5) The denomination or denominations of, and the manner of numbering and lettering, the Bonds of such Series, provided that each Bond shall be of the denomination of $5,000 or a multiple thereof, not exceeding the aggregate principal amount of the Bonds of such Series maturing in the year of maturity of the Bond for which the denomination is to be specified unless otherwise provided in the Series Resolution authorizing the issuance of such Bonds; (6) The Paying Agent or Paying Agents and the place or places of payment of the principal and Redemption Price, if any, of and interest on the Bonds of such Series or the manner of appointing and designating the same; ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 17 (7) The Redemption Price or Prices, if any, and, subject to the provisions of Article IV, the redemption terms for the Bonds of such Series or the method of determining the same; (8) The amount and due date of each Sinking Fund Installment, if any, for Bonds of like maturity of such Series, or the method of determining such Sinking Fund Installment; (9) The form or forms of the Bonds of such Series and of the Trustee's certificate of authentication; (10) The manner of execution of the Bonds of such Series; (11) If, at the time of issuance of the Bonds of such Series, an Interest Rate Exchange Agreement will apply to such Bonds or such Bonds are to be secured by Credit Enhancement, the form of Credit Enhancement or Interest Rate Exchange Agreement to be obtained, the identity of the Credit Enhancement Agency or of the counterparty to the Interest Rate Exchange Agreement, and the substantial form of the significant documents relating to the Credit Enhancement or Interest Rate Exchange Agreement; (12) If Bonds Bonds of such Series are to contain any tender or put options or the like, whether such Bonds are to be remarketed and, if so, the identity of any remarketing agent and the substantial form of any remarketing agreement relating to such Bonds; and (13) Any other provisions deemed advisable by the Bank, not in conflict with the provisions of this Resolution. All Bonds of each Series of like maturity shall be identical in all respects, except as to denominations, interest rate, and numbers and letters. (C) All (but not less than all) the Bonds of each Series shall be executed by the Bank for issuance under the Resolution and delivered to the Trustee and thereupon shall be authenticated by the Trustee and by it delivered to the Bank or to such other party as may be specified in a written order of the Bank, but only upon the receipt by the Trustee of: ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\Resolutions\2005 General Obligation Bond Resolution.wpd Page 18 (1) A Counsel's Opinion to the effect that (i) the Bank has the right and power to execute and deliver this Resolution and the Series Resolution authorizing such Series under the Act as amended to the date of such Opinion; (ii) this Resolution and such Series Resolution has been duly and lawfully executed and delivered by the Bank, is in full force and effect and is valid and binding upon the Bank and enforceable in accordance with its terms (subject, as to enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium, or other laws affecting creditors' rights generally from time to time in effect); (iii) this Resolution and such Series Resolution creates the valid pledge and assignment which it purports to create of the Municipal Bonds, subject to the application thereof to the purposes and on the conditions permitted by this Resolution; (iv) the Bonds of such Series are valid and binding general obligations of the Bank, enforceable in accordance with their terms and the terms of this Resolution and such Series Resolution; and (v) the Bonds of such Series have been duly and validly authorized and issued in accordance with the constitution and statutes of the State, including the Act as amended to the date of such Opinion, and in accordance with this Resolution; (2) A written order as to the delivery of such Bonds, signed by an Authorized Officer;(3) Either an original of the Series Resolution authorizing such Series or a copy thereof certified by an Authorized Officer; (4) Except in the case of Refunding Bonds, a certificate of an Authorized Officer stating that the Bank is not in default in the performance of any of the covenants, conditions, agreements or provisions contained in the Resolution; (5) Such further documents, moneys and securities as are required by the provisions of this Section 203, and Section 204, or Article X, or any Series Resolution or Supplemental Resolution adopted pursuant to Article X. Section 204 -Provisions for Refunding Bonds. (A) All or any part of one one or more Series of Refunding Bonds may be authenticated and delivered to refund all Outstanding Bonds or any part of one or more Series of Outstanding Bonds. Refunding ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\Resolutions\ 2005 General Obligation Bond Resolution.wpd Page 19 Bonds shall be issued in a principal amount sufficient, together with other moneys available therefor, to accomplish such refunding and to make such deposits as are required by the provisions of the Act, this Section and of the Series Resolution authorizing said Series of Refunding Bonds. (B) A Series of Refunding Bonds may be authenticated and delivered only upon receipt by the Trustee (in addition to the receipt by it of the documents required by Section 203) of: (1) Instructions to the Trustee to give due notice of redemption (which notice, in the case of an optional redemption, shall state that the redemption is conditioned by the Trustee on the receipt of sufficient funds for redemption) of all the Bonds to be refunded on the redemption date specified in such instructions; (2) Either (i) moneys (which may include all or a portion of the proceeds of the Refunding Bonds to be issued) in an amount sufficient to effect payment at the applicable Redemption Price of the Bonds or other obligations to be refunded, together with accrued interest on such Bonds or other obligations to the redemption date, or (ii) direct obligations of (including obligations issued or held in book-entry form on the books of) the Department of the Treasury of the United States of America which are not subject to redemption prior to the dates on which amounts will be needed to make payments on the Bonds or other obligations to be refunded and the principal of and interest on which when due, together with the moneys (which may include all or a portion of the proceeds of the Refunding Bonds to be issued), if any, contemporaneously deposited with the Trustee, will be sufficient to pay when due the applicable Redemption Price of the Bonds or other obligations to be refunded, together with accrued interest on such Bonds or other obligations to the redemption date, which moneys or Investment Securities shall be held by the Trustee or anyone or more of the Paying Agents or an escrow agent or trustee for other obligations in a separate account account irrevocably in trust for and assigned to the respective Holders of the Bonds or other obligations to be refunded; and ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolulion.wpd Page 20 (3) A certificate of an Authorized Officer containing such additional statements as may be reasonably necessary to show compliance with the requirements of subsection (A) and this subsection (B) of this Section 204. (C) From and after the delivery of the Refunding Bonds of a Series, the Trustee shall make appropriate adjustment between the Interest Account and Principal Account when disbursing and applying Municipal Bonds Payments deposited in the Debt Service Fund pursuant to the provisions of Section 604 to the end that such portion of the Municipal Bonds Payment as shall represent Municipal Bonds Interest Payment not required for deposit in the Interest Account for the purpose of paying interest accruing upon the Bonds shall be deposited in the Principal Account. Any surplus which might result upon and after such deposit shall be disposed of in the manner specified in the Series Resolution authorizing such Series. (D) Neither Investment Securities nor moneys deposited with the Trustee or an escrow agent or trustee for other obligations pursuant to paragraph (B)(2) of this Section nor principal or interest payments on any such Investment Securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the applicable Redemption Price of the Bonds or other obligations to be refunded, together with accrued interest on such Bonds or other obligations to the redemption date, and any cash received from such principal or interest payments, if not then needed for such purpose, shall, to the extent practicable, be reinvested in such Investment Securities as are described in clause (ii) of said paragraph maturing at times and in amounts sufficient to pay when due the applicable Redemption Price of such Bonds or other obligations, together with such accrued interest. ARTICLE III GENERAL TERMS AND PROVISIONS OF BONDS Section 301 -Description of Bonds; Payment. (A) The Bonds of each Series issued under the provisions hereof may be issued only as registered bonds and subject subject to Section 303 hereof, each Bond shall be entitled "General Obligation Bonds" and shall bear such additional letter or number series designation as shall be determined ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 21 in the Series Resolution authorizing the Bonds of the Series of which such Bond is one. Unless otherwise specified in the Series Resolution authorizing such Series of Bonds, Bonds of each Series shall be in Authorized Denominations each or any integral multiple thereof, shall be numbered consecutively from 1 upwards and shall bear interest payable on Interest Payment Dates. (B) The Bonds of each Series issued hereunder shall be dated as of and bear interest from the date specified in the Series Resolution that authorized such Series, which date may be contemporaneous with or prior to or after the date of issuance of such Bonds. (C) Both the principal of and the interest on the Bonds shall be payable in any coin or currency of the United States of America, as at the respective time of payment shall be legal tender for payment of public and private debts. Payment of the interest on any Bond shall be made to the person appearing on the Bond registration books of the Bank kept for such purpose by the Trustee, the registrar hereinafter provided for as the Holder thereof, by check or draft mailed to the Holder at her or his address as it appears on such registration books or to owners of $1,000,000 or more in aggregate principal amount of Bonds by wire transfer to a bank account designated by the Holder in written instructions furnished to the Trustee. The interest on Bonds so payable, and punctually paid or duly provided for, on any Interest Payment Date will be paid to the person who is the Holder thereof at the close of business on the applicable Record Date for such interest. The principal of and premium, if any, on Bonds are payable upon presentation and surrender thereof at the principal corporate trust office of the Trustee, as paying agent, except as otherwise provided by Series Resolution. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. (D) The Bonds of each Series may contain or have endorsed thereon such provisions, specifications and descriptive words not inconsistent with the provisions hereof as may be necessary or desirable to comply with custom, the rules of any ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolulionsI2005 General Obligation Bond Resolulion.wpd Page 22 securities exchange or commission or brokerage board or otherwise, as may be specified in the Series Resolution authorizing such Series of Bonds. Section 302 -Legends. The Bonds of each Series shall contain or have endorsed thereon a statement to the effect that the State shall not be liable thereon and that such Bond shall not be a debt of the State and may contain or have endorsed thereon such provisions, specifications and descriptive words not inconsistent with the provisions of this Resolution as may be necessary or desirable to comply with custom, or otherwise, as may be determined by the Bank prior to the delivery thereof to the Bondholder. Section 303 -Execution and Authentication. (A) The Bonds shall be executed in the name of the Bank by the manual or facsimile signature of its Chairman or ViceChairman and its corporate seal (or a facsimile thereof) shall be thereunto affixed, imprinted, engraved or otherwise reproduced, and attested by the manual or facsimile signature of its Secretary or such officer or employee of the Bank as shall be directed by the Series Resolution authorizing the issuance thereof, or in such other manner as may be required by law. In case anyone or more of the officers or employees who shall have signed or sealed any of the Bonds shall cease to be such officer or employee before the Bonds so signed and sealed shall have been actually authenticated and delivered by the Trustee, such Bonds may, nevertheless, be authenticated and delivered as herein provided, and may be issued as if the persons who signed or sealed such Bonds had not ceased to hold such offices or be so employed. Any Bonds of a Series may be signed and sealed on behalf of the Bank by such persons as at the actual time of the execution of such Bond shall be duly authorized or hold the proper office in or employment by the Bank, although at the date of the Bonds of such Series such persons may not have been so authorized or have held such office or employment. (B) The Bonds of each Series shall bear thereon a certificate of authentication, in the form set forth in the Series Resolution authorizing such Bonds, executed manually by the Trustee. Only such Bonds as shall bear thereon such certificate of ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 23 authentication shall be entitled to any right or benefit under the Resolution and no Bond shall be valid or obligatory for any purpose until such certificate of authentication shall have been duly executed by the Trustee. Such certificate of the Trustee upon any Bond executed on behalf of the Bank shall be conclusive evidence that the Bond so authenticated has been duly authenticated and delivered under the Resolution and that the Holder thereof is entitled to the benefits of the Resolution. Section 304 -Interchangeability of Bonds. Bonds, upon surrender thereof at the corporate trust office of the Trustee with a written instrument of transfer satisfactory to the Trustee, duly executed by the registered owner or their attorney duly authorized in writing, may, at the option of the registered owner thereof, be exchanged for an equal aggregate principal amount of registered Bonds of the same Series, maturity, and interest rate as the surrendered Bond. Section 305 -Negotiability, Transfer and Registry. All the Bonds issued under this Resolution shall be negotiable as provided in the Act, subject to the provisions for registration and transfer contained in this Resolution and in the Bonds. So long as any of the Bonds shall remain Outstanding, the Bank shall maintain and keep, at the corporate trust office of the Trustee, books for the registration and transfer of Bonds; and, upon presentation thereoffor such purpose at said office, the Bank shall register or cause to be registered therein, and permit to be transferred thereon, under such reasonable regulations as it or the Trustee may prescribe, any Bond entitled to registration or transfer. So long as any of the Bonds remain Outstanding, the Bank shall make all necessary provisions to permit the exchange of Bonds at the corporate trust office of the Trustee. The Bank and each Fiduciary may deem and treat the person in whose name any Bond shall be registered upon the books of the Bank as the absolute owner of such Bond, whether such Bond shall be overdue or not, forthe purpose of receiving payment of, or on account of, the principal and Redemption Price, if any, of and interest on such Bond and for all other purposes, and all such payments so made to any such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\00cs\37420001 \Resolutions\2005 General Obligation Bond Resolution.wpd Page 24 upon such Bond to the extent of the sum or sums so paid, and neither the Bank nor any Fiduciary shall be affected by any notice to the contrary. The Bank agrees to indemnify and save each Fiduciary harmless from and against any and all loss, cost, charge, expense judgment or liability incurred by it, acting in good faith and without negligence under this Resolution, in so treating any such registered owner. Section 306 -Regulations with Respect to Exchanges and Transfers. In all cases in which the privilege of exchanging Bonds or transferring Bonds is exercised, the Bank shall execute and the Trustee shall authenticate and deliver Bonds in accordance with the provisions of this Resolution. All Bonds surrendered in any such exchanges or transfers shall forthwith be cancelled by the Trustee. For every such exchange or transfer of Bonds, whether temporary or definitive, the Bank or the Trustee may, as a condition precedent to the privilege of making such exchange or transfer, make a charge sufficient to reimburse it for any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer. Notwithstanding any other provision of this Resolution the cost of preparing each registered Bond upon each exchange or transfer, and any other expenses of the Bank or the Trustee incurred in connection therewith (except any applicable tax, fee or other governmental charge) shall be paid by the Bank as an Administrative Expense. Neither the Bank or the Trustee shall be required (i) to make any exchange or transfer of Bonds of any Series during the ten (10) days (or such other period of time as may be specified in the Series Resolution authorizing such Series) next preceding an interest payment date on the Bonds of such Series or preceding any selection of Bond of such Series to be redeemed or (ii) to transfer or exchange any Bonds previously called for redemption. Section 307 -Bonds Mutilated, Destroyed, Stolen or Lost. In case any Bond shall become mutilated or be destroyed, stolen or lost, the Bank shall execute and the Trustee shall authenticate and deliver a new Bond of like Series, maturity and principal amount as the Bond so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Bond, upon surrender and cancellation of such mutilated Bond or in lieu of and substitution for the Bond destroyed, stolen or lost, upon filing with ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) I:\Docs\37420001 IResolutions\2005 General Obligation Bond Resolution.wpd Page 25 the Bank evidence satisfactory to the Bank and the Trustee that such Bond have been destroyed, stolen or lost and proof of ownership thereof, and upon furnishing the Bank and the Trustee with indemnity satisfactory to them and complying with such other reasonable regulations as the Bank and the Trustee may prescribe and paying such expenses as the Bank and the Trustee may incur in connection therewith. All Bonds so surrendered to the Trustee shall be cancelled by it and evidence of such cancellation shall be given to the Bank. Any such new Bonds issued pursuant to this section in substitution for Bonds alleged to be destroyed, stolen or lost shall constitute original additional contractual obligations on the part of the Bank, regardless of whether the Bonds so alleged to be destroyed, stolen or lost be at any time enforceable by anyone, and shall be equally secured by and entitled to equal and proportionate benefits with all other Bonds issued under this Resolution, in any moneys or securities held by the Bank or the Fiduciaries for the benefit of the Bondholders. If a Bondholder satisfies the conditions set forth in this section for the replacement of a mutilated Bond or a Bond alleged to be destroyed, stolen, or lost and such Bond has matured or all principal thereof and interest thereon shall become due for any other reason, then the Trustee may pay such principal of and interest on such Bond without issuing a replacement Bond. Section 308 -Preparation of Definitive Bonds; Temporary Bonds. Until the definitive Bonds of any Series are prepared, the Bank may execute, in the same manner as is provided in Section 303, and upon the request of the Bank, the Trustee shall authenticate and deliver, in lieu of definitive Bonds, but subject to the same provisions, limitations and conditions as the definitive Bonds, except as to the denominations thereof and as to exchangeability for registered Bonds, one or more temporary Bonds, substantially of the tenor of the definitive Bonds in lieu of which such temporary Bond or Bonds are issued in such denominations as may be authorized by the Bank, and with such omissions, insertions and variations as may be appropriate to temporary Bonds. The Bank at its own expense shall prepare and execute and, upon the surrender thereof of such temporary Bonds to the Trustee. The Trustee shall ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 26 authenticate and, without charge to the holder thereof, deliver in exchange therefor definitive Bonds of the same aggregate principal amount and Series and maturity as the temporary Bonds surrendered. Until so exchanged, the temporary Bonds shall in all respects be entitled to the same benefits and security as definitive Bonds authenticated and issued pursuant to this Resolution. If the Bank shall authorize the issuance of temporary Bonds in more than one denomination, the holder of any temporary Bond or Bonds may, at his option, surrender the same to the Trustee in exchange for another temporary Bond or Bonds of like aggregate principal amount, Series and maturity of any other authorized denomination or denominations, and thereupon the Bank shall execute and the Trustee shall authenticate and, in exchange for the temporary Bond or Bonds so surrendered and upon payment of the taxes, fees and charges provided for in Section 306, shall deliver a temporary Bond or Bonds of like aggregate principal amount, Series and maturity in such other authorized denomination or denominations as shall be requested by such holder.All temporary Bonds surrendered in exchange either for anothertemporary Bond or Bonds or for a definitive Bond or Bonds shall be forthwith cancelled by the Trustee. Section 309 -Cancellation and Destruction of Bonds. All Bonds paid or redeemed, either at or before maturity, shall be delivered to the Trustee when such payment or redemption is made, and such Bonds, together with all Bonds purchased by the Trustee, shall thereupon be promptly cancelled. Bonds so cancelled may, at any time, be cremated or otherwise destroyed by the Trustee, who shall execute a Certificate of cremation or destruction in duplicate by the signature of one of its authorized officers describing the Bonds so cremated or otherwise destroyed, and one executed Certificate shall be filed with the Bank and the other executed Certificate shall be retained by the Trustee. ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) J:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 27 ARTICLE IV REDEMPTION OF BONDS Section 401 -Redemption Provisions. The Bonds of each Series may be subject to redemption prior to maturity at such times and upon such terms as shall be fixed by the related Series Resolution. If less than all of the Bonds of anyone maturity of a Series shall be called for redemption, the particular units of Bonds, as determined in accordance with Section 403 herein, to be redeemed shall be selected by lot by the Trustee, or in any manner as the Trustee, in its sole discretion, may deem appropriate and fair. Section 402 -Notice of Redemption. (A) In the event any of the Bonds are to be redeemed, the Registrar shall cause notice to be given as provided in this Section 402. Unless otherwise specified in the Series Resolution authorizing the issuance of the applicable Series of Bonds, notice of redemption (i) shall be filed with the paying agent designated for the Bonds being redeemed and (ii) shall be mailed by first class mail, postage prepaid, to all Bondholder of Bonds to be be redeemed at their addresses as they appear on the registration books of the Trustee, at least thirty (30) days but not more than sixty (60) days prior to the date fixed for redemption. Such notice shall state the following information: (1) the complete official name of the Bonds, including Series, to be redeemed, the identification numbers of Bonds and the CUSIP numbers, if any, of the Bonds being redeemed, provided that any such notice shall state that no representation is made as to the correctness of CUSIP numbers either as printed on such Bonds or as contained in the notice of redemption and that reliance may be placed only on the identification numbers contained in the notice or printed on such Bonds; (2) any other descriptive information needed to identify accurately the Bonds being redeemed, including, but not limited to, the original issue date or dated date of and interest rate on such Bonds; ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) J:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 28 (3) in the case of partial redemption of any Bonds, the respective principal amounts thereof to be redeemed; (4) the date of mailing of redemption notices and the redemption date; (5) the redemption price; (6) that on the redemption date the redemption price will become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date; and (7) the place where such Bonds are to be surrendered for payment of the redemption price, designating the name and address of the redemption agent with the name of a contact person and telephone number. (B) In addition to the foregoing, further notice of any redemption of Bonds hereunder shall be given by the Trustee, at least two (2) Business Days in advance of the mailed notice to Bondholders, by registered or certified mail or overnight delivery service, to all registered securities depositories then in the business of holding substantial amounts (as reasonably determined by the Bondholders) of obligations of types comprising the Bonds and to at least two national information services that disseminate notices of redemption of obligations such as the Bonds. Such further notice shall contain the information required in clause (a) above. Failure to give all or any portion of such further notice shall not in any manner defeat the effectiveness of a call for redemption. (C) Upon the payment of the redemption price of Bonds being redeemed, each check or other transfer of funds issued for such purpose shall bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer. (D) If at the time of mailing of any notice of redemption there shall not be on deposit with the Trustee moneys sufficient to redeem all the Bonds called for ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) I:IOocsl374200011Resolutions12005 General Obligation Bond Resolution.wpd Page 29 redemption, such notice shall state that such redemption is subject to the deposit of the redemption moneys with the Trustee not later than the redemption date and that such notice shall be of no effect unless such moneys are so deposited. (E) A second notice of redemption shall be given, not later than ninety (90) days subsequent to the redemption date, to Bondholders of Bonds or portions thereof redeemed but who failed to deliver Bonds for redemption prior to the 60th day following such redemption date. Any notice mailed shall be conclusively presumed to have been duly given, whether or not the owner of such Bonds receives the notice. Receipt of such notice shall not be a condition precedent to such redemption, and failure so to receive any such notice by any of such Bondholders shall not affect the validity of the proceedings for the redemption of the Bonds. (F) In case any Bond is to be redeemed in part only, the notice of redemption which relates to such Bond shall state also that on or after the redemption date, upon surrender of such Bond, a new Bond in principal amount equal to the unredeemed portion of such Bond will be issued. Section 403 -Partially Redeemed Fully Registered Bonds. Unless otherwise specified in the Series Resolution authorizing the issuance of the applicable Series of Bonds, in case any registered Bond shall be redeemed in part only, upon the presentation of such Bond for such partial redemption, the Bank shall execute and the Trustee shall authenticate and shall deliver or cause to be delivered to or upon the written order of the Holder thereof, at the expense of the Bank, a Bond or Bonds of the same Series, interest rate and maturity, in aggregate principal amount equal to the unredeemed portion of such registered Bond. Unless otherwise provided by Series Resolution, a portion of any Bond of a denomination of more than the minimum Authorized Denomination to be redeemed will be in the principal amount of the minimum Authorized Denomination or an integral multiple thereof, and in selecting portions of such Bonds for redemption, the Trustee will treat each such Bond as representing that number of Bonds of the minimum Authorized Denomination which is ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 30 obtained by dividing the principal amount of such Bonds by the minimum Authorized Denomination. ARTICLE V CUSTODY AND APPLICATION OF CERTAIN PROCEEDS OF BONDS Section 501 -Application of Certain Proceeds. (A) Each Series Resolution authorizing the issuance of a Series of Bonds, a portion of the proceeds derived from the sale of which is to be applied to the purchase of Municipal Bonds, shall specify the name of each Governmental Unit which is to receive a Loan by the Bank from such proceeds and the amount of such proceeds to be applied to the making of each such Loan which shall be the amount of each such Loan. Contemporaneously with the issuance, sale and delivery of any Series of Bonds, the Bank shall apply the amount of the proceeds derived from the sale of such Series of Bonds, if any, as shall be specified in said Series Resolution for the purpose of making such Loans to each of the Governmental Units specified in the Series Resolution authorizing the issuance of such Series of Bonds. (B) Accrued interest, if any, received upon the delivery of such Series of Bonds shall be deposited in the Interest Account. The amount received as a premium over the principal amount of such Series of Bonds, if any, upon the delivery of such Series of Bonds shall be applied as provided in the Series Resolution authorizing such Series of Bonds. (C) The amount, if any, necessary to cause the amount on deposit in the Reserve Fund to satisfy the Reserve Fund Requirement. (D) Any remaining proceeds derived from the sale of a Series of Bonds shall be applied as provided in the Series Resolution authorizing such Series of Bonds. Section 502 -Loans. (A) A Loan to each Governmental Unit shall be made from the portion of the proceeds derived from the sale of each Series of Bonds specified in the Series Resolution authorizing the issuance of such Series of Bonds and the amount of each such Loan shall be the amount specified in such Series Resolution. All such payments made pursuant to such Series Resolution shall be subject to the provisions ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 31 and restrictions of this Article V, and the Bank covenants that it will not cause or permit to be paid from such portion of the proceeds derived from the sale of such Series of Bonds any sums except in accordance with such provisions and restrictions. (B) The Trustee shall pay to each Governmental Unit the amount of the Loan upon receipt by the Trustee of: (1) a written requisition of the Bank signed by an Authorized Officer stating (i) the name of the Governmental Unit to which the payment is to be made; and (ii) the amount to be paid; (2) a certificate signed by an Authorized Officer and attached to the requisition certifying that the terms and provisions of the Loan Agreement providing for such Loan are in compliance with Section 913, and that to the knowledge of such Authorized Officer such Governmental Unit is not in default under any of the terms or provisions of said Loan Agreement; (3) a Counsel's Opinion stating that such Municipal Bonds are valid obligations of such Governmental Unit as required by the Act and that the Loan Agreement has been duly authorized and executed by the Governmental Unit and constitutes a valid and binding obligation of the Governmental Unit enforceable in accordance with its terms; and (4) such Municipal Bonds of such Governmental Unit, registered as to both principal and interest in the name of the Bank or the Trustee and delivered in accordance with the Act. Upon receipt of such requisition, accompanying certificate, Counsel's Opinion and Municipal Bonds, the Trustee shall pay such amount directly to the Governmental Unit entitled thereto as named in such requisition. Section 503 -Retention and Inspection of Documents. All requisitions and certificates and Counsel's Opinions and Municipal Bonds received by the Trustee, as required in this Article V as conditions of payment may be relied upon by and shall be retained in the possession of the Trustee, subject at all times during normal business ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:lDocs\37420001\Re solutions\2005 General Obligation Bond Resolution.wpd Page 32 hours to the inspection of the Bank and, after written request received by the Trustee at least five business days prior to the date of inspection, by any Holder of at least five per cent in principal amount of the Series of Outstanding Bonds. ARTICLE VI ESTABLISHMENT OF FUNDS AND ACCOUNTS AND APPLICATION THEREOF Section 601 -Pledge. (A) The Bonds shall be direct and general obligations of the Bank, and its full faith and credit are pledged to the payment of the principal and redemption premium, if any, of and interest on the Bonds, subject to any agreements heretofore and hereafter made with the Holders of any other notes or bonds of the Bank pledging any particular revenues or assets not pledged under this Resolution. (B) The Municipal Bonds and the Municipal Bonds Payment, the investments thereof and the proceeds of such investments, if any, and all funds and accounts established by this Resolution to be held by the Trustee are hereby pledged and assigned for the payment of the principal of, Redemption Price of, interest on, and Sinking Fund Installments for, the Bonds in accordance with the terms and provisions of this Resolution, subject only to the provisions of this Resolution permitting the application thereof for the purposes and on the terms and conditions set forth in this Resolution authorizing the Bank to create Security Interests in said Municipal Bonds and Municipal Bonds Payment in favor of Credit Enhancement Agencies and counterparties to Interest Rate Exchange Agreements. Subject to the provisions of Section 805 of this Resolution, this pledge shall be valid and binding from and after the date of adoption of this Resolution, and the Municipal Bonds and the Municipal Bonds Payment and all other monies and securities in the funds and accounts established by this Resolution to be held by the Trustee hereby pledged shall immediately be subject to the lien of such pledge without any further act, and such lien shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Bank, regardless of whether such parties have notice thereof. Section 602 -Establishment of Funds and Accounts. (A) The Alaska Municipal Bond Bank Debt Service Fund (the "Debt Service Fund") is hereby established and ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolutionwpd Page 33 shall be maintained and held by the Trustee pursuant to the provIsIons of this Resolution. There is hereby created and established in the Debt Service Fund an "Interest Account," a "Principal Account" and a "Redemption Account" each of which shall be held by the Trustee. Amounts in the Interest Account, the Principal Account and the Redemption Account shall be used solely for the purpose of paying the principal of, Redemption Price of, interest on and Sinking Fund Installments for, the Bonds and of retiring such Bonds at or prior to maturity in the manner provided herein and in any Series Resolution. Amounts deposited in the Interest Account and the Principal Account shall be disbursed and applied by the Trustee at the times and in the manner provided in this Article VI and in paragraph (3) of Section 203. (B) There is hereby established within the Alaska Municipal Bond Bank Reserve Fund created by Section 44.85.270 of the Act, a 2005 General Obligation Bond Resolution Reserve Account (the "Reserve Fund") which shall be maintained and held by the Trustee pursuant to the provisions of this Resolution. (C) There is hereby established a Rebate Fund, and within such fund, a separate account for each Series of Bonds. (D) There is hereby established an Operating Fund which shall be held by the Bank pursuant to the provisions of this Resolution. Section 603 -Reserve Fund. (A) On or before the first day of each month, the Trustee shall set aside from amounts in the Reserve Fund derived from income or interest earned and profits realized by the Reserve Fund due to the investment thereof, an amount which, when added to the amounts theretofore set aside for such purpose and not paid into the Interest Account, will on such day be equal to the unpaid interest on the Reserve Fund Obligations accrued and to accrue to the last day of such month. If the Trustee so determines, said amounts may be deposited in an account which the Trustee may create in the Reserve Fund under the name of "Reserve Fund Obligations Interest Account". On or before each interest payment date of the Reserve Fund Obligations, said amounts shall be deposited in the Interest Account. ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) I:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 34 (B) On or before each principal payment date and Sinking Fund Installment payment date of Reserve Fund Obligations, the Trustee shall withdraw from amounts in the Reserve Fund and deposit in the Principal Account, an amount which, when added to the amount then on deposit in the Principal Account and derived from sources other than Municipal Bonds Payment, will be equal to the Principal Installment of the Reserve Fund Obligations falling due on such date. (C) On or before December 31 of each year, after complying with the provisions of paragraphs (1) and (2) above to the extent required by such date, the Trustee shall withdraw from the Reserve Fund, any amount remaining therein derived from income or interest earned and profits realized by the Reserve Fund due to the investment thereof, and pay over said amount to the Bank for deposit in the Operating Fund but only to the extent that there remains after such withdrawal an amount in the Reserve Fund at least equal to the Required Debt Service Reserve. (D) The The Reserve Fund Requirement may be satisfied with (i) monies made available by the State and paid to the Bank for the purpose of the Alaska Municipal Bond Bank Reserve Fund created by Section 44.85.270 of the Act in the amount provided by a Series Resolution; (ii) all monies paid to the Bank pursuant to the Act for the purpose of restoring the Reserve Fund to the amount of the Required Debt Service Reserve; (iii) such portion of the proceeds of sale of Bonds, if any, as shall be provided by any Series Resolution; (iv) Credit Enhancement; (v) any other monies which may be made available to the Bank for the purposes of the Reserve Fund from any other source or sources; or (vi) any combination of the foregoing. (E) In the event there shall be, on any interest payment date, a deficiency in the Interest Account, or, in the event there shall be, on any principal payment date or Sinking Fund Installment payment date, a deficiency in the Principal Account, the Trustee shall make up such deficiencies from the Reserve Fund by the withdrawal of cash therefrom for that purpose and by the sale or redemption of securities held in the Reserve Fund, if necessary, in such amounts as will, at the respective times, provide monies in the Interest Account and Principal Account sufficient to make up any such ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 35 deficiency. If a deficiency still exists immediately prior to a debt service payment date and after the withdrawal of cash, the Bank shall then draw from any Credit Enhancement for the Bonds in sufficient amount to make up such difference. Drawings under the Credit Enhancement shall be made on a pro-rata basis (in proportion to the respective maximum coverages) available under the Credit Enhancement. Such draw shall be made at such times and under such conditions as such Credit Enhancement shall provide. Section 604 -Interest Account. Principal Account and Redemption Account. (A) Except as otherwise provided in paragraph (3) of Section 204, the Trustee shall deposit Municipal Bonds Interest Payments and any other monies available forthe payment of interest in the Interest Account upon receipt thereof. The Trustee shall, on or before each interest payment date of the Bonds, pay, out of amounts then held for the credit of the Interest Account, to itself and the Paying Agents, the amounts required for the payment by it and such Paying Agents of the interest becoming due on the Bonds on such interest payment date, and such amounts so withdrawn are hereby irrevocably pledged for and shall be applied to the payment of such interest. The Trustee shall also payout of the Interest Account to itself and the appropriate Paying Agents, on or before any redemption date for Bonds being refunded by Refunding Bonds, the amount required for the payment of interest on the Bonds then to be redeemed, to the extent not otherwise provided in this Resolution. (B) The Trustee shall deposit Municipal Bonds Principal Payments and any other monies available for the payment of principal in the Principal Account, upon receipt thereof. The Trustee shall, on or before each principal payment date of or Sinking Fund Installment date for, the Bonds, pay, out of the monies then held for the credit of the Principal Account, to itself and the Paying Agents, the amounts required for the payment by it and such Paying Agents of the principal or Sinking Fund Installment due on the Bonds on such date, and such amounts so withdrawn are hereby irrevocably pledged for and shall be applied to the payment of such principal or Sinking Fund Installment. ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) I:lDocs\37420001\Resolutions\2005 General Obligation Bond Resolution.wpd Page 36 (C) The Trustee shall establish in the Redemption Account a separate subaccount for the Bonds of each Series Outstanding. (1) Any monies deposited into the Redemption Account from any source other than pursuant to Section 607 or Section 916 shall be applied to the purchase or redemption of Bonds in a manner to be determined by the Bank in accordance with Article IV. Any monies deposited into the Redemption Account pursuant to Section 607 shall be applied to the purchase or redemption of Reserve Fund Obligations in a manner to be determined by the Bank in accordance with Article IV. (2) The Bank shall deposit or cause to be deposited in the Redemption Account such portion of the monies received as the proceeds of sale or redemption of Municipal Bonds, as required by Section 916 hereof, and, upon any such deposit, shall advise the Trustee in writing of the Series of Bonds to which the same relates. Upon receipt, such monies shall be set aside by the Trustee in the appropriate Series sub-account. Monies so held in each separate sub-account by the Trustee shall be applied to the purchase or retirement of the Bonds of the Series in respect of which such sub-account was created as follows: (i) The Trustee shall promptly apply such monies to the purchase of Bonds of the Series in respect of which such sub-account was created having the same maturity date or dates and in the same principal amount within each maturity as the Municipal Bonds Principal Payments required to be made for the Municipal Bonds sold by the Bank or redeemed by the Governmental Unit at the most advantageous price obtainable with reasonable diligence, such price, however, not to exceed the Redemption Price which would be payable on the next ensuing date on which the Bonds of the Series so purchased are redeemable according to their terms. The Trustee shall pay the interest accrued on the Bonds so purchased to the date of sale or redemption of the Municipal Bonds from the Interest account and the balance of the purchase price from the applicable sub-account in the Redemption Account, as hereinabove provided, but no such purchase shall be made by the Trustee within the period of forty-five ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:lDocs\37420001\ResolutionsI2005 General Obligation Bond Resolutionwpd Page 37 (45) days next preceding a date on which such Bonds are subject to redemption under the provisions of the Series Resolution authorizing the issuance thereof. (ii) In the event the Trustee is able to purchase the requisite principal amount of Bonds from a sub-account in accordance with and under the foregoing provisions of this subparagraph (b) at a purchase price less than the sum of the deposits to such sub-account from the proceeds from the sale or redemption of Municipal Bonds and the applicable transfers from the Interest Account, upon the payment by the Trustee of the purchase price of such Bonds, the Trustee shall transfer the balance of monies remaining in such sub-account to the Bank for deposit in the Operating Fund. (iii) In the event the Trustee is unable to purchase the requisite principal amount of Bonds the Trustee shall call for redemption on the next ensuing redemption date such amount of Bonds of the Series in respect of which such sub-account was created having the same maturity date or dates and in the same principal amount within each maturity as the Municipal Bonds Principal Payments required to be made for the Municipal Bonds sold by the Bank or redeemed by the Governmental Unit, as, at the Redemption Price thereof, will exhaust said sub-account as nearly as may be. Such redemption shall be made pursuant to the provisions of Article IV hereof. The Trustee shall pay the interest accrued on the Bonds so redeemed to the date of sale or redemption of the Municipal Bonds from the Interest Account and the balance of such interest to the date of redemption of the Bonds and the Redemption Price from the applicable sub-account. (3) The Bank may, from time to time, by written instructions direct the Trustee to make purchases under subparagraph (b) above only after receipt of tenders. The Bank may specify the length of notice to be given and the date on which tenders are to be accepted or may authorize the Trustee to determine the same in its discretion. All such tenders shall be by sealed proposals proposals and no tenders shall be considered or accepted at any price exceeding the price specified under subparagraph (b) above for ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 38 the purchase of Bonds. The Trustee shall accept tenders with the lowest price, as determined by the Trustee, and if the monies available for purchase pursuant to such tenders are not sufficient to permit acceptance of all tenders and there shall be tenders at an equal price above the amount of monies available for purchase then the Trustee shall select by lot, in such manner as the Trustee shall determine in its discretion, the Bonds tendered which shall be purchased. No purchase of Bonds, either on tenders or otherwise, shall be made by the Trustee within the period of forty-five (45) days next preceding any date on which such Bonds are subject to redemption. (D) Monies set aside from time to time with the Trustee and Paying Agents for the payment of principal or Redemption Price of, interest on and Sinking Fund Installments for, the Bonds shall be held in trust for the Holders of the Bonds. Until so set aside for the payment of such principal, Redemption Price, interest, and Sinking Fund Installments, all all monies in such accounts shall be held in trust for the benefit of the Holders of all Bonds at the time Outstanding equally and ratably and without any preference or distinction as between Bonds of different Series, except that monies on deposit in the separate sub-accounts established in the Redemption Account shall be held in trust for and applied to the payment of the Bonds of the Series for which the applicable sub-account was established. Section 605 -Rebate Fund. (A) The Trustee shall establish and thereafter maintain, so long as the Bonds are Outstanding, a Rebate Fund which shall be held separate and apart from all other funds and accounts established under this Resolution and from all other moneys of the Trustee. (B) All amounts in the Rebate Fund, including income earned from investment of the fund, shall be held by the Trustee free and clear of the lien of this Resolution. In the event the amount on deposit in the Rebate Fund exceeds the aggregate amount of the Rebate Requirement for all Series of Bonds, as verified in writing by an independent public accountant or other qualified professional selected by the Bank at the time the Rebate Requirement is determined, less amounts of the Rebate Requirement theretofore paid to the United States for all Series of Bonds, the Trustee ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 39 shall, upon the Bank's request, withdraw from the Rebate Fund and pay to or upon the order of the Bank an amount not to exceed such excess to the Bank for deposit in the Operating Fund. (C) The Bank shall determine the amount of the Rebate Requirement with respect to each Series of Bonds on each applicable Rebate Calculation Date. The Bank shall deposit into the Rebate Fund the Rebate Requirement, if any, with respect to each Series of Bonds. The Bank shall instruct the Trustee to withdraw from the Rebate Fund and pay over to the United States Government with respect to each Series of Bonds: (1) not less frequently than once each five years commencing no later than 60 days after the first Rebate Calculation Date for such Series of Bonds and upon each fifth anniversary of such date, an amount which when added to all previous rebate payments made with respect to such Series of Bonds equals 90% of the sum of the Rebate Requirement pertaining to such Series of Bonds plus the amount, if any, of Rebate Requirement theretofore paid to the United States with respect to such Series of Bonds, and (2) not later than 60 days after the retirement of the last Bond of such Series, 100% of the Rebate Requirement with respect to such Series. The determination of rebatable arbitrage made with respect to each such payment date and with respect to any withdrawal and payment to the Bank from the Rebate Fund pursuant to this Resolution must be verified in writing by an independent public accountant or other qualified professional selected by the Bank. (D) The Trustee shall, at least sixty (60) days prior to each Rebate Calculation Date, notify the Bank of the requirements of this Section. By agreeing to give this notice, the Trustee assumes no responsibility whatsoever for compliance by the Bank with the requirements of Section 148 of the Code or any successor. The Bank expressly agrees that (notwithstanding any other provision of this Resolution) any failure of the Trustee to give any such notice, for any reason whatsoever, shall not cause the Trustee to be responsible for any failure of the Bank to comply with the requirements of said Section 148 or any successor thereof. ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 40 (E) The Trustee, on behalf of the Bank, shall keep and retain, until the date six years after the retirement of the last of the Bonds of each Series, records with respect to each Series of the Bonds and the investment and expenditure of amounts on deposit with the Trustee to comply with the aforementioned arbitrage rebate requirements, including without limitation a complete list of all investments and reinvestments of amounts on deposit with the Trustee with respect to each Series of the Bonds. For purposes of the computation required above, the Trustee shall, upon request, furnish to the Bank all information in the Trustee's control which is necessary for such computations. (F) The Bank hereby covenants and agrees that it will not enter, and will not cause the Trustee to enter into, any transaction or cause any transaction to be entered into with respect to the investment of gross proceeds of the Bonds, or otherwise, which reduces the amount which may be required to be paid to the United States pursuant to the arbitrage rebate requirements specified herein above, because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the yield on each Series of the Bonds not been relevant to either party. (G) The provisions of this Section may be amended or deleted, with respect to any or all series of the Bonds, from this Resolution upon receipt by the Bank and the Trustee of an opinion of bond counsel that such amendment or deletion will not adversely affect the exclusion from gross income of interest on the Bonds. Section 606 -Operating Fund. There shall be deposited in the Operating Fund all Fees and Charges collected by the Bank or the Trustee, to the extent not otherwise encumbered or pledged, and any other monies which may be made available to the Bank for the purposes of the Operating Fund from any other source or sources including, without limiting the generality of the foregoing, amounts transferred pursuant to paragraph (3) 3) of Section 603, subparagraph (b)(ii) of paragraph (3) of Section 604 and the amount received as a premium over the principal amount of a Series of Bonds, if any, to the extent provided in the Series Resolution authorizing such Series. Monies ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 41 at any time held for the credit of the Operating Fund shall be used for and applied solely to the following purposes: (a) To pay the Administrative Expenses of the Bank; (b) To pay the fees and expenses of the Trustee and Paying Agents; (c) To pay financing costs incurred with respect to a Series of Bonds, including fees and expenses of the attorneys, initial Trustee's and Paying Agents' fees and expenses, costs and expenses of financial consultants, printing costs and expenses, the payment to any officers, departments, boards, agencies, divisions and commissions of, or reimbursement to, the State of any statement of cost and expense or advances rendered to the Bank pursuant to the Act, and all other financing and other miscellaneous costs; and (d) To pay any expenses in carrying out any other purpose then authorized by the Act.All amounts in the Operating Fund shall be free and clear of any lien or pledge created by this Resolution but shall be held and applied in accordance with this section. Section 607 --Reduction of Required Debt Service Reserve. Whenever the amount of the Required Debt Service Reserve is reduced, the Trustee, only upon the written request of the Bank signed by an Authorized Officer, shall withdraw from any amounts on deposit in the Reserve Fund and deposit in the Redemption Account any amount not exceeding the amount of such reduction of the Required Debt Service Reserve. The amount to be withdrawn from the Reserve Fund in each instance pursuant to the provisions of this paragraph shall be determined by the Bank and the amount thereof certified to the Trustee in writing signed by an Authorized Officer. Section 608 -Trustee's Maintenance of Records on Payment of Bonds. In connection with the payment, redemption or purchase of all Bonds under the provisions of this Resolution, the Trustee shall keep accurate records of the source of the monies used to pay, redeem or purchase such Bonds. Section 609 -Obtaining Credit Enhancements and Interest Rate Exchange Agreements. Except as otherwise provided in a Series Resolution authorizing the ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 42 issuance of a Series of Bonds, the Bank may obtain Credit Enhancement or an Interest Rate Exchange Agreement with respect to such Bonds either at the time of issuance of the Bonds or any time thereafter. Section 610 -Creation of Additional Funds, Accounts and Subaccounts; Separate Credit Enhancement Funds; Pledge with Respect to Credit Enhancements and Interest Rate Exchange Agreements. (A) The Trustee shall establish within any Fund such Accounts in addition to the Accounts herein established as the Bank shall by Series Resolution or Supplemental Resolution determine and shall in like manner establish within any Account such additional subaccounts for the purposes of such Account as the Bank shall so determine. (B) The Bank may at any time by execution of a Series Resolution or Supplemental Resolution establish a Fund or Account in which to hold any Credit Enhancement and the proceeds thereof or drawings thereunder (a "Credit Enhancement Fund") for the benefit of any Series of Bonds to which such Credit Enhancement has been pledged, which pledge may be (but is not required to be) exclusively for the benefit of such Series of Bonds or certain designated Series of Bonds and not equally and ratably among all the Series of Bonds. Amounts held in a Credit Enhancement Fund shall not be considered a part of the Municipal Bonds Payment but, rather, shall be subject to such lien and pledge as may be created in the Series Resolution creating such Credit Enhancement Fund. (C) If the Bank creates a Credit Enhancement Fund, the Bank may direct, in the Series Resolution creating such Credit Enhancement Fund, that the Trustee pay, and if so directed in writing by the Bank the Trustee shall pay, principal (including premium, if any) of and interest on the Bonds secured by such Credit Enhancement Fund directly from amounts in such Credit Enhancement Fund and that the Trustee reimburse, and if so directed in writing by the Bank the Trustee shall so reimburse, such Credit Enhancement Fund for such payment from the Credit Enhancement Fund; provided, however, that the Bank may, in the Series Resolution authorizing the Series of Bonds to be secured by Credit Enhancement, treat any, or any part of any, obligation owed or ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) J:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 43 which may in the future be owed to the Credit Enhancement Agency pursuant to the Credit Enhancement Instrument as the Series of Bonds secured by such Credit Enhancement if the Corporation, at the time of issuance of said Series of Bonds and at the time of the creation of any such obligation satisfies the requirements of Section 203, in which case the Trustee shall pay the principal of and interest on any such obligations in accordance with the terms of this Resolution treating such obligations as a Series of Bonds. In a Series Resolution authorizing a Series of Bonds secured by a Credit Enhancement Fund the Bank may fix provisions relating to such Fund pursuant to the terms of a Series Resolution. In addition to the foregoing, the Bank may agree to permit a Credit Enhancement Agency to be subrogated to the rights of any Bondholders whose Bonds are secured by the Credit Enhancement provided that such Credit Enhancement Agency is not in default under such Credit Enhancement. ARTICLE VII SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS Section 701 -Security for Deposits. All monies held hereunder by the Trustee shall be continuously and fully secured, for the benefit of the Bank and the Holders of the Bonds in such manner as may then be required or permitted by applicable State or federal laws and regulations regarding the security for, or granting a preference in the case of, the deposit of trust funds. The Trustee or any Paying Agent shall not be required to give security for the deposit of any monies with them held in trust for the payment of the principal or Redemption Price of or interest on any Bonds, or for the Trustee to give security for any monies which shall be represented by obligations purchased under the provisions of this Resolution as an investment of such monies. Section 702 -Investment of Funds and Accounts Held by the Trustee. (A) Upon the deposit of any amounts in any fund or account held by the Trustee under the provisions of this Resolution, in the manner hereinabove prescribed, the Bank may furnish the Trustee with a schedule of dates on which it is estimated by the Bank that such monies in said fund or account will be required to be expended. The Bank may from time to time amend the schedule so furnished. Upon receipt of such schedule or ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 44 amended schedule, the Bank may direct the Trustee to, or in the absence of receipt of such schedule or such direction the Trustee shall, invest and reinvest in Investment Securities the monies in said fund or account so that the maturity date or date of redemption at the option of the holder of such obligations shall coincide as nearly as practicable with the times at which monies are needed by the Bank to be so expended. The Bank also may direct the Trustee that all or part of the amounts in the Interest Account and the Principal Account in the Debt Service Fund not be invested for specified periods of time. (B) Obligations purchased as an investment of monies in any fund or account held by the Trustee under the provisions of this Resolution shall be deemed at all times to be a part of such fund or account and the income or interest earned, profits realized or losses suffered by a fund or account due to the investment thereof shall be retained in, credited or charged, as the case may be, to such fund or account, except that the income or interest earned and profits realized by the Reserve Fund due to the investment thereof shall be transferred by the Trustee in accordance with and to the extent provided by paragraphs (1), (3) and (5) of Section 603. (C) In determining whether or not the amount in the Reserve Fund is at least equal to the Reserve Fund Requirement, the Trustee shall include the amount of interest earned or accrued thereon as of the date of evaluation and shall also include, but only if any other requirement therefor specified in a Series Resolution has been satisfied, the principal component of any Credit Enhancement then on deposit in the Reserve Fund. (D) Except as otherwise provided in the Resolution, the Trustee shall sell at the best price obtainable, or present for redemption or exchange, any obligation purchased by it as an investment pursuant to this Resolution whenever it shall be requested in writing by an Authorized Officer of the Bank to do so or whenever it shall be necessary in order to provide monies to meet any payment or transfer from the fund or account for which such investment was made. The Trustee shall advise the Bank in writing, on or before the twentieth day of each calendar month, of the details of all investments ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 45 held for the credit of each fund and account in its custody under the provisions of this Resolution as of the end of the preceding month. Section 703 -Liability of Trustee for Investments. The Trustee shall not be liable or responsible for the making of any investment authorized by the provisions of this Article, in the manner provided in this Article, or for any loss resulting from any such investment so made except for its own negligence or default. ARTICLE VIII THE TRUSTEE AND THE PAYING AGENTS Section 801 -Appointment and Acceptance of Duties of Trustee. J.P. Morgan Trust Company, National Association, a trust company or bank having the powers of a trust company doing business and having a corporate trust office in Seattle, Washington, is hereby appointed as Trustee for the Holders from time to time of the Bonds. The Trustee shall signify its acceptance of the duties and obligations imposed upon it by this Resolution by executing the certificate of authentication endorsed upon the Bonds, and, by executing such certificate upon any Bond, the Trustee shall be deemed to have accepted such duties and obligations not only with respect to the Bond so authenticated, but with respect to all the Bonds thereafter to be issued, but only, however, upon the terms and conditions set forth in the Resolution. Section 802 -Appointment and Acceptance of Duties of Paying Agents. The Bank shall appoint one or more Paying Agents for the Bonds of any Series in the Series Resolution authorizing such Bonds or shall appoint such Paying Agent or Paying Agents by or pursuant to a resolution of the Bank adopted prior to the authentication and delivery of such Bonds, and may at any time or from time to time appoint one or more other Paying Agents in the manner and subject to the conditions set forth in Section 812 for the appointment of a successor Paying Agent. The Trustee may be appointed to act as Paying Agent notwithstanding that it may then be acting in the capacity of Trustee. Each Paying Agent shall signify its acceptance of the duties and obligations imposed upon it by this Resolution by written instrument of acceptance executed and delivered to the Bank and the Trustee. The principal or corporate trust ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\00csI37420001 IResolulions\2005 General Obligation Bond Resolution.wpd Page 46 offices of the Paying Agents are hereby designated as the respective agencies of the Bank for the payment of the interest on and principal or Redemption Price of the Bonds. Section 803 -Responsibilities of Fiduciaries. (A) The recitals offact herein and in the Bonds contained shall be taken as the statements of the Bank and the Fiduciaries assume any responsibility for the correctness of the same. No Fiduciary shall be deemed to make any representations as to the validity or sufficiency of this Resolution or of any Bonds issued hereunder or in respect of the security afforded by this Resolution, and no Fiduciary shall incur any responsibility in respect thereof. The Trustee shall, however, be responsible for its representations contained in its certificate on the Bonds. No Fiduciary shall be under any responsibility or duty with respect to any other Fiduciary. No Fiduciary shall be under any 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 indemnified to its satisfaction. No Fiduciary shall be liable in connection with the performance of its duties hereunder except for its own negligence or willful misconduct. Neither the Trustee nor any Paying Agent shall be under any responsibility or duty with respect to the application of any moneys paid to anyone of the others or the use or application by the Bank of the Bonds or the proceeds thereof. (B) Except during the continuance of an Event of Default, the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Resolution, and no implied covenants or obligations shall be read into this Resolution against the Trustee, and, in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinion expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Resolution. Resolution. (C) In case an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Resolution and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of his own affairs. ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\Resolulions\2005 General Obligation Bond Resolulion.wpd Page 47 (0) No provision of this Resolution shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that (1) the Trustee shall not be liable for any error of judgment made in good faith by a responsible officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts, (2) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount of the Outstanding Bonds relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Resolution, and (3) no provision of this Resolution shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Except as otherwise expressly provided herein, the Trustee shall determine whether any conditions or requirements set forth herein for any purpose have been met, and such determination by the Trustee shall be conclusive. (E) Regardless of whether it is therein expressly so provided, every provision of this Resolution, any Series Resolution, or any related document relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Article. (F) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Resolution at the request or direction of any of the Bondholders pursuant to this Resolution, unless such Bondholders shall have offered to the Trustee security or indemnity to its satisfaction against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. (G) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, orotherpaperordocument. ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolulion.wpd Page 48 (H) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. (I) The permissive right of the Trustee to do things enumerated in this Resolution shall not be construed as a duty. (J) In accepting the trusts hereby created, the Trustee acts solely as Trustee for the Bondholders and not in its individual capacity and all persons, including, without limitation, the Bondholders and the Bank having any claim against the Trustee arising from this Resolution shall look only to the funds and accounts held by the Trustee or its agent hereunder for payment except as otherwise provided herein. Under no circumstances shall the Trustee be liable in its individual capacity for the obligations evidenced by the Bonds. Section 804 -Evidence on Which Fiduciaries May Act. Each Fiduciary may rely and 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. Each Fiduciary may consult with counsel, who mayor may not be of counsel to the Bank, and the opinion of such shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by it hereunder in good faith and in reliance thereon. Whenever any Fiduciary shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or omitting 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 Resolution upon the faith thereof, but in its discretion the Fiduciary may in 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 ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) J:\Docs\37420001\ResolulionsI2005 General Obligation Bond Resolulion.wpd Page 49 otherwise expressly provided herein, any request, order, notice or other direction required or permitted to be furnished pursuant to any provision hereof by the Bank to any Fiduciary shall be sufficiently executed if executed in the name of the Bank by an Authorized Officer. Section 805 -Compensation. The Bank shall pay to the Trustee and to each Paying Agent from time to time reasonable compensation for all services rendered under this Resolution, and also all reasonable expenses, charges, counsel fees and other disbursements, including those of its attorneys, agents and employees, incurred in and about the performance of their powers and duties under this Resolution, and the Trustee and each Paying Agent shall have a lien therefor on any and all funds at any time held by it under this Resolution. The Bank further agrees to indemnify and save the Trustee and each Paying Agent harmless against any liabilities which it may incur in the exercise and performance of its powers and duties hereunder, and which are not due to its negligence or default. Section 806 -Permitted Acts and Functions. The Trustee and any Paying Agent may become the owner of any Bonds, with the same rights it would have if it were not such Trustee or Paying Agent. The Trustee and any Paying Agent may act as depository 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 enforcement of the Bonds or this Resolution, whether or not any such committee shall represent the Holders of a majority in principal amount of the Bonds then Outstanding. Section 807 -Resignation of Trustee. The Trustee may at any time resign and be discharged of the duties and obligations created by this Resolution by giving not less than ninety (90) days' written notice to the Bank and to the registered owners of Bonds, specifying the date when such resignation shall take effect and such resignation shall take effect immediately upon the appointment of a successor Trustee pursuant to Section 809 hereof. ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 50 Section 808 -Removal of Trustee. The Trustee shall be removed by the Bank if at any time so requested by an instrument or concurrent instruments in writing, filed with the Trustee and the Bank, and signed by the Holders of a majority in principal amount of the Bonds then Outstanding or their attorneys-in-fact duly authorized, excluding any Bonds held by orforthe account of the Bank. The Bank may remove the Trustee at any time, except during the existence of an Event of Default, for such cause as shall be determined in the sole discretion of the Bank by filing with the Trustee an instrument signed by an Authorized Officer of the Bank. Section 809 -Appointment of Successor Trustee. In case at any time the Trustee shall resign or shall be removed or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or if a receiver, liquidator or conservator of the Trustee, or of its property, shall be appointed, or if any public officer shall take charge or control of the Trustee, or of its property or affairs, the Bank covenants and agrees that it will thereupon appoint a successor Trustee. The Bank shall provide written notice of such appointment to the registered owners of the Bonds. If in a proper case no appointment of a successor Trustee shall be made pursuant to the foregoing provisions of this Section within forty-five (45) days after the Trustee shall have given to the Bank written notice, as provided in Section 807, or after a vacancy in the office of the Trustee shall have occurred by reason of its inability to act, the Trustee or the Holder of any Bond may apply to any court of competent jurisdiction to appoint a successor Trustee. Said court may thereupon, after such notice, if any, as such court may deem proper and prescribe, appoint a successor Trustee. Any Trustee appointed under the provisions of this Section 809 in succession to the Trustee shall be a trust company or bank in good standing having the powers of a trust company within or outside the State, and having a capital and surplus aggregating at least Fifty Million Dollars ($50,000,000) if there be such a trust company or bank willing and able to accept the office on reasonable and customary terms and authorized by law to perform all the duties imposed upon it by this Resolution. ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 51 Section 810 -Transfer of Rights and Property to Successor Trustee. Any successor Trustee appointed under this Resolution shall execute, acknowledge and deliver to its predecessor Trustee, and also to the Bank, an instrument accepting such appointment, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become fully vested with all monies, estates, properties, rights, powers, duties and obligations of such predecessor Trustee, with like effect as if originally named as Trustee; but the Trustee ceasing to act shall nevertheless, on the written request of the Bank, or of the successor Trustee, execute, acknowledge and deliver such instruments of conveyance and further assurance and do such other things as may reasonably be required for more fully and certainly vesting and confirming in such successor Trustee all the right, title and interest of the predecessor Trustee in and to any property held by it under this Resolution, and shall pay over, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Should any deed, conveyance or instrument in writing from the Bank be required by such successor Trustee for more fully and certainly vesting in and confirming to such successor Trustee any such estates, rights, powers and duties, any and all such deeds, conveyances and instruments in writing shall, on request, and so far as may be authorized by law, be executed, acknowledged and delivered by the Bank. Any such successor Trustee shall promptly notify the Paying Agents of its appointment as Trustee. The Bank shall pay the expenses of effecting a transfer under this Section. Section 811 -Merger or Consolidation. Any company into which the Fiduciary may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which Fiduciary may sell or transfer all of its corporate trust business, shall be the successor to such Fiduciary without the execution or filing of any paper or the performance of any further act, provided that such company shall be a trust company or bank which is qualified to be a successor to the Trustee under Section 809 or which is qualified to be a successor to the Paying Agent under Section 812. ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\Resolutions\2005 General Obligation Bond Resolution.wpd Page 52 Section 812 -Resignation or Removal of the Paying Agents and Appointment of Successors. Any Paying Agent may at any time resign and be discharged of the duties and obligations created by this Resolution by giving at least sixty (60) days written notice to the Bank and the Trustee. Any Paying Agent may be removed at any time by an instrument filed with such Paying Agent and the Trustee and signed by an Authorized Officer of the Bank. Any successor Paying Agent shall be appointed by the Bank and shall be a trust company or bank having the powers of a trust company having a capital and surplus aggregating at least Fifty Million Dollars ($50,000,000), and willing and able to accept the office of Paying Agent on reasonable and customary terms and authorized by law to perform all the duties imposed upon it by this Resolution. In the event of the resignation or removal of any Paying Agent, such Paying Agent shall pay over, assign and deliver any monies held by it to its successor, or if there be no successor then appointed, to the Trustee until such successor be appointed. In the event that for any reason there shall be a vacancy in the office of Paying Agent, the Trustee shall act as such Paying Agent. Section 813 -Evidence of Signatures of Bondholders and Ownership of Bonds. (A) Any request, consent or other instrument which this Resolution may require or permit to be signed and executed by the Bondholders may be in one or more instruments of similar tenor, and shall be signed or executed by such Bondholders in person or by their attorneys appointed in writing. Proof of (i) the execution of any such instrument, or of an instrument appointing any such attorney, or (ii) the holding by any person of the Bonds shall be sufficient for any purpose of this Resolution (except as otherwise herein expressly provided) if made in the following manner, but the Trustee may nevertheless in its discretion require further or other proof in cases where it deems the same desirable: (1) The fact and date of the execution by any Bondholder or his attorney of such instrument may be proved by the certificate, which need not be acknowledged or verified, of an officer of a bank or trust company satisfactory ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 53 to the Trustee or of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which she purports to act, that the person signing such request or other instrument acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer. The authority of the person or persons executing any such instrument on behalf of a corporate Bondholder may be established without further proof if such instrument is signed by a person purporting to be the president or a vice president of such corporation with a corporate seal affixed and attested by a person purporting to be its secretary or an assistant secretary; (2) The amount of Bonds transferable by delivery held by any person executing such request or other instrument as a Bondholder, and the numbers and other identification thereof, and the date of his holding such Bonds, may be proved by a certificate, which need not be acknowledged or verified, satisfactory to the Trustee, executed by an officer of a trust company, bank, financial institution or other depository or member of the National Association of Securities Dealers, Inc. wherever situated, showing that at the date therein mentioned such person exhibited to such officer or had on deposit with such depository the Bonds described in such certificate. Continued ownership after the date stated in such certificate may be proved by the presentation of such certificate if the certificate contains a statement by such officer that the depository held that Bonds therein referred to on the date of the certificate and that they will not be surrendered without the surrender of the certificate to the depository, except with the consent of the Trustee, and a certificate of the Trustee, which need not be acknowledged or verified, that such consent has not been given. (B) Except in the case of Bonds transferable by delivery only, the ownership of Bonds and the amount, numbers and other identification, and date of holding the same shall be proved by the registry books. Any request, consent or vote of the owner of any ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI200S General Obligation Bond Resolution.wpd Page 54 Bond shall bind all future owners of such Bond in respect of anything done or suffered to be done by the Bank or any Fiduciary in accordance therewith. ARTICLE IX COVENANTSOFTHEBANK The Bank covenants and agrees with the Holders of the Bonds as follows: Section 901 -Payment of Bonds. The Bank shall duly and punctually payor cause to be paid the principal or Redemption Price, if any, of every Bond and the interest thereon, at the dates and places and in the manner stated in the Bonds according to the true intent and meaning thereof, and shall duly and punctually pay, or cause to be paid, all Sinking Fund Installments, if any, becoming payable with respect to any Series of Bonds. Section 902 -Extension of Payment of Bonds. The Bank shall not directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or the time of payment of any claims for interest by the purchase or funding of such Bonds or claims for interest or by any other arrangement and in case the maturity of any of the Bonds or the time for payment of any claims for interest shall be extended, such Bonds or claims for interest shall not be entitled in case of any default under this Resolution to the benefit of this Resolution or to any payment out of any assets of the Bank or the funds (except funds held in trust for the payment of particular Bonds or claims for interest pursuant to this Resolution) prior to benefits accorded to or the payment of the principal of all Bonds issued and Outstanding the maturity of which has not been extended and of such portion of the accrued interest on the Bonds as shall not be represented by such extended claims for interest. Nothing herein shall be deemed to limit the right of the Bank to issue Refunding Bonds as provided in Section 203 and such issuance shall not be deemed to constitute an extension of maturity of Bonds. Section 903 -Offices for Servicing Bonds. The Bank shall at all times maintain an office or agency where Bonds may be presented for transfer or exchange, and where notices, presentations and demands upon the Bank in respect of the Bonds or of this Resolution may be served. The Bank hereby appoints the Trustee as its agent ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001 \Resolutionsl200S General Obligation Bond Resolution.wpd Page 55 to maintain such office or agency for the transfer or exchange of Bonds and for the service of such notices, presentations and demands upon the Bank and may appoint one or more co-registrars for such purposes. The Bank hereby appoints the Trustee as Paying Agent and hereby appoints the Paying Agent as its agent to maintain such offices or agencies for the payment of Bonds. Section 904 -Further Assurances. At any and all times the Bank shall, so far as it may be authorized by law, pass, make, do, execute, acknowledge and deliver, all and every such further resolutions, acts, deeds, conveyances, assignments, transfers and assurances as may be necessary for the better assuring, conveying, granting, assigning, confirming all and singular the rights, Municipal Bonds Payments, the Municipal Bonds and other monies, securities, funds and property hereby pledged or assigned, or intended so to be, or which the Bank may hereafter become bound to pledge or assign. Section 905 -Power to Issue Bonds and Make Pledges. The The Bank is duly authorized pursuant to law to authorize and issue the Bonds for the purposes herein authorized and to adopt this Resolution and to pledge the Municipal Bonds Payments, the Municipal Bonds and other monies, securities, funds and property purported to be pledged by this Resolution in the manner and to the extent provided in this Resolution. The Municipal Bonds Payments, the Municipal Bonds, and other monies, securities, funds and property so pledged are and will be free and clear of any pledge, lien, charge or encumbrance thereon or with respect thereto prior to, or of equal rank with, the pledge created by this Resolution, except for the liens in favor of the Trustee and Paying Agents provided in Section 805 hereof, and all corporate or other action on the part of the Bank to that end has been duly and will be duly and validly taken. The Bonds and the provisions of this Resolution are and will be the valid and legally enforceable obligations of the Bank in accordance with their terms. The Bank shall at all times, to the extent permitted by law, defend, preserve and protect the pledge of the Municipal Bonds Payments, the Municipal Bonds and other monies, securities, funds ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) I:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 56 and property pledged under this Resolution and all the rights of the Bondholders under this Resolution against all claims and demands of all persons whomsoever. Section 906 -General Covenants of the Bank. (A) The Bank shall do and perform or cause to be done and performed all acts and things required to be done or performed by or on behalf of the Bank under law and this Resolution in accordance with the terms hereof. (B) Upon the date of issuance of any of the Bonds, all conditions, acts and things required by law and this Resolution to exist, to have happened and to have been performed precedent to and in the issuance of such Bonds shall exist, have happened and have been performed and the issue of such Bonds, together with all other indebtedness of the Bank, shall be within every debt and other limit prescribed by the laws of the State. (C) The Bank does hereby pledge to and agree with the Holders of the Bonds that it will not cause the State to limit or alter the rights vested by the Act in the Bank to fulfill the terms of any agreements made with Bondholders, or in any way impair the rights and remedies of such Holders until the Bonds, together with the interest thereon, with interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceeding by or on behalf of such Holders, are fully met and discharged. (D) Upon failure of a Governmental Unit to make any principal or interest payment on the date specified in, and as required by, the applicable Loan Agreement securing payment of the Municipal Bonds, the Trustee shall immediately notify the Executive Director of the Bank who shall then take the following actions: (i) the Executive Director shall within two days of the Governmental Unit's failure to make the Municipal Bonds Payment pursuant to the terms of the applicable Loan Agreement, contact such Governmental Unit and request payment; ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\Resolutions\2005 General Obligation Bond Resolution.wpd Page 57 (ii) in the event payment is not made by the Governmental Unit pursuant to (i) above, the Trustee shall make up such deficiencies from the Reserve Fund as provided for in Section 603(E) of this Resolution; (iii) in the event payment is not made by the Governmental Unit pursuant to (i) above, and the Reserve Fund is drawn upon to make up such deficiency pursuant to (ii) above, the Executive Director shall initiate intercept proceedings with the applicable State agencies pursuant to Section 917 of this Resolution; (iv) in the event amounts collected pursuant to (iii) above are insufficient to replenish amounts held in the Reserve Fund to the Reserve Fund Requirement, the Executive Director shall contact the Governor of the State and the State legislature as set forth in Section 911 (B) of this Resolution; and (v) if there remains a deficiency in the Reserve Fund after the Executive Director has exhausted the requirements found in (i) through (iv) above, the Executive Director shall request a loan from the Department of Revenue pursuant to AS 44.85.270(i) and provide for such loan to be used to cause the amount in the Reserve Fund to satisfy the Reserve Fund Requirement. Section 907 -Accounts and Reports. (A) The Bank shall keep, or cause to be kept, proper books of record and account in which complete and correct entries shall be made of its transactions relating to all Municipal Bonds Payments, Municipal Bonds, the Fees and Charges and all funds and accounts established by this Resolution, which shall at all reasonable times be subject to the inspection of the Trustee or the Holders of an aggregate of not less than twenty-five per centum (25%) in principal amount of Bonds then Outstanding or their representatives duly authorized in writing. (B) The Bank shall annually, on or before the last day of January in each year, file with the Trustee a copy of an audit for the preceding Fiscal Year, accompanied by an Accountant's Certificate, and an annual report setting forth in complete and reasonable detail: (a) its operations and accomplishments; (b) its receipts and expenditures during such Fiscal Year in accordance with the categories or classifications established by the Bank for its operating and capital outlay purposes; (c) ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 58 its assets and liabilities at the end of such Fiscal Year, including a schedule of its Municipal Bonds Payments, Municipal Bonds, Fees and Charges and the status of reserve, funds and the funds and accounts established by this Resolution; and (d) a schedule of its Bonds Outstanding and other obligations outstanding at the end of such Fiscal Year, together with a statement of the amounts paid, redeemed and issued during such Fiscal Year. A copy of each such annual report and Accountant's Certificate shall be mailed promptly thereafter by the Trustee to each Bondholder who shall have filed his name and address with the Bank for such purpose. Section 908 -Personnel and Servicing of Programs. (A) The Bank shall at all times appoint, retain and employ competent personnel for the purpose of carrying out its respective programs and shall establish and enforce reasonable rules, regulations, tests and standards governing the employment of such personnel at reasonable compensation, salaries, fees and charges and all persons employed by the Bank shall be qualified for their respective positions. (B) The Bank may pay to the respective State agency, governmental unit or political subdivision of the State from the Operating Fund such amounts as are necessary to reimburse the respective State agency, governmental unit or political subdivision of the state for the reasonable costs of any services performed for the Bank. Section 909 -Waiver of Laws. The Bank shall not at any time insist upon or plead in any manner whatsoever, or claim or take the benefit or advantage of any stay or extension law now or at any time hereafter in force which may affect the covenants and agreements contained in this Resolution or in any Series Resolution or in the Bonds, and all benefit or advantage of any such law or laws is hereby expressly waived by the Bank. Section 910 -Fees and Charges. The Bank shall establish, make, maintain and charge such Fees and Charges to each Governmental Unit to which a Loan is made, and shall from time to time revise such Fees and Charges whenever necessary, so that such Fees and Charges actually collected from each such Governmental Unit will at all ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 59 times produce monies which, together with such Governmental Unit's Allocable Proportion of other monies available under the provisions of this Resolution, and other monies available therefor, including any grants made by the United States of America or any agency or instrumentality thereof or by the State or any agency or instrumentality thereof and amounts applied therefor from amounts transferred to the Operating Fund pursuant to paragraph (3) of Section 603, will be at least sufficient: (a) To pay, as the same become due, the Governmental Unit's Allocable Proportion of the Administrative Expenses of the Bank; and (b) To pay, as the same become due, the Governmental Unit's Allocable Proportion of the fees and expenses of the Trustee and Paying Agents. The Bank shall provide the Trustee with a schedule of the Fees and Charges to be paid by each Governmental Unit, and of each revision thereof, and shall require each Governmental Unit to make payment of the Fees and Charges required to be paid by it directly directly to the Trustee. The Trustee shall promptly advise the Bank of each and every failure of a Governmental Unit to make payment of Fees and Charges when due in accordance with the applicable schedule. Section 911 -Administration of Reserve Fund. (A) The Bank shall establish and maintain the Reserve Fund in accordance with the provisions of this Resolution. All monies and securities held in the Reserve Fund shall be used, disbursed and applied only in accordance with the provisions of this Resolution and for no other purpose. Monies and securities held in the Reserve Fund shall not be withdrawn therefrom at any time in such amount as would reduce the amount in such Fund to an amount less than the Required Debt Service Reserve except as otherwise provided in this Resolution. (B) The Bank shall cause the Chairman of the Board of Directors of the Bank annually, before each January 30, to make and deliver to the Governor of the State and to the legislature his certificate stating the amount, if any, required to restore the Alaska Municipal Bond Bank Reserve Fund to the amount of the Required Debt Service Reserve and a copy of such certificate shall be promptly delivered by the Bank to the ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\Resolutions\2005 General Obligation Bond Resolution.wpd Page 60 Trustee. Monies received by the Bank from the State pursuant to such a certification, in accordance with the provisions of Section 44.85.270(g) of the Act shall, to the extent such certification was occasioned by the fact that the amount in the Reserve Fund was less than the Required Debt Service Reserve, be deposited in the Reserve Fund, as required by paragraph (D) of Section 603. (C) The Bank shall annually submit to the State a budget request for an appropriation to cause, if necessary, amounts held in the Reserve Fund to equal the Reserve Fund Requirement. (Amendment: Effective August 19,2009) Section 912 -Issuance of Additional Obligations. (A) The Bank shall not subsequent to the issuance of the initial Series of Bonds under this Resolution create or permit the creation of or issue any obligations or create any additional indebtedness which will be secured by a charge and lien on the Municipal Bonds and the Municipal Bonds Payments or which will be payable from the Debt Service Fund or the Reserve Fund, except that additional Series of Bonds may be issued from time to time pursuant to a Series Resolution subsequent to the issuance of the initial Series of Bonds under this Resolution on a parity with the Bonds of such initial Series of Bonds and secured by an equal charge and lien on the Municipal Bonds and the Municipal Bonds Payments and payable equally and ratably from the Debt Service Fund and Reserve Fund for the purposes of (i) making Loans to Governmental Units, (ii) making payments into the Interest Account, (iii) making payments into the Reserve Fund, (iv) funding of Notes theretofore issued by the Bank for any purposes for which Bonds may have been issued, and (v) subject to the provisions and limitations of Section 203, the refunding of any Bonds then Outstanding, under the conditions and subject to the limitations in this Section 912 provided. (B) No additional Series of Bonds shall be issued subsequent to the issuance of the initial Series of Bonds under this Resolution unless: (1) the aggregate principal amount of Bonds and Notes of the Bank outstanding at the time of issuance and delivery of such additional Bonds including the principal amount of such additional Bonds will not exceed any limit thereon imposed by law; ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\Resolutions\2005 General Obligation Bond Resolution.wpd Page 61 (2) there is at the time of the issuance of such additional Bonds no deficiency in the amounts required by this Resolution or any Series Resolution to be paid into the Debt Service Fund and into the Reserve Fund; (3) the amount of the Reserve Fund, upon the issuance and delivery of such additional Bonds and the deposit in the Reserve Fund of any amount provided therefor in the Series Resolution authorizing the issuance of such additional Bonds, shall not be less than the Required Debt Service Reserve; and (4) the maturities of, or Sinking Fund Installments for, the additional Bonds then being issued representing Loan Obligations, unless such additional Bonds are being issued to refund Outstanding Bonds in accordance with the provisions of Section 203, shall be equal to the scheduled Municipal Bonds Principal Payments to be made in respect of the Loans with respect to which such additional Bonds are to be issued. (C) The Bank expressly reserves the right to adopt one or more other general obligation bond resolutions and reserves the right to issue Notes and any other obligations so long as the same are not a charge or lien on the Municipal Bonds, the Municipal Bonds Payments and the Fees and Charges or payable from the Debt Service Fund or the Reserve Fund created pursuant to this Resolution. Section 913 -Loan Agreement Provisions. No Loan shall be made by the Bank from the proceeds of the sale of Bonds, and no Bonds shall be issued by the Bank for the purpose of providing funds with which to make a Loan, unless the Loan Agreement under which such Loan is to be made shall comply with, and no Bonds shall be issued by the Bank to fund Notes or to refund Bonds unless the Loan Agreement under which the Loan was made from the proceeds of such Notes or Bonds, shall also comply with, the following terms, conditions, provisions and limitations: (a) The Governmental Unit which is a party to such Loan agreement must be a Governmental Unit as defined by the Resolution and the Loan Agreement must be executed in accordance with existing laws; (b) The Governmental Unit, prior to or simultaneously with the issuance of Bonds of the Bank issued to make a Loan to the Governmental Unit, shall issue ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 62 Municipal Bonds which are valid obligations of the Governmental Unit as required by the Act;(c) The Municipal Bonds Interest Payments to be made by the Governmental Unit under such Loan Agreement shall be not less than the interest payments the Bank is required to make on the Loan Obligation and shall be scheduled by the Bank in such manner and at such times (notwithstanding the dates of payment as stated in the Municipal Bonds) as to provide funds sufficient to pay interest on the Loan Obligation as the same becomes due; (d) The Municipal Bonds Principal Payments to be made by the Governmental Unit under such Loan Agreement shall be scheduled by the Bank in such manner and at such times (notwithstanding the dates of payment as stated in the Municipal Bonds) as to provide funds sufficient to pay the principal of the Loan Obligation as the same matures; (e) The Governmental Unit shall be obligated to pay Fees and Charges to the Bank at the times and in the amounts which will enable the Bank to comply with the provisions of Section 910; (f) The Governmental Unit shall agree that in the event the amounts referred to in paragraphs (c) and (d) are not paid by it to the Bank on or before the times specified in the Loan Agreement, any money payable to the Governmental Unit by any department or agency of the State shall be withheld from such Governmental Unit and paid over directly to the Trustee acting under the General Obligation Bond Resolution and that the said agreement shall be full warrant, authority and direction to make such payment to any official of the State responsible for such payment upon notice to such official by the Bank as provided in the Act: (g) The Bank shall not sell and the Governmental Unit shall not redeem prior to maturity any of the Municipal Bonds with respect to which the Loan is made in an amount greater than the Outstanding Bonds issued with respect to such Loan which are then redeemable, and in the event of any such sale or redemption of such Municipal Bonds, the same shall be in an amount not less than the aggregate of (i) the principal ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) J:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolulionwpd Page 63 amount of the Loan Obligation so to be redeemed, (ii) the interest to accrue on the Loan Obligation so to be redeemed to the next redemption date thereof not previously paid, (iii) the applicable premium, if any, payable on the Loan Obligation so to be redeemed, and (iv) the costs and expenses of the Bank in effecting the redemption of the Loan Obligation so to be redeemed; provided, however, that in the event the Loan Obligation has been refunded and the Refunding Bonds therefor were issued in a principal amount in excess of or less than the Loan Obligation remaining unpaid at the date of issuance of such Refunding Bonds, the amount which the Governmental Unit shall be obligated to payor the Bank shall receive under item (i) above shall be the principal amount of such Refunding Bonds Outstanding. In the event the Loan Obligation has been refunded and the interest the Bank is required to pay on the Refunding Bonds therefor is less than the interest that the Bank was required to pay on the Loan Obligation, the amount which the Governmental Unit shall be obligated to payor the Bank shall receive under item (ii) above shall be the amount of interest to accrue on such Refunding Bonds Outstanding. (h) The Governmental Unit shall give the Bank at least fifty (50) days' notice of intention to redeem its Municipal Bonds. Section 914 -Modification of Loan Agreement Terms. The Bank shall not consent to the modification of, or modify, the rate or rates of interest of, or the amount or time of payment of any installment of principal of or interest on any Municipal Bonds evidencing a Loan, or the amount or time of payment of any Fees and Charges payable with respect to such Loan, or the security for or any terms or provisions of such Loan or the Municipal Bonds evidencing the same, in a manner which adversely affects or diminishes the rights of the Bondholders; provided, however, that, in the event the Loan Obligation is being or has been refunded and the Refunding Bonds therefor are in a principal amount in excess of or less than the principal amount of the Bonds refunded, the Bank may consent to the modification of and modify the Loan agreement relating to such Loan and the Municipal Bonds evidencing the same, and the Municipal Bonds Payments to be made thereunder so long as such Municipal Bonds Payments are ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 Generel Obligation Bond Resolution.wpd Page 64 sufficient in amount and payable at the times required for the payment of the principal of and interest on such Refunding Bonds, and further provided, however, that, in the event the Loan Obligation has been refunded and the interest the Bank is required to pay on the Refunding Bonds issued for the purpose of refunding such original Bonds is less than the interest the Bank was required to pay on such original Bonds refunded by the Bank, the Municipal Bonds Interest Payments to be made by the Governmental Unit in respect of such Loan may be reduced so that the amounts required to be paid shall be sufficient to pay interest on such Refunding Bonds Outstanding. Section 915 -Sale of Municipal Bonds by Bank. The Bank shall not sell any Municipal Bonds except as provided in subsection (g) of Section 913. Section 916 -Disposition of the Proceeds of Sale or Redemption of Municipal Bonds. In the event Municipal Bonds or other obligations securing a Loan shall be sold by the Bank or redeemed by the Governmental Unit in accordance with terms of the applicable Loan Agreement, the Bank shall, upon such sale by the Bank or redemption by the Governmental Unit, deposit the proceeds of such sale or redemption, except an amount thereof equal to the costs and expenses of the Bank in effecting the redemption of the Bonds to be redeemed, into the applicable sub-account or subaccounts in the Redemption Account and shall apply the same to the purchase, retirement or redemption of the appropriate Bonds in accordance with the provisions of this Resolution. The balance in such applicable sub-account or sub-accounts of such proceeds of sale or redemption of Municipal Bonds after the redemption of the Bonds to be redeemed shall be deposited in the Operating Fund. Section 917 -Enforcement of Municipal Bonds. The Bank shall diligently enforce, and take all reasonable steps, actions and proceedings necessary for the enforcement of, all terms, covenants and conditions of all Loan Agreements and the Municipal Bonds evidencing Loans made by the Bank, including the prompt collection, and the giving of notice to the Commissioner of Revenue, Commissioner of Commerce, Community and Economic Development and the Commissioner of Administration and any other department or agency of the State which is custodian of any money payable ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) J:\Docs\37420001\Reso lutions\2005 General Obligation Bond Resolution.wpd Page 65 to the Governmental Unit of any failure or default of the Governmental Unit in the payment of its Municipal Bonds Payment and shall promptly transfer any such monies, upon receipt thereof, to the Trustee and, in such event, or if such monies are paid directly to the Trustee, the Trustee shall deposit any such monies in the Principal Account and Interest Account in place of said unpaid Municipal Bonds Payment or in the event deficiencies in said Accounts created by such default shall have been made up by the Reserve Fund pursuant to paragraph (5) of Section 603, in the Reserve Fund to the extent of such deficiencies. Section 918 -Continuing Disclosure; Bankruptcy. (A) The Bank hereby covenants and agrees that it will comply with and carry out all the provisions of each Continuing Disclosure Certificate. Notwithstanding any other provision of this Resolution, failure of the Bank to comply with any Continuing Disclosure Certificate shall not be considered an Event of Default, and any Bondholder may take such actions only as may be provided in such Continuing Disclosure Certificate. (B) The Bank hereby covenants and agrees that it will notify the Rating Agencies then rating the Bonds of any change in the Act which would permit it or require it to declare bankruptcy under the Bankruptcy Code. Section 919 -Tax Covenants. The Bank shall not knowingly take or cause any action to be taken which would cause interest on any Bonds to become taxable for federal income tax purposes. The Bank shall at all times do and perform all acts and things necessary or desirable, including, but not limited to, complying with the rebate provisions of Section 148 of the Code, as applicable, and complying with the provisions of any letter of instructions from bond counsel, in order to assure that interest paid on Bonds shall, for purposes of federal income taxation, be excludable from the gross income of the recipients thereof and exempt from taxation. The Bank shall not permit at any time or times any proceeds of any Bonds or any amounts amounts held hereunder to be used, directly or indirectly, in a manner which would result in the exclusion of any Bond from the treatment afforded by subsection (a) of Section 103 of the Code. ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 66 ARTICLE X SERIES RESOLUTION AND SUPPLEMENTAL RESOLUTIONS Section 1001 -Modification and Amendment without Consent. Notwithstanding any other provisions of this Article X, or Article XI, the Bank may adopt at any time or from time to time Series Resolutions or Supplemental Resolutions for anyone or more of the following purposes, and any such Series Resolution or Supplemental Resolution shall become effective in accordance with its terms upon the filing with the Trustee of a copy thereof certified by an Authorized Officer: (A) To provide for the issuance of a Series of Bonds pursuant to the provisions of this Resolution and to specify and determine such matters and things referred to in Article II of this Resolution and to prescribe the terms and conditions pursuant to which such Bonds may be issued, paid or redeemed; (B) To add to the covenants and agreements of the Bank for the purpose of further securing the payment of the Bonds, provided such additional covenants and agreements are not contrary to or inconsistent with the covenants and agreements of the Bank contained in this Resolution; (C) To prescribe further limitations and restrictions upon the issuance of Bonds and the incurring of indebtedness by the Bank which are not contrary to or inconsistent with the limitations and restrictions thereon theretofore in effect; (D) To surrender any right, power or privilege reserved to or conferred upon the Bank by the terms of this Resolution, provided that the surrender of such right, power or privilege is not contrary to or inconsistent with the covenants and agreements of the Bank contained in this Resolution; (E) To confirm as further assurance any pledge under and the subjection to any lien, claim or pledge created or to be created by the provisions of this Resolution of the Municipal Bonds and Municipal Bonds Payments or of any other monies, securities or funds; (F) To modify any of the provisions of this Resolution or any previously adopted Series Resolution in any other respect; provided that such modifications shall not be ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) I:\Docs\37420001\Resolutions\2005 General Obligation Bond Resolution.wpd Page 67 effective until after all Bonds of any Series of Bonds Outstanding as of the date of adoption of such Series Resolution or Supplemental Resolution shall cease to be Outstanding, and all Bonds issued under such modified resolutions shall contain a specific reference to the modifications; (G) To cure any ambiguity or defect or inconsistent provision in this Resolution or to insert such provisions clarifying matters or questions arising under this Resolution as are necessary or desirable in the event any such modifications are not contrary to or inconsistent with this Resolution as theretofore in effect. Section 1002 -Supplemental Resolutions Effective with Consent of Bondholders. The provisions of this Resolution may also be modified or amended at any time or from time to time by a Supplemental Resolution, with the consent of Bondholders in accordance with and subject to the provisions of Article XI which Supplemental Resolution, upon the filing with the Trustee of a copy thereof, certified by an Authorized Officer and upon compliance with the Article XI, shall become fully effective in accordance with its terms as provided in said Article. Section 1003 -General Provisions Relating to Series Resolutions and Supplemental Resolutions. This Resolution shall not be modified or amended in any respect except as provided in and in accordance with and subject to the provisions of this Article X and Article XI. Nothing contained in this Article X or Article XI shall affect or limit the rights or obligations of the Bank to adopt, make, do, execute or deliver any resolution, act or other instrument pursuant to the provisions of Section 904 or the right or obligation of the Bank to execute and deliver to the Trustee or any Paying Agent any instrument which elsewhere in this Resolution it is provided or permitted to be delivered to the Trustee or any Paying Agent. A copy of every Series Resolution and Supplemental Resolution adopted by the Bank when filed with the Trustee shall be accompanied by a Counsel's Opinion stating that such Series Resolution or Supplemental Resolution has been duly and lawfully adopted in accordance with the provisions of this Resolution, is authorized or permitted by this Resolution and is valid and binding upon the Bank and enforceable in ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) I:\Docs\37420001IResolutionsI2005 General Obligation Bond Resolution.wpd Page 68 accordance with its terms (subject, as to enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium, or other laws affecting creditor's rights generally from time to time in effect). The Trustee is hereby authorized to accept delivery of a certified copy of any Series Resolution or Supplemental Resolution permitted or authorized pursuant to the provisions of this Resolution and to make all further agreements and stipulations which may be contained therein, and, in taking such action, the Trustee shall be fully protected in relying on Counsel's Opinion that such Series Resolution or Supplemental Resolution is authorized or permitted by the provisions of this Resolution. No Series Resolution or Supplemental Resolution changing, amending or modifying any of the rights or obligations of the Trustee or of any Paying Agent may be adopted by the Bank without the written consent of the Trustee or Paying Agent affected thereby. ARTICLE XI AMENDMENTS Section 1101 -Powers of Amendment. Any modification or amendment of this Resolution and of the rights and obligations of the Bank and of the Holders of the Bonds, in any particular, may be made by a Supplemental Resolution, with the written consent given as hereinafter provided in Section 1102, (a) of the Holders of at least two-thirds in principal amount of the Bonds Outstanding at the time such consent is given, or (b) in case less than all of the several Series of Bonds then Outstanding are affected by the modification or amendment, of the Holders of at least two-thirds in principal amount of the Bonds of each Series so affected and Outstanding at the time such consent is given; provided, however, that such modification or amendment shall not (i) permit a change in the terms of redemption or maturity of the principal of any Outstanding Bond or of any installment of interest thereon or Sinking Fund Installment therefor, (ii) or a reduction in the principal amount or the Redemption Price thereof or in the rate of interest thereon, or (iii) a a reduction of the percentage of the Holders of which is required to effect any such modification or amendment, or (iv) permit the ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 69 creation of any lien prior to or on a parity with the lien created by this Resolution (except in the manner provided by this Resolution) or deprive the Holders of the Bonds of the lien created by this Resolution, without the consent of the Holders of all the Bonds Outstanding or of the Series of Bonds affected by such modification or amendment. For the purposes of this Section, a Series shall be deemed to be affected by a modification or amendment of this Resolution if the same adversely affects or diminishes the rights of the Holders of Bonds of such Series. Section 1102 -Consent of Bondholders. (A) The Bank may at any time adopt a Supplemental Resolution making a modification or amendment permitted by the provisions of Section 1101, to take effect when and as provided in this Section. A copy of such Supplemental Resolution (or brief summary thereof or reference thereto), together with a request to Bondholders for their consent thereto, shall be to by, or on behalf of, the Bank's to Bondholders . Such Supplemental Resolution shall not be effective unless and until there shall have been filed with the Trustee (a) the written consents of Holders ofthe percentages of Outstanding Bonds specified in Section 1101 and (b) a Counsel's Opinion stating that such Supplemental Resolution has been duly and lawfully adopted and filed by the Bank in accordance with the provisions of this Resolution, is authorized or permitted hereby and is valid and binding upon the Bank and enforceable in accordance with its terms, and (ii) a notice shall have been mailed as hereinafter provided in this Section. (B) The consent of a Bondholder to any modification or amendment shall be effective only if accompanied by proof of the holding, at the date of such consent, of the Bonds with respect to which such consent is given, which proof shall be such as is permitted by Section 813. A certificate or certificates by the Trustee filed with the Trustee that it has examined such proof and that such proof is sufficient in accordance with Section 813 shall be conclusive that the consents have been given by the Holders of the Bonds described in such certificate or certificates of the Trustee. Any such consent shall be binding upon the Holder of the Bonds giving such consent and upon any subsequent Holder of such Bonds and of any Bonds issued in exchange therefor ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 70 (regardless of whether such subsequent Holderthereof has notice thereof) unless such consent is revoked in writing by the holder of such Bonds giving such consent or a subsequent holder thereof by filing with the Trustee, prior to the time when the written statement of the Trustee hereinafter provided for in this Section is filed, such revocation and, if such Bonds are transferable by delivery, proof that such Bonds are held by the signer of such revocation in the manner permitted by Section 813. The fact that a consent has not been revoked may likewise be proved by a certificate of the Trustee filed with the Trustee to the effect that no revocation thereof is on file with the Trustee. (C) At any time after the Holders of the required percentages of Bonds shall have filed their consents to the Supplemental Resolution, the Trustee shall make and file with the Bank and the Trustee a written statement that the Holders of such required percentages of Bonds have filed such consents. Such written statement shall be conclusive that such consents have been so filed. At any time thereafter notice, stating in substance that the Supplemental Resolution adopted by the Bank on a stated date, a copy of which is on file with the Trustee, has been consented to by the Holders of the required percentages of Bonds and will be effective as provided in this Section, may be given to Bondholders by the Bank by mailing such notice to Bondholders at least once not more than ninety days (90) after the Holders of the required percentages of Bonds shall have filed their consents to the Supplemental Resolution and the written statement of the Trustee hereinabove provided for is filed. The Bank shall file with the Trustee proof of the publication of such notice and, if the same shall have been mailed to Bondholders, of the mailing thereof. A record, consisting of the papers required or permitted by this Section to be filed with the Trustee, shall be proof of the matters therein stated. Such Supplemental Resolution making such amendment or modification shall be deemed conclusively binding upon the Bank, the Fiduciaries and the Holders of all Bonds at the expiration of forty (40) days after the filing with the Trustee of the proof of the first publication of such last mentioned notice, except in the event of a final decree of a court of competent jurisdiction setting aside such Supplemental Resolution in a legal action or equitable proceeding for purpose ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 71 commenced within such forty day period; except that any Fiduciary and the Bank during such forty day period and any such further period during which any such action or proceeding may be pending shall be entitled in their absolute discretion to take such action, or to refrain from taking such action, with respect to such Supplemental Resolution as they may deem expedient. Section 1103 -Modifications by Unanimous Consent. The terms and provisions of this Resolution and the rights and obligations of the Bank and of the Holders of the Bonds may be modified or amended in any respect upon the adoption and filing with the Trustee by the Bank of a copy of a Supplemental Resolution certified by an Authorized Officer and the consent of the Holders of all of the Bonds then Outstanding, such consent to be given as provided in Section 1102, except that no notice to Bondholders either by mailing or publication shall be required provided, however, that no such modification or amendment shall change or modify any of the rights or obligations of the Trustee or Paying Agents without the filing with the Trustee of its written assent thereto in addition to the consent of Bondholders. Section 1104 -Mailing and Publication. Any provision in this Article for the mailing of a notice or other document to Bondholders shall be fully complied with if it is mailed postage prepaid only (i) to each registered owner of Bonds then Outstanding at his address, if any, appearing upon the registry books of the Bank, (ii) to each Holder of any Bond payable to bearer who shall have filed with the Trustee an address for notices, and (iii) to the Trustee. Section 1105 -Exclusion of Bonds. Bonds owned or held by or for the account of the Bank shall not be deemed Outstanding for the purpose of consent or other action or any calculation of Outstanding Bonds provided for in this Resolution, and the Bank shall not be entitled with respect to such Bonds to give any consent or take any other action provided for in this Resolution. At the time of any consent consent or other action taken under this Resolution, the Bank shall furnish the Trustee a certificate of an authorized Officer, upon which the Trustee may rely, describing all Bonds so to be excluded. ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\Resolutions\2005 General Obligation Bond Resolution.wpd Page 72 Section 1106 -Notation on Bonds. Bonds delivered after the effective date of any action taken as in Article X or XI provided may, and if the Trustee so determines, shall, bear notation by endorsement or otherwise in form approved by the Bank and the Trustee as to such action, and in that case upon demand of the Holder of any Bond Outstanding at such effective date and upon presentation of his Bond for such purpose at the corporate trust office of the Trustee suitable notation shall be made on such Bond by the Trustee as to any such action. If the Bank or the Trustee shall so determine, new Bonds so modified as in the opinion of the Trustee and the Bank to conform to such action shall be prepared and delivered, and upon demand of the Holder of any Bond then Outstanding shall be exchanged, without cost to such Bondholder, for Bonds of the same Series and maturity then Outstanding, upon surrender of such Bonds. ARTICLE XII DEFAULTS AND REMEDIES Section 1201 -Trustee to Exercise Powers of Statutory Trustee. The The Trustee shall be and hereby is vested with all of the rights, powers and duties of a trustee appointed by Bondholders pursuant to Section 44.85.310 and 320 of the Act and the right of Bondholders to appoint a trustee pursuant to Section 44.85.310 and 320 of the Act is hereby abrogated pursuant to Section 44.85.220(18) of the Act. Section 1202 -Events of Default. Each of the following events is hereby declared an "Event of Default," that is to say; if (a) the Bank shall default in the payment of the principal or Redemption Price of, Sinking Fund Installment for, or interest on, any Bond when and as the same shall become due whether at maturity or upon call for redemption, or otherwise; or (b) the Bank shall fail or refuse to comply with the provisions of Section 44.85.270(g) of the Act, or such amounts as shall be certified by the Chair of the Bank to the Governor and to the Legislature pursuant to such provisions of the Act shall not be appropriated and paid to the Bank prior to the termination of the then current State fiscal year; or ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\Resolutions\2005 General Obligation Bond Resolution.wpd Page 73 (c) the Bank shall fail or refuse to comply with the provisions of the Act, other than as provided in (b) above, or shall default in the performance or observance of any other of the covenants, agreements or conditions on its part in this Resolution, any Series Resolution, any Supplemental Resolution, or in the Bonds contained, and such failure, refusal or default shall continue for a period of forty-five (45) days after written notice thereof by the Trustee or the Holders of not less than twenty-five per centum (25%) in principal amount of the Outstanding Bonds. Provided, however, that an Event of Default shall not be deemed to exist under the provisions of this paragraph (c) upon the failure of the Bank to make and collect Fees and Charges required to be made and collected by the provisions of this Resolution or upon the failure of the Bank to enforce any obligation undertaken by a Governmental Unit pursuant to a Loan Agreement including the making of the stipulated Municipal Bonds Payment so long as the Bank may otherwise be directed by law and so long as the Bank shall be provided with monies from the State or otherwise, other than withdrawals from or reimbursements of the Reserve Fund, sufficient in amount to pay the principal of and interest on all Bonds as the same shall become due during the period for which the Bank shall be directed by law to abstain from making and collecting such Fees and Charges and from enforcing the obligations of a Governmental Unit under the applicable Loan Agreement. Section 1203 -Remedies. (A) Upon the happening and continuance of any Event of Default specified in paragraph (a) of Section 1202, the Trustee shall proceed, or upon the happening and continuance of any Event of Default specified in paragraphs (b) and (c) of Section 1202, the Trustee may proceed, and upon the written request of the Holders of not less than twenty-five per centum (25%) in principal amount of the Outstanding Bonds shall proceed, in its own name, to protect and enforce its rights and the rights of the Bondholders by such of the following remedies, as the Trustee, being advised by counsel, shall deem most effectual to protect and enforce such rights: (1) by mandamus or other suit, action or proceeding at law or in equity, enforce all rights of the Bondholders, including the right to require the Bank to make and collect ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI200S General Obligation Bond Resolution.wpd Page 74 Fees and Charges and Municipal Bonds Payments adequate to carry out the covenants and agreements as to, and pledge of, such Fees and Charges and Municipal Bonds Payments, and other properties and to require the Bank to carry out any other covenant or agreement with Bondholders and to perform its duties under the Act; (2) by bringing suit upon the Bonds; (3) by action or suit in equity, require the Bank to account as if it were the trustee of an express trust for the Holders of the Bonds; (4) by action or suit in equity, enjoin any acts or things which may be unlawful or in violation of the rights of the Holders of the Bonds; (B) Upon the occurrence of an Event of Default under Section 1202(a), unless the principal of all the Bonds shall have already become due and payable, the Trustee, by notice in writing to the Bank, may, and upon the written request of the Holders of not less than a majority in aggregate principal amount of the Bonds at the time outstanding, shall, in accordance with the provisions of the Act, declare the principal of all the Bonds then outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Resolution or in the Bonds contained to the contrary notwithstanding. This provision, however, is subject to the condition that if, at any time after the principal of the Bonds shall have been so declared due and payable, and before any judgment or decree for the payment of the monies due shall have been obtained or entered, the Bank shall deposit with the Trustee a sum sufficient to pay all principal on the Bonds matured prior to such declaration and all matured installments of interest (if any) upon all the Bonds, with interest on such overdue installments of principal at the rate borne by the respective Bonds, and the reasonable expenses of the Trustee, and any and all other defaults known to the Trustee (other than in the payment of principal of and interest on the the Bonds due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall have been made therefor, then, and in ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 75 every such case, the Holders of at least a majority in aggregate principal amount of the Bonds then outstanding, by written notice to the Bank and to the Trustee, may, on behalf of the Holders of all of the bonds, rescind and annul such declaration and its consequences and waive such default; but no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon. (C) In the enforcement of any remedy under this Resolution, the Trustee shall be entitled to sue for, enforce payment on and receive any and all amounts then or during any default becoming, and at any time remaining, due from the Bank for principal, Redemption Price, interest or otherwise, under any provision of this Resolution or a Series Resolution or of the Bonds, and unpaid, with interest on overdue payments at the rate or rates of interest specified in such Bonds, together with any and all costs and expenses of collection and of all proceedings hereunder and and under such Bonds, without prejudice to any other right or remedy of the Trustee or of the Bondholders, and to recover and enforce a judgment or decree against the Bank for any portion of such amounts remaining unpaid, with interest, costs and expenses, and to collect from any monies available for such purpose, in any manner provided by law, the monies adjudged or decreed to be payable. Section 1204 -Priority of Payments After Default. During the continuance of an Event of Default, in the event that the funds held by the Trustee and Paying Agents shall be insufficient for the payment of interest and principal or Redemption Price then due on the Bonds, such funds (other than funds held for the payment or redemption of particular Bonds which have theretofore become due at maturity or by call for redemption) and any other monies received or collected by the Trustee acting pursuant to the Act and this Article XII, after making provision for the payment of any expenses necessary in the opinion of the Trustee to protect the interests of the Holders of the Bonds, and for the payment of the charges and expenses and liabilities incurred and advances made by the Trustee or any Paying Agents in the performance of their respective duties under this Resolution, shall be applied as follows: ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\Resolutions\2005 General Obligation Bond Resolution.wpd Page 76 (a) Unless the principal of all of the Bonds shall have become or have been declared due and payable, FIRST: To the payment to the persons entitled thereto of all installments of interest then due in the order of the maturity of such installments, together with interest on overdue installments of interest and, ifthe amount available shall not be sufficient to pay in full any installment, then to the payment thereof ratably, according to the amounts due on such installment, to the persons entitled thereto, without any discrimination or preference; and SECOND: To the payment to the persons entitled thereto of the unpaid principal or Redemption Price of any Bonds which shall have become due, whether at maturity or by call for redemption, in the order of their due dates and, if the amounts available shall not be sufficient to pay in full all the Bonds due on any date, then to the payment thereof ratably, according to the amounts of principal or Redemption Price due on such date, to the persons entitled thereto, thereto, without any discrimination or preference. (b) If the principal of all of the Bonds shall have become or have been declared due and payable, to the payment of the principal and interest then due and unpaid upon the Bonds together with interest on overdue installments of interest 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 amounts due respectively for principal and interest, to the persons entitled thereto without any discrimination or preference except as to any difference in the respective rates of interest specified in the Bonds. Whenever monies are to be applied by the Trustee pursuant to the provisions of this Section 1204, such monies 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 monies available for for application and the likelihood of additional money becoming available for such application in the future; the deposit of such monies with the Paying Agents, or otherwise setting aside such monies in trust ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 77 for the proper purpose, shall constitute proper application by the Trustee; and the Trustee shall incur no liability whatsoever to the Bank, to any Bondholder or to any other person for any delay in applying any such monies, so 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 Resolution as may be applicable at the time of application by the Trustee. Whenever the Trustee shall exercise such discretion in applying such monies, it 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 forthe 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. Interest on overdue installments of interest shall be equal to the rate on the Bond as to which the interest installment is overdue. The provisions of this Section 1204 are in all respects subject to the provisions of Section 902. Section 1205 -Termination of Proceedings. In case any proceeding taken by the Trustee on account of any Event of Default shall have been discontinued or abandoned for any reason, then in every such case the Bank, the Trustee and the Bondholders shall be restored to their former positions and rights hereunder, respectively, and all rights, remedies, powers and duties of the Trustee shall continue as though no such proceeding had been taken. Section 1206 -Bondholders' Direction of Proceedings. Anything in this Resolution to the contrary notwithstanding, the Holders of the majority in principal amount of the Bonds then Outstanding shall have the right by an instrument or concurrent instruments in writing executed and delivered to the Trustee, to direct the method of conducting all remedial proceedings to be taken by the Trustee hereunder, provided that such direction shall not be otherwise then in accordance with law or the ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 78 provisions of this Resolution, and that the Trustee shall have the right to decline to following any such direction which in the opinion of the Trustee would be unjustly prejudicial to Bondholders not parties to such direction. Section 1207 -Limitation on Rights of Bondholders. No Holder of any Bond shall have any right to institute any suit, action, mandamus or other proceeding in equity or at law hereunder, or for the protection or enforcement of any right under this Resolution or any right under law unless such Holder shall have given to the Trustee written notice of the event of default or breach of duty on account of which such suit, action or proceeding is to be taken, and unless the Holders of not less than twenty-five per centum (25%) in principal amount of the Bonds then Outstanding shall have made written request of the Trustee after the right to exercise such powers or right of action, as the case may be, shall have occurred, and shall have afforded the Trustee a reasonable opportunity either to proceed to exercise the powers herein granted or granted under the law or to institute such action, suit or proceeding in its name and unless, also, there shall have been offered to the Trustee reasonable security and indemnity against the costs, expenses and liabilities to be incurred therein or thereby and the Trustee shall have refused or neglected to comply with such request within a reasonable time; and such notification, request and offer of indemnity are hereby declared in every such case, at the option of the Trustee, to be conditions precedent to the execution of the powers under this Resolution or for any other remedy hereunder or under law. It is understood and intended that no one or more Holders of the Bonds hereby secured shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of this Resolution, or to enforce any right hereunder or under law with respect to the Bonds or this Resolution, except in the manner herein provided, and that all proceedings at law or in equity shall be instituted, had and maintained in the manner herein provided and for the benefit of all Holders of the Outstanding Bonds. Notwithstanding the foregoing provisions of this Section or any other provisions of this Article XII, the obligation of the Bank shall be absolute and unconditional to pay the principal or Redemption Price of and interest on the Bonds to ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\R esolulionsI2005 General Obligalion Bond Resolulion.wpd Page 79 the respective Holders thereof at the respective due dates thereof, and nothing herein shall affect or impair the right of action, which is absolute and unconditional, of such Holders to enforce such payment. Section 1208 -Possession of Bonds by Trustee Not Required. All rights of action under this Resolution or under any of the Bonds, enforceable by the Trustee, may be enforced by it without the possession of any of the Bonds or the production thereof on the trial or other proceeding relative thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in its name for the benefit of all the Holders of such Bonds, subject to the provisions of this Resolution. Section 1209 -Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee or to the Holders of the Bonds 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 or in equity, or by statute. Section 1210 -No Waiver of Default. No delay or omission of the Trustee or of any Holder of the Bonds to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy given by this Resolution to the Trustee and the Holders of the Bonds, respectively, may be exercised from time to time and as often as may be deemed expedient. Section 1211 -Notice of Event of Default. The Trustee shall give to the Bondholders notice of each Event of Default hereunder known to the Trustee within ninety (90) days after knowledge of the occurrence thereof, unless such Event of 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 or Redemption Price of or interest on any of the Bonds, or in the making of any payment required to be made into the Debt Service Fund or the Reserve Fund, 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 responsible officers of the Trustee in ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 80 good faith determines that the withholding of such notice is in the interests of the Bondholders. Each such notice of Event of Default shall be given by the Trustee by mailing written notice thereof: (1) to all registered Holders of Bonds, as the names and addresses of such Holders appear upon the books for registration and transfer of Bonds as kept by the Trustee; (2) to such Bondholders as have filed their names and addresses with the Trustee for that purpose; and (3) to such other persons as is required by law. ARTICLE XIII DEFEASANCE Section 1301 -Defeasance. (A) If the Bank shall payor cause to be paid to the Holders of the Bonds, the principal and interest and Redemption Price, if any, to become due thereon, at the times and in the manner stipulated therein and in this Resolution, and also shall payor cause to be paid all other sums payable hereunder by the Bank, including any amounts payable to the United States, then the pledge of any revenues and assets hereby pledged and all other rights granted hereby shall, at the election of the Bank (evidenced by a certificate of an Authorized Officer filed with the Trustee, signifying the intention of the Bank to discharge all such indebtedness and this Resolution and any Supplemental Resolution), and notwithstanding that any Bonds shall not have been surrendered for payment, be discharged and satisfied. In such event, the Trustee shall, upon the written request of the Bank, execute and deliver to the Bank all such instruments as may be desirable to evidence such discharge and satisfaction and the Fiduciaries shall pay over or deliver to the Bank all moneys or securities held by them pursuant to this Resolution which are not required for the payment or redemption of Bonds not theretofore surrendered for such payment or redemption. (B) If funds shall have been set aside and shall be held in trust by Fiduciaries for the payment of principal, interest and Redemption Price (through deposit by the Bank offunds for such payment or redemption or otherwise) atthe maturity or upon the date upon which such Bonds have been duly called for redemption thereof, such Bonds ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) I:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 81 shall be deemed to have been paid within the meaning and with the effect expressed in subsection (A) of this Section. All Outstanding Bonds shall, prior to the maturity or redemption date thereof, be deemed to have been paid within the meaning and with the effect expressed in subsection (A) of this Section if (i) in case any of said Bonds are to be redeemed on any date prior to their maturity, the Bank shall have given to the Trustee in form satisfactory to it irrevocable instructions to publish as provided in Article IV notice of redemption on said date of such Bonds, (ii) there shall have been deposited with the Trustee either funds in an amount which shall be sufficient, or Investment Securities which are not subject to redemption prior to the dates on which amounts will be needed to make payments on the Bonds defeased and the principal of and the interest on which when due will provide moneys which, together with the moneys, if any, deposited with the Trustee at the same time, shall be sufficient in the the opinion of an Accountant delivered to the Trustee, to pay when due the principal or Redemption Price, if any, and interest due and to become due on said Bonds on any date prior to the redemption date or maturity date thereof, as the case may be, (iii) in the event said Bonds are not by their terms subjectto redemption within the next succeeding sixty (60) days, the Bank shall have given the Trustee in form satisfactory to it irrevocable instructions to mail a notice to the Holders of such Bonds that the deposit required by (ii) above has been made with the Trustee and that said Bonds are deemed to have been paid in accordance with this Section and stating such maturity or redemption date upon which moneys are to be available for the payment of the principal or Redemption Price, if any, of said Bonds and (iv) a Counsel's Opinion stating that all conditions precedent to the satisfaction and discharge of this Resolution have been complied with, the defeasance complies with the terms of this Resolution, and and the defeasance will not adversely affect the tax status of the Bonds. Neither Investment Securities or moneys deposited with the Trustee pursuant to this Section nor principal or interest payments on any such Investment Securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal or Redemption Price, if any, of and interest on said Bonds; provided that any cash received from such ALASKA MUNICIPAL BONO BANK General Obligation Bond Resolution (Amended) I:\Docs\37420001\ResolulionsI2005 General Obligation Bond Resolulion.wpd Page 82 principal or interest payments on such Investment Securities deposited with the Trustee, if not then needed for such purpose, shall, to the extent practicable, be reinvested in Investment Securities maturing at times and in amounts sufficient to pay when due the principal or Redemption Price, if any, and interest to become due on said Bonds on and prior to such redemption date or maturity date thereof, as the case may be, and interest earned from such reinvestments shall be paid over to the Bank, as received by the Trustee, free and clear of any trust, lien or pledge. (C) If, through the deposit of moneys by the Bank or otherwise, the Fiduciaries shall hold, pursuant to this Resolution, moneys sufficient to pay the principal and interest to maturity on all Outstanding Bonds or to pay, in the case of Bonds in respect of which the Bank shall have taken all action necessary to redeem prior to maturity, the Redemption Price and interest to such redemption date, then at the written request of the Bank all moneys moneys held by any Paying Agent shall be paid over to the Trustee and, together with other moneys held by it hereunder, shall be held by the Trustee for the payment or redemption of Outstanding Bonds. (0) Anything in this Resolution to the contrary notwithstanding, any moneys held by a Fiduciary in trust for the payment and discharge of any of the Bonds which remain unclaimed for one year after the date when all of the Bonds have become due and payable, either at their stated maturity dates or by call for earlier redemption, if such moneys were held by the Fiduciary at such date, or for one year after the date of deposit of such moneys if deposited with the Fiduciary after the said date when all of the Bonds became due and payable, shall be repaid by the Fiduciary to the Bank, as its absolute property and free from trust, and the Fiduciary shall thereupon be released and discharged. (E) The references in this section to "Investment Securities described in clause (1) of the definition thereof' shall include only direct and general obligations of the United States which are not-callable prior to the scheduled maturity in the related escrow deposit agreement where the Outstanding Bonds to be deemed to be paid upon ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:lDocs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 83 the deposit thereof are insured by a municipal bond insurance company licensed and authorized to issue the policy in the State. ARTICLE XIV MISCELLANEOUS Section 1401 -Preservation and Inspection of Documents. All documents received by the Trustee or any Paying Agent under the provisions of this Resolution or any Series Resolution shall be retained in its possession and shall be subject at all reasonable times to the inspection of the Bank, the Trustee or any Paying Agent and, after written request received by the Trustee at least five business days prior to the date of inspection, by any Holder of five percent in principal amount of any Series of Outstanding Bonds, and their agents and representatives, any of whom may make copies thereof. Section 1402 -Parties of Interest. Nothing in this Resolution or in any Series Resolution adopted pursuant to the provisions hereof, expressed or implied, is intended to or shall be construed to confer upon or to give to any person or party other than the Bank, Trustee, Paying Agents and the Holders of the Bonds, remedies or claims under or by reason of this Resolution or any Series Resolution or any covenants, conditions or stipulations thereof; and all covenants, stipulations, promises and agreements in this Resolution and any Series Resolution contained by or on behalf of the Bank shall be for the sole and exclusive benefit of the Bank, Trustee and Paying Agents and the Holders from time to time of the Bonds. Section 1403 -No Recourse Under Resolution or on Bonds. All covenants, stipulations, promises, agreements and obligations of the Bank contained in this Resolution shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Bank and not of any member, officer or employee of the Bank in his individual capacity, and no recourse shall be had for the payment of the principal or Redemption price of or interest on the Bonds or for any claim based thereon or on this Resolution against any member, officer or employee of the Bank or any natural person executing the Bond. ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolulionsI2005 General Obligation Bond Resolution.wpd Page 84 Section 1404 -Severability. If anyone or more of the covenants, stipulations, promises, agreements or obligations, provided in this Resolution on the part of the Bank, Trustee or any Paying Agent to be performed should be determined by a court of competent jurisdiction to be contrary to law, then such covenant or covenants, stipulation or stipulations, promise or promises, agreement or agreements, obligation or obligations shall be deemed and construed to be severable from the remaining covenants, stipulations, promises, agreements and obligations herein contained and shall in no way affect the validity of the other provisions of this Resolution. Section 1405 -Headings. Any headings preceding the texts of the several Articles and Sections hereof, and any table of contents or marginal notes appended to copies hereof, shall be solely for convenience of reference and shall not constitute a part of this Resolution, nor shall they affect its meaning, construction or effect. Section 1406 -Conflict. All resolutions or parts of resolutions or other proceedings of the Bank in conflict herewith be and the same are repealed insofar as such conflict exists. Section 1407 -Governing Law. This Resolution and the Bonds shall be construed in accordance with, and governed by, the laws of the State of Alaska. Section 1408 -Effective Date. This Resolution shall take effect immediately upon its adoption. ALASKA MUNICIPAL BOND BANK General Obligation Bond Resolution (Amended) 1:\Docs\37420001\ResolutionsI2005 General Obligation Bond Resolution.wpd Page 85 CERTIFICATE I, DEVEN J. MITCHELL, Executive Director of the Alaska Municipal Bond Bank (the "Bank"), HEREBY CERTIFY that Series Resolution No. 2011-01, adopted by the Board of Directors of the Bank on February 1, 2011, has not been amended, superseded, or repealed, but is in full force and effect as of the date hereof. IN WITNESS WHEREOF, I have hereunto set my hand this 1st day of March 2011. ~..... II; ~ • i (/I ! I /, D,' EN J. MITC ELL Executive Director I, AMBB/General Obligation Bonds, 2011 Series One Certificate of Series Resolution 1:\Docs\37421723\Certi ficate of Series Resolution 2011-01.wpd ALASKA MUNICIPAL BOND BANK RESOLUTION NO. 2011-01 A SERIES RESOLUTION AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION BONDS, 2011 SERIES ONE, OF THE ALASKA MUNICIPAL BOND BANK WHEREAS, the Board of Directors of the Alaska Municipal Bond Bank (the "Bank") by Resolution entitled "A Resolution Creating And Establishing An Issue Of Bonds Of The Alaska Municipal Bond Bank; Providing For The Issuance From Time To Time Of Said Bonds; Providing For The Payment Of Principal Of And Interest On Said Bonds; And Providing For The Rights Of The Holders Thereof," adopted July 13, 2005, as amended August 19, 2009 (the "Resolution"), has created and established an issue of Bonds of the Bank; and WHEREAS, the Resolution authorizes the issuance of said Bonds in one or more series pursuant to a Series Resolution authorizing each such series; and WHEREAS, the Board of Directors of the Bank has determined that it is necessary and required that the Bank issue at this time a Series of Bonds to be designated "Alaska Municipal Bond Bank General Obligation Bonds, 2011 Series One" (the "2011 Series One Bonds") to provide moneys to carry out the purposes of the Bank; BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE ALASKA MUNICIPAL BOND BANK AS FOLLOWS: ARTICLE I AUTHORITY AND DEFINITIONS Section 101 -Series Resolution. This Series Resolution (the "2011 Series One Resolution") is adopted in accordance with the provisions of the Resolution and pursuant to the authority contained in the Act. Section 102 -Definitions. In this 2011 Series One Resolution and with respect to the 2011 Series One Bonds: (1) Unless otherwise defined in Article I herein, all capitalized terms herein shall have the same meanings, respectively, as such terms are given in Article I of the Resolution. (2) "Bank" shall mean the Alaska Municipal Bond Bank. (3) "Beneficial Owner" shall mean the person in whose name a 2011 Series One Bond is recorded as the beneficial owner of such 2011 Series One Bond by the respective systems of Depository Trust Company and the Depository Trust Company Participants or the registered owner of the 2011 Series One Bond if the 2011 Series One Bond is not then held in book-entry form under Section 206. (4) "Bond Purchase Contract" shall mean the agreement by and between the Bank and Underwriter, providing for the purchase and sale of the 2011 Series One Bonds. (5) "Bond Year" shall mean each one-year period that ends on an anniversary of the date of issue of the 2011 Series One Bonds. (6) "Chairman" shall mean the chairman of the Board of Directors of the Alaska Municipal Bond Bank Authority. (7) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, together with all regulations applicable thereto. (8) "Continuing Disclosure Certificate" shall mean the Continuing Disclosure Certificate executed by the Bank and dated the date of issuance and delivery of the 2011 Series One Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. (9) "Depository Trust Company" shall mean The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York, and its successors and assigns. (10) "Depository Trust Company Participant" shall mean a trust company, bank, broker, dealer, clearing corporation and any other organization that is a participant of Depository Trust Company. (11) "Excess Investment Earnings" shall mean the amount of investment earnings on gross proceeds of the 2011 Series One Bonds determined by the Bank to be required to be rebated to the United States of America under the Code. (12) "Financial Advisor" shall mean Western Financial Group, LLC. (13) "Letter of Representations" shall mean the Blanket Issuer Letter of Representations dated May 2, 1995 from the Bank to Depository Trust Company and the operational arrangements referred to therein, a copy of which is attached hereto as Exhibit A. (14) "Loan Agreement" shall mean, collectively, the agreements (a) by and between the Bank and the Kodiak Island Borough, Alaska, and (b) by and between the Bank and the City and Borough of Wrangell, Alaska, each pertaining to the repayment of a Loan to the Governmental Unit as provided for herein. AMBBlGeneral Obligation Bonds, 2011 Series One Series Resolution No. 2011-01 1:\Docs\37421723\Series Resolution 2011-01.wpd Page 2 (15) "Record Date" shall mean fifteen days preceding each interest payment date with respect to the 2011 Series One Bonds. (16) "Underwriter" shall mean Piper Jaffray&Co., together with any other financial institution, if any, approved by the Bank. (17) "2011 Series One Bonds" shall mean the Bonds authorized by Article II hereof. ARTICLE II AUTHORIZATION OF 2011 SERIES ONE BONDS Section 201 -Principal Amount, Designation and Series. Pursuant to the provisions of the Resolution, a series of Bonds designated as "Alaska Municipal Bond Bank General Obligation Bonds, 2011 Series One" is hereby authorized to be issued in the aggregate principal amount of not to exceed $8,635,000. The Executive Director is hereby authorized to change the designation to allow for the sale of the 2011 Series One Bonds to be combined and sold with other Bonds authorized by a Series Resolution and approved by the Board of Directors of the Bank. Section 202 -Purposes. The purposes for which the 2011 Series One Bonds are being issued are (i) making a Loan to the Governmental Units to the extent and in the manner provided in Article III, and (ii) making a deposit in the Reserve Fund as provided in Article III. Section 203 -Date, Maturities and Interest Rates. The 2011 Series One Bonds shall be dated the date the 2011 Series One Bonds are delivered to the Underwriter. Subject to adjustment as provided for in this Section 203, the 2011 Series One Bonds shall mature, or have Sinking Fund Installments due, on the 1st day of March of each year, in the principal amounts expressed for such year, as set forth below: Maturity Date 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 AMBBlGeneral Obligation Bonds, 2011 Series One Series Resolution No. 2011-01 1:\00cs\37421723\8eries Resolution 2011-D1.wpd Principal Amount $280,000 290,000 300,000 305,000 515,000 335,000 345,000 365,000 380,000 605,000 Maturity Date 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Principal Amount $390,000 410,000 430,000 450,000 475,000 500,000 525,000 550,000 575,000 610,000 Page 3 The exact principal amount of each maturity, or the exact amount of each Sinking Fund Installment, the maturity dates, and the interest rates of the 2011 Series One Bonds shall be fixed and determined by the Chairman or the Executive Director at the time the 2011 Series One Bonds are sold pursuant to Section 210 hereof but subject to the limitations set forth in Section 201 hereof. Section 204 -Interest Payments. The 2011 Series One Bonds shall bear interest from their dated date. The first interest payment date shall be September 1,2011 (or such other date as may be fixed and determined by the Chairman or the Executive Director), thereafter, interest on the 2011 Series One Bonds shall be payable on the 1st day of March and September (or such other months as may be fixed and determined by the Chairman or the Executive Director), computed on the basis of a 360-day year composed of twelve thirty-day months. Section 205 -Denominations, Numbers and Other Designation. The 2011 Series One Bonds shall be issued in in registered form in the denomination of $5,000 or any integral multiple thereof, not exceeding the aggregate principal amount of the 2011 Series One Bonds authorized herein. The 2011 Series One Bonds shall be numbered serially with any additional designation that the Bank deems appropriate. Section 206 -Securities Depository. (1) The 2011 Series One Bonds shall be registered initially in the name of "Cede &Co.," as nominee of Depository Trust Company ("DTC"), and shall be issued initially in the form of a single bond for each maturity in the amount of such maturity. Registered ownership of the 2011 Series One 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's successor; or (iii) to any person as provided in paragraph (4) below. (2) Upon the resignation of DTC or its successor successor (or any substitute depository or its successor) from its functions as depository or a determination by the Bank that it is no longer in the best interest of Beneficial Owners to continue the system of book-entry transfers through DTC or its successors (or any substitute depository or its successor), the Bank may 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) of paragraph (1) above, the Trustee shall, upon receipt of all Outstanding 2011 Series One Bonds, together with a written request of an Authorized Officer and a supply of new 2011 Series One Bonds, authenticate a single new 2011 Series One Bond for each maturity of 2011 Series AMBB/General Obligation Bonds, 2011 Series One Series Resolution No. 2011-01 1:\Docs\37421723\Se ries Resolution 2011-01.wpd Page 4 One Bonds then Outstanding, registered in the name of such successor or such substitute depository, or its nominee, as the case may be, all as specified in such written request. (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 Bank determines that it is in the best interest of the Beneficial Owners that they be able to obtain Bond certificates, the ownership of 2011 Series One Bonds may then be transferred to any person or entity as provided in the Resolution and such 2011 Series One Bonds shall no longer be held in book-entry form. An Authorized Officer shall deliver a written request to the Trustee to issue 2011 Series One Bonds as provided in the Resolution in any authorized denomination, together with a supply of definitive Bonds. Upon receipt of all then Outstanding 2011 Series One Bonds by the Trustee, together with a written request of an Authorized Officer to the Trustee, new 2011 Series One Bonds shall be issued and authenticated in such denominations and registered in the names of such persons as are requested in such written request. (5) For so long as the 2011 Series One Bonds are held in book-entry form under this Section, the Bank and the Trustee may treat DTC (or its nominee) as the sole and exclusive registered owner of the 2011 Series One Bonds registered in its name for the purposes of payment of principal or Redemption Price of and interest on such 2011 Series One Bonds, selecting such 2011 Series One Bonds, or portions thereof to be redeemed, giving any notice permitted or required to be given to Bondholders under the Resolution, registering the transfer of such 2011 Series One Bonds and obtaining any consent or other action to be taken by Bondholders and for all other purposes whatsoever; and neither the Bank nor the Trustee shall be affected by any notice to the contrary. Neither the Bank nor the Trustee shall have any responsibility or obligation to any DTC Participant, any person claiming a beneficial ownership interest in the 2011 Series One Bonds under or through DTC or any DTC Participant, or any other person not shown on the registration books of the Trustee as being a registered owner, with respect to the accuracy of any records maintained by DTC or any DTC Participant; the payment by DTC or any Depository Trust Company Participant of any amount in respect of the principal or Redemption Price of or interest on the 2011 Series One Bonds, any notice which is permitted or required to be given to Bondholders under the Resolution, the selection by DTC or any Depository Trust Company Participant of any person to receive payment in the event of a partial redemption of the 2011 Series One Bonds, or any consent given or other action taken by DTC as Bondholder. The Trustee shall pay from money available under the Resolution all principal and Redemption Price of and interest on 2011 Series One Bonds only to or upon the order of DTC, and all such payments shall be valid and effective to fully satisfy and discharge the Bank's obligations with respect to the principal or Redemption Price of and interest on the 2011 Series One Bonds to the extent of the sum or sums so paid. Section 207 -Places and Manner of Payment. For so long as all Outstanding 2011 Series One Bonds are registered in the name of Cede & Co. or its registered assigns, payment AMBBlGeneral Obligation Bonds, 2011 Series One Series Resolution No. 2011-01 1:\Docs\37421723\Series Resolution 2011-01.wpd Page 5 of principal and interest thereon shall be made as provided in the Letter of Representations and the operational arrangements referred to therein as amended from time to time. In the event that the 2011 Series One Bonds are no longer registered in the name of Cede & Co. or its registered assigns, (i) payment of interest on the 2011 Series One Bonds will be made by check or draft mailed by first class mail to the registered owner, at the address appearing on the bond register on the Record Date of the Bank kept at the corporate trust office of the Trustee, or, upon the written request of a registered owner of at least $1,000,000 in principal amount of 2011 Series One Bonds received at least 15 days prior to an interest payment date, by wire transfer in immediately available funds to an account in the United States of America designated by such registered owner; and (ii) principal of the 2011 Series One Bonds will be payable at the corporate trust office of the Trustee upon surrender of the 2011 Series One Bonds representing such principal. Both principal of and interest on the 2011 Series One Bonds are payable in any coin or currency of the United States of America which, on the respective dates of payment thereof, shall be legal tender for the payment of public and private debts. Section 208 -Optional Redemption. The Chairman orthe Executive Director are, and each of them is, hereby authorized to determine the optional redemption provisions, if any, for the 2011 Series One Bonds and shall cause any such provisions to be included in the Bond Purchase Contract and the form of the 2011 Series One Bonds. Section 209 -Mandatory Redemption. The Chairman or the Executive Director are, and each of them is, hereby authorized to determine the mandatory redemption provisions, if any, for the 2011 Series One Bonds and shall cause any such provisions to be included in the Bond Purchase Contract and the form of the 2011 Series One Bonds. Section 210 -Sale of 2011 Series One Bonds. The 2011 Series One Bonds shall be sold at negotiated sale to the Underwriter pursuant to the terms of the Bond Purchase Contract. The Chairman or the Executive Director are, and each of them is, hereby authorized to execute the Bond Purchase Contract with the Underwriter regarding the sale of the 2011 Series One Bonds upon his approval of the sale details of the 2011 Series One Bonds, including, but not limited to, the dated date and the delivery date of the 2011 Series One Bonds, the aggregate principal amount and the principal amount of each maturity of 2011 Series One Bonds, the purchase price of the 2011 Series One Bonds, the maturity and the interest payment dates of the 2011 Series One Bonds, the redemption provisions and interest rate of each maturity of the 2011 Series One Bonds. Provided, however, the aggregate principal amount of the 2011 Series One Bonds shall not exceed Eight Million Six Hundred Thirty-Five Thousand and No/100s Dollars ($8,635,000.00), the true interest cost on the 2011 Series One Bonds shall not exceed seven percent (7%), and the Underwriter's discount shall not exceed three-quarters of one percent (.75%) of the par value of the 2011 Series One Bonds. Additionally, priorto execution of the Bond Purchase Contract, the Chairman or the Executive Director, with the assistance of the Bank's AMBBlGeneral Obligation Bonds, 2011 Selies One Selies Resolution No. 2011-01 1:\Docs\37421723\Series Resolution 2011-01.wpd Page 6 Financial Advisor, shall take into account those factors which, in their judgment, will result in the lowest true interest cost on the 2011 Series One Bonds. The authority granted to the Chairman and the Executive Director, under this Section 210, shall expire 90 days from the date of approval of this 2011 Series One Resolution. Section 211 -Official Statement. The Chairman or the Executive Director are, and each of them is, hereby authorized to approve the final form of, and the distribution to prospective purchasers and other interested persons of, the preliminary Official Statement of the Bank for the 2011 Series One Bonds in the form submitted to and part of the records of the meeting, with such changes as the Chairman or the Executive Director shall deem advisable. The Chairman and the Executive Director are hereby further authorized to approve the final form of the Official Statement. The distribution of the preliminary Official Statement and the Official Statement, as approved by the Chairman or the Executive Director, in connection with the offering of the 2011 Series One Bonds is hereby ratified, confirmed and approved. There is hereby delegated to the Chairman or the Executive Director the power to deem the preliminary Official Statement final on behalf of the Bank for purposes of Securities and Exchange Commission Rule 15c2-12(b)(1). ARTICLE III DISPOSITION OF BOND PROCEEDS Section 301 -Disposition of Proceeds For Loan Purposes. Upon the delivery of the 2011 Series One Bonds the Bank shall, in accordance with Article V of the Resolution, apply a portion of the proceeds derived from the sale of the 2011 Series One Bonds to the making of a (i) Loan to the Kodiak Island Borough, Alaska, in the principal amount not to exceed $8,000,000, and (ii) Loan to the City and Borough of Wrangell, Alaska, in the principal amount of not to exceed $225,000. Section 302 -Reserve Fund Deposit. Upon the delivery of the 2011 Series One Bonds the Bank shall deposit a portion of the proceeds derived from the sale of the 2011 Series One Bonds into the Reserve Fund, which amount, together with other available funds, if any, will be the amount necessary to make the total amount in the Reserve Fund equal to the Required Debt Service Reserve upon delivery of the 2011 Series One Bonds. Section 303 -Disposition of Remainder of Bond Proceeds. The balance of the proceeds of the sale of the 2011 Series One Bonds representing any premium received over the principal amount of the 2011 Series One Bonds after deducting the amounts to be paid for costs of issuing the 2011 Series One Bonds, amounts necessary to ensure the deposit to the Reserve Fund equals the Required Debt Service Reserve, and after deducting the AMBBlGeneral Obligation Bonds, 2011 Series One Series Resolution No. 2011-01 1:\Docs\37421723\Series Resolution 2011-01.wpd Page 7 amount allocable to the Reserve Obligations which amount shall be deposited in the Reserve Fund, shall be deposited with the Governmental Units and applied towards costs of issuance and debt service payments due and owing on their respective Municipal Bonds (as such term is defined in the Loan Agreement) or such other permitted purpose. ARTICLE IV EXECUTION AND FORM OF 2011 SERIES ONE BONDS Section 401 -Execution and Form of 2011 Series One Bonds. The 2011 Series One Bonds shall be executed in the manner set forth in Section 303 of the Resolution. Subject to the provisions of the Resolution, the 2011 Series One Bonds, and the Trustee's certificate of authentication, shall be of substantially the following form and tenor: ALASKA MUNICIPAL BOND BANK GENERAL OBLIGATION BONDS, 2011 SERIES ONE INTEREST RATE: ---% MATURITY DATE: ___________,20__ CUSIP NO: Registered Owner: CEDE &Co. Principal Amount: ________ and No/100 Dollars Alaska Municipal Bond Bank (herein called the "Bank"), a public body corporate and politic, constituted as an instrumentality of the State of Alaska, organized and existing under and pursuant to the laws of the State of Alaska, acknowledges itself indebted to, and for value received, hereby promises to pay to CEDE & CO. or registered assigns, the principal sum specified above on the Maturity Date specified above, and to pay to the registered owner hereof interest on such principal sum from the date hereof to the date of maturity of this Bond at the rate per annum specified above, payable 1,20__, and semi-annually on the 1st day of and on the 1st day of thereafter. For so long as this Bond is held in book-entry form, payment of principal and interest shall be made by wire transfer to the registered owner pursuant to written instructions furnished to The Bank of New York Mellon Trust Company, N.A., in Seattle, Washington (or its successor in interest), as Trustee under the General Bond Resolution of the Bank, adopted July 13, 2005, as amended August 19, 2009 (herein called the "Resolution"), or or its successor as Trustee (herein called the "Trustee"). In the event that this Bond is no longer held in book-entry form, (i) payment of interest will be made by check or draft mailed by first class mail to the registered owner at the address appearing on the bond register of the Bank kept by the Trustee, or, upon the written request of a registered owner of at least $1,000,000 in principal amount of 2011 Series One Bonds received at least 15 days prior to an interest payment date, by wire transfer in immediately available funds to an account in the United States of America designated by such registered owner; and (ii) principal will AMBBlGeneral Obligation Bonds, 2011 Series One Series Resolution No. 2011-01 1:\Docs\37421723\Series Resolution 2011..Q1.wpd Page 8 be payable upon presentation and surrender hereof at the corporate trust office of the Trustee. Interest shall be computed on the basis of a 360-day year composed of twelve thirty-day months. Both principal of and interest on this Bond are payable in any coin or currency of the United States of America which, on the respective dates of payment thereof, shall be legal tender for the payment of public and private debts. This Bond is a general obligation of the Bank and is one of a duly authorized issue of Bonds of the Bank designated "Alaska Municipal Bond Bank Bonds" (herein called the "Bonds"), issued and to be issued in various series under and pursuant to the Alaska Municipal Bond Bank Act, constituting Chapter 85, Title 44, of the Alaska Statutes (herein called the "Act"), and under and pursuant to the Resolution and a series resolution authorizing each such series. As provided in the Resolution, the Bonds may be issued from time to time pursuant to series resolutions in one or more series, in various principal amounts, may mature at different times, may bear interest at different rates and, subject to the provisions thereof, may otherwise vary. The aggregate principal amount of bonds which may be issued under the Resolution is not limited except as provided in the Resolution and the Act, and all Bonds issued and to be issued under said Resolution are and will be equally and ratably secured by the pledges and covenants made therein, except as otherwise expressly provided or permitted in the Resolution. This Bond is one of a series of Bonds issued in the aggregate principal amount of $ under the Resolution of the Bank and a series resolution of the Bank, adopted ,2011, and entitled: "A Series Resolution Authorizing the Issuance of General Obligation Bonds, 2011 Series One, of the Alaska Municipal Bond Bank" (said resolutions being herein collectively called the "Resolutions"). Copies of the Resolutions are on file at the office of the Bank and at the corporate trust office of the Trustee, and reference to the Resolutions and any and all supplements thereto and modifications and amendments thereof and to the Act is made for a description of the pledges and covenants securing the 2011 Series One Bonds; the nature, extent and manner of enforcement of such pledges; the rights and remedies of the registered owners of the 2011 Series One Bonds with respect thereto; and the terms and conditions upon which the Bonds are issued and may be issued thereunder; to all of the provisions of which the registered owner of this Bond, by acceptance of this Bond, consents and agrees. To the extent and in the manner permitted by the terms of the Resolutions, the provisions of the Resolutions or any resolution amendatory thereof or supplemental thereto may be modified or amended by the Bank, with the written consent of the registered owners of at least two-thirds in principal amount of the Bonds then outstanding and, in case less than all of the several series of Bonds would be affected thereby, with such consent of the registered owners of at least two-thirds in principal amount of the Bonds of each series so affected then outstanding. The 2011 Series One Bonds are subject to redemption prior to their respective scheduled maturities as set forth below. AMBBlGeneral Obligation Bonds, 2011 Series One Series Resotution No. 2011-01 I:\Docs\37421723\Series Resolution 2011-01.wpd Page 9 The 2011 Series One Bonds maturing on and after 1, 20_, are subject to redemption on or after 1, 20_, at the option of the Bank at a price of 100% of the principal amount thereof to be redeemed plus accrued interest to the date of redemption. Unless previously redeemed pursuant to the foregoing optional redemption provisions, the 2011 Series One Bonds maturing on 1, 20_ (the "Term Bonds") are subject to redemption on 1 of the following years and in the following principal amounts at 100% ofthe principal amount of the 2011 Series One Bonds to be redeemed plus accrued interest, if any, to the redemption date. Term Bonds Due-----1, 20_ Sinking Fund Requirement Notice of redemption will be mailed to owners of 2011 Series One Bonds called for redemption not less than 30 days nor more than 60 days before the redemption date. Interest on any 2011 Series One Bonds called for redemption will cease on the redemption date. This Bond is transferable, as provided in the Resolutions, only upon the books of the Bank kept for that purpose at the corporate trust office of the Trustee, by the registered owner hereof in person or by its attorney duly authorized in writing, upon the surrender of this Bond together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered owner or its attorney duly authorized in writing, and thereupon a new registered 2011 Series One Bond or Bonds in the same aggregate principal amount and of the same maturity, in authorized denominations, shall be issued to the transferee in exchange therefor as provided in the Resolutions and upon the payment of the charges, if any, therein prescribed. The 2011 Series One Bonds are issuable in the denomination of $5,000 or any integral multiple thereof, not exceeding the aggregate principal amount of 2011 Series One Bonds maturing in the year of maturity of the Bond for which the denomination of the Bond is to be specified. Subject to such conditions and upon payment of such charges, if any, 2011 Series One Bonds, upon surrender thereof at the corporate trust office of the Trustee with a written instrument of transfer satisfactory to the Trustee, duly executed by the registered owner or its attorney duly authorized in writing, may, at the option of the registered owner thereof, be exchanged for an equal aggregate principal amount of registered 2011 Series One Bonds of any other authorized denominations, of the same maturity. AMSS/General Obligation Sonds, 2011 Series One Series Resolution No. 2011-01 1:\Docs\37421723\Series Resolution 2011-01.wpd Page 10 The Bank is obligated to pay the principal of and interest on the 2011 Series One Bonds only from revenues or funds of the Bank, and the State of Alaska is not obligated to pay such principal of or interest on the 2011 Series One Bonds. Neither the faith and credit nor the taxing power of the State of Alaska is pledged to the payment of the principal of or the interest on the 2011 Series One Bonds. This Bond is fully negotiable for all purposes of the Uniform Commercial Code, and each owner of this Bond by accepting this Bond shall be conclusively considered to have agreed that this Bond is fully negotiable for those purposes. Neither a member of the Bank nor any person executing the 2011 Series One Bonds shall be liable personally on the 2011 Series One Bonds by reason of the issuance thereof.This Bond shall not be entitled to any benefit under the Resolutions or be valid or become obligatory for any purpose until this Bond shall have been authenticated by the execution by the Trustee of the Trustee's Certificate of Authentication hereon. 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 Resolutions 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 performed in due time, form and manner as required by law and that the issue of the 2011 Series One Bonds, together with all other indebtedness of the Bank, is within every debt and other limit prescribed by law. IN WITNESS WHEREOF, the Alaska Municipal Bond Bank has caused this Bond to be executed in its name by the manual or facsimile signature of its Chairman and its corporate seal (or a facsimile thereof) to be affixed, imprinted, engraved or otherwise reproduced hereon, and attested by the manual or facsimile signature of its Executive Director all as of the day of 2011. ALASKA MUNICIPAL BOND BANK [SEAL] ATTEST: Executive Director AMBBlGeneral Obligation Bonds, 2011 Series Series One Series Resolution No. 2011-01 1:\Docs\37421723\5eries Resolution 2011-01.wpd Chairman Page 11 TRUSTEE'S CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the within-mentioned Resolutions and is one of the 2011 Series One Bonds of the Alaska Municipal Bond Bank. THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee Date of Authentication: Authorized Officer ARTICLE V MISCELLANEOUS Section 501 -Paying Agent. The Bank of New York Mellon Trust Company, N.A., Seattle, Washington, or its successor, is appointed paying agent for the 2011 Series One Bonds. Section 502 -Arbitrage Rebate. Within 30 days after the end of every fifth Bond Year, and within 60 days of the date when all of the 2011 Series One Bonds have been retired (or at such other time or times as may then be required by the Code and the applicable Income Tax Regulations), the Bank shall determine the Excess Investment Earnings and pay rebate amounts due the United States of America with respect thereto, as provided in Section 148(f) of the Code and the applicable Income Tax Regulations. Section 503 -2011 Series One One Debt Service Account. There is hereby established as a special account in the Debt Service Fund the "2011 Series One Debt Service Account," for the purpose of receiving amounts in the Debt Service Fund allocable to the 2011 Series One Bonds. Such amounts and the earnings thereon shall be deposited and held, and separately accounted for, in the 2011 Series One Debt Service Account. Section 504 -Tax Exemption and General Tax Covenant. The Bank intends that interest on the 2011 Series One Bonds shall be excludable from gross income for federal income tax purposes pursuant to Section 103 and 141 through 150 of the Code, and the applicable regulations. The Bank covenants not to take any action, or knowingly omit to take any action within its control, that if taken or omitted would cause the interest on the 2011 Series One Bonds to be included in gross income, as defined in 61 of the Code, for federal income tax purposes. Section 505 -Arbitrage Covenant. The Bank shall make no use or investment of the gross proceeds of the 2011 Series One Bonds which will cause the 2011 Series One Bonds to AMBBlGeneral Obligation Bonds, 2011 Series One Series Resolution No. 2011-01 1:\Docs\37421723\8eries Resolulion 2011-01.wpd Page 12 be "arbitrage bonds" subject to federal income taxation by reason of Section 148 of the Code. The Bank hereby covenants that so long as any of the 2011 Series One Bonds are outstanding, the Bank, with respect to the gross proceeds of the 2011 Series One 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 506 -Resolution Clarification. It shall hereby be clarified that the Resolution, at Section 919, shall only apply to Bonds issued on a tax-exempt basis. Section 507 -Loan Agreement. The Chairman or the Executive Director are each hereby authorized to execute the Loan Agreement between the Bank and the herein referred to Governmental Units, in a form similar to the form submitted to and part of the records of the meeting of February 1, 2011, with such changes as the Chairman or the Executive Director shall deem advisable. Section 508 -Continuing Disclosure. The Bank hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate attached hereto as Exhibit B. Notwithstanding any other provision of this 2011 Series One Resolution, failure of the Bank to comply with the Continuing Disclosure Certificate shall not be considered a default of the Bank's obligations under this 2011 Series One Resolution, the Resolution orthe 2011 Series One Bonds; however, the Beneficial Owner of any Bond may bring an action for specific performance, to cause the Bank to comply with its obligations under this Section. Section 509 -Chairman and Executive Director. The Chairman and the Executive Director are each hereby authorized to execute all documents and to take any action necessary or desirable to carry out the provisions of this 2011 Series One Resolution and to effectuate the issuance and delivery of the 2011 Series One Bonds, including execution of the Bond Purchase Contract. The authority granted in this Section 508 to the Chairman and the Executive Director includes authorization to solicit commitments for a policy of insurance with respect to payment of the interest on and principal of the Bonds and thereafter to accept such commitment which is in the best interest of the Bank and enter into such agreement with the bond insurer as shall be in the best interests of the Bank. Section 510 -Effective Date. This 2011 Series One Resolution shall take effect immediately. AMBBIGeneral Obligation Bonds, 2011 Series One Series Resolution No. 2011-01 J:\Docs\37421723\8eries Resolution 2011-01.wpd Page 13 EXHIBIT A BLANKET ISSUER LETTER OF REPRESENTATIONS AMBBIGeneral Obligation Bonds, 2011 Series One Series Resolution No. 2011-01 1:\Docs\37421723\8eries Resolution 2011-01.wpd Page A-1 SAMPLE OFFERING DOCUMENT LANGUAGE DESCRIBING BOOK-ENTRY-ONLY ISSUANCE (Prepared by DTC-bracketed material may apply only to certain issues) 1. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the securities (the "Securities"). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for [each issue of] the Securities, [each] in the aggregate principal amount of such issue, and will be deposited with DTC. [If, however, the aggregate principal amount of [any] issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.] 2. DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust &Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org. 3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records. The AMBBIGeneral Obligalion Bonds, 2011 Series One Series Resolution No. 2011-01 1:\Docs\37421723\Series Resolution 2011-01.wpd Page A-2 ownership interest of each actual purchaser of each Security ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which mayor may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. 5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. [Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.] 6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. 7. Neither DTC nor Cede &Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). AMBBlGeneral Obligation Bonds, 2011 Series One Series Resolution No. 2011-01 1:\Docs\37421723\Series Resolution 2011-01.wpd Page A-3 8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede &Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt offunds and corresponding detail information from Issuer or Agent, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, Agent, or Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of Issuer or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to [Tender/Remarketing] Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant's interest in the Securities, on DTC's records, to [Tender/Remarketing] Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book-entry credit of tendered Securities to [Tender/Remarketing] Agent's DTC account. 10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. 11. Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC. 12. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof. AMBBlGeneral Obligation Bonds, 2011 Series One Series Resolution No. 2011-01 1:\Docs\37421723\Series Resolution 2011-01.wpd Page A-4 EXHIBIT B CONTINUING DISCLOSURE CERTIFICATE Alaska Municipal Bond Bank (the "Issuer") executes and delivers this Continuing Disclosure Certificate (the "Disclosure Certificate") in connection with the issuance of $ Alaska Municipal Bond Bank General Obligation Bonds, 2011 Series One (the "Bonds"). The Bonds are being issued under the General Bond Resolution of the Bank entitled "A Resolution Creating And Establishing An Issue Of Bonds Of The Alaska Municipal Bond Bank; Providing For The Issuance From Time To Time Of Said Bonds; Providing For The Payment Of Principal Of And Interest On Said Bonds, And Providing For The Rights OfThe Holders Thereof," adopted July 13, 2005, as amended August 19, 2009 (the "General Bond Resolution"), and Series Resolution No. 2011-01 adopted on February _, 2011 (the "Series Resolution," and together with the General Bond Resolution, the "Resolutions"). The Issuer covenants and agrees as follows: Section 1. Purpose of the Disclosure Certificate. The Issuer is executing and delivering this Disclosure Certificate for the benefit of the Beneficial Owners of the Bonds, and to assist the Participating Underwriter in complying with Securities and Exchange Commission Rule 15c2-12(b)(5). Section 2. Definitions. In addition to the definitions set forth in the Resolutions, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" means any Annual Report provided by the Issuer pursuant to, and as described in, Section 3 of this Disclosure Certificate. "Fiscal Year" means the fiscal year of the Issuer (currently the 12-month period ending June 30), as such fiscal year may be changed from time to time as required by State law. "MSRB" means the Municipal Securities Rulemaking Board. "Participating Underwriter" means any of the original underwriters of the Bonds required to comply with the Rule in connection with the offering of the Bonds. "Rule" means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended from time to time. Section 3. Provision ofAnnual Reports and Financial Statements. Commencing with its Fiscal Year ending June 30, 2011, the Issuer will provide to the MSRB, in a format as prescribed by the Rule: AMBBlGeneral Obligation Bonds, 2011 Series One Series Resolution No. 2011-01 1:\Docs\37421723\Series Resolution 2011-01.wpd Page B-1 (a) Not later than 210 days after the end of each Fiscal Year, an Annual Report for the Fiscal Year. The Annual Report shall contain or incorporate by reference: (i) annual audited financial statements of the Issuer; (ii) a statement of authorized, issued and outstanding bonded debt of the Issuer; (iii) the Reserve Fund balance and the estimated Required Debt Service Reserve under the Resolutions; and (iv) for each of the Governmental Units that has outstanding with the Issuer an amount of Bonds equal to or greater than ten percent (10%) of all Outstanding Bonds under the General Bond Resolution as of the last day of the Fiscal Year of the Issuer, statistics regarding such Governmental Units similar to those found in Appendix _ to the Official Statement. Any or all of these items may be included by specific reference to documents available to the public or the internet website of the MSRB or filed with the Securities and Exchange Commission. The Issuer shall clearly identify each such other document so incorporated by reference. The Annual Report may be submitted as a single document or as separate documents comprising a package, provided that audited financial statements may be submitted separately from the remainder of the Annual Report. (b) Not later than 120 days after the end of each Fiscal Year, the Issuer will notify each Governmental Unit, who has, or had, an amount of Bonds equal to or greater than ten percent of all Bonds Outstanding under the General Bond Resolution, of its continuing disclosure undertaking responsibility. A list of Governmental Units deemed Obligated Persons for the prior Fiscal Year will be included in the Annual Report. Section 4. Notice of Failure to Provide Information. The Issuer shall provide in a timely manner to the MSRB notice of any failure to satisfy the requirements of Section 3 of this Disclosure Certificate. Section 5. Reporting of Significant Events. (a) The Issuer shall file with the MSRB a notice of any of the following events with respect to the Bonds, within ten ((10) business days of the occurrence of such event: (1) Principal and interest payment delinquencies. (2) Unscheduled draws on debt service reserves reflecting financial difficulties. (3) Unscheduled draws on credit enhancements reflecting financial difficulties. (4) Substitution of credit or liquidity providers, or their failure to perform. AMBBlGeneral Obligation Bonds, 2011 Series One Series Resolution No. 2011-01 1:\00cs\37421723\Series Resolution 2011-01.wpd Page B-2 (5) Adverse tax opinions or events affecting the tax-exempt status of the Bonds which include (i) the issuance by the Internal Revenue Service ("IRS") of proposed or final determinations of taxability, (ii) Notices of Proposed Issues (IRS From 5701-TEB), (iii) other material notices or determinations with respect to the -Bonds, and (iv) other events affecting the tax status of the Bonds. (6) Defeasances. (7) Rating changes. (8) Tender offers. (9) Bankruptcy, insolvency, receivership or similar proceeding by the Issuer or "obligated person." (b) The Issuer shall file with the MSRB a notice of any of the following events with respect to the Bonds, within ten (10) business days of the occurrence of such event, if material: (1) Nonpayment-related defaults. (2) Modifications to rights of holders of the Bonds. (3) Bond calls, other than mandatory, scheduled redemptions not otherwise contingent on the occurrence of an event. (4) Bonds. Release, substitution or sale of property securing repayment of the (5) Other than in the normal course of business, the consummation of a merger, consolidation, or acquisition involving an "obligated person," or the sale of all or substantially all of the assets of the Issuer or "obligated person," or the entry into a definitive agreement to undertake such an action, or a termination of a definitive agreement relating to any such actions, other than in accordance with its terms. (6) Appointment of a successor or additional trustee or the change in name of the trustee for the Bonds. Section 6. Termination of Reporting Obligation. The Issuer's obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. AMBBlGeneral Obligation Bonds, 2011 Series One Series Resolution No. 2011-01 1:\Docs\37421723\Series Resolution 2011-01.wpd Page B-3 Section 7. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, provided that the amendment meets each of the following conditions: (a) The amendment is made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of the Issuer; (b) This Disclosure Certificate, as amended, would have complied with the requirements of the Rule as of the date hereof, after taking into account any amendments or interpretations of the Rule, as well as any changes in circumstances; (c) The Issuer obtains an opinion of counsel unaffiliated with the Issuer that the amendment does not materially impair the interests of the Beneficial Owners of the Bonds; and (d) The Issuer notifies and provides the MSRB with copies of the opinions and amendments. Any such amendment may be adopted without the consent of any Beneficial Owner of any of the Bonds, notwithstanding any other provision of this Disclosure Certificate or the Resolutions. The first Annual Report containing amended operating data or financial information pursuant to an amendment of this Disclosure Certificate shall explain, in narrative form, the reasons for the amendment and its effect on the type of operating data and financial information being provided. Section 8. Filing Alternative. Any filing required underthe terms ofthis Disclosure Certificate may be made solely by transmitting such filing to the Electronic Municipal Market Access as provided at http://www.emma.msrb.org, or in such other manner as may be permitted from time to time by the Securities Exchange Commission. Section 9. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate, any Beneficial Owner maytake such actions as may be necessary and appropriate, including an action to compel specific performance, to cause the Issuer to comply with its obligations under this Disclosure Certificate. No failure to comply with any provision of this Disclosure Certificate shall be deemed an Event of Default under the Resolutions, and the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action to compel specific performance. AMBBlGeneral Obligation Bonds, 2011 Series One Series Resolution No. 2011-01 1:\Docs\37421723\Series Resolution 2011-01.wpd Page 8-4 Section 10. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Trustee, the Participating Underwriter and the Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. Section 11. Prior Compliance. The Issuer is in compliance with all of its prior undertakings pursuant to the Rule. DATED this _ day of 2011.ALASKA MUNICIPAL BOND BANK DEVEN J. MITCHELL Executive Director AMBBlGeneral Obligation Bonds, 2011 Series One Series Resolution No. 2011-01 1:\Docs\37421723\8er ies Resolution 2011-01.wpd Page 8-5 * Preliminary, subject to change. PRELIMINARY OFFICIAL STATEMENT DATED FEBRUARY 3,2011 Piperjaffray® Due: March 1, as shown on inside cover $8,635,000* ALASKA MUNICIPAL BOND BANK General Obligation Bonds, 2011 Series One New Issue Book-Entry Only Dated: Date of Delivery Moody's Rating: Aa2 Fitch Rating: Applied For (See "Ratings" herein.) In the opinion ofBond Counsel, based on an analysis ofe.xisting statutes, regulations, rulings and court decisions, and assuming, among other things, compliance by the Bond Bank with its covenants relating to certain requirements in the Internal Revenue Code of 1986, as amended (the "Code''), interest on the 2011 Series One Bonds is e.xcludedfrom gross income ofowners thereoffor federal income tax purposes. Interest on the 2011 Series One Bonds is not treated as a tax preference item for purposes ofeither the individual or corporate alternative minimum tax, however, interest in the 2011 Series One Bonds is included in adjusted current earnings for purposes of computing the the federal alternative minimum tax on certain corporations. See "TAX MATTERS" herein. The 2011 Series One Bonds are subject to redemptionprim'to their stated maturity dates. See "DESCRIPTION OF THE 2011 SERIES ONE BONDS -Optional Redemption, -Mandatory Redemption." The 2011 Series One Bonds are general obligations of the Bond Bank, and the full faith and credit of the Bond Bank are pledged for the punctual payment of the principal of and interest on the 2011 Series One Bonds. The 2011 Series One Bonds are equally and ratably secured by the pledge and assignment ofall Municipal Bonds acquired by the Bond Bank under the Bond Bank's 2005 General Bond Resolution on a parity with other Bonds of the Bond Bank heretofore or hereafter issued under the 2005 General Bond Resolution. The 2011 Series One Bonds are the eighteenth series of Bonds issued under the 2005 General Obligation Bond Resolution. The 2011 Series One Bonds do not constitute an indebtedness or other liability of the State of Alaska, and the 2011 Series One Bonds do not directly, indirectly or contingently obligate the State of Alaska to levy any form of taxation or make any appropriation for the payment of the 2011 Series One Bonds. Neither the faith and credit nor the taxing power of the State of Alaska is pledged for the payment of the 2011 Series One Bonds. The Bond Bank has no taxing power. See "SECURITY FOR THE 2011 SERIES ONE BONDS." The Alaska Municipal Bond Bank (the "Bond Bank") General Obligation Bonds, 2011 Series One (the "2011 Series One Bonds") initially will be issued as fully registered bonds, in book-entry fonn only, registered in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"), which will serve as depository of the 2011 Series One Bonds. Individual purchases of the 2011 Series One Bonds will be made in principal amounts of $5,000 or integral multiples thereof within a single sub-series and maturity. Purchasers of the 2011 Series One Bonds will not receive certificates representing their beneficial ownership ownership interests in the 2011 Series One Bonds. Interest on the 2011 Series One Bonds will accrue from the date of delivery of the 2011 Series One Bonds, or from the most recent interest payment date to which interest has been paid, and is payable on each March 1 and September 1, commencing September 1, 2011. The Bank of New York Mellon Trust Company, N.A., of Seattle, Washington, as the Trustee and Paying Agent for the 2011 Series One Bonds, will make principal and interest payments to DTC. Disbursement of such payments to DTC's Participants is the responsibility of DTC. Disbursement of such payments to the Beneficial Owners is the responsibility of the DTC Participants. See "DESCRIPTION OF THE 2011 SERIES ONE BONDS" and "APPENDIX G -DTC AND BOOK-ENTRY SYSTEM." The 2011 Series One Bonds are offered when, as and if issued, subject to the approving legal opinion of Wohlforth, Johnson, Brecht, Cartledge & Brooking of Anchorage, Alaska, Bond Counsel. Certain legal matters will be passed upon for the Governmental Units by their respective bond counsel. It is expected that the 2011 Series One Bonds in definitive fonn will be issued and available by Fast Automated Securities Transfer for delivery through the facilities ofDTC in New York, New York on or about March 1,2011. $8,635,000* Alaska Municipal Bond Bank General Obligation Bonds 2011 Series One MATURITIES, AMOUNTS, INTEREST RATES, YIELDS AND CUSIP NUMBERS CUSIP CUSIP Interest Number') Interest Number') _---"D'-"u~e..:.:M~a~r;ch~l__~A~m'_"o"'_u""_nt"'s__* _~R",a",te,,----_Y~I,-,e,"·"'ld'____O""'1"-'1'-'7~9P'____ ___'D""u""'e::...:M=a"'_'rc""h'_'1'______'_A""m""_o""'u~n:.:.ts"_*_--,R.."a~t","_e Yield O1l79P 2012 $280,000 2022 $390,000 2013 290,000 2023 410,000 2014 300,000 2024 430,000 2015 305,000 2025 450,000 2016 515,000 2026 475,000 2017 335,000 2027 500,000 2018 345,000 2028 525,000 2019 365,000 2029 550,000 2020 380,000 2030 575,000 2021 605,000 2031 610,000 $_,_,__% Term Bond due March I, 20_ priced at_% CUSIP Number 01179P (1) CUSIP numbers have been assigned to the 20 II Series One Bonds by Standard & Poor's CUSIP Service Bureau, a division of the McGraw Hill Companies, Inc., and are included solely for the convenience of the owners of the 2011 Series One Bonds. The Bond Bank is not responsible for the assignment or correctness of the CUSIP numbers set forth herein. * Preliminary, subject to change. This Official Statement is furnished by the Bond Bank to provide information regarding the sale of the 2011 Series One Bonds referred to herein and may not be reproduced or be used, in whole or in part, for any other purpose. The delivery of this Official Statement does not imply that information herein is correct as of any time subsequent to the date hereof. No dealer, salesman or any other person has been authorized by the Bond Bank to give any information or to make any representation other than as contained in this Official Statement in connection with the offering described herein and, if given or made, such other information or representation must not be relied upon as having been authorized by the foregoing. This Official Statement does not constitute an offer of any securities other than those described on the cover page or an offer to sell or a solicitation of an offer to buy in any jurisdiction in which it is unlawful to make such an offer, solicitation, or sale. The information and expressions of of opinion set forth in this Official Statement have been furnished by the Bond Bank and include information from other sources that the Bond Bank believes to be reliable. Neither this Official Statement nor any statement which may have been made orally is to be construed as a contract with the owners of any ofthe 2011 Series One Bonds. The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information set forth in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. UPON ISSUANCE, THE 2011 SERIES ONE BONDS WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND WILL NOT BE LISTED ON ANY STOCK OR OTHER SECURITIES EXCHANGE. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER FEDERAL, STATE, OR OTHER GOVERNMENTAL ENTITY OR AGENCY, OTHER THAN THE BOND BANK, WILL HAVE PASSED ON THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS OFFICIAL STATEMENT OR APPROVED THE 2011 SERIES ONE BONDS FOR SALE. THE 2005 GENERAL BOND RESOLUTION WILL NOT BE QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED. The remainder of this page has intentionally been left blank. ALASKA MUNICIPAL BOND BANK 333 Willoughby Avenue, 11th Floor P.O. Box 110405 Juneau, Alaska 99811-0405 (907) 465-2388 http://www.revenue.state.ak.us/treasury/ambba/Board of Directors Mark Pfeffer -Chair Luke Welles -Vice Chair Gregory Gursey -Member Susan Bell -Member (Ted Leonard -First Delegate to Susan Bell) Bryan Butcher -Member (Jerry D. Burnett -First Delegate to Bryan Butcher) Executive Director Deven J. Mitchell Bond Counsel Wohlforth, Johnson, Brecht, Cartledge & Brooking Anchorage, Alaska Trustee The Bank ofNew York Mellon Trust Company, N.A. Seattle, Washington Financial Advisor Western Financial Group, LLC Lake Oswego, Oregon The reference above to the Bond Bank's website is contact information provided only for convenience. The reference is not a hyperlink and, by this reference, the Bond Bank's website is not incorporated into this Official Statement. TABLE OF CONTENTS Page Introduction I Purpose of the 20 I I Series One Bonds , I Authorization and Purpose 1 Sources and Uses of Funds 2 Description of the 201 1 Series One Bonds 2 General Description 2 2011 Series One Bonds 2 Optional Redemption 2 Mandatory Redemption 2 Notice of Redemption 3 Selection of 20 11 Series One Bonds for Redemption 3 Security for the 20 I I Series One Bonds 4 General 4 Pledge Effected by the 2005 General Bond Resolution 4 Municipal Bonds 5 2005 General Bond Resolution Reserve Fund 5 State Payments , 6 Pledge of the State 6 The Alaska Municipal Bond Bank 7 Organization 7 Board of Directors 7 Management 8 Future Financing Plans 8 Debt Payment Record 8 Bonds Outstanding 9 1976 General Bond Resolution 9 2005 General Bond Resolution 9 2010 Municipal Obligation Bond Resolution 9 Revenue Bond Resolutions 9 Coastal Energy Impact Program 9 Direct Loans 10 Total Bond Bank Bonds Issued and Outstanding as of February 1, 20 I 1 11 Remaining Debt Capacity After the Issuance of the 2011 Series Series One Bonds 11 Debt Service Requirements of Outstanding General Obligation Bonds and the 2011 Series One Bonds 12 Summary of the 2005 General Bond Resolution 13 2005 General Bond Resolution Constitutes Contract.. 13 Obligation of Bonds 13 Pledge 13 Power to Issue Bonds and Make Pledges 13 General 13 Waiver of Laws 14 Loan Agreement Provisions 14 Modification of Loan Agreement Terms 15 Enforcement of Municipal Bonds 15 Funds and Accounts 15 Security for Deposits 17 Payment of Bonds 17 Fees and Charges 17 Issuance of Additional Obligations Including for the Purpose of Refunding 17 Defeasance 18 Supplements and Amendments 18 Events of Default and Remedies 19 Excess Earnings 20 Litigation 20 Certain Legal Matters 21 Underwriting 21 Financial Advisor 21 Financial Statements 21 Tax Matters 21 Ratings 23 Sources of Certain Information 23 Continuing Disclosure Undertaking 23 Prior Compliance with Continuing Disclosure Undertakings Under the Rule 23 Definitions 25 Miscellaneous 27 Preliminary Official Statement 27 Official Statement 27 APPENDIX A APPENDIX B APPENDIX C APPENDIX D APPENDIX E APPENDIX F APPENDIX G -Form of Legal Opinion State Payments to Governmental Units -Government Unit Statistics Regarding Participation in the Bond Bank Summaries of Borrowers Representing 10% or More of Outstanding Principal -Financial Statements of the Alaska Municipal Bond Bank for the Year Ended June 30, 2010 -2005 General Obligation Bond Resolution -DTC and Book-Entry System OFFICIAL STATEMENT $8,635,000* ALASKA MUNICIPAL BOND BANK GENERAL OBLIGATION BONDS 2011 SERIES ONE INTRODUCTION This Official Statement is furnished by the Alaska Municipal Bond Bank (the "Bond Bank") to provide information regarding the Bond Bank in connection with the sale of its $8,635,000* General Obligation Bonds, 20 II Series One (the "20 I I Series One Bonds"). The Bond Bank was created pursuant to Alaska Statutes 44.85.005 -44.85.420, as amended (the "Act"), for the primary purpose of lending money to Governmental Units in the State of Alaska (the "State") including the purchase of Municipal Bonds issued by such Governmental Units. Certain capitalized terms used in this Official Statement, and not otherwise defined herein, are defined under "DEFINITIONS." All references herein to agreements and documents are qualified in their entirety by reference to the definitive forms thereof, and all references to the 20 I I Series One Bonds are further qualified by reference to the information with respect thereto contained in the 2005 General Obligation Bond Resolution, adopted by the Board of Directors of the Bond Bank on July 13, 2005 (the "2005 General Bond Resolution") and Resolution No. 20 I I-0 I adopted by the Board of Directors ofthe Bond Bank on February 1,201 I (the "Series Resolution," and together with the 2005 General Bond Resolution, the "Bond Resolution"). All bonds which are issued under and pursuant to the terms of the 2005 General Bond Resolution are hereafter referred to as the "Bonds." Any statements or information which include matters of opinion or estimates are represented as opinions or estimates in good faith, but no assurance can be given that the facts will materialize as so opined or estimated. Appendix D contains financial, economic and demographic summary information relating to the Governmental Units whose Municipal Bonds represent 10 percent or more of the Loan Obligations outstanding under the 2005 General Bond Resolution. PURPOSE OF THE 2011 SERIES ONE BONDS Authorization and Purpose The 20 I I Series One Bonds are being issued pursuant to the terms of the Bond Resolution, and are the eighteenth series of Bonds issued under the 2005 General Bond Resolution. The 20 I I Series One Bond proceeds are being loaned to two Governmental Units. Proceeds of the 20 I I Series One Bonds will be loaned: (a) to the Kodiak Island Borough for capital improvements to school facilities in the Borough; and (b) to the City and Borough of Wrangell for capital improvements to an elementary school playground. * Preliminary, subject to change. Sources and Uses of Funds The table below presents the sources and uses of funds related to the 2011 Series One Bonds. Sources of Funds: Par Amount of2011 Series One Bonds Original Issue Premium/(Discount) Total Sources of Funds Uses of Funds: Loan to the Kodiak Island Borough Loan to the City and Borough of Wrangell Deposit to Reserve Fund Underwriter's Discount Rounding Total Uses of Funds $8,635,000.00* $8,000,000.00 225,000.00 DESCRIPTION OF THE 2011 SERIES ONE BONDS General Description The 2011 Series One Bonds are issuable only as fully registered bonds, registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC") as securities depository for the 2011 Series One Bonds. Principal of and interest on the 2011 Series One Bonds are payable by The Bank of New York Mellon Trust Company, N.A., of Seattle, Washington, as Trustee under the 2005 General Bond Resolution, to DTC which, in turn, is obligated to disburse such principal and interest payments to its participants (the "DTC Participants") in accordance with DTC procedures. See "Appendix G DTC and Book-Entry System." 2011 Series One Bonds The 2011 Series One Bonds mature on the dates and bear interest at the rates set forth on the inside cover page of this Official Statement. The 2011 Series One Bonds are issuable in denominations of $5,000 or any integral multiple thereof within a single sub-series and maturity, are dated as of the date of delivery and bear interest from their date payable on September I, 2011, and semiannually thereafter on each March 1 and September I to their date of maturity or prior redemption, whichever may occur first. Optional Redemption The 2011 Series One Bonds maturing on or after March I, 2022 are subject to redemption in whole or in part at the option of the Bond Bank on any date on or after March I, 2021 at a price of 100% of the principal amount thereof to be redeemed plus accrued interest to the date of redemption. Each underlying borrower of proceeds of the 2011 Series One Bonds may prepay its loan on terms identical to the redemption provisions associated with the 2011 Series One Bonds. Mandatory Redemption The 2011 Series One Bonds maturing on March 1, 20_ are subject to mandatory sinking fund redemption on March 1 of the years and in the principal amounts set forth in the following table. Any such redemption shall be at a price equal to 100 percent of the principal amount to be redeemed plus accrued and unpaid interest thereon to the date fixed for redemption, but without premium. 2 * Final Maturity Notice of Redemption Date March 1,20_ March 1,20_ March 1,20_* Principal Amount $ At least 30 days, but not more than 60 days, prior to the date upon which any 2011 Series One Bonds are to be redeemed, the Trustee will mail a notice of redemption to the registered owner of any 2011 Series One Bond all or a portion of which is to be redeemed, at the owner's last address appearing on the registration books of the Bond Bank kept by the Trustee. When all of the 2011 Series One Bonds are held under the DTC book-entry system, such notice will be sent to DTC, and any notice to the beneficial owners of the 2011 Series One Bonds will be the responsibility of DTC Participants. The Bond Bank will not provide redemption notices to the beneficial owners. Selection of2011 Series One Bonds for Redemption If fewer than all of the 20 I I Series One Bonds are to be redeemed prior to maturity, the Bond Bank may select the maturity or maturities to be redeemed at the option of the Bond Bank. If, at the time notice of redemption is given the 2011 Series One Bonds are in book-entry form, then the Trustee is required to select the 2011 Series One Bonds for redemption by lot in accordance with the Letter of Representations. The 2005 General Bond Resolution provides that if less than all of the Bonds of anyone maturity of a Series are called for redemption, the Bonds to be redeemed are to be selected by lot by the Trustee or in any manner as the Trustee, in its sole discretion, may deem appropriate and fair. The initial Trustee has deemed the provisions set forth above to be appropriate and fair. However, none of the Bond Bank, the Underwriter, the initial Trustee or any successor Trustee can provide any assurance that any successor Trustee will deem the provisions set forth above to be appropriate and fair or that DTC, DTC's direct and indirect participants or any other intermediary will allocate the redemption of the 201 I Series One Bonds on such basis. See "Appendix GDTC and Book-Entry System."The remainder of this page is intentionally left blank. 3 SECURITY FOR THE 2011 SERIES ONE BONDS GeneralThe 201 I Series One Bonds constitute general obligations of the Bond Bank, and the full faith and credit of the Bond Bank are pledged to the payment of the principal of and interest on the 2011 Series One Bonds. The 2011 Series One Bonds do not constitute an indebtedness or other liability of the State of Alaska, and the 2011 Series One Bonds do not directly, indirectly or contingently obligate the State of Alaska to levy any form of taxation or make any appropriation for the payment of the 2011 Series One Bonds. Neither the faith and credit nor the taxing power of the State of Alaska is pledged for the payment of the 2011 Series One Bonds. The Bond Bank has no taxing power. The 2011 Series One Bonds are the eighteenth series of parity Bonds issued under the 2005 General Bond Resolution. As of February I, 2011, not taking into account the issuance of the 20 I I Series One Bonds, the Bond Bank will have outstanding $ I94,995,000 of general obligation bonds issued under its 1976 General Bond Resolution, $443,970,000 of Bonds issued under its 2005 General Bond Resolution and $4,765,000 under its 2010 General Bond Resolution. Moral Obligation. As additional security for payment of principal of and interest on the 201 I Series One Bonds and other Bonds issued under the 2005 General Bond Resolution, the Bond Bank has established a parity Reserve Fund. See "SECURITY FOR THE 2011 SERIES ONE BONDS 2005 General Bond Resolution Reserve Fund." The Act provides that in order to ensure the maintenance of the Reserve Fund Requirement, the Chair of the Bond Bank is annually required (before each January 30) to make and deliver to the Governor and to the State Legislature a certificate stating the amount, if any, required to restore the Reserve Fund to the amount of the Reserve Fund Requirement. Money received by the Bond Bank from the State pursuant to such certification will, to the extent such certification was occasioned by the fact that the amount in the Reserve Fund was less less than the Reserve Fund Requirement, be deposited in the Reserve Fund. The State Legislature is legally authorized, but not legally obligated, to appropriate such sums during the then current State fiscal year. This provision of the Act does not create a debt obligation on behalf ofthe State or a legally enforceable obligation ofthe State. Pledge Effected by the 2005 General Bond Resolution Pursuant to the 2005 General Bond Resolution, all Municipal Bonds, all Municipal Bonds Payments, the investments thereof and the proceeds of such investments, and all funds and accounts established by the 2005 General Bond Resolution, are pledged and assigned to the Trustee, equally and ratably, to secure the payment of the principal of, redemption premium, if any, and interest on all Bonds outstanding under the 2005 General Bond Resolution, subject only to the provisions of the 2005 General Bond Resolution permitting the application thereof for the purposes and on the terms and conditions specified in the 2005 General Bond Resolution. The Act and the 2005 General Bond Resolution provide among other things that (i) any pledge made in respect of the Bonds will be valid and binding from the time the pledge is made, (ii) the Municipal Bonds, the Municipal Bonds Payments and all other money and securities so pledged and thereafter received by the Bond Bank immediately will be subject to the lien of such pledge without any further act, and (iii) the lien of any such pledge will be valid and binding against all parties having any claims of any kind in tort, contract or otherwise against the Bond Bank irrespective of whether the parties have notice. 4 Municipal Bonds Under the provisions of the Act and the 2005 General Bond Resolution, the Bond Bank can purchase Municipal Bonds from any Governmental Unit. The 2005 General Bond Resolution defines Municipal Bonds as "general obligation bonds, revenue bonds, notes or other evidences of debt issued by any Governmental Unit as now or hereafter defined in the Act which have heretofore been or will hereafter be acquired by the Bond Bank as evidence ofa Loan to the Governmental Unit pursuant to the Act." For each issue of Municipal Bonds that the Bond Bank purchases, the Bond Bank will obtain a bond counsel's opinion stating that (a) such Municipal Bonds are valid debt obligations of such Governmental Unit as required by the Act and (b) a Loan Agreement has been duly authorized and executed between the Bond Bank and the Governmental Unit that constitutes a valid and binding obligation of the Governmental Unit. Each Loan Agreement obligates a Governmental Unit to (a) make interest payments on its Municipal Bond sufficient in amount and at such times to provide the Bond Bank funds to meet interest payments on its Loan Obligations as they become due; and (b) make principal payments on its Municipal Bond sufficient in amount and at such times to provide the Bond Bank funds to meet principal payments on its Loan Obligations as they become due. Pursuant to the Loan Agreement, the Governmental Unit may be required to pay fees and charges to the Bond Bank to meet the Governmental Unit's allocable portion of certain expenses. Each Loan Agreement also contains restrictions on the sale or redemption of Municipal Bonds. 2005 General Bond Resolution Reserve Fund The 2005 General Bond Resolution established the Reserve Fund to be held by the Trustee and maintained at an amount equal to the Reserve Fund Requirement. The Reserve Fund Requirement is equal to the least of the following: (i) 10% of the initial principal amount of each Series of Bonds then Outstanding; (ii) Maximum Annual Debt Service with respect to all Bonds Outstanding; (iii) 125% of Average Annual Debt Service on all Bonds Outstanding; or (iv) such lower amount as may be required by law. See "DEFINITIONS Required Debt Service Reserve." The Reserve Fund has been funded with Bond proceeds and cash deposits from the Bond Bank. The Reserve Fund does not contain any surety policies or other forms of liquidity facility. The Reserve Fund Requirement may, however, be satisfied entirely, or in part, by a letter of credit, line of credit, credit facility, surety bond, bond insurance, or any other instrument or arrangement obtained in connection with the issuance of a Series of Bonds. As of February 1, 2011, the Reserve Fund value was approximately $30.86 million (unaudited), an amount sufficient to satisfY the Reserve Fund Requirement. As of that date, approximately 32% of the assets in the Reserve Fund were funded from cash deposits by the Bond Bank. On or before December 31 of each year, and subject to the requirements of the 2005 General Bond Resolution, the Trustee will transfer from the Reserve Fund any amounts remaining in the Reserve Fund derived from income or interest earned and profits realized by the Reserve Fund due to investments thereof to the Operating Fund, but only to the extent that there remains after such transfer an amount in the Reserve Fund equal to the Required Debt Service Reserve. See "SUMMARY OF THE 2005 GENERAL BOND RESOLUTION Funds and Accounts -Reserve Fund." The Bond Bank is required to deliver a statement to the Governor and the State Legislature annually, before January 30, stating the amount, if any, necessary to restore the Reserve Fund to the Required Debt Service Reserve. The State Legislature may, but is under no legal obligation to, appropriate money sufficient to restore the Reserve Fund to the Required Debt Service Reserve. The Bond Bank has never reported a deficiency in any of the reserve funds held by the Bond Bank. 5 The State of Alaska's fiscal year 2011 operating budget includes an appropriation to replenish the Reserve Fund in the event of a default by a Government Unit. The Bond Bank has obligated itself to seek this appropriation on an annual basis under the terms of the 2005 General Bond Resolution. The Bond Bank cannot predict whether the State will, in the future, include such appropriation in the State's operating budget. Custodian Account. Money not held by the Trustee in the Reserve Fund or in reserves for bonds issued under other bond resolutions is maintained by the Bond Bank in an account herein referred to as the Custodian Account (the "Custodian Account"). The Custodian Account contains direct State appropriations and investment earnings. As of June 30, 20 I0, the Custodian Account market value balance (unaudited) was $5,674,117. The statutory earnings transfer generated by activity in fiscal year 2009 and by statute due to the State's general fund in fiscal year 2010 was $819,843. However, the $819,843 was appropriated back to the Bond Bank in the State's fiscal year 2010 operating budget. This marked the second time since 1986 that the State has appropriated funds to the Bond Bank. The entire Custodian Account balance is available for appropriation, at any time, by the State Legislature. State Payments The Act provides that any department or agency of the State, after notice from the Bond Bank that a Governmental Unit is in default on the payment of the principal of or interest on its Municipal Bonds then held or owned by the Bond Bank, will withhold the payment of money held by it and payable to such Governmental Unit and pay over such money to the Bond Bank for the purpose of paying principal of and interest on the bonds of the Bond Bank. State payments to Governmental Units include payments through the School Debt Reimbursement Program and Education Support Funding through the Department of Education and Early Development; and community jail funding through the Department of Corrections. A table appears in Appendix B that presents the amount of State payments to communities that have borrowed from the Bond Bank as well as the maximum annual loan payments and associated estimated coverage provided by those State payments. There is no guarantee that State payments will continue or remain at the current levels. The payment and amount of such State payments is uncertain, and Legislative authorization for such payments is subject to appropriation and amendment or repeal. See "APPENDIX B -STATE PAYMENTS TO GOVERNMENTAL UNITS." The Bond Bank has never implemented the State payment intercept remedy. Pledge of the State Pursuant to the Act, the State has pledged and agreed with the holders of the Bonds that it will not limit or restrict the rights vested in the Bond Bank by the Act to, among other things, purchase, hold and dispose of Municipal Bonds and fulfill the terms of an agreement (including the 2005 General Bond Resolution) made by the Bond Bank with such holders, or in any way impair the rights or remedies of such holders until the Bonds, including interest on the Bonds and interest on unpaid installments of interest and all costs and expenses in connection with an action or proceeding by or on behalf of such holders, are fully met, paid and discharged. The remainder of this page is intentionally left blank. 6 THE ALASKA MUNICIPAL BOND BANK Organization The powers of the Bond Bank are vested in the Directors. The membership of the Bond Bank consists of five Directors: the Commissioners of the Department of Revenue and the Department of Commerce, Community and Economic Development of the State and three Directors appointed by the Governor. The three appointees serve four-year staggered terms and must be qualified voting residents of the State. The Commissioners of the Department of Revenue and the Department of Commerce, Community and Economic Development may appoint delegates to the Bond Bank Board of Directors to serve in their absence. The Directors elect one of their members as chair and one of their members as vice-chair and also elect a secretary and treasurer who need not be Directors. Action may be taken and motions and resolutions adopted by the Bond Bank at any meeting by the affirmative vote of at least three Directors. The Directors appoint an Executive Director to manage the business of the Bond Bank. Bank. Board of Directors The Bond Bank's Board of Directors includes members listed below. Mark Pfeffer -Chair. Term expires July 15,2012. Mr. Pfeffer was appointed to the Board on October 10, 200 I. Mr. Pfeffer is a registered architect who owns an architectural practice in Anchorage, Alaska. He is active in the development, design and management of commercial real estate projects, many of which include public/private partnerships. He is a partner in the firms Koonce Pfeffer Bettis, Inc. and Venture Development Group, LLC. Mr. Pfeffer received a Bachelor of Architecture Degree from the University of Nebraska in 1980. Luke Welles -Vice-Chair. Term expires July 15,2011. Mr. Welles was appointed to the Board on May 21, 2008. Mr. Welles is Chief Financial Officer of LifeMed Alaska, LLC, which provide medivac services in Alaska. Prior to his current job, Mr. Welles was the Chief Financial Officer for the Yukon Kuskokwim Healthcare Corporation which administers healthcare in 52 rural communities including a hospital located in Bethel, Alaska. He has management experience in healthcare, civil construction and commercial real estate. Over the past 15 years he has served on several economic development commissions in the State, as a city council member in Homer, Alaska and multiple boards. Mr. Welles received a Bachelor of Arts Degree in Foreign Service and International Business from Baylor University in 1989. GregOly Gursey -Member. Term expires July 15,2014. Mr. Gursey was appointed to the Board on June 22, 2009. Mr. Gursey became President of Benefit Brokers, Inc. in 200 I, after working as Vice President of Investments for Wedbush Morgan Securities for II years. Mr. Gursey also serves as a FINRA industry arbitrator in both civil and industry arbitration cases. After graduating from the University of Alaska Anchorage with a degree in finance, Mr. Gursey became involved with the University of Alaska Foundation. He served as the first Chairman of the UAA College of Fellows, served as a Trustee to the UA Foundation, and was a member of the Investment Committee to the UA Foundation. Mr. Gursey recently completed appointments to both the State of Alaska Dental Examiner's Board and the U.S Treasury Department's Taxpayer Advocacy Panel. He served on the Investment Commission for the Municipality of Anchorage, and has served on several local boards. Ted Leonard -Member. Mr. Leonard is the first delegate for Susan Bell, Commissioner of the Department of Commerce, Community and Economic Development. Mr. Leonard was appointed Executive Director of the Alaska Industrial Development and Export Authority (AIDEA) on May 19, 2008. He was most recently the Deputy Commissioner of the Department of Commerce, Community and Economic Development. In the Deputy Commissioner capacity, he oversaw the regulatory divisions of the department which included the Division of Insurance, the Division of Banking and Securities, and the Division of Corporations, Business and 7 Professional Licensing. He served as the Commissioner's designee on the boards of the Alaska Housing Finance Corporation, Alaska Aerospace Development Corporation, and the Alaska Community Service Commission. Mr. Leonard has worked for the last 19 years in both the government and private sector in the areas of finance and accounting in Alaska including the Mat-Su and Lower Kuskokwim School Districts as wel1 as the City of Dillingham. He also served as the Director of Finance and Administrative Services for the City of WasiIIa. He received his undergraduate degree from the Col1ege of Idaho and a Masters of Management from WiIIamette University. He is a Certified Management Accountant and Senior Professional in Human Resources. Jerry Burnett -Member. Deputy Commissioner of the Department of Revenue. Jerry Burnett is the first delegate for Bryan Butcher, Commissioner of the Department of Revenue. Mr. Burnett was appointed to this position in August 2008 after having served as the Administrative Services Director and Legislative Liaison for the Department of Revenue for the previous four years. Other state service includes two years as Administrative Services Director at the Department of Corrections and 12 years as Finance Committee and Budget and Audit Committee staff to the Alaska Legislature. From 1983 to 2002 Mr. Burnett was an adjunct professor of Business at the University of Alaska Southeast and during this time also worked as a Real Estate Broker and Life and Health Insurance Agent. He has a Master of Business Administration and a Master of Public Administration from the University of Alaska, and a Bachelor of Science Degree in Occupational Safety and Health from Central Washington University. Management Deven J. Mitchel1, who also serves as State Debt Manager and Investment Officer in the Department of Revenue -Division of Treasury, was appointed Executive Director of the Bond Bank in 1999. Mr. Mitchel1 has worked for the State Department of Revenue since 1992. He previously held several positions in Alaska financial institutions. Mr. Mitchel1 holds a Bachelor of Science Degree in Business Administration from Northern Arizona University. Rather than employ staff, the Bond Bank contracts in the private sector for a wide range of professional services. The Executive Director coordinates the activities of these professionals, which include bond counsel, financial advisor, accountants, auditors, fund trustees, bond trustees and investment managers. Future Financing Plans The Bond Bank anticipates issuing additional bonds pursuant to its 2005 General Bond Resolution or other bond resolutions within the next 12 months. The principal amount of such additional bonds depends on the number and size of the applications for Bond Bank financing from Governmental Units. The Bond Bank may not issue revenue bonds in excess of $75 mil1ion during any fiscal year without State Legislature approval. Revenue refunding bonds are not included in the $75 mil1ion fiscal year limitation. No revenue bonds have been issued or are anticipated to be issued in fiscal year 20 II. The total amount of Bond Bank bonds and notes outstanding at anyone time may not exceed $1 billion. As of February I, 20 II, the total principal amount of the Bond Bank's bonds and notes outstanding, not including the 20 II Series One Bonds, was $705,982,834. Debt Payment Record The Bond Bank has always made principal and interest payments on its general obligation and revenue bonds when due. No deficiencies have arisen in any Bond Bank debt service fund or reserve fund, nor has there been a need to exercise the provision requiring that State payments to Governmental Units be paid to the Bond Bank. 8 BONDS OUTSTANDING Under the provisions of the Act, the Bond Bank can issue additional series of Bonds under its 2005 General Bond Resolution or issue bonds under other resolutions that the Bond Bank may choose to adopt. The Bond Bank currently has, or is expected to have, bonds outstanding under the following resolutions: 1976 General Bond Resolution As of February I, 20 II, the Bond Bank has issued $721,985,000 of general obligation bonds under the 1976 General Bond Resolution, $194,995,000 of which remain outstanding. 2005 General Bond Resolution The 2011 Series One Bonds are the eighteenth issue of Bonds under the 2005 General Bond Resolution. As of February 1, 2011, the Bond Bank has issued $468,600,000 of general obligation bonds under the 2005 General Bond Resolution (not including the principal amount of the 2011 Series One Bonds), $443,970,000 of which remains outstanding. 2010 Municipal Obligation Bond Resolution On November 2, 2010, the Bond Bank's Board of Directors approved the 2010 Municipal Obligation Bond Resolution ("2010 Resolution"). Bonds issued pursuant to the terms of the 2010 Resolution are general obligation bonds, equally and ratably secured by a pledge and assignment of all obligations acquired by the Bond Bank under the 2010 Resolution. As of February 1, 2011, the Bond Bank has issued $4,765,000 of general obligation bonds under the 2010 General Bond Resolution, $4,765,000 of which remains outstanding. Revenue Bond Resolutions The Authority (with respect to the issuance of revenue bonds the Bond Bank is referred to as the Authority) has issued revenue bonds under stand-alone revenue bond resolutions. The proceeds of these revenue bonds are applied toward the purchase of revenue bonds issued by municipal borrowers. A list of the outstanding revenue bond resolutions, amount of bonds outstanding and obligated municipal borrowers appears in the table titled "TOTAL BOND BANK BONDS ISSUED AND OUTSTANDING AS OF FEBRUARY 1,2011" herein. Coastal Energy Impact Program The Bond Bank issued bonds bonds to provide loans to local governments that qualified for aid under the Coastal Energy Impact Program ("CEIP"). CEIP is a federal program designed to provide financial assistance to coastal states and municipalities facing impacts from offshore oil development. The United States Department of Commerce, National Oceanic and Atmospheric Administration ("NOAA") and the Bond Bank entered into an agreement whereby the Bond Bank was the direct lending agency for the CEIP in the State, with $50 million available to make loans to local governments or to establish reserves for loans to local governments. The Bond Bank issued CEIP bonds, the proceeds of which were used to purchase bonds issued by the Kenai Peninsula Borough, the City of Seward, the City ofNome and the City ofSt. Paul. The total amount ofCEIP bonds outstanding as of June 30, 2010, under the Coastal Energy Impact Loan Program was $10,872,834, consisting of loans to the City ofSt. Paul and the City ofNome. City ofSt. Paul. The Bond Bank issued its $$6,562,878 1983 Series A Coastal Energy Bonds to fund a loan to the City of St. Paul to construct a new bulk fuel farm. The City of St. Paul failed to pay the four annual payments due on May 31, 1997, 1998, 1999 and 2000. The City ofSt. Paul and NOAA restructured the City ofSt. Paul's loan 9 effective December 14, 2000. The City of St. Paul made timely payments on the loan until 2005, when it became delinquent in meeting its CEIP loan obligation. On February 19, 2010, NOAA officials agreed to repayment assistance in the form of a moratorium on interest accrued and forbearance on further loan payments, retroactive to April 18, 2005 and continuing until March 18, 2015. City ofNome. In 1985, the City of Nome, NOAA and the Bond Bank entered into a tripartite agreement which provided the City of Nome with $5 million in CEIP financing to assist in the construction of a $29 million causeway associated with the development of oil and gas resources in Norton Sound near Nome. Under terms of the agreement, the City of Nome would repay the obligation with revenues generated by causeway tariffs resulting from the oil and gas development. The CEIP contained provisions for the forgiveness of loans if expected development did not occur. In 1994, NOAA, the City of Nome and the Bond Bank agreed to a 10-year moratorium on principal and interest payments, with no further accrual of interest during the suspension period. No renewed interest in oil and gas exploration or development has resulted despite repeated leasing opportunities offered by the Federal Minerals Management Service. The moratorium ended in August 2004. As of January 29, 2009, the City of Nome, the Bond Bank and NOAA entered into an amendment of the tripartite agreement under which the City of Nome will repay the loan to NOAA in semi-annual installments over 30 years. Bonds issued for the CEIP are not secured by a pledge of any amounts held by or payable to the Bond Bank under the 2005 General Bond Resolution, including the Reserve Fund, nor are they secured directly or indirectly by any reserve account created under the Act. Direct Loans The Bond Bank has purchased certain bond anticipation notes and defeased certain Bond Bank bonds with money from the Custodian Account while retaining underlying communities' bonds. As of February 1, 2011, the Bond Bank holds the principal amount of $290,000 of City and Borough of Yakutat Electric Utility Revenue Bonds in its financial portfolio. It also holds $2,140,664 of City of Galena Electric Utility Revenue Bonds and $232,531 of City of Galena appropriation obligations in its financial portfolio. 10 TOTAL BOND BANK BONDS ISSUED AND OUTSTANDING AS OF FEBRUARY 1,2011 Original Amount Amount Issued Outstanding I. Total 2005 General Resolution G.O. Bonds(J) $477,235,000(1) $452,605,000(1) II. Total 1976 General Resolution G.O. Bonds 72 1,985,000 194,995,000 III. Total 2010 Municipal Obligation Resolution G.O. Bonds $4,765,000 $4,765,000 IV. Revenue Bonds Municipal Borrower 2000B Resolution City of Seward 3,000,000 140,000 2001A&B Resolution Ketchikan Gateway Borough 4,250,000 2,505,000 2002 Resolution City of Ketchikan 6,250,000 2,930,000 2003B Resolution City of Valdez 19,000,000 15,435,000 2004A Resolution City & Borough ofJuneau 28,845,000 26,165,000 2004B Resolution Municipality of Anchorage 5,365,000 4,745,000 V. Coastal Energy Impact Loan Program 35,456,046 10,872,834 REMAINING DEBT CAPACITY AFTER THE ISSUANCE OF THE 2011 SERIES ONE BONDS Debt Limit (Section 44.85.180 ofthe Act) Less Outstanding Bonds General Obligation Bonds 1976 General Resolution 2010 Municipal Obligation Bond Resolution 2005 General Resolution Revenue Bonds Coastal Energy Loan Program Total Outstanding Debt Remaining Debt Capacity $194,995,000 4,765,000 452,605,000(1) $1,000,000,000(2) 652,365,000(1) 51,380,000 10,872,834 $714,617,834(1) $285,382,166(1) (1) Includes the 2011 Series One Bonds; preliminary, subject to change. (2) The limit applies to all outstanding bonds or notes issued by the Bond Bank. 11 DEBT SERVICE REQUIREMENTS OF OUTSTANDING GENERAL OBLIGATION BONDS AND THE 2011 SERIES ONE BONDS(I) (Fiscal Years Ending June 30) Fiscal Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 Existing Debt Service $30,626,346 40,963,743 41,781,662 40,113,635 39,221,944 37,027,112 36,718,498 38,300,323 36,206,247 34,175,466 33,316,592 30,625,289 31,866,599 30,762,782 29,474,420 27,529,965 26,373,646 27,490,153 22,832,262 17,402,477 16,429,392 10,156,163 10,133,580 7,407,428 5,493,148 7,186,293 2,842,114 2,802,235 1,374,228 $590,396,047 2011 Series One Principal* $280,000 290,000 300,000 305,000 515,000 335,000 345,000 365,000 380,000 605,000 390,000 410,000 430,000 450,000 475,000 500,000 525,000 550,000 575,000 610,000 $8,635,000* 2011 Series One Interest* Total Debt Service* (1) Totals may not foot due to rounding. The 2011 Series One Bonds are the eighteenth Series of Bonds issued under the 2005 General Bond Resolution. * Preliminary, subject to change. 12 SUMMARY OF THE 2005 GENERAL BOND RESOLUTION The following is a summary of certain provisions of the 2005 General Bond Resolution, to which reference is made for a complete statement of the provisions or contents of the document. Words and terms used in this summary are defined in the above-mentioned document and will have the same meanings herein as contained in that document, except as defined in this Official Statement. 2005 General Bond Resolution Constitutes Contract The 2005 General Bond Resolution constitutes a contract between the Bond Bank and the owners of the Bonds, and the pledges made in the 2005 General Bond Resolution and the covenants and agreements therein set forth to be performed by the Bond Bank will be for the equal and proportionate benefit, protection and security of the holders of any and all of the Bonds, all of which will be of equal rank without preference, priority or distinction. Obligation of Bonds The Bonds are direct and general obligations of the Bond Bank, and the full faith faith and credit of the Bond Bank are pledged for the payment of the principal or redemption price of, interest on and sinking fund installments for, the Bonds. The State will not be liable for payment on the Bonds, and the Bonds will not be a debt or liability, or constitute a pledge or loan of the faith and credit of the State. Pledge The Municipal Bonds and the Municipal Bonds Payments, the investments thereof and the proceeds of such investments, if any, and all funds and accounts established by the 2005 General Bond Resolution to be held by the Trustee are pledged and assigned for the payment of the principal of, redemption price of, interest on, and sinking fund installments for, the Bonds in accordance with the terms and provisions of the 2005 General Bond Resolution, subject only to the provisions of the 2005 General Bond Resolution permitting the application thereof for the purposes and on the terms and conditions set forth in the 2005 General Bond Resolution. The Municipal Bonds and the Municipal Bonds Payments and all other money and securities pledged pursuant to the 2005 General Bond Resolution immediately will be subject to the lien of such pledge without any further act, and such lien will be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Bond Bank, regardless of whether such parties have notice thereof. Power to Issue Bonds and Make Pledges The Bond Bank covenants that it is duly authorized by law to issue the Bonds and to pledge the Municipal Bonds Payments, the Municipal Bonds and other money, securities, funds and property purported to be pledged by the 2005 General Bond Resolution which will be free and clear of any pledge, lien, charge or encumbrance thereon or with respect thereto prior to, or of equal rank with, the pledge created by the 2005 General Bond Resolution, except for the liens in favor of the Trustee and Paying Agent as provided in the 2005 General Bond Resolution. The Bond Bank will at all times, to the extent permitted by law, defend, preserve and protect the pledge of the Municipal Bonds Payments, the Municipal Bonds and other money, securities, funds and property pledged under the 2005 General Bond Resolution and all the rights of the Bondholders under the 2005 General Bond Resolution against all claims and demands of all persons whomsoever. GeneralThe Bond Bank will do and perform or cause to be done and performed all acts and things required to be done or performed by or on behalf of the Bond Bank under law and the 2005 General Bond Resolution in accordance with the terms thereof. 13 The Bond Bank pledges and agrees that it will not cause the State to limit or alter the rights vested by the Act in the Bond Bank to fulfill the terms of any agreements made with Bondholders, or in any way impair the rights and remedies of such Bondholders, until the Bonds, together with the interest thereon, with interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceeding by or on behalf of such holders, are fully met and discharged. Waiver of Laws The Bond Bank will not at any time insist upon or plead in any manner whatsoever, or claim or take the benefit or advantage of any stay or extension of law now or at any time hereafter in force which may affect the covenants and agreements contained in the 2005 General Bond Resolution or in any Series Resolution or in the Bonds, and all benefit or advantage of any such law or laws is hereby expressly waived by the Bond Bank. Loan Agreement Provisions No loan will be made and no Bonds will be issued for the purpose of providing funds with which to make a loan, unless the Loan Agreement under which such loan is to be made will comply with, but not limited to, the following: (a) The Governmental Unit which is a party to such Loan Agreement must be a Governmental Unit as defined by the 2005 General Bond Resolution, and the Loan Agreement must be executed in accordance with existing laws. (b) The Governmental Unit, prior to or simultaneously with the issuance of Bonds, will issue Municipal Bonds which are valid debt obligations of the Governmental Unit as required by the Act. (c) The Municipal Bonds Payments to be made by the Governmental Unit under such Loan Agreement will be not less than the interest and principal payments the Bond Bank is required to make on the Loan Obligations and will be scheduled by the Bond Bank in such manner and at such times as to provide funds sufficient to pay principal and interest on the Loan Obligations as the same become due. (d) The Governmental Unit will be obligated to pay Fees and Charges to the Bond Bank at the times and in the amounts which will enable the Bond Bank to comply with the provisions of the 2005 General Bond Resolution. (e) The Governmental Unit will agree that in the event the Municipal Bonds Payments are not paid by it to the Bond Bank on or before the times specified in the Loan Agreement, any money payable to the Governmental Unit by any department or agency of the State will be withheld from such Governmental Unit and paid over directly to the Trustee acting under the 2005 General Bond Resolution. (f) The Bond Bank will not sell, and the Governmental Unit will not redeem prior to maturity, any of the Municipal Bonds with respect to which the Loan is made in an amount greater than the Outstanding Bonds issued with respect to such Loans which are then redeemable, and any such sale or redemption of such Municipal Bond will be in an amount not less than the aggregate of (i) the principal amount of the Loan Obligations to be redeemed, (ii) the interest to accrue accrue on the Loan Obligations so to be redeemed to the next redemption 14 date, (iii) the applicable redemption premium, and (iv) the costs and expenses of the Bond Bank in effecting the redemption of the Loan Obligations. (g) The Government Unit must give the Bond Bank at least fifty days notice of its intent to redeem its Municipal Bonds. Modification of Loan Agreement Terms The Bond Bank will not consent to the modification of, or modifY, the rates of interest of, or the amount or time of payment of any installment of principal of or interest on, any Municipal Bonds evidencing a Loan, or the amount or time of payment of any Fees and Charges payable with respect to such Loan, or the security for or any terms or provisions of such Loan or the Municipal Bonds evidencing the same, in a manner which adversely affects or diminishes the rights of the Bondholders. Enforcement of Municipal Bonds The Bond Bank wi11 diligently enforce, and take all reasonable steps, actions and proceedings necessary for the enforcement of, all terms, covenants and conditions of all Loan Agreements and the Municipal Bonds, including the prompt collection, and the giving of notice to the Commissioner of Revenue, Commissioner of Commerce, Community and Economic Development and the Commissioner of Administration and any other department or agency of the State which is custodian of any money payable to the Governmental Unit of any failure or default of the Governmental Unit in the payment of its Municipal Bonds Payments and will promptly transfer any such money, upon receipt thereof, to the Trustee and the Trustee wi11 deposit any such money in the Principal Account and Interest Account in place of said unpaid Municipal Bonds Payments or in the event deficiencies in said Accounts created by such default will have been made up by the Reserve Fund, into the Reserve Fund to the extent of such deficiencies. Funds and Accounts The 2005 General Bond Resolution established a Debt Service Fund, consisting of an Interest Account, a Principal Account and a Redemption Account; a Reserve Fund, a Rebate Fund, a separate sub-account for each Series of Bonds; and an Operating Fund. The Debt Service Fund, the Rebate Fund and the Reserve Fund are held by the Trustee. The Operating Fund is held by the Bond Bank. Debt Service Fund. The Trustee will deposit Municipal Bonds Interest Payments and any other money available for the payment of interest in the Interest Account upon receipt thereof. The Trustee will, on or before each interest payment date, payout of the Interest Account the amounts required for the payment of the interest becoming due on each series of Bonds on such interest payment date. The Trustee will deposit Municipal Bonds Principal Payments and any other money available for the payment of principal in the Principal Account upon receipt thereof. The Trustee wi11, on or before each principal payment date or Sinking Fund Installment date, payout of the Principal Account the amounts required for the payment of the principal or Sinking Fund Installment due on each series of Bonds on such date. The Trustee establishes in the Redemption Account a separate sub-account for each Series of Bonds. Any money deposited into the Redemption Account from any source will be applied to the purchase or redemption of Bonds. Any money deposited into the Redemption Account from the Reserve Fund because of a reduction in the Required Debt Service Reserve will be applied to the purchase or redemption of Reserve Fund Obligations. Reserve Fund. Monthly, the Trustee will set aside from amounts in the Reserve Fund derived from investment earnings and profits realized by the Reserve Fund due to investments thereof, an amount which, when added to the amounts theretofore set aside for such purpose and not paid into the Interest Account, will on such 15 date be equal to the unpaid interest on the Reserve Fund Obligations accrued and to accrue to the last day of such month. On or before each principal payment date and Sinking Fund Installment payment date of Reserve Fund Obligations, the Trustee will withdraw from amounts in the Reserve Fund and deposit in the Principal Account an amount which, when added to the amount then on deposit in the Principal Account and derived from sources other than Municipal Bonds Payments, will be equal to the Principal Installment of the Reserve Fund Obligations falling due on such date. On or before December 31 of each year, after satisfYing the deposit requirements set forth above, the Trustee will withdraw from the Reserve Fund any amount remaining therein derived from investment earnings or profits due to investments thereof, and pay over said amount to the Bond Bank for deposit in the Operating Fund, but only to the extent that there remains after such withdrawal an amount in the Reserve Fund at least equal to the Reserve Fund Requirement. The Bond Bank will pay into the Reserve Fund (a) money made available by the State and paid by the State for the purpose of the Alaska Municipal Bond Bank Reserve Fund created by the Act in the amount provided by a Series Resolution; (b) all money paid to the Bond Bank pursuant to the Act for the purpose of restoring the Reserve Fund to the amount of the Reserve Fund Requirement; (c) such portion of the proceeds of sale of Bonds, if any, as will be provided by any Series Resolution; (d) Credit Enhancement; and (e) any other money which may be made available to the Bond Bank for the purposes of the Reserve Fund from any other source or sources. The Reserve Fund Requirement may be satisfied entirely, or in part, by a letter of credit, a line or credit, a credit facility, a surety bond, or any other instrument or arrangement obtained in connection with the issuance of a Series of Bonds; provided, however, any credit enhancement satisfYing all or any part of the Reserve Fund Requirement after after the initial issuance of Bonds or issued in substitution of any prior credit enhancement previously issued will not, by itself, cause a withdrawal or downward revision of the ratings maintained by any Rating Agency with respect to the Bonds. In the event there will be a deficiency in the Interest Account or in the Principal Account, the Trustee will make up such deficiencies from the Reserve Fund. Administration of Reserve Fund. Money and securities held in the Reserve Fund will not be withdrawn therefrom at any time in such amount as would reduce the amount in such Fund to an amount less than the Reserve Fund Requirement except for the payment when due of debt service on Reserve Fund Obligations and to cure a deficiency in the Principal Account or the Interest Account. Whenever the amount in the Reserve Fund is less than the Reserve Fund Requirement, the Bond Bank will transfer from other amounts legally available the amount required to restore the Reserve Fund to the Reserve Fund Requirement. Rebate Fund. There will be deposited in the Rebate Fund the amount of the Rebate Requirement for each Series of Bonds, and the Trustee will pay over to the United States Government such amounts as determined by the Bond Bank and as set forth in the 2005 General Bond Resolution. Operating Fund. There will be deposited in the Operating Fund all Fees and Charges, to the extent not otherwise encumbered or pledged, and any other money which may be made available to the Bond Bank therefor from any other source or sources. Money at any time held for the credit of the Operating Fund will be used for and applied solely to the following purposes: (a) to pay the Administrative Expenses of the Bond Bank; (b) to pay the fees and expenses of the Trustee and any Paying Agent; (c) to pay financing costs incurred with respect to a Series of Bonds; and (d) to pay any expenses incurred in carrying out any other purpose then authorized by the Act. All amounts in the Operating Fund will be free and clear of any lien or pledge created by the 2005 General Bond Resolution. 16 Security for Deposits All money held by the Trustee will be continuously and fully secured, for the benefit of the Bond Bank and the Bondholders in such manner as may then be required or permitted by applicable State or federal laws and regulations regarding the security for, or granting a preference in the case of, the deposit of trust funds. It will not be necessary for the Trustee or any paying agent to give security for the deposit of any money with them held in trust for the payment of the principal or Redemption Price of or interest on any Bonds, or for the Trustee to give security for any money which will be represented by obligations purchased under the provisions of the 2005 General Bond Resolution as an investment of such money. Payment of Bonds The Bond Bank will duly and punctually payor cause to be paid the principal or Redemption Price, if any, of every Bond and the interest thereon, at the dates and places and in the manner provided in the Bonds according to the true intent and meaning thereof, and will duly and punctually satisfY all Sinking Fund Installments, if any, becoming payable with respect to any Series of Bonds. Fees and Charges The Bond Bank may charge such Fees and Charges to each Governmental Unit to which a Loan is made, and will revise such Fees and Charges if necessary, so that such Fees and Charges actually collected from each such Governmental Unit will at all times produce money which, together with such Governmental Unit's Allocable Proportion of other money available under the provisions of the 2005 General Bond Resolution, and other money available therefor, will be at least sufficient to pay, as the same become due, the Governmental Unit's Allocable Proportion of the Administrative Expenses of the Bond Bank and of the fees and expenses of the Trustee and any Paying Agent. Issuance of Additional Obligations Including for the Purpose of Refunding The Bond Bank may issue additional Bonds and refunding Bonds pursuant to the terms of the 2005 General Bond Resolution; however, no additional series of Bonds will be issued unless: (a) the aggregate principal amount of Bonds and Notes Outstanding at the time of issuance and delivery of such additional Bonds including the principal amount of such additional Bonds, will not exceed any limit thereon imposed by State law; (b) there is at the time of the issuance of such additional Bonds no deficiency in the amounts required by the 2005 General Bond Resolution or any Series Resolution to be paid into the Debt Service Fund and into the Reserve Fund; (c) the amount of the Reserve Fund, upon the issuance and delivery of such additional Bonds, will not be less than the Required Debt Service Reserve; and (d) the maturities of, or Sinking Fund Installments for, the additional Bonds representing Loan Obligations, unless such additional Bonds are being issued to refund Outstanding Bonds, will be equal to the scheduled Municipal Bonds Principal Payments to be made in respect of the Loans with respect to which such additional Bonds are to be issued. issued. The Bond Bank expressly reserves the right to adopt other general bond resolutions and reserves the right to issue notes and any other obligations so long as the same are not a charge or lien on the Municipal Bonds, the Municipal Bonds Payments and the Fees and Charges or payable from the Debt Service Fund or the Reserve Fund. 17 Defeasance If the Bond Bank will payor cause to be paid to the holders of all Bonds then Outstanding, the principal and interest and/or Redemption Price, if any, to become due thereon, at the times and in the manner stipulated therein and in the 2005 General Bond Resolution and also will payor cause to be paid all other sums payable under the 2005 General Bond Resolution, including any amounts payable to the United States, then, at the option of the Bond Bank, as expressed in an instrument in writing signed by an Authorized Officer and delivered to the Trustee, the covenants, agreements and other obligations of the Bond Bank to the Bondholders will be discharged and satisfied. All Outstanding Bonds of any Series will, prior to the maturity or redemption date thereof, be deemed to have been paid if (a) in case any of said Bonds are to be redeemed on any date prior to their maturity, the Bond Bank will have given to the Trustee in form satisfactory to it irrevocable instructions to publish notice of redemption on said date of such Bonds, and (b) there will have been deposited with the Trustee either monies in an amount which will be sufficient or Investment Securities which are not subject to redemption prior to the dates on which amounts will be needed to make payments on the Bonds and described in clause (I) of the definition thereof, the principal of and the interest on which when due will provide money which, together with the money, if any, deposited with the Trustee or Paying Agent at the same time, will be sufficient, to pay, when due, the principal or Redemption Price, if applicable, and interest due and to become due on said Bonds on and prior to the redemption date or maturity date thereof, as may be the case. Supplements and Amendments The Bond Bank may supplement the 2005 General Bond Resolution without the consent of the Bondholders or the Trustee for various purposes not inconsistent with the 2005 General Bond Resolution, to provide for the issuance of additional Series of Bonds, to impose additional limitations or restrictions on the issuance of Bonds, to impose other restrictions on the Bond Bank, to surrender any right, power or privilege, or to confirm any pledge of or lien upon the Municipal Bonds or the Municipal Bonds Payments or any other funds. The Bond Bank may also supplement the 2005 General Bond Resolution to cure any ambiguity, omission or defect in the 2005 General Bond Resolution, provided such modifications are not contrary to or inconsistent with the 2005 General Bond Resolution as theretofore in effect. Any modification or amendment of the 2005 General Bond Resolution and of the rights and obligations of the Bond Bank and of the Bondholders may be made with the written consent (a) of the holders of at least two-thirds in principal amount of the Bonds Outstanding at the time such consent is given, or (b) in case less than all of the several Series of Bonds then Outstanding are affected by the modification or amendment, of the holders of at least two-thirds in principal amount of the Bonds of each Series so affected and Outstanding at the time such consent is given; provided, however, that such modification or amendment will not permit (i) a change in the tenns of redemption or maturity of the principal of any outstanding Bond or of any installment of interest thereon or Sinking Fund Installment therefor, (ii) a reduction in the principal amount or the Redemption Price thereof or in the rate of interest thereon, (iii) a reduction of the percentage of the Holders of which is required to effect any such modification or amendment, or (iv) the creation of any lien prior to or on a parity with the lien created by the 2005 General Bond Resolution (except in the manner provided by the 2005 General Bond Resolution) or deprive the Bondholders of the lien created by the 2005 General Bond Resolution, without the consent of the holders of all the Bonds Outstanding or of the Series of Bonds affected by such modification or amendment. To the extent that the full payment of the interest and principal of Bonds of a Series is secured by Credit Enhancement, the Credit Enhancement Agency will be considered to be the Bondholder of all the Bonds of the Series for purposes of exercising any rights with respect to supplements and amendments to the 2005 General Bond Resolution if the Credit Enhancement so provides. 18 Events of Default and Remedies Each of the following events is an Event of Default under the 2005 General Bond Resolution: (a) the Bond Bank defaults in the payment of the principal or Redemption Price of, Sinking Fund Installment for, or interest on, any Bond when and as the same will become due whether at maturity or upon call for redemption, or otherwise; (b) the Bond Bank fails or refuses to comply with the provisions of the Act regarding the certification of deficiencies in the 2005 General Bond Resolution Reserve Fund, or such amounts as will be certified to the Governor and to the Legislature pursuant to the Act will not be appropriated and paid to the Bond Bank prior to the termination of the then current State fiscal year; or (c) the Bond Bank fails or refuses to comply with the provisions of the Act, other than as provided in (b) above, or defaults in the performance or observance of any other of the covenants, agreements or conditions on its part in the 2005 General Bond Resolution, any Series Resolution, any Supplemental Resolution, or in the Bonds contained, and such failure, refusal or default will continue for a period of 45 days after written notice thereof by the Trustee or the Holders of not less than 25 percent in principal amount of the Outstanding Bonds; provided, however, that an event of default will not be deemed to exist under the provisions of clause (c) above upon the failure of the Bond Bank to make and collect Fees and Charges required to be made and collected by the 2005 General Bond Resolution or upon the failure of the Bond Bank to enforce any obligation undertaken by a Governmental Unit pursuant to a Loan Agreement including the making of the stipulated Municipal Bonds Payments so long as the Bond Bank may be otherwise directed by law and so long as the Bond Bank will be provided with money from the State or otherwise, other than withdrawals from or reimbursements of the Reserve Fund, sufficient in amount to pay the principal of and interest on all Bonds as the same will become become due during the period for which the Bond Bank will be directed by law to abstain from making and collecting such Fees and Charges and from enforcing the obligations of a Governmental Unit under the applicable Loan Agreement. Upon the happening and continuance of any event of default specified in paragraph (a) above, the Trustee will proceed, or upon the happening and continuance of any event of default specified in paragraphs (b) and (c) above, the Trustee may proceed, and upon the written request of the holders of not less than 25 percent in principal amount of the Outstanding Bonds will proceed, in its own name, to protect and enforce its rights and the rights of the Bondholders by such of the following remedies as the Trustee, being advised by counsel, will deem most effectual to protect and enforce such rights: (a) by mandamus or other suit, action or proceeding at law or in equity, enforce all rights of the Bondholders, including the right to require the Bond Bank to make and collect Fees and Charges and Municipal Bonds Payments adequate to carry out the covenants and agreements as to, and pledge of, such Fees and Charges and Municipal Bonds Payments, and other properties and to require the Bond Bank to carry out any other covenant or agreement with Bondholders and to perform its duties under the Act; (b) by bringing suit upon the Bonds; (c) by action or suit in equity, require the Bond Bank to account as if it were the trustee of an express trust for the holders of the Bonds; (d) by action or suit in equity, enjoin any acts or things which may be unlawful or in violation of the rights of the holders of the Bonds. 19 Upon the occurrence of an event of default the Trustee may, and upon the written request of the holders of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding will, declare the principal of all the Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same will be immediately due and payable. This provision, however, is subject to the condition that if before any judgment or decree for the payment of the money due will have been obtained or entered, the Bond Bank will deposit with the Trustee a sum sufficient to pay all principal on the Bonds matured prior to such declaration and all matured installments of interest upon all the Bonds, with interest on such overdue installments of principal at the rate borne by the respective Bonds, and the reasonable expenses of the Trustee, and any and all other defaults known to the Trustee will have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate will have been made therefor, then the holders of at least a majority in aggregate principal amount of the Bonds then outstanding, may, on behalf of the holders of all of the Bonds, rescind and annul such declaration and its consequences and waive such default. Bondholders' Direction ofProceedings. The holders of a majority in principal amount of the Bonds then Outstanding will have the right to direct the method of conducting all remedial proceedings to be taken by the Trustee, provided that such direction will not be otherwise than in accordance with law or the 2005 General Bond Resolution, and that the Trustee will have the right to decline to follow any such direction which in the opinion of the Trustee would be unjustly prejudicial to Bondholders not parties to such direction. Limitation on Rights of Bondholders. No holder of any Bond will have any right to institute any suit, action, mandamus or other proceeding in equity or at law under the 2005 General General Bond Resolution, or for the protection or enforcement of any right under the 2005 General Bond Resolution or any right under law unless such holder will have given to the Trustee written notice of the event of default or breach of duty on account of which such suit, action or proceeding is to be taken, and unless the holders of not less than 25 percent in principal amount of the Bonds then Outstanding will have made written request of the Trustee and will have afforded the Trustee a reasonable opportunity either to proceed to exercise the powers granted under the 2005 General Bond Resolution or law or to institute such action, suit or proceeding in its name and unless, also, there will have been offered to the Trustee reasonable security and indemnity against the costs, expenses and liabilities to be incurred thereby, and the Trustee will have refused or neglected to comply with such request within a reasonable time. No holder of the Bonds will have any right to affect, disturb or prejudice the security of the 2005 General Bond Resolution, or to enforce any right with respect to the Bonds or the 2005 General Bond Resolution, except in the manner provided in the 2005 General Bond Resolution, and all proceedings at law or in equity will be instituted, held and maintained in the manner herein provided and for the benefit of all Bondholders. Excess Earnings The Bond Bank covenants and agrees to calculate Rebatable Arbitrage and to pay Rebatable Arbitrage to the United States of America in the manner necessary to comply with the then applicable federal tax law. Within 30 days after the end of every fifth Bond Year, and within 60 days of the date when all of each Series of Bonds have been retired (or at such other time or times as may then be required by the Code and the applicable Income Tax Regulations), the Bond Bank will determine the Rebatable Arbitrage with respect to each Series of Bonds, and pay rebate amounts due the United States of America with respect thereto, as provided in Section 148(f) of the the Code. LITIGATION Upon the delivery of the 20 I I Series One Bonds, the Bond Bank will furnish a certificate to the effect that, among other things, there is no litigation pending in any court to restrain or enjoin the issuance or delivery of the 2011 Series One Bonds, or in any way contesting the validity or enforceability of the 20 II Series One Bonds, the 2005 General Bond Resolution or any Bonds or money pledged under the 2005 General Bond Resolution. 20 CERTAIN LEGAL MATTERS Legal matters incident to the authorization, issuance and sale by the Bond Bank of the 2011 Series One Bonds are subject to the approving legal opinions of Wohlforth, Johnson, Brecht, Cartledge & Brooking of Anchorage, Alaska, Bond Counsel to the Bond Bank. The proposed forms of the opinions of Bond Counsel are included herein as Appendix A. Certain legal matters will be passed upon for the City and Borough of Wrangell by its counsel, K&L Gates LLP of Seattle, Washington. Certain legal matters will be passed upon for the Kodiak Island Borough by its counsel Birch Horton Bittner & Cherot of Anchorage, Alaska. UNDERWRITING The 2011 Series One Bonds are to be purchased by Piper Jaffray & Co. (the "Underwriter") from the Bond Bank at an aggregate purchase price of $ (equal to the aggregate principal amount of the 2011 Series One Bonds, plus an original issue premium of$ , less Underwriter's discount of$ ), subject to the terms of a Bond Purchase Contract between the Bond Bank and the Underwriter. The Bond Purchase Contract provides that the Underwriter will purchase all of the 2011 Series One Bonds if any are purchased and that the obligation to make such purchase is subject to certain terms and conditions set forth in the Bond Purchase Contract, including the approval by counsel of certain legal matters. Piper Jaffray & Co., ("Piper") has entered into an agreement (the "Distribution Agreement") with Advisors Asset Management, Inc. ("AAM") for the distribution of certain municipal securities offerings allocated to Piper at the original offering prices. Under the Distribution Agreement, if applicable to the Bonds, Piper will share with AAM a portion of the fee or commission, exclusive of management fees, paid to Piper. FINANCIAL ADVISOR Western Financial Group, LLC has acted as financial advisor (the "Financial Advisor") to the Bond Bank in connection with the issuance of the 201 I Series One Bonds. The Financial Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume responsibility for the accuracy, completeness, or fairness of the information contained in this Official Statement. Western Financial Group, LLC is an independent advisory firm registered with the Securities and Exchange Commission and is not engaged in the business of underwriting, trading, or distributing municipal securities or other public securities. FINANCIAL STATEMENTS The financial statements of the Bond Bank included as Appendix E to this Official Statement have been audited by Elgee Rehfeld Mertz LLC, independent certified public accounts, to the extent and for the periods indicated in their report thereon. Such financial statements have been included in reliance upon the report of Elgee Rehfeld Mertz LLC. The Bond Bank has not requested Elgee Rehfeld Mertz LLC to provide written consent for inclusion of the financial statements in this Official Statement. TAX MATTERS In the opinion of Bond Counsel, based on an analysis of existing laws, regulations, rulings and court court decisions and assuming, among other things, compliance with certain covenants, interest on the 2011 Series One Bonds is excludable from gross income for federal income tax purposes. The 201 I Series One Bonds are not private activity bonds, and interest on the 2011 Series One Bonds is not an item of tax preference for purposes of determining alternative minimum taxable income for individuals or corporations under the Code. However, interest 21 in the 2011 Series One Bonds is taken into account in detennining adjusted current earnings for purposes of computing the federal alternative minimum tax imposed on certain corporations. Bond Counsel is also of the opinion, based on existing laws of the State as enacted and construed that interest on the 2011 Series One Bonds is excludable from taxation by the State except for transfer, estate and inheritance taxes. The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the 2011 Series One Bonds. The Bond Bank has covenanted to comply with certain restrictions designed to assure that interest on the 2011 Series One Bonds is excludable from federal gross income. Failure to comply with these covenants may result in interest on the 2011 Series One Bonds being included in federal gross income, possibly from the date of issuance ofthe 2011 Series One Bonds. The opinion of Bond Counsel assumes compliance with these covenants. Bond Counsel has not undertaken to detennine (or to infonn any person) whether any actions taken (or not taken) or events occurring (or not occurring) after the date of issuance of the 20 II Series One Bonds may adversely affect the tax status of interest on the 2011 Series One Bonds. Although Bond Counsel has rendered an opinion that interest on the 2011 Series One Bonds is excludable from gross income for federal income tax purposes, the ownership or disposition of, or the accrual or receipt of interest on, such 2011 Series One Bonds may otherwise affect a 2011 Series One Bond Owner's federal or State tax liability. The nature and extent of these other tax consequences will depend upon the 2011 Series One Bond Owner's particular tax status and the 2011 Series One Bond Owner's other items of income or deduction. Bond Counsel expresses no opinion regarding any other tax consequences relating to the ownership or disposition of, or the accrual or receipt of interest on, the 2011 Series One Bonds. Owners of the 2011 Series One Bonds should consult their tax advisors regarding the applicability of any collateral tax consequences of owning the 2011 Series One Bonds, which may include original issue discount, original issue premium, purchase at market discount or at a premium, taxation upon sale, redemption or other disposition, and various withholding requirements. Backup Withholding. Interest on tax-exempt obligations such as the 2011 Series One Bonds are in many cases subject to information reporting in a manner similar to interest paid on taxable obligations. Backup withholding may be imposed on payments made after March 31, 2007 to any bondholder who fails to provide certain required information including an accurate taxpayer identification number to any person required to collect such information pursuant to Section 6049 of the Code. This reporting requirement does not in and of itself affect or alter the excludability of interest on the 2011 Series One Bonds from gross income income for federal income tax purposes or any other federal tax consequence of purchasing, holding or selling tax-exempt obligations. Changes in Federal Tax Law. From time to time, there are legislative proposals in the Congress and in the states that, if enacted, could alter or amend the federal and state tax matters referred to above or adversely affect the market value of the 2011 Series One Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether if enacted it would apply to bonds issued prior to enactment. In addition, regulatory actions are from time to time announced or proposed and litigation is threatened or commenced which, if implemented or concluded in a particular manner, could adversely affect the market value of the 2011 Series One Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular litigation or judicial action will be resolved, or whether the 2011 Series One Bonds or the market value thereof would be impacted thereby. Purchasers of the 2011 Series One Bonds should consult their tax advisors regarding any pending or proposed legislation, regulatory initiatives or litigation. The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of issuance and delivery of the 2011 Series One Bonds and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any pending legislation, regulatory initiatives or litigation. 22 Bond Counsel's opinion is not a guarantee of a result and is not binding on the Internal Revenue Service ("IRS"), rather, the opinion represents its legal judgment based upon its review of existing statutes, regulations, published rulings, and court decisions and the representations and covenants of the Bond Bank. The IRS has an ongoing program of auditing the tax-exempt status of the interest on governmental obligations. If an audit of the 2011 Series One Bonds is commenced, under current procedures, the IRS is likely to treat the Bond Bank as the "taxpayer," and the owners of the 201 1 Series One Bonds (the "Owners") would have no right to participate in the audit process. In responding to or defending an audit of the tax-exempt status of the interest on the 201 I Series One Bonds, the Bond Bank may have different or conflicting interests from the Owners. Public awareness of any future audit of the 201 1 Series One Bonds could adversely affect the value and liquidity of the 201 I Series One Bonds during the pendency ofthe audit, regardless of its ultimate outcome. RATINGS Moody's Investors Service Inc. ("Moody's") and Fitch Ratings ("Fitch") have assigned "Aa2" and "_" ratings, respectively, to the 2011 Series One Bonds. Such ratings reflect only the views of such organizations and any desired explanation of the significance of such ratings should be obtained from the rating agency furnishing the same, at the following addresses: Moody's, 7 World Trade Center, 250 Greenwich Street, New York, New York 10007, (212) 553-0300; Fitch, One State Street Plaza, New York, New York 10004, (212) 908-0500. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance such ratings will continue for any given period of time or that such ratings will not be revised downward or withdrawn entirely by the rating agencies if, in the judgment of such rating agencies, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the 2011 Series One Bonds. SOURCES OF CERTAIN INFORMATION As "Obligated Persons" as of the date of this Official Statement, the City of Ketchikan and the City and Borough of Sitka have provided information in this Official Statement appearing in Appendix D. The Bond Bank makes no representation as to the accuracy of information in this Official Statement concerning the City of Ketchikan or the City and Borough of Sitka. CONTINUING DISCLOSURE UNDERTAKING Basic Undertaking to Provide Annual Financial Information and Notice ofMaterial Events. Continuing disclosure is provided for the benefit of beneficial owners. Pursuant to the Securities and Exchange Commission (the "SEC") Rule 15c2-12 (the "Rule"), the Bond Bank will agree to provide, or cause to be provided, to the Municipal Securities Rulemaking Board ("MSRB") annual financial information and operating data as described below. In addition, if any Governmental Unit has outstanding with the Bond Bank an amount of bonds equal to or greater than 10 percent of all Bonds outstanding under the 2005 General Bond Resolution, such Governmental Unit will be deemed an "Obligated Person" under the Rule and will be contractually required, at a minimum, to provide updated financial information of the type included in Appendix 0 hereof and annual financial statements prepared in accordance with generally accepted accounting principles applicable to the governmental entities, as such principles may be changed from time to time. Not later than 120 days after the end of each Bond Bank fiscal year, the Bond Bank will notifY each Governmental Unit that has, or had, an amount of bonds equal to or greater than 10 percent of all Bonds Outstanding under the 2005 General Bond Resolution, of its continuing disclosure undertaking responsibility. A list of Governmental Units deemed Obligated Persons for the prior fiscal year will be included in the Bond Bank's annual financial information filing. 23 The Bond Bank will also undertake to provide or cause to be provided to the MSRB a notice of the occurrence of any of the following events specified by the Rule with respect to the 201 1 Series One Bonds within ten business days of the occurrence of the event: (a) principal and interest payment delinquencies; (b) unscheduled draws on debt service reserves reflecting financial difficulties; (c) unscheduled draws on credit enhancements reflecting financial difficulties; (d) substitution of credit or liquidity providers, or their failure to perform; (e) adverse tax opinions or events affecting the tax-exempt status of the 2011 Series One Bonds; (f) defeasances; (g) rating changes; (h) tender offers; (i) bankruptcy, insolvency, receivership or similar proceeding by the Bond Bank or "obligated person". The Bond Bank will also file with the MSRB a notice of any of the following events with respect to the Bonds within ten business days of the occurrence of such event, if material: (a) non-payment related defaults; defaults; (b) modification to rights of holders of Bonds; (c) bond calls, other than mandatory, scheduled redemptions not otherwise contingent on the occurrence of an event; (d) release, substitution or sale of property securing repayment of the bonds; (e) other than in the normal course of business, the consummation of a merger, consolidation or acquisition involving an "obligated person," or the sale of all or substantially all of the assets of the Bond Bank or "obligated person," or the entry into a definitive agreement to undertake such an action, or a termination of a definitive agreement relating to any such actions, other than in accordance with its terms; (f) appointment of a successor or additional trustee or the change in name of the for the Bonds. The Bond Bank also will provide to the MSRB timely notice of its failure to provide required annual financial information on or before the date specified below. Type ofAnnual Financial Information Undertaken to be Provided by the Bond Bank. The annual financial information that the Bond Bank undertakes to provide will consist of (a) annual financial statements for the Bond Bank, prepared in accordance with generally accepted accounting principles applicable to governmental entities, as such principles may be changed from time to time; (b) a statement of authorized, issued and outstanding bonded debt; (c) Reserve Fund balance; and (d) Governmental Unit statistics in substantially the same form as Appendix C attached hereto. This information will be provided to the MSRB not later than 210 days after the end of each fiscal year of the Bond Bank (currently, the 12-month period ending June 30), as such fiscal year may be changed as required by State law, commencing with the Bond Bank's fiscal year ending June 30, 2011. Amendment of Undertaking. The Undertaking is subject to amendment after the primary offering of the 2011 Series One Bonds without the consent of any Beneficial Owner of any 2011 Series One Bond, or any broker, dealer, municipal securities dealer, dealer, participating underwriter, rating agency, or the MSRB, if (a) the amendment is made in connection with a change in circumstances that arises from a change in legal requirements, a change in law, or a change in the identity, nature or status of the Bond Bank; (b) the Undertaking, as amended, would have complied with the requirements of the Rule at the time of the primary offering of the 201 1 Series One Bonds, after taking into account any amendments or interpretations of the Rule by the SEC and any changes in circumstances; (c) the Bond Bank obtains an opinion of nationally recognized bond counsel to the effect that the amendment will not adversely affect the Bond Bank's compliance with the Undertaking and Rule; and (d) the Bond Bank notifies and provides the MSRB with copies of the opinions and amendments. Such amendment may be adopted without the consent of any Beneficial Owner of any of the 2011 Series One Bonds, notwithstanding any other provision ofthe Undertakings or the Bond Resolution. The first annual report containing amended operating data or financial information pursuant to an amendment of the Bond Bank continuing disclosure undertaking will explain, in narrative form, the reasons for the amendment and its effect on the type of operating data and financial information being provided. All notices, financial information and operating data required by this undertaking to be provided to the MSRB must be in electronic format as prescribed by the MSRB. All documents provided to the MSRB pursuant to this undertaking must be accompanied by identifying information as prescribed by the MSRB. 24 Termination. The obligations of the Bond Bank under its undertaking will tenninate upon the legal defeasance, prior redemption or payment in full of all of the 20 II Series One Bonds. Remedy for Failure to Comply with Undertaking. No failure by the Bond Bank and/or the Obligated Persons identified in Appendix D hereto to comply with any provisions of their respective undertakings will constitute a default in respect of the 20 II Series One Bonds and the sole remedy under the respective undertakings in the event of any failure of the Bond Bank and/or the Obligated Persons identified in Appendix D hereto to comply with their respective undertaking will be the right to obtain specific performance of the undertaking. Prior Compliance with Continuing Disclosure Undertakings Under the Rule The Bond Bank is in compliance with all of its prior undertakings pursuant to the Rule. DEFINITIONS The following terms are used in this Official Statement with the following meanings: "Act" -The Alaska Municipal Bond Bank Act, Act, codified as Chapter 85, Title 44, of the Alaska Statutes, as amended. "Bond Bank" -The Alaska Municipal Bond Bank, a public corporation and instrumentality of the State of Alaska within the Department of Revenue but with legal existence independent of and separate from the State. "Bonds" -Bonds issued by the Bond Bank under the 2005 General Bond Resolution pursuant to a Series Resolution. These include "Loan Obligations" and "Reserve Fund Obligations" as defined below. "Code" -Internal Revenue Code of 1986 and the regulations thereunder, as amended. "Credit Enhancement" A letter of credit, a line of credit, a credit facility, a surety bond, bond insurance, or any other instrument or arrangement obtained in connection with the issuance of a Series of Bonds to further secure the payment of the Bonds of such Series or to satisfy the Reserve Fund Requirement. "Credit Enhancement Agency" -Any bank or other institution that provides Credit Enhancement. "Debt Service Fund" -A fund established by the 2005 General Bond Resolution to be maintained and held by the Trustee. The 2005 General Bond Resolution defines and provides that the "Interest Account," "Principal Account" and "Redemption Account" are maintained within the Debt Service Fund. "Fees and Charges" -All fees and charges authorized to be charged by the Bond Bank pursuant to Sections 44.85.080 (8), (15), and (16) of the Act and charged by the Bank pursuant to the terms and provisions of the Loan Agreements. "Governmental Unit" -A municipality or such other entity from which the Bond Bank is authorized by law to purchase its revenue bonds, general obligation bonds, notes, or other forms of indebtedness and which otherwise satisfies conditions found in the 2005 General Bond Resolution and in the Loan Agreement. "Loan Agreement" -An agreement, and any amendments thereto, entered into between the Bond Bank and a Governmental Unit setting forth the terms and conditions of a loan. 25 "Loan Obligations" -The amount of Bonds and the Bonds themselves issued by the Bond Bank for the purchase of Municipal Bonds ofa Governmental Unit. "Municipal Bonds" -General obligation bonds, revenue bonds, notes or other evidence of debt issued by any Governmental Unit, as defined in the Act, which have been acquired by the Bond Bank as evidence of a loan to the Governmental Unit pursuant to the Act. "Municipal Bonds Payment" The amounts paid or required to be paid, from time to time, for principal and interest by a Governmental Unit to the Bond Bank on the Governmental Unit's Municipal Bonds. "Notes" -Any obligations referred to in the 2005 General Bond Resolution issued by the Bond Bank other than Bonds. "Operating Fund" A fund established by the 2005 General Bond Resolution. This fund is not held by the Trustee and money therein is not pledged as security for Bonds. "Outstanding" -When used with reference to Bonds, shall mean, as of any date, Bonds theretofore or then being delivered under the provisions of the 2005 General Bond Resolution, other than Bonds owned or held by or for the account of the Bond Bank except: (i) any Bonds cancelled by the Trustee at or prior to such date, (ii) any Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been delivered pursuant to the 2005 General Bond Resolution, and (iii) Bonds deemed to have been paid as provided in the 2005 General Bond Resolution. "Reserve Fund" -The reserve account established by the 2005 General Bond Resolution and held by the Trustee pursuant to the provisions ofthe 2005 General Bond Resolution. "Reserve Fund Obligations" -Bonds issued by the Bond Bank to obtain funds to deposited in the Reserve Fund. "Reserve Fund Requirement" -The amount required to be on deposit in the 2005 General Bond Resolution Reserve Fund is the least of the following: (i) 10% ofthe initial stated principal amount of each Series of Bonds then Outstanding; (ii) maximum annual principal and interest requirements on all Bonds then Outstanding; (iii) 125% of average annual principal and interest requirements on all Bonds then Outstanding; or (iv) such lesser amount as shall be required by law. The Reserve Fund Requirement may be satisfied entirely, or in part, by Credit Enhancement; provided, however, any Credit Enhancement satisfYing all or any part ofthe Reserve Fund Requirement after the initial issuance ofBonds or issued in substitution for any prior Credit Enhancement previously issued will not, by itself, cause a withdrawal or downward revision ofthe ratings maintained by any Rating Agency with respect to the Bonds. "Required Debt Service Reserve" -As of any date of calculation, the amount required to be on deposit in the Reserve Fund which amount shall at least be equal to the Reserve Fund Requirement. "Series Resolution" -A resolution of the Bond Bank authorizing the issuance of a series of Bonds in accordance with the terms of the 2005 General Bond Resolution. "2005 General Bond Resolution" -The Bond Bank's 2005 General Obligation Bond Resolution adopted July 13, 2005. (The Bond Bank may adopt additional general obligation resolutions for the same or different purposes.) 26 MISCELLANEOUS The summaries or descriptions of provisions in the Bond Resolution and all references to other materials not purporting to be quoted in full are only brief outlines of certain provisions thereof and do not constitute complete statements of such documents or provisions, and reference is hereby made to the complete documents and materials, copies of which will be furnished by the Bond Bank on request. The 2005 General Bond Resolution has been included herein as Appendix F. Any statements made in this Official Statement indicated to involve matters of opinion or estimates are represented as opinions or estimates in good faith. No assurance can be given, however, that the facts will materialize as so opined or estimated. PRELIMINARY OFFICIAL STATEMENT The Bond Bank hereby deems this Preliminary Official Statement pursuant to the SEC Rule 15c2-12 as final as of its date except for the omission of the information dependent upon the pricing of the issue, such as offering prices, interest rates, delivery date and other terms of the 2011 Series One Bonds dependent on the foregoing matters. OFFICIAL STATEMENT The Bond Bank has authorized the execution and distribution of this Official Statement. ALASKA MUNICIPAL BOND BANK /s/Deven J. Mitchell Executive Director 27 [THIS PAGE INTENTIONALLY LEFT BLANK] APPENDIX A Form of Legal Opinions [THIS PAGE INTENTIONALLY LEFr BLANK] Wohlforth I Johnson I Brecht Cartledge IBrooking A PROFESSIONAL CORPORATION Julius J. Brecht Cheryl Rawls Brooking Cynthia L. Cartledge Michael Gatti Clyde W. Hutchins Jr. Robert M. Johnson Leila R. Kimbrell Eric E. Wohlfarth Board of Directors Alaska Municipal Bond Bank P.O. Box 110405 Juneau, Alaska 99811 Ladies and Gentlemen: ATTORNEYS AT LAW 900 WEST 5TH AVENUE, SUITE 600 ANCHORAGE, ALASKA 99501·2048 March _, 2011 Telephone 907.276.6401 Facsimile 907.276.5093 Website www.akatty.com We have acted as Bond Counsel in connection with the issuance by the Alaska Municipal Bond Bank (the "Bank") of$ General Obligation Bonds, 2011 Series One (the "Bonds"). We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion, including the opinions of bond counsel to the Governmental Units concerning the validity and enforceability of the Municipal Bonds, and the Loan Agreements securing the Loans financed with the proceeds of the Bonds (as such terms are defined in the Resolutions referred to below). The Bonds are issued under the Alaska Municipal Bond Bank Act, Chapter 85 of Title 44 of the Alaska Statutes, as amended (the "Act"), the General Obligation Bond Resolution of the Bank entitled "A Resolution Creating And Establishing An Issue Of Bonds Of The Alaska Municipal Bond Bank; Providing For The Issuance From Time To Time Of Said Bonds; Providing For The Payment Of Principal Of And Interest On Said Bonds, And Providing For The Rights Of The Holders Thereof," adopted July 13, 2005, as amended August 19, 2009 (the "General Bond Resolution") and Series Resolution No. 2011-01, adopted February 1,2011 (the "Series Resolution," and together with the General Bond Resolution, the "Resolutions"). A-I Alaska Municipal Bond Bank March , 2011 Page 2 The Bonds are in registered form, are dated the date of delivery, mature on 1st day of March in the years in the respective principal amounts, and bear interest at the rates, as follows: Due Date 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Principal Amount $ Interest Rate Due Date 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Principal Amount $ Interest Rate The Bonds bear interest from the date of delivery, payable on September 1, 2011, and semi-annually thereafter on March 1 and September 1 in each year. The Bonds are subject to redemption prior to maturity as provided in the form of Bond. In connection with the issuance of the Bonds, we have reviewed the Resolutions and the federal tax certificate of the Bank dated the date hereof (the "Tax Certificate"), a Certificate of No-Litigation of the Attorney General (counsel to the Bank), certificates of the Bank, the Trustee and others, and such other documents, opinions and matters to the extent we deemed necessary to render the opinions set forth herein. The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. Such opinions may be affected by actions taken or omitted or events occurring after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur. We disclaim any obligation to update this letter. We have assumed the genuineness of all documents and signatures presented to us (whether as originals or as copies) by any parties other than the Bank and the due and legal execution and delivery thereof by any parties other than the Bank. We have not undertaken to verify independently, and have assumed, the accuracy of the factual matters represented, warranted or certified in the documents referred to in the preceding paragraph. Furthermore, we have assumed compliance with the covenants and agreements contained in the Resolutions and the Tax Certificate, including (without limitation) covenants and agreements compliance with which is necessary to assure that future actions, omissions or events will not cause interest on the Bonds to be included in gross income for federal income tax purposes. We call attention to the fact that the rights and obligations under the Bonds, the Loan Agreements, and the Tax Certificate may be A-2 Alaska Municipal Bond Bank March , 2011 Page 3 subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors' rights generally and to the application of equitable principles. We express no opinion as to the Official Statement or other offering material relating to the Bonds thereto, or relating to the undertaking by the Bank to provide ongoing disclosure pursuant to Securities and Exchange Commission Rule 15c2-12. As to questions of fact material to our OpIniOn, we have relied upon various statements and representations of the Bank contained in the Resolutions and in the certified proceedings and other certifications of public officials furnished to us without undertaking to verify the same by independent investigation. Subject to the foregoing, we are of the opinion that, under existing law: 1. The Bank has the right and power to execute and deliver the Resolutions. 2. The Resolutions have been duly and lawfully executed and delivered by the Bank, are in full force and effect and are valid and binding upon the Bank and enforceable in accordance with their terms (subject, as to enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium, orotherlaws affecting creditors' rights generally from time to time in effect). 3. The Resolutions create the valid pledge and assignment which they purport to create of the Municipal Bonds, subject to the application thereof to the purposes and on the conditions permitted by the Resolutions. 4. The Bonds are valid and binding general obligations of the Bank, enforceable in accordance with their terms and the terms of the Resolutions. 5. The Bonds have been duly and validly authorized and issued in accordance with the constitution and statutes of the State of Alaska, including the Act as amended to the date of this opinion, and in accordance with the Resolutions. 6. The Bonds are not a debt or liability, nor do they constitute a pledge of the faith and credit, of of the State of Alaska. 7. Underexisting laws, regulations, rulings and judicial decisions, interest on the Bonds is excludable from the gross income of the owners thereof for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. However, interest on the Bonds is taken into account in determining adjusted current earnings for purposes of computing the federal alternative minimum tax imposed on certain corporations. The opinion set forth in the first sentence of this paragraph is subject to the condition that the Bank comply with A-3 Alaska Municipal Bond Bank March __,2011 Page 4 all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The Bank has covenanted to comply with all applicable requirements. Failure to comply with certain of such requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. 8. Under existing laws, interest on the Bonds is free from taxation by the State of Alaska except for transfer, estate and inheritance taxes. Except as expressly stated above, we express no opinion regarding any other federal or state income tax consequences of acquiring, carrying, owning or disposing of the Bonds. Owners of the Bonds should consult their tax advisor regarding the applicability of any collateral tax consequences of owning the Bonds, which may include original issue discount, original issue premium, purchase at a market discount or at a premium, taxation upon sale, redemption or other disposition, and various withholding requirements. This opinion is given as of the date hereof, and we assume no obligation to update, revise or supplement this opinion or reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. Sincerely, WOHLFORTH, JOHNSON, BRECHT, CARTLEDGE & BROOKING Cynthia L. Cartledge A-4 APPENDIXB State Payments to Governmental Units [THIS PAGE INTENTIONALLY LEFT BLANK] Appendix B State Payments to Governmental Units The State of Alaska (the "State") disburses to Alaskan cities and boroughs (the "Governmental Units") funds that generally are available for uses other than paying municipal bond debt service. In the event of default by a Governmental Unit with respect to a Loan Agreement, the Bond Bank can cause such funds, held in custody by the State prior to disbursement, to be paid over to the Bond Bank. However, the State may at any time reduce or terminate the disbursements or programs under which they are made. Four departments ofthe State disburse money to Governmental Units, as follows: (1) Department of Education and Early Development. The Department of Education and Early Development (DEED) disburses State aid for educational purposes primarily through two programs. The first program provides a system under which the State, subject to annual appropriation by the State Legislature, will reimburse municipalities that operate school districts for certain costs of school construction. State reimbursement applies to debt service on locally issued general obligation school bonds. Timing of reimbursements is determined by municipalities' debt service payments, and is made throughout the year. This program provides generally, subject to certain statutory conditions, that the State will reimburse municipalities for between 60 percent and 100 percent of debt service incurred for such bonds, depending on when such bonds were issued. The State has in the past, and may in the future, appropriate less than the full amount to which the municipalities are entitled. When appropriations are less than 100 percent of the entitlement, funds have been allocated pro rata among the eligible school districts. Under the second program, the State aids local school districts in the payment of operating expenses under the State "K-12 Support" funding which provides education-related aid for programs such as the Public School Foundation, boarding home grants, youth and detention funding, handicapped facilities, pupil transportation, and nutrition programs. The program provides for monthly distributions to the school districts. (2) Department of Revenue. The Department of Revenue disburses local shares of various taxes collected by the State within the jurisdiction of certain Governmental Units including corporate income, amusement, aviation fuel, electric, telephone, liquor and fisheries taxes. Payments are distributed semi-annually in January and July. (3) Department of Commerce, Community and Economic Development. The Department of Commerce, Community and Economic Development (DCCED) administers a payment in lieu of taxes program under which the federal government pays a fee for use of land. The payments received from the federal government are passed through the State to certain Governmental Units. Distributions occur annually in July. The State also disburses money to certain Governmental Units through the DCCED's Capital Matching Grants program to provide assistance in financing capital projects. Distributions are made throughout the year as approved projects are constructed. (4) Department of Corrections. The Department of Corrections transfers monthly amounts to pay operational expenses of local communities that house prisoners in municipal-owned facilities. Sources: State ofAlaska, Department ofAdministration, Division ofFinance; State ofAlaska, Office of Management and Budget; and State ofAlaska, Department ofRevenue, Tax Division B-1 Schuol Debt Malching ShllrcdTllxes& DOT Reimbunement Rcimbur~cmcnt Education Support Grants Through Communlly Jails Re\'l~nue Sharing Totallnlercept Maximum Annual Debt Co,'crage Fees FY2009 Progrolm FY 2011 FY2011 FY2011 FY2011 FY 2011 FY 2011 Cllpability Scn'icc(l) Rlliio Aleutians East Borough $2.202.129 $567.708 $512,060 $725.{XX) $407,309 City & Borough of Juneau ·164.380 0 13.304.889 17.799.038 2.017,698 Kerlili Peninsula Borough 1.271.580 0 1,583.496 17.213,121 2,554.445 Kctchiklln Gate\\ay Borough 2,866,348 0 2.419,628 637.115 Kodiak Island Borough (2) 943.676 732.242 Northwest Arctic Borough 0 City & Borough of Sitka 0 2.68 Municipality of Skagway td City & Borough of Wrungell (2) N Citics Bethel Cordova Dillin ' lalll 469.877 6.81 0 0 5.12 0 0 34.82 0 0 133.313 2.783.290 27.35 () 660.235 428.30·1 4.795.158 4.1Xl 233.007 0 269.926 12.134.116 11.80 Petershur' 773,729 499.001 15.076.280 237.256 2-15,101 22.156,031 16.56 SewilTd· 782.853 0 13.665.685 468,795 226.846 15,1-14.179 3.47 Soldotna-0 () () 1,546,327 0 297.660 1.843.987 8.35 Ullillaska 8.251.161 () 837.556 6.696,362 502.348 279.655 19.%9.358 4.023,7 -l.9CJ Valdez 561].421 222,868 823.281 8.544.298 345,680 321.582 14.934,622 2,126, 7,02 Wasilla-288.022 () 0 9,732,931 () 459.348 10,480.301 2,596,4 4,0·1 ~ Communltie~ that arc located in n horough which opernles thc public schooh In Ihc communit)· tlnd rccci,·cs thai rclnted Education Support Funding. (1) Includes maximum annual dehl ~en'ice on genertll obligation and revenue-backed loans is~ucd thnJugh AMBO. (2) Borrower 10 this iuue. Maximum annual debt sen'ice and co\"Cragc roltio SUbject 10 change. Note: The onJy 100ln made by the AUUlOrity to an l.'l1!ity withollt inlerceptahlc state rcvcnues is to Ule Illter-isiand Ferry Authority, That loan is. however. guaranteed by collatcrul provided by the Ketchikan Gatew3Y Borough APPENDIXC Government Unit Statistics Regarding Participation in the Bond Bank [THIS PAGE INTENTIONALLy LEFf BLANK] APPENDIXC GOVERNMENTAL UNIT STATISTICS REGARDING PARTICIPATION IN THE BOND BANK 2005 GENERAL BOND RESOLUTION OUTSTANDING LOAN PRINCIPAL TO GOVERNMENTAL UNIT BORROWERS OF THE ALASKA MUNICIPAL BOND BANK AS OF FEBRUARY 1,2011 (Includes 2011 Series One Bonds) Outstanding Percent of Borrower Par Outstanding City and Borough of Sitka $61,050,000 13.49% City of Ketchikan 52,615,000 11.62% City of Seward 41,185,000 9.10% City of Unalaska 39,350,000 8.69% City and Borough of Juneau 34,875,000 7.71% Ketchikan Gateway Borough 32,495,000 7.18% Aleutians East Borough 25,725,000 5.68% Kenai Peninsula Borough 24,540,000 5.42% Kodiak Island Borough (1) 19,660,000 4.34% South Peninsula Hosp. (KPB) 16,135,000 3.56% City of Cordova 15,920,000 3.52% City of Kodiak 14,515,000 3.21% Northwest Arctic Borough 14,485,000 3.20% City of Dillingham 14,140,000 3.12% City of Nome 5,325,000 1.18% City of Petersburg 5,005,000 1.11% Municipality of Skagway 4,680,000 1.03% City of Bethel 3,345,000 0.74% City of WasiIIa 2,805,000 0.62% City of Soldotna 2,500,000 0.55% City of Kenai 2,000,000 0.44% City of King Cove 1,245,000 0.28% Inter-Island Ferry Authority 1,165,000 0.26% City and Borough of Wrangell (1) 225,000 0.05% Reserve Obligations 17,620,000 3.89% Total Outstanding Par $452,605,000 100.00% (I) Preliminary, subject to change. C-l nN DEBT SERVICE OF OUTSTANDING GENERAL OBLIGAT10N LOANS TO GOVERNMENTAL UNIT BORROWERS OF THE ALASKA MUNICIPAL BOND BANK UNDER THE 2005 GENERAL BOND RESOLUTION FISCAL YEARS 2011-2020 (Includes 2011 Series One Bonds) (Table refleets Participant Loan Payments through fiscal year 2020. Debt service on bonds issued under the 2005 Resolution continue to 2039.) Borrower 2011 2012 2013 2014 2015 ?016 2017 2018 2019 2o?0 City of K(~l("hik<1n Utility -2CX)S LO<ln 51,309,9-13 51,318,380 51,317,580 51.315,180 51,330,180 51,331,680 51,332,480 City of Nome -2005 Loan 3(X),738 299,738 298,138 301,338 302,338 302,838 299,838 5301,433 5302,564 5303,114 Kenai Peninsula Borough CenL Em. Svrs. Disl. -2006 Loan 192,078 191.378 190,378 190,128 190,728 191.128 191,328 191,171 190,809 190,071 City of Seward -2005 Port Loan 119,573 117,135 114,535 116,935 118,435 114,685 116,685 118,405 114,899 116,329 City of Seward -2{x}3 Refundin!" 284,575 280,950 281,550 286,750 288,750 Cily of Seward· 2006 Port Loan 344,880 344,680 3-43,880 344,380 3-46,380 242,980 344,380 ?rl5,099 345,405 344,993 eiLy of Ketchikan Porl -2006 Loan 2,561.825 2,559,2(x) 2.560,113 2,559,450 2,556,156 2,555,069 2,556,963 2,553,063 2,548,063 2,550,038 Inler-Island Ferry Authority -2007 Refunding 155,300 156,2(Xl 156,900 161,400 160,644 154,750 157,938 156,347 159,666 158,100 City of Nome -2007 Refunding 70,425 178,025 178,325 177,488 181,397 179,894 177,419 180,247 182,859 180,619 Norlhwest Arctic Borouf~h -2007 Refunding 256,%9 256,769 256,569 256,331 256,fJ94 255,856 1,259,844 1,249,172 1,248,350 1,248,825 City of Pctershuq~ -2007 Rdunding 57,769 145,769 141,969 147,181 147,131 141,944 1-J.5,919 140,159 144,391 143,681 City of Seward -2007 Refunding 93,075 97,775 219,475 241,838 243,859 235,606 241,Q..l..4 241,709 237,394 238,363 City and Borough of Sitka -2007 Refunding 849,750 851,250 846,850 846,575 845,3-41 847,319 848,7S1 851,672 849,219 0 City of Wasilla -2007 Refunding 426,S4-l 419,844 422,744 417,744 422,263 420,819 421,681 423,241 424,588 0 Kenai Peninsula Peninsula Borouf~h -2007 Loan 316,325 316,725 311,825 314,538 316,725 313,225 312,625 0 0 0 City of PQlershurg -2007 Loan 92,156 90,356 88,556 91,281 88,925 91,431 88,5+! 90,778 92,894 90,100 Aleutians East Borough -2007 Refunding 991,538 1,199,881 1,203,538 1,206,238 1,203,438 945,438 947,338 1,772218 1,818,363 1,835,863 Soulh Kenai Peninsula Hospital -2(X)7 Refunding 147,644 147,081 146,500 145,900 145,300 144,700 144,100 143,500 142,825 146,950 City and Borough of Juneau ~ 2007111 Dock Loan 752,211 751,394 750,131 753,159 748,813 747,175 749,575 746,875 749,125 745,500 City of Belhd -2007111 Court Facility Loan 294,394 293,975 293,344 292,413 295,225 291,838 293,038 29-1,125 295,125 290,750 Kenai Peninsula Borough South Hospital Service Area 1,128,419 1,131,425 1,128,475 1,129,569 1,129,600 1,128,569 1,126,475 1,127,363 1,124,313 1,122,938 Kodiak M&P Loan 124,921 127,971 125,871 128,621 126,221 128,671 125,971 128,121 125,121 127,521 Kodiak Lift Loan 244,080 240,780 242,330 243,580 244,530 240,330 240,980 241,330 241,380 242,030 Kodiak Island Borough 2008 One Loan 623,460 624,710 620,210 625,210 624,210 622,460 624,960 620,160 624,960 62.1,960 City of Dillingham 2C08 One Loan 1,177,840 1,176,840 1,174,590 1,176,090 1,176,090 1,179,590 1,176,340 1,178,540 1,174,540 1,174,54!) Kodiak Police Station 2fXJ8 Ont' Loan 528,490 525,990 528,240 529,990 531,240 531,990 532,240 529,040 505,(>4() 507,840 City of Seward Long T(?nTI Carl' 2008 One Loan 1,9i2,663 1,968,663 1,973,163 1,970,663 1,971,413 1,970,163 1,971,913 1,970,513 1,972,713 1,973,313 City and Borough of Sitka 2008 Two Luan 566,945 562,245 561,945 563,445 562,045 565,245 562,845 564,725 564,625 564,(lO5 Municipality of Skagway 2008 Two LOiln 394,735 394,535 393,735 394,215 391,215 393,035 394,435 395,210 391,110 395,330 This table continues on the following page. Borrower 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 City of Seward 200S Two Loan 392,036 396,036 394,436 393,686 393,886 393,886 393,686 393,151 394,751 393,151 City of Unalaska 2009 One Loan 1,306,650 1,922,275 1,915,100 1,914,000 1,916,800 1,909,900 1,912,900 1,909,025 1,908,275 1,905,525 City of Kodiak 2009 One Boat Lift Loan 67,438 71,913 71,213 70,413 69,613 68,713 67,713 71,588 70,338 69,088 City of Unalaska 2009 Two Loan 559,625 559,225 563,225 561,425 559,025 558,775 558,800 563,588 560,413 ° Kodiak Island Borough 2009 Two Loan 1,503,200 1,501,800 1,503,400 1,502,800 ° City of Cordova 2009 Two Loan 1,369,281 1,372,281 1,369,281 1,370,481 1,370,681 1,371,656 1,367,%9 1,369,094 1,371,244 1,369,906 City of Nome 2009 Two Loan 51,863 51,063 55,263 54,263 53,263 52,138 51,075 55,044 53,694 52,269 City and Borough of Juneau· 2009 Three Loan 1,501,450 1,498,450 1,449,750 1,479,850 1,493,075 1,500,650 1,485,600 1,495,800 1,444,800 1,468,800 Ketchikan Gateway Borough·2009 Four Loan 1,827,239 1,776,519 1,776,419 1,775,819 1,774,769 1,m,769 1,775,519 1,768,232 1,754,104 1,743,479 Kenai Peninsula Borough~2009 Four Loan 1,071,928 1,051,450 1,052,950 1,055,150 1,055,600 ° City of Kenai~2010One Loan 175,%3 177,348 175,848 178,598 176,198 178,798 175,398 176,998 178,398 172,704 Ketchikan Gateway Borough-2010 One Loan 725,951 720,950 725,350 729,000 722,050 729,800 725,800 731,000 730,000 728,000 Northwest Arctic Borough-2010 One Loan 280,043 282,215 279,815 281,215 282,465 283,565 283,165 282,565 281,765 280,765 City of Petersburg~2010One Loan 136,105 238,994 236,994 239,419 236,269 238,044 239,094 234,494 234,794 234,894 City of Unalaska·20l0 One Loan 427,617 425,849 427,249 426,699 425,999 425,149 427,149 428,749 424,949 425,949 City of Ketchikan Utility. 2010 Refunding 897,103 891,350 893,850 ° Northwest Arctic Borough. 2010 Refunding 216,418 2,063,800 966,250 970,750 %9,350 %7,200 ° City of Unalaska· 2010 Refunding 259,958 ° City and Borough of Juneau· 2010 Two Loans 407,242 1,118,319 1,147,719 1,143,819 1,141,794 1,139,319 1,139,029 1,129,772 1,117,534 1,107,744 City of Cordova 2010 Two Loan 9,148 43,480 47,830 46,955 45,905 49,780 48,430 46,859 45,138 48,188 City of King Cove 2010 Two Loan 15,808 43,612 43,212 42,712 42,112 41,512 45,743 44,762 43,686 42,540 Aleutians East Borough· 2010 Loan 119,074 393,078 399,478 399,778 399,003 397,078 398,878 395,378 3%,578 397,966 City of King Cove 2010 Three Loan 18,088 58,142 62,592 61,842 60,942 59,892 58,692 62,392 60,992 59,680 City of Unalaska 2010 TIlfee Loan 130,687 434,317 440,317 435,192 438,892 436,267 437,267 437,867 438,067 433,605 Kenai Peninsula Borough 2010 Four Loan 1,359,081 1,494,765 1,487,m 1,477,241 1,468,022 1,459,887 1,442,725 1,431,305 1,411,775 City of Ketchikan 2010 Four Loan 581,073 637,981 632,888 631,272 628,044 623,153 616,549 608,190 603,500 Ketchikan Gateway Borough 2010 Four Loan 285,131 342,594 339,087 334,573 333,976 332,198 324,287 320,209 315,233 City and Borough of Sitka 2010 Four Loan 3,813,103 4,066,332 4,069,032 4,082,982 4,064,732 4,064,932 4,075,151 4,062,570 4,047,570 City of Soldotna 2010 Four Loan 199,351 220,916 219,162 216,905 219,070 215,646 216,594 211,905 211,752 City and Borough of Wrangell 2011 One Loan~ 29,400 28,800 28,200 27,600 26,800 31,000 30,000 28,750 27,500 Kodiak Island Boroul!h2011 One Loan~ 638,168 640,368 642,268 638,868 637,468 640,668 638,268 642,268 640,268 Total Loan Obligation OS 529,849,196 540,767,435 540,320,754 539,479,927 537,981,836 536,326,429 536,345,066 535,494,165 535,385,652 533,506,621 'Preliminary, 5ubject to change. [THIS PAGE INTENTIONALLy LEFf BLANK] APPENDIXD Summaries of Borrowers Representing 10% or More of Outstanding Principal of Bonds Issued Under the 2005 General Bond Resolution [THIS PAGE INTENTIONALLY LEFT BLANK] CITY OF KETCHIKAN KETCHIKAN PUBLIC UTILITIES ENTERPRISE FUND FINANCIAL SUMMARY 2003 2004 2005 2006 2007 2008 2009 Audited Audited Audited Audited Audited Restated Audited ASSETS Utility Plan In-Service $67,621,026 $66,742,145 $65,655,049 $63,472,399 $65,675,153 $65,397,934 $69,718,266 Construction Work in Progress 30,078,405 1,838,196 2,147,195 3,720,138 3,046,020 8,748,881 8,017,706 Cash 14,766,191 14,973,617 15,601,381 18,036,431 17,271,704 15,351,432 13,958,674 Restricted Assets 8,433,752 3,653,916 3,731,971 3,592,407 3,881,216 5,128,164 4,062,167 Other Assets 7,552,144 6,496,443 6,770,815 7,537,978 9,709,775 11,890,125 8,686,219 Total Assets 128,451,518 93,704,317 93,906,411 96,359,353 99,583,868 106,516,536 104,443,032 LIABILITIES AND NET ASSETS Revenue Bonds Payable 26,060,000 23,960,000 22,475,000 20,580,000 20,214,266 20,574,802 19,902,223 Other Liabilities 7,690,314 2,990,668 3,444,420 4,243,388 5,320,524 6,782,025 4,045,215 Total Liabilities 33,750,314 26,950,668 25,919,420 24,823,388 25,534,790 27,356,827 23,947,438 NET ASSETS 94,701,204 66,753,649 67,986,991 71,535,965 74,049,078 79,159,709 80,495,594 Operating Revenues 27,744,410 27,180,231 27,691,757 31,085,610 30,786,551 33,275,983 33,310,537 Operation and Maintenance 14,604,369 14,874,171 13,974,313 15,188,374 17,777,974 19,912,114 20,861,336 Administrative and General 4,452,846 5,139,468 5,106,907 5,635,363 5,076,384 5,634,660 6,034,476 Depreciation 5,971,682 6,113,112 6,248,245 6,861,088 6,624,656 5,728,819 6,086,514 Payment in Lieu of Taxes 650,000 650,000 Operating Income (Loss) 2,065,513 403,480 2,362,292 3,400,785 1,307,537 2,000,390 328,211 Non-Operating Revenue (Expense) (1,183,143) (1,139,856) (736,471) (108,887) 197,069 75,885 (402,557) Net Income (Loss) Before Contribution 882,370 (736,376) 1,625,821 3,291,898 1,504,606 2,076,275 (74,346) Contributions 16,761,341 1,099,417 257,521 907,076 1,658,507 3,601,635 2,085,231 Special Item 82,721 Transfer of Net Assets -Swan Lake -Lake Tyee Intertie Project (28,310,596) Transfer -Payment In Lieu of Taxes (650,000) (650,000) (650,000) (650,000) (675,000) Change in Net Assets 17,643,711 (27,947,555) 1,233,342 3,548,974 2,513,113 5,110,631 1,335,885 Population of Service Area •• 13,685 13,093 13,125 13,174 13,166 12,993 12,984 Population of City 8,002 7,691 7,685 7,662 7,732 7,508 7,503 # of Electric Customers 7,178 7,161 7,202 7,251 7,305 7,346 7,365 # of Telephone Access Lines 10,653 10,131 9,840 9,554 9,039 8,122 7,467 # of Water Customers 2,851 2,905 2,928 3,035 3,230 3,223 3,217 Revenue Bond Coverage 3.02 2.22 3.33 3.92 3.21 2.93 2.30 . Water is only provided within the City *. Change in accounting standards payment in lieu of tax must be reported as a transfer D-l CITY OF KETCHIKAN PORT FINANCIAL SUMMARY 2003 2004 2005 2006 2007 2008 2009 Audited Audited Audited Audited Audited Audited Audited ASSETS Cash $2,895,450 $5,121,067 $7,066,674 $4,529,687 $8,471,112 $4,939,650 $4,827,125 Port Facilities (net) 10,282,618 10,072,444 9,762,409 10,405,568 41,226,714 46,312,527 44,947,620 Construction Work in Progress 2,276,353 2,686,197 1,632,135 26,082,665 3,493,927 832,620 963,018 Restricted Assets 19,872,348 4,743,690 4,215,907 4,819,708 Other Assets 129,455 99,752 47,113 515,697 560,772 2,103,049 1,730,443 Total Assets 15,583,876 17,979,460 18,508,331 61,405,965 58,496,215 58,403,753 57,287,914 LIABILITIES AND NET ASSETS General Obligation Bonds Payable 2,245,000 2,065,000 1,880,000 1,685,000 1,480,000 1,265,000 1,035,000 Revenue Bonds Payable 38,500,000 37,875,000 37,220,000 36,540,000 Other Liabilities 3,261,400 2,541,005 3,759,032 7,105,081 5,130,176 4,191,404 3,147,957 Total Liabilities 5,506,400 4,606,005 5,639,032 47,290,081 44,485,176 42,676,404 40,722,957 NET ASSETS ASSETS 10,077,476 13,373,455 12,869,299 14,115,884 14,011,039 15,727,349 16,564,957 Operating Revenues 1,774,457 5,000,010 7,096,948 6,427,207 7,895,063 8,839,267 8,922,228 Operation and Maintenance 828,052 792,954 1,945,688 2,299,099 1,506,749 3,653,251 5,522,050 Depreciation 610,454 632,143 618,708 657,485 985,775 1,390,850 1,460,265 Payment in Lieu of Taxesrraxes 102,100 102,100 102,100 102,100 102,100 282,770 290,000 Operating Income (Loss) 233,851 3,472,813 4,430,452 3,368,523 5,300,439 3,512,396 1,649,913 Non-Operating Revenue (Expense) (22,824) (183,706) (68,390) (310,285) (1,697,827) (1,933,922) (1,738,365) Net Income (Loss) Before Contribution 211,027 3,289,107 4,362,062 3,058,238 3,602,612 1,578,474 (88,452) Contributions 41,004 6,872 12,251 42,006 1,864,661 740,672 926,060 Extraordinary Item (2,432,884) Special Item 14,789 Transfers (2,445,585) (1,853,659) (5,572,069) (617,625) Change in Net Assets 252,031 3,295,979 (504,156) 1,246,585 (104,796) 1,716,310 837,608 1.0 x Annual Debt Service/Reserves AccounVRepair and Replacement Fund/SPH Lease Payments N/A N/A N/A N/A N/A 1.28 1.12 • Unaudited # of Ships 37 37 37 36 36 37 36 # of Calls/Stops 538 535 562 503 504 508 497 # of Water Passengers 770,663 848,969 921,429 838,880 899,638 941,910 963,220 • Reflects statistical infonmation provided by the Ketchikan Visitors Bureau D-2 City and Borough of Sitka Electric Enterprise Fund Financial Summary 2004 2005 2006 2007 2008 2009 2010 Audited Audited Audited Audited Audited Audited Unaudited Assets Cash 8,143,639 9,387,420 7,413,414 8,458,918 9,393,512 8,993,721 8,868,159 Restricted Assets 6,388,355 6,412,431 6,893,530 6,964,401 7,020,244 7,376,785 7,149,277 Other Assets 1,984,033 1,821,898 2,188,653 2,189,489 3,185,865 3,602,067 4,256,023 Construction in Progress 1,220,488 1,580,484 1,504,571 1,524,810 1,130,584 2,883,684 5,555,467 Utility Plant in Service 71,247,965 69,529,520 69,974,445 69,898,054 67,869,782 66,094,407 64,914,833 Total Assets 88,984,480 88,731,753 87,974,613 89,035,672 88,599,987 88,950,664 90,743,759 liabilities and Net Assets liabilities Other Liabilities 320,698 492,294 471,531 663,351 654,181 419,304 636,920 Revenue Bonds Payable 39,600,000 38,050,000 36,390,000 34,570,000 32,550,000 30,395,000 28,090,000 Deferred loss on bonds (1,650,996) (1,511,558) (1,372,120) (1,232,682) (1,093,244) (954,781) (815,343) Revenue Note Payable 10,386,520 10,287,213 9,977,213 9,760,076 9,534,167 9,299,130 9,054,598 Total liabilities 48,656,222 47,317,949 45,466,624 43,760,745 41,645,104 39,158,653 36,966,175 Net Assets 40,328,258 41,413,804 42,507,989 45,274,927 46,954,883 49,792,011 53,777,584 Operating Revenues 9,538,911 9,976,533 9,999,043 10,716,798 10,939,726 11,846,117 10,852,914 Operating Expenses Administrative and General 1,309,195 1,204,058 1,334,555 1,392,512 1,799,393 1,955,508 1,699,737 Operation and Maintenance 2,946,610 3,582,937 3,282,047 3,752,626 4,144,733 4,465,023 4,366,115 Depreciation 1,815,328 1,877,245 1,920,919 2,006,972 2,024,708 1,998,438 1,994,177 Operating Income 3,467,778 3,312,293 3,461,522 3,564,688 2,970,892 3,427,148 2,792,885 Nonoperating revenue (expense) Investment Income 248,638 751,273 450,992 791,965 1,020,133 642,422 523,298 Interest Expense (3,045,411) (2,976,520) (2,881,055) (2,741,335) (2,621,198) (2,469,192) (2,369,426) Other 62,726 50,717 315,931 351,823 208,962 Net Income before contributions and transfers 671,005 1,087,046 1,094,185 1,666,035 1,685,758 1,952,201 1,155,719 Capital contributions 1,300,914 603,582 2,853,752 Extraordinary Item: Net Pension Obligation Relief 281,345 Transfer In (Out) net (186,823) (1,500) (5,802) (23,898) Change In Net Assets 484,182 1,085,546 1,094,185 2,966,949 1,679,956 2,837,128 3,985,573 Population of City and Borough 8,805 8,947 8,833 8,644 8,615 8,627 # of electric customers 4,975 5,012 5,061 5,113 5,197 5,257 5,278 KwH Sold 94,634,990 95,844,639 98,405,781 106,491,085 109,997,183 114,866,192 108,739,970 Revenue Bond Debt Service 3,949,208 3,987,436 4,111,182 4,024,958 4,113,594 4,106,690 4,108,407 Revenue Bond Coverage (> 1.25) 1.40 1.49 1.43 1.59 1.54 1.56 1.34 * Data not available D-3 [THIS PAGE INTENTIONALLY LEFT BLANK] APPENDIXE Financial Statements of the Alaska Municipal Bond Bank for the Year Ended June 30, 2009 [THIS PAGE INTENTIONALLY LEFT BLANK] ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Management's Discussion and Analysis and Financial Statements For the Year Ended June 30, 2010 Together With Independent Auditors' Report ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Table of Contents Management's Discussion and Analysis Financial Statements Independent Auditors' Report Statement of Net Assets and Governmental Funds Balance Sheets Statement of Activities and Governmental Funds Statements of Revenues, Expenses and Changes in Fund BalancelNet Assets Notes to Financial Statements Supplemental Schedule of Statutory Reserve Accounts -Assets, Liabilities, and Account Reserves 1-6 7-8 9 10 11-26 27-30 ALASKA MUNICIPAL BOND BANK AUTHORITY Management's Discussion and Analysis For the Year Ended June 30, 2010 This Management's Discussion and Analysis (MD&A) is required by GASB 34, a rule established by the Governmental Accounting Standards Board. This section is intended to make the financial statements more understandable to the average reader who is not familiar with traditional accounting terminology. This financial report has two integral parts: this MD&A and the financial statements with the accompanying notes that follow. Together, they present the Alaska Municipal Bond Bank Authority's (Bond Bank) financial performance during the fiscal year ended June 30, 2010. Summarized prior fiscal year information is shown within this MD&A, as needed, for comparative purposes. Required financial statements GASB 34 requires two types of financial statements: the Statement of Net Assets and Governmental Fund Balance Sheets and the Statement of Activities and Governmental Fund Revenues, Expenditures and Changes in Fund Balance. These statements report financial information about the Bond Bank's activities using generally accepted accounting principles. Financial Highlights During fiscal year 2010, the Bond Bank approved 12 municipal loan applications for projects in 10 communities, resulting in $85.1 million in bonds being issued and funding $82.7 million worth of loan activity. Bond Bank Bond activity in FY2010 resulted in approximate savings of $9.6 million to the borrowing communities. The activity level and community benefit is comparable to FY2009 when the Bond Bank issued $76.7 million to fund 9 community projects and provided savings of $6.8 million to the borrowing communities. The financial position of the Bond Bank remains strong. All reserves are fully funded and invested. Fiscal year 2010 investment earnings funded fiscal year 2010 operations and will provide for $32,628 excess earnings that is appropriated to the Bond Bank. The Bond Bank holds unrestricted reserves adequate to make up shortfalls in years when investment earnings are not sufficient to fund operations. Statement of Net Assets The Statement of Net Assets, reports assets, liabilities and net assets of the Bond Bank. Assets Assets represent 1) the value of the Bond Bank's investments and investment income receivable on the financial statement dates, recorded at fair market value, and (2) bond principal and interest payments receivable from municipalities. The investments generate income for the Bond Bank to use to meet reserve requirements and pay operating costs. Historically excess operating account earnings have been appropriated to the State of Alaska's (State) general fund each year. House Bill 300 however, for the fiscal year ended June 30, 2010, appropriated the excess earnings of the operating account to the Bond Bank's reserve fund. Interest received on bonds purchased from municipalities is used to pay the Bond Bank's corresponding interest payments on the bonds that it has issued. -1- ALASKA MUNICIPAL BOND BANK AUTHORITY Management's Discussion and Analysis Liabilities Liabilities represent claims against the fund for 1) goods and services provided before the financial statement date but not yet paid for at that date, and 2) interest and bond payments due to purchasers of the Bond Bank's bonds after the financial statement date. Restricted and Unrestricted Net Assets Net assets are comprised of two components. The restricted portion reflects monies maintained in separate trust accounts where their use is limited by applicable bond covenants for repayment of bonds. The unrestricted portion reflects the accumulated excess of the Bond Bank's share of earnings on investments held over those earnings distributed to the State as well as investment income that has not been realized and therefore is not yet subject to distribution to the State's general fund. The following table shows the value of Bond Bank assets summarized as of June 30, 2010 and 2009 as well as liabilities and net assets. Changes from 2010 to 2009 As of June 30, 1ncrease/(Decrease) 2010 2009 Dollars Percent Assets: Cash and investments $ 69,319,402 $ 67,000,925 $ 2,318,477 3.46% Bonds and bond interest receivable 618,175,368 571,017,973 47,157,395 8.26% Total assets 687,494,770 638,018,898 49,475,872 7.75% Liabilities: Accounts payable and accrued liabilities 1,656,128 1,505,169 150,959 10.03% Bonds and bond interest payable 641,574,660 592,790,073 48,784,587 8.23% Total liabilities 643,230,788 594,295,242 48,935,546 8.23% Net Assets: Restricted 32,401,674 31,673,324 728,350 2.30% Unrestricted 11,862,308 12,050,332 (188,024) -1.56% Total net assets $ 44,263,982 $ 43,723,656 $ 540,326 1.24% The increase in cash and investments reflects realized and unrealized investment income. The increase in bonds and bond interest receivable, as well as in bonds and bond interest payable, reflects the issuance of approximately $85.1 million in new bonds during the year, net of principal payments on bonds previously issued of almost $38.7 million. Restricted net assets represents appropriations made by the State to fund the Bond Bank, as well as Bond Bank funds placed into separate accounts in accordance with the reserve requirements of each bond indenture. The State original 1986 appropriation of $18,601,414, has increased by supplemental -2- ALASKA MUNICIPAL BOND BANK AUTHORITY Management's Discussion and Analysis appropriations, of$855,347, $819,843, and $32,628, for FY08, FY09 and FYI0, respectively. As of June 30,2010 $299,064 was unallocated to specific reserve accounts and was held in the Custodian account. Unrestricted net assets represent accumulated earnings on Bond Bank investments, not used to fund reserves, and unrealized gains that are segregated until realized. The decrease in unrestricted net assets is due primarily to the funding of bond issue reserves. The Bond Bank's investments are all held in U.S. Government securities. Statement of Activities The statement of activities shows the activity that occurred during each of the last fiscal years. Revenues Revenues include total return on investments and interest payments received from municipalities. Earnings on investments include interest on fixed income marketable securities and the change in fair market value of those investments. Expenses Expenses include interest payments made to bond holders who purchased the Bond Bank's bonds, payments made to the State of Alaska and operating expenses. Operating expenses include all expenditures required to issue bonds during the current year and include in-house expenses, as well as external consultant fees. Expenses are subtracted from revenues. The following is a condensed statement of AMBBA's changes in net assets: Changes from 2010 to 2009 As of June 30, Increase/(Decrease) 2010 2009 Dollars Percent Revenues: Interest income on bonds receivable $ 27,797,779 $ 24,562,340 $ 3,235,439 13.17% Investment earnings 2,329,330 2,995,730 (666,400) -22.24% Total income 30,127,109 27,558,070 2,569,039 9.32% Expenses: Interest expense on bonds payable 28,844,623 25,449,575 3,395,048 13.34% Operating expenses 742,160 555,235 186,925 33.67% Payments to primary government 32,628 819,843 (787,215) -96.02% Total expenses 29,619,411 26,824,653 2,794,758 10.42% Other financing source -transfer from primary government 32,628 819,843 (787,215) -96.02% Change in net assets: 540,326 1,553,260 (1,012,934) -65.21% Net assets, beginning ofperiod 43,723,656 42,170,396 1,553,260 3.68% Net assets, end ofperiod $ 44,263,982 $ 43,723,656 $ 540,326 1.24% -3- ALASKA MUNICIPAL BOND BANK AUTHORITY Management's Discussion and Analysis Interest income and expense on bonds receivable and payable are a function of the total amount of bonds outstanding, the age of the bonds and the interest rates at which they are issued. The increases in both these line items are consistent with the net increase in bond interest receivable and payable of $47.2 million and $48.8 million, respectively. Net earnings totaled $1.5 million and $.5 million, at June 30, 2009 and 2010, respectively. Investment earnings are a function of market conditions. The Bond Bank uses other assets to subsidize debt service during times of low investment returns in bond reserve funds. Governmental Funds The governmental funds include the General Fund, which accounts for the primary operations of the Bond Bank, and the Debt Service Fund, which accounts for the resources accumulated and payments made on the long-term debt of the Bond Bank. The primary difference between the governmental funds balance sheet and the statement of net assets is the elimination of inter-fund payables and receivables. Bond proceeds are reported as other financing source in the governmental funds statement of revenues and expenses and this contributes to the change in fund balance. In the statement of net assets, however, issuing debt increases long-term liabilities and does not affect the statement of activities. Similarly, repayment of debt principal is recorded as expenditure in the governmental funds statement of revenues and expenses and reduces the liability in the statement of net assets. The following tables show the changes in governmental funds. General Fund Changes from 20 I°to 2009 As of June 30, Increase/(Decrease) 2010 2009 Dollars Percent Assets: Cash and Investments $ 7,007,592 $ 7,485,057 $ (477,465) -6.38% Accrued interest receivable 47,524 46,701 823 1.76% Interfund receivable 5,009,188 5,284,620 (275,432) -5.21% Total assets 12,064,304 12,816,378 (752,074) -5.87% Liabilities: Accounts payable and accrued liabilities 138,292 13,273 125,019 941.90% Total liabilities 138,292 13,273 125,019 941.90% Fund Balance Unreserved 11,926,012 12,803,105 (877,093) -6.85% Total fund balance 11,926,012 12,803,105 (877,093) -6.85% Total liabilities and fund balance $ 12,064,304 $ 12,816,378 $ (752,074) -5.87% -4- ALASKA MUNICIPAL BOND BANK AUTHORITY Management's Discussion and Analysis Debt Service Fund Changes from 2010 to 2009 As of June 30, Increase/(Decrease) 2010 2009 Dollars Percent Assets: Cash and Investments and related receivables $ 64,085,099 $ 60,374,381 $ 3,710,718 6.15% Bonds and bond interest receivable 616,354,555 570,516,272 45,838,283 8.03% Total assets 680,439,654 630,890,653 49,549,001 7.85% Liabilities: Accounts payable and accrued liabilities 1,517,836 1,491,896 25,940 1.74% Interfund payables 5,009,188 5,284,620 (275,432) -5.21% Total liabilities 6,527,024 6,776,516 (249,492) -3.68% Fund Balance Reserved 673,912,630 623,710,624 50,202,006 8.05% $ 680,439,654 $ 630,487,140 $ 49,952,514 7.92% General Fund Changes from 2010 to 2009 As of June 30, Increase/(D ecrease) 2010 2009 Dollars Percent Revenues Interest income $ 270,376 $ 330,371 $ (59,995) -18.16% Total income 270,376 330,371 (59,995) -18.16% Expenditures Operating expenses 742,160 555,235 186,925 33.67% Payments to primary government 32,628 819,843 (787,215) -96.02% Total expenses 774,788 1,375,078 (600,290) -43.65% Excess of revenues over expenditures (504,412) (1,044,707) 540,295 -51.72% Other financing sources (uses) -Transfers (372,681 ) 994,070 (1,366,751 ) -137.49% Fund balance, beginning of period 12,803,105 12,853,742 (50,637) -0.39% Fund balance, end of period $ 11,926,012 $ 12,803,105 $ (877 ,093) -6.85% -5- ALASKA MUNICIPAL BOND BANK AUTHORITY Management's Discussion and Analysis Debt Service Fund Changes from 2010 to 2009 As of June 30, Increase/(Decrease) 2010 2009 Dollars Percent Revenues: Interest income on bonds receivable $ 27,713,943 $ 24,537,300 $ 3,176,643 12.95% Investment earnings 2,142,790 2,690,399 (547,609) -20.35% Total income 29,856,733 27,227,699 2,629,034 9.66% Expenditures: Interest payments 26,465,454 24,691,322 1,774,132 7.19% Principal payments 38,729,582 27,318,462 11,411,120 41.77% Total expenses 65,195,036 52,009,784 13,185,252 25.35% Excess of revenues over expenditures (35,338,303) (24,782,085) ( 10,556,218) 42.60% Other financing sources -Bond proceeds 85,135,000 76,725,000 8,410,000 10.96% Transfers 405,309 (174,227) 579,536 -332.63% Excess of revenues and transfers over expenditures 50,202,006 51,768,688 (1,566,682) -3.03% Fund balance, beginning of period 623,710,624 571,941,936 51,768,688 9.05% Fund balance, end of period $ 673,912,630 $ 623,710,624 $ 50,202,006 8.05% Debt At year end the Bond Bank had $633,627,834 of bonds and notes outstanding up 7.9% from $587,222,416 at June 30, 2009. This debt is secured by the assets of the Bond Bank, except for the Coastal Energy notes payable, see note (5) to the financial statements. The outstanding balance is comprised of the following table of bonds issued for loans and $2.5 million in bonds issued for reserve deposits: GO bonds payable Revenue bonds payable Coastal Energy notes payable As of June 30, 2010 2009 $ 568,900,000 $ 516,555,000 53,855,000 59,705,000 10,872,834 10,962,416 $ 633,627,834 $ 587,222,416 Changes from 2010 to 2009 Increase/(Decrease) DolIars Percent $ 52,345,000 10.13% (5,850,000) -9.80% (89,582) -0.82% $ 46,405,418 7.90% Contacting the Bond Bank's Financial Management This financial report is designed to provide our customers, investors, and creditors with a general overview of the Bond Bank's finances and to demonstrate the Bond Bank's accountability of its assets. If you have any questions about this report or need additional financial information, contact the Executive Director of the Bond Bank at (907) 465-3750. -6- ELGEEREHFELD MERTZ,LLC CERTIFIED PUBLIC ACCOUNTANTS 9309 Glacier Highway, Suite B-200 • Juneau, Alaska 99801 907.789.3178 • FAX 907.789.7128 • www.errncpa.com INDEPENDENT AUDITORS' REPORT The Board of Directors Alaska Municipal Bond Bank Authority Juneau, Alaska We have audited the accompanying financial statements of the governmental activities and each major fund of Alaska Municipal Bond Bank Authority (the Authority), a component unit of the State of Alaska, as of and for the year ended June 30, 2010, which collectively comprise the Authority's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the management of the Authority. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Alaska Municipal Bond Bank Authority as of June 30, 20 I0, and the changes in financial position for the year then ended in conformity with accounting principles generally accepted in the United States of America. Accounting principles generally accepted in the United States of America require that the management's discussion and analysis pages I through 6 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Authority's financial statements as a whole. The Supplemental Schedule of Statutory Reserve Accounts -Assets, Liabilities and Account Reserves, on pages 27 through 30 are presented for purposes of additional analysis and are not a required part of the financial statements. This Supplementary Schedule is the responsibility of management and was derived from and relate directly to the underlying -7- accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. September 30, 2010 -8- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Statement of Net Assets and Governmental Funds Balance Sheets June 30, 20 I0 Adjustments Statement ofNet General Fund Debt Service Fund Total (Note 7) Assets ASSETS Cash and cash equivalents $ 98,772 $ 8,023,469 S 8,122,241 S $ 8,122,241 Investments, at fair value (note 4) 5,548,610 55,648,551 61,197,161 61,197,161 Accrued interest receivable: Bonds receivable 19,656 7,659,721 7,679,377 7,679,377 Investment securities 27,868 413,079 440,947 440,947 Bonds receivable (note 5) 1,360,210 608,694,834 610,055,044 610,055,044 Interfund receivables 5,009,188 5,009,188 (5,009,188) Total assets $ 12,064,304 S 680,439,654 $ 692,503,958 (5,009,188) 687,494,770 LIABILITIES Accounts payable $ 138,292 $ $ 138,292 138,292 Deferred revenue 1,517,836 1,517,836 1,517,836 Accrued interest payable 7,946,826 7,946,826 Interfund payables 5,009,188 5,009,188 (5,009,188) Long-term liabilities (notes 5 and 6): Portion due or payable within one year: General obligation bonds payable 33,200,000 33,200,000 Revenue bonds payable 2,475,000 2,475,000 Other long-term debt 3,043,246 3,043,246 Portion due or payable after one year: General obligation bonds payable 535,700,000 535,700,000 Revenue bonds payable 51,380,000 51,380,000 Other long-term debt 7,829,588 7,829,588 Total liabilities 138,292 6,527,024 6,665,316 636,565,472 643,230,788 FUND BALANCESINET ASSETS Fund balances: Reserved 299,064 673,912,630 674,211,694 (674,211,694) Unreserved 11,626,948 11,626,948 (11,626,948) Total fund balances 11,926,012 673,912,630 685,838,642 (685,838,642) Total liabilities and fund balances $ 12,064,304 $ 680,439,654 $ 692,503,958 Net assets: Restricted for debt service 32,401,674 32,401,674 Unrestricted 11,862,308 11,862,308 Total net assets S 44,263,982 $ 44,263,982 The accompanying notes to the financial statements are an integral part of these statements. -9- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Statement of Activities and Governmental Funds Statements of Revenues, Expenditures, and Changes in Fund BalanceslNet Assets For the Year Ended June 30, 20 I0 Adjustments Statement of General Fund Debt Service Fund Total (Note 7) Activities Revenues: Investment earnings $ 186,540 $ 2,142,790 $ 2,329,330 $ $ 2,329,330 Interest income on bonds receivable 83,836 27,713,943 27,797,779 27,797,779 Total revenues 270,376 29,856,733 30,127,109 30,127,109 Expenditures /expenses: Debt service: Principal payments 38,729,582 38,729,582 (38,729,582) Interest payments /expense 26,465,454 26,465,454 2,379,169 28,844,623 Payments to Primary Government 32,628 32,628 32,628 Professional services 508,475 508,475 508,475 Personal services 124,665 124,665 124,665 Administrative travel 18,222 18,222 18,222 Printing and advertising 2,000 2,000 2,000 Office expense 493 493 493 Arbitrage interest 88,288 88,288 88,288 Miscellaneous expenses 17 17 17 Total Total expenditures /expenses 774,788 65,195,036 65,969,824 (36,350,413) 29,619,411 Excess (deficiency) of revenues over expenditures /expenses (504,412) (35,338,303) (35,842,715) 36,350,413 507,698 Other financing source /(uses): Proceeds ofbonds payable 85,135,000 85,135,000 (85,135,000) Transfers from Primary Government 32,628 32,628 32,628 Transfers to/from Custodial Fund (1,252,199) 1,252,199 Transfers -internal activities 846,890 (846,890) Total other financing sources /(uses) (372,681) 85,540,309 85,167,628 (85,135,000) 32,628 Excess (deficiency) of revenues and transfers in over expenditures /expenses and transfers out (877,093) 50,202,006 49,324,913 (48,784,587) 540,326 Fund balances /net assets: Beginning of the year 12,803,105 623,7 I0,624 636,513,729 (592,790,073) 43,723,656 End of the year S 11,926,012 S 673,912,630 S 685,838,642 S (641,574,660) S 44,263,982 The accompanying notes to the financial statements are an integral part of these statements. -10- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements For the Year Ended June 30, 2010 (1) History/Reporting Entity The Alaska Municipal Bond Bank Authority (Authority or Bond Bank) was created pursuant to Alaska Statute, Chapter 85, Title 44, as amended, (Act) as a public corporation and instrumentality of the State of Alaska (State), but with a legal existence independent of and separate from the State. The Authority is a discretely presented component unit of the State of Alaska for purposes of financial reporting. The Authority was created for the purpose of making moneys available to municipalities within the State to finance capital projects or for other authorized purposes by means of issuance of bonds by the Authority and use of proceeds from such bonds to purchase from the municipalities their general obligation and revenue bonds. The Authority commenced operations in August 1975. The bonds are obligations of the Authority, payable only from revenues or funds of the Authority, and the State of Alaska is not obligated to pay principal or interest thereon, and neither the faith and credit nor the taxing power of the State is pledged to the bonds. The municipal bonds and municipal bond payments, investments thereof and proceeds of such investments, if any, and all funds and accounts established by the bond resolution to be held by the Trustee (with the exception of the Coastal Energy Loan Debt Service Program, which is administered by the Authority) are pledged and assigned for the payment of bonds. The Authority may not issue revenue bonds in excess of $75 million in any fiscal year unless the State of Alaska Legislature approves a greater amount. Revenue refunding bonds are not included in the $75 million fiscal year limitation. AS 44.85.180(c) was enacted in 1975, limiting Bond Bank outstanding bonds at any time to $150 million. This Statue has been periodically amended to raise the limit. In fiscal year 2010, the limit is $1 billion. Total Bond Bank bonds and notes outstanding as of June 30, 2010 are approximately $633.6 million. Thus, the limit on additional bond issuance as ofJune 30, 2010 is approximately $366.4 million. (2) Summary of Significant Accounting Policies The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial principles. The most significant of the Authority's accounting policies are described below. (a) Government-wide and Fund Financial Statements The statement of net assets and the statement of activities report information on all of the activities of the Authority. For the most part, the effect of interfund activity has been removed from these statements. The balance sheet and statement of revenues, expenditures and changes in fund balances are provided for governmental funds. (b) Measurement Focus, Basis ofAccounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both -11- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 180 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures are recorded only when payment is due. The Authority reports the following major governmental funds: The General Fund is the Authority'S primary operating fund. It accounts for all financial resources of the Authority, except those required to be accounted for in another fund. The Authority adopts an annual budget for the operating account only. The Debt Service Fund accounts for the resources accumulated and payments made for principal and interest on long-term debt of the Authority. The Authority does not adopt a budget for the Debt Service Fund because it is not legally required to do so. The purposes of each of these funds are described in the following paragraphs: General Fund The General Fund is comprised of a Custodian Account and an Operating Account. The Custodian Account is established to account for appropriations by the State of Alaska Legislature available to fund the Special Reserve Accounts. The Operating Account is established to account for the ordinary operations of the Authority. Moneys are derived from the following sources: (a) amounts appropriated by the Legislature, (b) fees and charges collected, (c) income on investments of the Statutory Reserve Account in excess of required debt service reserves required by bond resolutions and (d) any other moneys made available for purposes of the General Fund from any other source. Amounts in the Operating Account may be used to pay (a) administrative expenses of the Authority, (b) fees and expenses of the Trustee and paying agents, (c) financing costs incurred with respect to issuance of bonds and (d) any expenses in carrying out any other purpose then authorized by the Act. The excess revenues of the Operating Account are returned to the State of Alaska. The State of Alaska may appropriate the excess revenues to the Bond Bank Custodian Account to fund Special Reserve Accounts. Debt Service Fund Within the Debt Service Fund, separate Debt Service Programs have been established for each bond resolution to account for the portion of bond sale proceeds used to purchase obligations of the municipalities and for the payment of interest and principal on all bonds of the Authority issued under its resolutions. Each program is comprised of an "interest account" and a "principal account", both of which are maintained by a trustee. The receipts of interest and principal from the municipalities and the Statutory Reserve Account are deposited in these programs and are used to pay interest and principal on the Authority bonds. One additional Debt Service Program has been established to account for transactions not involving bond resolutions. This is the Coastal Energy Loan Debt Service Program. The Coastal Energy Loan Debt Service Program is not maintained by a trustee. Payments of interest and principal by municipalities having coastal -12- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements energy loans are made directly to the federal government by the municipalities and are accounted for in the Coastal Energy Loan Debt Service Program. Each debt service fund program contains a Statutory Reserve Account established to account for (a) money available to fund debt service reserves required by future bond sales under various bond resolutions (Custodian Account) and (b) debt service reserves which have already been established under various bond resolutions which are to be used in the case of deficiency in a Debt Service Program in accordance with its respective bond resolution (reserve accounts). Separate reserve accounts exist under each bond resolution as follows: 1976 General Bond Resolution -The amount on deposit in the reserve account is to be the greater of the maximum annual debt service requirement or 10% of all municipal loan obligations outstanding. The reserve account is comprised of an ordinary reserve sub-account and a special reserve sub-account. The ordinary reserve sub-account is created as a result of the Authority increasing each bond issue by the amount necessary to fund up to one-third of the required debt service reserve or with a transfer from the Custodian Account. The special reserve sub-account is created and funded from the Custodian Account at an amount equal at least to two-thirds of the required debt service reserve. Both sub-accounts are maintained by a trustee. On August 23, 1999, the Authority amended the debt service reserve requirement for the 1976 bond resolution that takes effect when all bonds outstanding as of the date of the resolution are retired. Under this new requirement, the reserve must be the least of: (i) 10% of the original stated principal amount of all bonds outstanding; (ii) the maximum annual principal and interest requirements on all bonds then outstanding; (iii) 125% of the average principal and interest requirements on all bonds then outstanding; or (iv) such lesser amount as shall be required to maintain the exemption of interest of all bonds outstanding from inclusion in gross income for federal income tax purposes under the Internal Revenue Code. 1999 Revenue Bond Resolution -Under this resolution a special reserve account was created at an amount equal to the maximum annual debt service of municipal obligations outstanding from moneys made available by legislative appropriation residing in the Custodian Account. 2000 Revenue Bond Resolution -Under this resolution a special reserve account was created at an amount equal to the maximum annual debt service of municipal obligations outstanding from moneys made available by legislative appropriation residing in the Custodian Account. 2001 Revenue Bond Resolution -Under this resolution a special reserve account was created at an amount equal to the maximum annual debt service of municipal obligations outstanding from moneys made available by legislative appropriation residing in the Custodian Custodian Account. 2002 A Revenue Bond Resolution -Under this resolution a special reserve account was created at an amount equal to the maximum annual debt service of municipal obligations outstanding from moneys residing in the Custodian Account. 2003 B Revenue Bond Resolution -Under this resolution a special reserve account was created at an amount equal to the maximum annual debt service of municipal obligations outstanding from moneys residing in the Custodian Account. -13- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements 2004 A Revenue Bond Resolution -Under this resolution a special reserve account was created at an amount equal to the maximum annual debt service of municipal obligations outstanding from moneys residing in the Custodian Account. 2004 B Revenue Bond Resolution -Under this resolution a special reserve account was created at an amount equal to the maximum annual debt service of municipal obligations outstanding from moneys residing in the Custodian Account. 2005 General Bond Resolution -The reserve must be the least of: (i) 10% of the initial principal amount of each Series of Bonds outstanding; (ii) the maximum annual principal and interest requirements on all bonds outstanding; (iii) 125% of the average annual debt service on all bonds then outstanding; or (iv) such lower amount as may be allowed by law. The reserve account is comprised of an ordinary reserve sub-account and a special reserve subaccount. The ordinary reserve sub-account is created as a result of the Authority increasing each bond issue or with a transfer from the Custodian Account. The special reserve subaccount is created and funded from the Custodian Account. Both sub-accounts are maintained by a trustee. Amounts in the Statutory Reserve Account in excess of (a) required debt service reserves, (b) appropriations by the legislature residing in the Custodian Account, and (c) income on nonlegislature-appropriated funds are transferred to the Operating Account. Income on nonlegislature-appropriated funds, representing excess of revenues over expenditures of the ordinary reserve accounts and interest earned on the unreserved investment earnings account is accumulated in the Custodian Account and is available to fund the Special Reserve account. (c) Restricted Assets Certain resources set aside for the repayment of the Authority's bonds, net of certain proceeds from additional bonds issued, are classified as restricted net assets on the statement of net assets because they are maintained in separate trust accounts and their use is limited by applicable bond covenants. Cash and cash equivalents and investments include $32,401,674 of restricted assets. These assets were funded from transfers from the Custodial Account to reserve accounts of Bond Bank equity of $12,092,442 and $20,010,168 of State appropriated equity. Of the original State appropriation of $18,601,414 and fiscal year 2008 and 2009 appropriations of $855,347 and $819,843, respectively, $266,436 was unallocated to a reserve account at June 30, 2010, and is in the Custodial account. As of June 30, 2010, $32,628 of earnings on the original State appropriation was available to allocate to reserve accounts from the Custodial Account. (d) Long-Term Obligations In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the statement of net assets. (e) Fund Equity In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. In the government-wide financial statements, restrictions of net assets are reported when externally imposed. -14- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements (f) Interest Arbitrage Rebate Bonds issued and funds segregated into reserves after August 15, 1986 are subject to Internal Revenue Service income tax regulations which require rebates to the U.S. Government of interest income earned on investments purchased with the proceeds from the bonds or any applicable reserves in excess of the allowable yield of the issue. Amounts owed are expensed when paid and refunds are recorded when received. (g) Income Taxes The Authority is exempt from paying federal and state income taxes. (h) Refunding Gains/Losses The Authority reports gains or losses recognized from the refunding of bonds in interest revenue or expense. (3) Cash The Authority considers all highly liquid investments purchased with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents at June 30, 2010 consist of money market accounts held with various financial institutions. The bank balance of all of the Authority's cash and cash equivalents are collateralized by securities held in the Authority's name by its custodial agent. At June 30, 2010, the amounts recorded in the Authority's general ledger equaled its bank balances. (4) Investments The fair value as of June 30,2010 of the Authority's investments is $61,197,161. At June 30, 2010 the investments held in the reserve accounts total $55,648,551, and the Custodian account total $5,548,610. The fair value of debt security investments by contractual maturity as of June 30, 2010 is shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalty. u.s. Treasury secUIities U.S. Government agencies secUIities Total investments (a) Investment Policies Less than 1 $ 5,452,309 3,829,875 $ 9,282,184 Investment Maturities (in Years) 1-5 6-10 More than 10 Total $ 37,852,641 $ 485,000 $ $ 43,789,950 13,577,336 17,407,211 $ 51,429,977 $ 485,000 $ $ 61,197,161 The Authority has distinct investment objectives and policies associated with the Custodian Account, Reserve Funds, and municipal debt payments. The three classes of funds are listed below: • Custodian Account -The Custodian Account investment portfolio is designed with the objective of attaining the highest market rate of return subject to the required use of the Custodian Account for -15- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements operation, funding transfers to the state, and funding reserves. When the Custodian Account balance allows, a longer investment horizon is implemented for the Custodian Account, accepting the limited probability of short-term loss in exchange for higher yield on investments. The Custodian Account balance must exceed $15 million, and be forecasted to exceed $15 million for the subsequent six-month period, and an analysis of risk profile and historical benefit between the varying strategies must be undertaken before any shift in the investment strategy of the Account. The Custodian Account has to maintain sufficient liquidity to meet operating requirements, provide the prior fiscal year's state dividend, and to allow transfers to reserves as needed for bond issuance activity. Long-term preservation of principal is the third objective of the Custodian Account's investment program. Investments shall be undertaken in a manner that minimizes the probability of long-term loss. o The Custodian Account balance is a critical component in determining anticipated life, ability to diversify, and investment policy in this account. Accordingly, when the account balance is above $15 million a more aggressive policy will be implemented. When the account balance is below $15 million a more conservative policy will be used. o Shifting from one asset allocation to another may be approved by the Investment Committee when there is a projection of a continued trend in account balance justifying the shift. o There are no arbitrage restrictions. o When the Custodian Account balance is less than $15 million, the following policies apply: .. 20% Money Market Fund and 80% government agencies and U.S. Treasuries with maturities of less than 5 years. .. Performance benchmark for the 20%: Three month U.S. Treasury Bill. .. Performance benchmark for the 80%: Merrill Lynch 1-5 Govermnent Index. o When the Custodian Account balance exceeds and is expected to remain in excess of $15 million, the following policies apply: .. Greater of 10% or a percentage equal to $750,000 in market value: Money Market Fund. .. Up to 90%: Broad U.S. Bond Market Fund. .. Performance benchmark for the greater of 10% or the percentage of the fund invested that is benchmarked to Money Market Fund: Three-month U.S. Treasury Bill. .. Performance benchmark for the up to 90%: Lehman Brothers Aggregate Index. o The following transactions are prohibited with the Custodian Account unless those transactions have the prior written consent of the Investment Committee: .. Short sale of securities (the sale and settlement of a security not currently owned by the Authority and a formal agreement to borrow the security to facilitate the settlement of the short sale);-16- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements • Purchases of futures, forwards or options for the purpose of speculating (currency futures, forwards and options are permitted only for hedging or to facilitate otherwise permissible transactions); • Borrowing to leverage the return on investments. Extended settlement of securities purchases executed to facilitate or improve the efficiency of a transaction will not be considered borrowing, provided that sufficient cash equivalent securities or receivables are available to facilitate the extended settlement; • Purchases of "private placement" or unrated corporate bonds. • Bond Reserve Funds -Preservation of principal is the foremost objective of the Bond Reserve Funds investment program. These funds shall be managed to ensure that the corpus is preserved. These funds will not be expended until the final maturity of the bond issue they secure, unless there is a failure to pay debt service by a community. As there is limited benefit in maximizing return it is the least important objective of the Bond Reserve Funds. It is anticipated that the Reserve Funds cumulative average return should target the blended arbitrage yield limit of the bond issues secured. o Bond resolutions limit allowed investment of these funds. Investment risk should be examined on an annual basis to ensure that no greater than the minimum level of risk required to achieve the highest probability of earning the arbitrage yield limit on the bonds is incurred. o 100% government agencies and U.S. Treasuries with maturities ofless than 5 years. o Performance benchmark is Merrill Lynch 1-5 Government Index. • Municipal Debt Payments -Preservation of principal and liquidity are the foremost objectives of the Municipal Debt Payments investment program, as these funds will be expended within seven business days of receipt. Return on investment is a benefit of holding these funds for the advance payment period, but not the focus of investing the funds. The bond resolutions limit investments. o 100% Money Market Fund. o Performance benchmark is three-month U.S. Treasury Bill. It is the policy of the Authority to diversify its investments and to ensure the safety and liquidity of the investments by observing the following sound investment practices: • Not more than 5% of the Custodian Account may be invested in the corporate debt of anyone issuer, at the time of purchase. • In the event of a credit downgrade which reduces a security below the required rating written notification will be made to the Investment Committee setting forth the particulars of the downgrade and recommending a course of action. • Not more than 50% of the Custodian Account may be invested in corporate securities, at the time of purchase. • The duration of the Custodian Account must remain within 80 to 120 percent of the duration of the Lehman Brothers Aggregate Index. -17- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements • Purchases of more than 10% of a corporate bond issue shall not be made. (b) Concentration Risk Concentration risk is the risk of loss attributed to the magnitude of the Authority's investment in a single issuer. Concentration limits are not established in the bond indentures and governing agreements for pledged investments. The Authority's policies set out maximum concentration limits for investments managed by the external investment manager. (c) Credit Risk Credit risk is the risk of loss due to the failure of the security or backer. The Authority mitigates its credit risk by limiting investments permitted in the investment policies. U.S. Treasury securities and securities of agencies that are explicitly guaranteed by the U.S. government total $61,197,161, and are not considered to have credit risk. (d) Custodial Credit Risk The Authority assumes levels of custodial credit risk for its deposits with financial institutions, bank investment agreements, and investments. For deposits, custodial credit risk is the risk that, in the event of a bank failure, the Authority's deposits may not be returned. For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the Authority will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The Authority has not established a formal custodial credit risk policy for its investments. The Authority had no investments registered in the name of a counterparty. (e) Interest Rate Risk Interest rate risk is the risk that the market value of investments will decline as a result of changes in general interest rates. For non-pledged investments, the Authority mitigates interest rate risk by structuring its investments' maturities to meet cash requirements, thereby avoiding the need to sell securities in the open market prior to maturity. For investments held held in trust, investment maturities are structured to meet cash requirements as outlined in its bond indentures and contractual and statutory agreements. (1) Modified Duration Modified duration estimates the sensitivity of an investment to interest rate changes. The following table shows the Authority's investments with their weighted average modified duration as of June 30, 2010 by investment type: U.S. Treasury securities U.S. Government agency Total portfolio -18-Investment Fair Values $ 43,789,950 17,407,211 $ 61,197,161 Modified Duration 3.53 3.32 3.43 ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements (5) Bond and Notes Receivable The General Fund includes $1,360,210 of 5% bonds receivable due from the Cities of Yakutat, Galena and Sitka that mature through 2013. Bonds and notes receivable by debt service program at June 30, 2010 mature III varying annual installments as follows: Year ending June 2000B Seward 200lA Ketchikan 2001 B Ketchikan 2002A Ketchikan 30 1976 General 2005 General Revenue Revenue Revenue Revenue 2011 $ 19,238,000 $ 13,585,000 $ 135,000 $ 100,000 $ 150,000 $ 540,000 2012 16,720,000 17,440,000 140,000 105,000 155,000 560,000 2013 15,925,000 17,060,000 110,000 165,000 585,000 2014 14,875,000 16,915,000 115,000 175,000 610,000 2015 14,605,000 16,120,000 125,000 180,000 635,000 2016-2020 69,074,000 78,690,000 555,000 820,000 2021-2025 45,570,000 70,900,000 2026-2030 2,350,000 68,295,000 2031-2035 35,400,000 2036 and after 11,205,000 $ 198,357,000 $ 345,610,000 $ 275,000 $ 1,110,000 $ 1,645,000 $ 2,930,000 Year ending June 2003B Valdez 2004A CBJ 2004B Anchorage Coastal Energy 30 Revenue Revenue Revenue Loan Total Principal 2011 $ 865,000 $ 575,000 $ 110,000 $ 3,043,246 $ 38,341,246 2012 935,000 595,000 115,000 547,061 37,312,061 2013 1,000,000 620,000 120,000 551,032 36,136,032 2014 1,070,000 650,000 125,000 555,165 35,090,165 2015 1,135,000 680,000 130,000 559,467 34,169,467 2016-2020 6,600,000 3,875,000 730,000 1,874,169 162,218,169 2021-2025 4,695,000 4,995,000 905,000 755,542 127,820,542 2026-2030 6,460,000 1,145,000 923,262 79,173,262 2031-2035 8,290,000 1,475,000 1,128,213 46,293,213 2036 and after 935,677 12,140,677 $ 16,300,000 $ 26,740,000 $ 4,855,000 $ 10,872,834 $ 608,694,834 Under the Coastal Energy Loan Program (Program), the Authority issued $5,000,000 1986 Series A Coastal Energy Bonds (Bonds) payable to the National Oceanic and Atmospheric Administration (NOAA). The proceeds of these bonds were used to purchase port revenue bonds from the City of Nome. The City of Nome Nome entered into a tripartite agreement with NOAA and the Authority effective August 2, 1994 to defer payment of the principal and accrual of interest for ten years. Effective January 29,2009 a second amendment to the tripartite agreement was executed. The amendment authorized the issuance of 2009A Bonds for the purpose of refunding by exchange the outstanding City of Nome, Alaska, Port Revenue Bond 1986 Series A. The related loan payable does not represent a general obligation of the Authority as it is payable only from proceeds received from the City of Nome. Also under the Program, the Authority issued $6,563,000 1987 Series A Coastal Energy Bonds payable to NOAA. The proceeds of these bonds were used to purchase port revenue bonds from the City of St. Paul. The City of St. Paul entered into a tripartite agreement with NOAA and the Authority effective -19- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements December 14, 2000 to modify and amend the repayment terms including principal and interest. On April 18,2005, the City of St. Paul asked for NOAA's recommendation for loan forgiveness which was denied on January 24,2006. Subsequently, on March 17,2009, NOAA issued another determination on request for recommendation of CEIP loan forgiveness but a final agreement has not been reached between the City of St. Paul and NOAA as of June 30, 2010. The related loan payables do not represent a general obligation of the Authority as they are payable only from proceeds received from the City of Nome and St. Paul, respectively. Payment of principal and interest on the Bond Bank's Coastal Energy Bond is not secured by a pledge of any amounts held by or payable to the Bond Bank under the General Bond Resolution, including the Reserve Account, and is not in any way a debt or liability of the Bond Bank. The Coastal Energy Bonds and related accounts are included in the Bond Bank's statutory limit for total bonds outstanding and therefore included in the Bond Bank's financial statements. -20- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements (6) Long -Term Liabilities Issue Debt Service Account Principal Interest rate outstanding Statutory Reserve Account Ordinary Reserve Sub-Account Principal Interest rate outstanding 6.9%-9% 160,000 4.4%-5% 755,000 3.875%-4.75% 2,475,000 3.875%-4.75% 2.5%-4.5% 4,165,000 2.50"10-4.50% 3.875%-4.80% 8,245,000 3.875%-4.80"/0 3.70%-4.80% 6,625,000 4.80% 2.00%-3.625% 2,655,000 2.00"10-3.625% 4.90%-6.00% 10,620,000 4.90"10-6.00% 2.00%-5.25% 7,360,000 2.00%-3.5% 290,000 2.00%-5.00% 18,410,000 3.00%-4.40% 12,460,000 2.00%-4.00% 11,130,000 2.00"10-4.00% '76 General Bond Resolution Program: 1998 Series A Aleutians East, City of 1998 Series B -Cordova, City of 2000 Series C -Northwest Arctic Borough 2000 Series D -Petersburg 2000 Series E: Kenai Kodiak Island Borough Lake and Peninsula Wrangell Nome 2000 Series F -Kodiak Island Borough 2001 Series A -Northwest Arctic Borough 2001 Series B -Aleutians East Borough 2002 Series A -Wasilla, City of 2002 Series B Wrangell, City of Northwest Arctic Borough 2003 Series A -Ketchikan Gateway Borough 2003 Series C Kenai Peninsula Borough Lake & Peninsula Borough 2003 Series D -Kenai 2003 Seri es E Aleutians East Borough Kenai Peninsula Borough 2003 Series F -Seward 2003 Series G -NW Arctic Borough 2004 A Series Fairbanks Sitka 2004 B Seri es Nome Valdez Petersburg Craig Seward 2004 C Series Kodiak Island Borough Palmer Petersburg 2004D Series Adak Kodiak Island Borough 4.625%-6% 4%-4.75% 4.53%-5.75% 4.55%-5.70% 4.75%-5.375% 4.00%-5.00% 3.00%-5.00% -21-$ 205,000 205,000 1,000,000 85,000 1,832,000 11,600,000 10,405,000 5.00"10-5.375% 423,000 285,000 755,000 525,000 305,000 210,000 365,000 225,000 (continued) ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements Debt Service Account Statutory Reserve Account Ordinary Reserve Sub-Account Issue 2005 A Series Cordova Fairbanks Ketchikan Gateway Borough Northwest Arctic Borough Sitka Unalaska 2005 B Series Haines Ketchikan Gateway Borough North Pole, City of Palmer Sitka 2005 C Series Haines Petersburg Northwest Arctic Borough 2006 A Series Aleutians East Borough Ketchikan Gateway Borough Lake & Peninsula Borough Nome Wrangell Total 1976 General Bond Resolution Fund 2005 Series General Bond Resolution Program: 2005 -One Series Ketchikan, City of Nome Seward 2006 -One Series Kenai Peninsula Borough Seward 2006-Two Series -Ketchikan, City of 2007-One Series Kenai Peninsula Borough Inter-Island Ferry Authority Nome, City of NW Arctic Borough Petersburg Seward, City of Sitka, City of Wasilla, City of 2007-Two Series Kenai Peninsula Borough Aleutians East Borough Interest rate 2.50%-5.00% 3.00%-5.00% 4.00%-5.00% 4.00%4.00%4.35% 3.00%-5.00% 4.00%-6.00% 4.25%4.75% 4.00%-5.50% 3.75%-5.00% -22-Principal outstanding 29,275,000 19,350,000 25,705,000 13,345,000 198,357,000 13,625,000 6,080,000 36,540,000 23,765,000 23,945,000 Interest rate 2.75%-5.00% 5.00% 5.00% 4.00% 3.00%-5.00"10 4.50%-6.00"/0 5% 4.00%-5.50"/0 4.50% Principal outstanding 1,435,000 465,000 2,185,000 950,000 8,128,000 350,000 390,000 1,765,000 1,290,000 685,000 (continued) ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements Statutory Reserve Account Debt Service Account Ordinary Reserve Sub-Account Principal Principal Issue Interest rate outstanding Interest rate outstandi ng 2007-Three Series 4.25%-5.50% 13,680,000 4.00% 415,000 Bethel, City of Juneau, Ci ty and Borough of 2007-Four Series -Kenai Peninsula Borough 4.25%-5.00% 13,605,000 4.25%-4.50"10 1,070,000 2007-Five Series -Kodiak, City of 4.00%-6.00% 5,910,000 2008-0ne Series 4.00%-5.00% 56,350,000 5.00% 4,250,000 Dillingham Kodiak Island Borough Kodiak, City of Seward 2008-Two Series 4.40%-6% 17,200,000 4.75%-6.00"10 1,560,000 Seward Sitka, City of Skagway 2009-0ne Series 3.0%-5.625 25,985,000 4.00%-5.50 % 730,000 Kodiak, City of Unalaska, City of 2009-Two Series 4.0%-6.00% 26,265,000 4.0%-6.00"10 1,825,000 Cordova Nome, City of Unalaska, City of Kodiak, Island Borough 2009-Three Series -Juneau, City and Borough of 2.0%-4.00% 12,415,000 2.0%-4.00"10 975,000 2009-A-Four Series 3.0%-4.00% 7,855,000 3.0%-4.00"10 840,000 Kenai Peninsula Borough Ketchikan, Gateway Borough 2009-B-Four Series -Ketchikan, Gateway Borough 4.625%-5.40% 20,425,000 20 IO-A-Series One 2.0%-5.00% 20,085,000 3.00% 335,000 Ketchikan, City of Ketchikan, Gateway Borough Kenai, City of Northwest Arctic Borough Petersburg Unalaska, City of 201O-B Series One 5.993%-6.341% 7,415,000 Kenai, City of Northwest Arctic Borough Petersburg Unalaska, City of 201O-A Series Two 2.0%-3.0% 3,060,000 3.00% 325,000 Juneau, City and Borough of Cordova King Cove, City of 201O-B Series Two 3.751%4.907% 11,405,000 Juneau, City and Borough of Cordova King Cove, City of Total 2005 Series General Bond Resolution Fund 345,610,000 16,805,000 (continued) -23- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements Debt Service Account Statutory Reserve Account Ordinary Reserve Sub-Account Issue 2000B Seward Revenue Bond Resolution Program 200 IA Ketchikan Revenue Bond Resolution Program 200lB Ketchikan Revenue Bond Resolution Program 2002A Ketchikan Revenue Bond Public Utilities 2003B Valdez, City of Bond Resolution Program 2004A Juneau, City and Borough of Bond Resolution ProgI 2004B Anchorage Bond Resolution Program Total Revenue Bonds Coastal Energy Reserve Loan Account: City ofNome Port Facility Revenue Bond City ofSaint Paul-Fuel Dock Total Coastal Energy Reserve Loan Account Interest rate 4.35%-5.5% 4.5%4.9% 4.5%4.9% 3.00%-5.00% 2.75%-5.25% 6.25%-4.375% 4.00%4.75% 8.50% 5% Principal outstanding 275,000 1,110,000 1,645,000 2,930,000 16,300,000 26,740,000 4,855,000 53,855,000 4,866,956 6,005,878 10,872,834 $ 608,694,834 Principal Interest rate outstanding $ 24,933,000 During the year ended June 30, 2010 the Authority'S long-term liabilities changed as follows: Beginning End of year New debt Repayments of year General obligation bonds payable $ 516,555,000 $ 85,135,000 $ 32,790,000 $ 568,900,000 Revenue bonds payable 59,705,000 5,850,000 53,855,000 Other long-term debt 10,962,416 89,582 10,872,834 Total $ 587,222,416 $ 85,135,000 $ 38,729,582 $ 633,627,834 General obligation bonds are secured by bonds receivable and by amounts in the ordinary reserve account. The Act further provides that if a municipality defaults on its principal and/or interest payments, upon written notice by the Authority, the State of Alaska must pay to the Authority all funds due from the defaulting municipality from the State in an amount sufficient to clear the default. If the Alaska Municipal Bond Bank Authority must draw on the Alaska municipal bond bank authority reserve fund (AS 44.85.270), 2005 General Bond Resolution Reserve, because of a default by a borrower, an amount equal to the amount drawn from the reserve is appropriated appropriated from the State of Alaska General Fund to the Authority reserve fund (AS 44.85.270). Loans made under the Coastal Energy Loan Program are payable only from proceeds received from the municipalities to which the loans were made. -24- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements The above bonds mature in varying annual installments. The maturities at June 30, 2010 are as follows: 1976 2005 Year ending June 2000B Seward 30 General Reserve General Reserve Revenue 2011 $ 19,238,000 $ 377,000 $ 13,585,000 $ $ 135,000 2012 16,720,000 1,225,000 17,440,000 80,000 140,000 2013 15,925,000 435,000 17,060,000 1,350,000 2014 14,875,000 5,000 16,915,000 595,000 2015 14,605,000 245,000 16,120,000 1,225,000 2016-2020 69,074,000 3,751,000 78,690,000 5,615,000 2021-2025 45,570,000 2,090,000 70,900,000 2,745,000 2026-2030 2,350,000 68,295,000 3,430,000 2031-2035 35,400,000 2036 and after 11,205,000 1,765,000 $ 198,357,000 $ 8,128,000 $ 345,610,000 $ 16,805,000 $ 275,000 Year ending June 2001 A Ketchikan 200lB Ketchikan 2002A Ketchikan 2003B Valdez 2004A CBJ 30 Revenue Revenue Revenue Revenue Revenue 2011 $ 100,000 $ 150,000 $ 540,000 $ 865,000 $ 575,000 2012 105,000 155,000 560,000 935,000 595,000 2013 110,000 165,000 585,000 1,000,000 620,000 2014 115,000 175,000 610,000 1,070,000 650,000 2015 125,000 180,000 635,000 1,135,000 680,000 2016-2020 555,000 820,000 6,600,000 3,875,000 2021-2025 4,695,000 4,995,000 2026-2030 6,460,000 2031-2035 8,290,000 2036 and after $ 1,110,000 $ 1,645,000 $ 2,930,000 $ 16,300,000 $ 26,740,000 2004B Year ending June Anchorage Coastal Energy 30 Revenue Loan Total Principal Total Interest 2011 $ 110,000 $ 3,043,246 $ 38,718,246 $ 28,510,171 2012 115,000 547,061 38,617,061 27,149,950 2013 120,000 551,032 37,921,032 25,730,392 2014 125,000 555,165 35,690,165 24,090,188 2015 130,000 559,467 35,639,467 22,624,920 2016-2020 730,000 1,874,169 171,584,169 89,775,460 2021-2025 905,000 755,542 132,655,542 53,413,328 2026-2030 1,145,000 923,262 82,603,262 26,210,725 2031-2035 1,475,000 1,128,213 46,293,213 9,990,376 2036 and after 935,677 13,905,677 1,312,179 $ 4,855,000 $ 10,872,834 $ 633,627,834 $ 308,807,689 -25- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements (7) Adjustments Certain adjustments are considered to be necessary to the governmental funds in order to present the Authority's financial position and the results of its operations. These adjustments include the elimination of inter-fund payables and receivables. Additionally, bond proceeds are reported as financing sources in governmental funds and thus contribute to the change in fund balance. In the statement of net assets, however, issuing debt increases long-term liabilities and does not affect the statement of activities. Similarly, repayment of principal is an expenditure in the governmental funds and reduces the liability in the statement of net assets. (8) Commitments The amount of Authority receipts determined under AS 44.85.270(h) available for transfer by the Authority for fiscal year 2010 were appropriated to the Bond Bank Authority Reserve Fund (AS 44.85.270(a)) in the amount of $32,628, increasing the cumulative state appropriated amount to $20,042,796 at June 30, 2010. The entire Custodian Account balance is available for appropriation, at any time, by the State Legislature. (9) Subsequent Events Subsequent to June 30, 2010, Senate Bill 230, Section 30, appropriated $2,450,000 from the General Fund to the Alaska Municipal bond Bank for purposes of making a direct loan to the city of Galena. Loan repayments will be included in the statutorily defined revenues of the Bond Bank. This loan closed on July 28, 2010. In addition, the Bond Bank approved loans to communities of Unalaska, Aleutians East Borough and to the City of King Cove in the amount of$II,975,000 scheduled to close on September 16,2010. -26- ALASKA MUNICIPAL BOND BANK AUTHORITY (A Component Unit of the State of Alaska) Supplemental Schedule of Statutory Reserve Accounts -Assets, Liabilities and Account Reserves For the year ended June 30, 2010 2005 Series 1976 General 1976 General Obligation 2005 Series "Ordinary" "Special" Interest Resolution Assets Cash $ 88,550 $ 177,462 $ 616,630 $ 134,391 Accrued interest receivable 62,080 164,746 186,253 Marketable securities 9,445,486 20,738,278 25,464,787 Interaccount receivables 3,909,592 $ 9,596,116 $ 24,990,078 $ 616,630 $ 25,785,431 Liabilities Interaccount payab1es $ 1,480,431 $ 5,953,305 $ 616,630 $ 668,641 Bond payable 8,128,000 16,805,000 Accrued interest payable 100,401 186,708 9,708,832 5,953,305 616,630 17,660,349 Reserves Special Reserve -State Appropriated 15,663,302 3,720,198 Special Reserve -Unappropriated 3,243,579 4,226,119 Special Reserve -Unrealized gain (loss) 129,892 178,765 Ordinary Reserve -Unallocated (232,541) Ordinary Reserve -Unrealized gain (loss) 119,825 (112,716) 19,036,773 19,036,773 8,125,082 $ 9,596,116 $ 24,990,078 $ 616,630 $ 25,785,431 (continued) See independent auditors' report -27- ALASKA MUNICIPAL BOND BANK AUTHORITY (A Component Unit of the State of Alaska) Supplemental Schedule of Statutory Reserve Accounts -Assets, Liabil ities and Account Reserves For the year ended June 30, 20 I0 2005 Series 1999A Inter-200lA Investment Island 2000B Seward Ketchikan Assets Cash $ 234,585 $ 97,182 $ 149,441 $ 154,678 Accrued interest receivable Marketable securities Interaccount receivables 1,503,382 7,788 $ 1,737,967 $ 97,182 $ 157,229 $ 154,678 Liabilities Interaccount payables $ 1,737,967 $ 2,770 $ $ 3 Bond payable Accrued interest payable 1,737,967 2,770 3 Reserves Special Reserve -State Appropriated 94,412 147,71 I 154,675 Special Reserve -Unappropriated Special Reserve -Unrealized gain (loss) 9,518 Ordinary Reserve -Unallocated Ordinary Reserve -Unrealized gain (loss) 94,412 157,229 154,675 $ 1,737,967 $ 97,182 $ 157,229 $ 154,678 See independent auditors' report -28- ALASKA MUNICIPAL BOND BANK AUTHORITY (A Component Unit of the State of Alaska) Supplemental Schedule of Statutory Reserve Accounts -Assets, Liabilities and Account Reserves For the year ended June 30, 20 I0 200IB 2002A Ketchikan Ketchikan 2003B Valdez 2004A CBJ Assets Cash S 229,875 S 625,013 S 1,780,100 S 1,875,788 Accrued interest receivable Marketable securities Interaccount receivables 29,639 S 112 $ 229,875 $ 625,013 S 1,809,739 S 1,875,900 Liabilities Interaccount payables S 5 S 13 $ Bond payable Accrued interest payable 5 13 Reserves Special Reserve -State Appropriated 229,870 Special Reserve -Unappropriated 625,000 1,780,063 1,875,750 Special Reserve -Unrealized gain (loss) 29,676 150 Ordinary Reserve -Unallocated Ordinary Reserve -Unrealized gain (loss) 229,870 625,000 1,809,739 1,875,900 $ 229,875 $ 625,013 S 1,809,739 $ 1,875,900 (continued) See independent auditors' report -29- ALASKA MUNICIPAL BOND BANK AUTHORITY (A Component Unit of the State of Alaska) Supplemental Schedule of Statutory Reserve Accounts -Assets, Liabilities and Account Reserves For the year ended June 30, 20 I0 2004B Anchorage Total Assets Cash $ 341,937 $ 6,505,632 Accrued interest receivable 413,079 Marketable securities 55,648,551 Interaccount receivables 67 5,450,580 $ 342,004 $ 68,017,842 Liabilities Interaccount payables $ $ 10,459,765 Bond payable 24,933,000 Accrued interest payable 287,109 35,679,874 Reserves Special Reserve -State Appropriated 20,010,168 Special Reserve -Unappropriated 341,931 12,092,442 Special Reserve -Unrealized gain (loss) 73 348,074 Ordinary Reserve -Unallocated (232,541) Ordinary Reserve -Unrealized gain (loss) 119,825 342,004 32,337,968 $ 342,004 $ 68,017,842 See independent auditors' report -30- APPENDIXF 2005 General Obligation Bond Resolution [THIS PAGE INTENTIONALLy LEFf BLANK] TABLE OF CONTENTS ARTICLE I STATUTORY AUTHORITY AND DEFINITIONS Section 101 -Authority for This Resolution. Section 102 -Resolution Constitutes Contract.. Section 103 -Definitions.. ARTICLE II AUTHORIZATION AND ISSUANCE OF BONDS Section 201 ~ Authorization of Bonds and Interest Rate Exchange Agreements.. 15 Section 202 -Issuance and Delivery of Bonds.. 16 Section 203 -Provisions for Issuance of Bonds. . 16 Section 204 -Provisions for Refunding Bonds. . 19 GENERAL OBLIGATION BOND RESOLUTION ALASKA MUNICIPAL BOND BANK ARTICLE III GENERAL TERMS AND PROVISIONS OF BONDS Section 301 -Description of Bonds; Payment. Section 302 -Legends. Section 303 -Execution and Authentication.. Section 304 -Interchangeability of Bonds. Section 305 -Negotiability, Transfer and Registry.. Section 306 -Regulations with Respect to Exchanges and Transfers.. Section 307 -Bonds Mutilated, Destroyed, Stolen or Lost.. Section 308 -Preparation of Definitive Bonds; Temporary Bonds.. Section 309 -Cancellation and Destruction of Bonds. ARTICLE IV REDEMPTION OF BONDS Section 401 -Redemption Provisions.. Section 402 -Notice of Redemption.. Section 403 -Partially Redeemed Fully Registered Bonds. 21 23 23 24 24 25 25 26 27 28 28 30 Adopted July 13. 2005 ARTICLE V CUSTODY AND APPLICATION OF CERTAIN PROCEEDS OF BONDS Section 501 -Application of Certain Proceeds.. 31 Section 502 -Loans. . 31 Section 503 -Retention and Inspection of Documents. 32 ARTICLE VI ESTABLISHMENT OF FUNDS AND ACCOUNTS AND APPLICATION THEREOF Section 601 -Pledge. 33 Section 602 -Establishment of Funds and Accounts.. 33 ALASKA MUNICIPAL BOND BANK Tllblo of Conhints (AmandrHi) Pago 1 ARTICLE VII SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS Section 701 -Security for Deposits. 44 Section 702 -Investment of Funds and Accounts Held by the Trustee. 44 Section 703 -Liability of Trustee for Investments.. 46 Section 603 -Reserve Fund.. . . . . 34 Section 604 -Interest Account. Principal Account and Redemption Account. 36 Section 605 -Rebate Fund.. 39 Section 606 -Operating Fund. 41 Section 607 -Reduction of Required Debt Service Reserve. 42 Section 608 -Trustee's Maintenance of Records on Payment of Bonds. . 42 Section 609 -Obtaining Credit Enhancements and Interest Rate Exchange Agreements.. 42 Section 610 -Creation of Additional Funds, Accounts and Subaccounts; Separate Credit Enhancement Funds; Pledge with Respect to Credit Enhancements and Interest Rate Exchange Agreements. 43 ARTICLE VIII THE TRUSTEE AND THE PAYING AGENTS Section 801 -Appointment and Acceptance of Duties of Trustee. 46 Section 802 -Appointment and Acceptance of Duties of Paying Agents. . 46 Section 803 -Responsibilities of Fiduciaries. 47 Section 804 -Evidence on Which Fiduciaries May Act. 49 Section 805 -Compensation. 50 Section 806 -Pennitted Acts and Functions.. 50 Section 807 -Resignation of Trustee. . 50 Section 808 -Removal of Trustee. 51 Section 809 -Appointment of Successor Trustee. 51 Section 810 -Transfer of Rights and Property to Successor Trustee. 52 Section 811 -Merger or Consolidation. . 52 Section 812 -Resignation or Removal of the Paying Agents and Appointment of Successors. 53 Section 813 -Evidence of Signatures of Bondholders and Ownership of Bonds.. 53 ARTICLE IX COVENANTS OF THE BANK Section 901 -Payment of Bonds.. Section 902 -Extension of Payment of Bonds.. Section 903 -Offices for Servicing Bonds. Section 904 -Further Assurances. Section 905 -Power to Issue Bonds and Make Pledges. Section 906 -General Covenants of the Bank.. 55 55 55 56 56 57 Section 907 -Accounts and Reports. . 58 Section 908 -Personnel and Servicing of Programs. 59 Section 909 -Waiver of Laws.. 59 Section 910 -Fees and Charges. 59 Section 911 -Administration of Reserve Fund.. 60 Section 912 -Issuance of Additional Obligations.. 61 Section 913 -Loan Agreement Provisions. . 62 Section 914 -Modification of Loan Agreement Terms. . 64 Section 915 -Sale of Municipal Bonds by Bank.. 65 Section 916 -Disposition of the Proceeds of Sale or Redemption of Municipal Bonds. 65 Section 917 -Enforcement of Municipal Bonds. 65 Section 918 -Continuing Disclosure; Bankruptcy.. 66 Section 919 -Tax Covenants.. 66 ARTICLE X SERIES RESOLUTION AND SUPPLEMENTAL RESOLUTIONS Section 1001 -Modification and Amendment without Consent. 67 Section 1002 -Supplemental Resolutions Effective with Consent of Bondholders. 68 Section 1003 -General Provisions Relating to Series Resolutions and Supplemental Resolutions. 68 ARTICLE XI AMENDMENTS Section 1101 -Powers of Amendment.. 69 Section 1102 -Consent of Bondholders.. 70 Section 1103 -Modifications by Unanimous Consent. 72 Section 1104 -Mailing and Publication.. 72 Section 1105 -Exclusion of Bonds.. 72 Section 1106 -Notation on Bonds. 73 ARTICLE XII DEFAULTS AND REMEDIES Section 1201 -Trustee to Exercise Powers of Statutory Trustee.. 73 Section 1202 -Events of Default. 73 Section 1203 -Remedies.. 74 Section 1204 -Priority of Payments After Default. . 76 Section 1205 -Termination of Proceedings. . 78 Section 1206 -Bondholders' Direction of Proceedings.. 78 Section 1207 -Limitation on Rights of Bondholders.. 79 Section 1208 -Possession of Bonds by Trustee Not Required. 80 Section 1209 -Remedies Not Exclusive.. 80 ALASKA MUNICIPAL BOND BANK 1{lbhl ofCOlItonts (AmQndod) 1\Ooc:>'.:lr'=1~",..",.=c...".""'O:>o;ll_8o<><lRtoWvl""'-..:l Page 2 F-I ALASKA MUNICIPAL BOND BANK 1{lblo of COlItonts (AmQndrHi) '1Do<:'.:l74=1~..",.=Ce""0I!0<>....~B=dR...d>.~c"w;>d Pago 3 Section 1210 ~ No Waiver of Default. Section 1211 -Notice of Event of Default.. ARTICLE XIII DEFEASANCE Section 1301 -Defeasance. ARTICLE XIV MISCELLANEOUS Section 1401 -Preservation and Inspection of Documents. Section 1402 -Parties of Interest. . Section 1403 -No Recourse Under Resolution or on Bonds.. Section 1404 -Severability.. Section 1405 -Headings. Section 1406 -Conflict. .. Section 1407 -Governing Law.. Section 1408 -Effective Date.. ALASKA MUNICIPAL BOND BANK Tablo of Conronts (AmondrnJ) l\i;):x;<'JU<'OOOl-...·"""..=Go""""OO>;.\'01!l<tr:dfln«M"~w:>e 80 80 81 84 84 84 85 85 85 85 85 Pago 4 GENERAL OBLIGATION BOND RESOLUTION A RESOLUTION CREATING AND ESTABLISHING AN ISSUE OF BONDS OF THE ALASKA MUNICIPAL BOND BANK; PROVIDING FOR THE ISSUANCE FROM TIME TO TIME OF SAID BONDS; PROVIDING FOR THE PAYMENT OF PRINCIPAL OF AND INTEREST ON SAID BONDS; AND PROVIDING FOR THE RIGHTS OF THE HOLDERS THEREOF. SE IT RESOLVED by the Board of Directors of the Alaska Mun'ldpalBond Bank as follows: ARTICLE I STATUTORY AUTHORITY AND DEFINITIONS Section 101-AuthoritvforThis Resolution. This Resolution is adopted pursuant to the provisions of the Act. Section 102 -Resolution Constitutes Contract. In consideration of the purchase and acceptance of the Bonds by those who shall hold the same from time to time, the provisions of this Resolution shall be a part of the contract of the Bank with the Holders of Bonds and shall be deemed to be and shall constitute a contract between the Bank, the Trustee and the Holders from time to time of the Bonds. The pledge hereof and the provisions, covenants and agreements herein set forth to be performed by or on behalf of the Bank shall be for the benefit, protection and security of the Holders of any and all of such Bonds. Each Bond, Credit Enhancement facility, and Interest Rate Exchange Agreement, regardless of the time or times of its issue or maturity, shall be of equal rank without preference, priority or distinction over any other Sond, Credit Enhancement facility, or Interest Rate Exchange Agreement except as expressly provided in this Resolution. Section 103 -Definitions. The following terms shall, for all purposes of this Resolution, have the following meanings unless the context shall clearly indicate some other meaning: "Accountant's Certificate" shall mean a certificate signed by an independent certified public accountant or a firm of independent certified public accountants selected by the Bank. "Accreted Amount" shall mean, with respect to Capital Appreciation of Bonds of any Series and as of the date of calculation, the amount established pursuant to the Series Resolution authorizing such Capital Appreciation Bonds as the amount representing the initial public offering price, plus the accumulated and compounded principal and interest on such Bonds. "Act" shall mean the Alaska Municipal Bond Bank Authority Act, constituting Chapter 85, Title 44, of the Alaska Statutes, as amended to the date of adoption of this Resolution. "Administrative Expenses" shall mean the Bank's expenses of carrying out and administering its powers, duties and functions, as authorized by the Act, and shall include, without limiting the generality of the foregoing: administrative and operating expenses, legal, accounting and consultant's services and expenses, payments to pension, retirement, health and hospitalization funds, and any other expenses required or permitted to be paid by the Bank under the provisions of the Act or this Resolution or otherwise. "Aggregate Debt Service" for any period shall mean, as of any date ofcalculation and with respect to all Bonds, the sum of the amounts of Debt Service for such period. "Annual Debt Service" shall mean the total amount of Debt Service for any Outstanding Bonds in any Fiscal Year. "Authorized Denominations" with respect to any Series of Bonds issued hereunder, has the meaning specified in the related Series Resolution. "Authorized Officer" shall mean the Chairman, Vice Chairman, Executive Secretary, or Executive Directorofthe Bank and any other director, officer or employee of the Bank authorized by resolution of the Bank to perform such act or discharge such debt. "Bank" shall mean the Alaska Municipal Bond Bank, a public body corporate and politic consututed as a public corporation and instrumentality of the State of Alaska within the Department of Revenue but having a legal existence independent of and separate from the State exercising public and essential governmental functions and created by the Act, or any body, agency or instrumentality of the State which shall hereafter succeed to the powers, duties and functions of the Bank. "Beneficial Owner" shall mean the person in whose name a Bond is recorded as the beneficial owner of such Bond by the respective systems of DTC and the DTC Participants or the Holder of the Bond if the Bond is not then held in book-entry form. "Bond" or "Bonds" shall mean any Alaska Municipal Bond Sank Bond or Bonds, or Alaska Municipal Bond Bank Authority Bond or Bonds, as the case may be, authenticated and delivered under this Resolution pursuant to a Series Resolution. "Bondholder" or "Holder" or words of similar import, when used with reference to a Bond or Bonds, shall mean any person who shall be the registered owner of any Outstanding Bond or Bonds issued in fully registered form or the bearer of any Bond or Bonds issued in bearer form or registered to bearer. When aU Bonds of a Series are held by a securities depository, "Bondholder" or "Holder" shall mean the beneficial ownerofthe Series in question determined under the rules of that securities depository; otherwise "Bondholder" or "Holder" means owner of record on the bond register maintained by the Paying Agent. To the extent that the full payment of the interest on and principal of Bonds of a Series is secured by Credit Enhancement, the Credit Enhancement Agency shall be considered to be the "Bondholder" or "Holder" of all the Bonds of that Series for purposes of exercising any rights with respect to supplements and amendments to this Resolution if the Credit Enhancement Agreement so provides. "Bond Year" shall mean each one-year period that endson an anniversary of the date of issue of the Bonds. "Sook-Entry System" sharr mean the system in which the Bonds (represented by one Bond certificate for each maturity of the Bonds) are delivered into the possession ofOTC and are issued and fully-registered as to principal and interest in the name of Cede & Co., and whereby beneficial interests in the Bonds are purchased by investors through DTC Participants, such interests shown and transfers thereof effected only through the records maintained by the respective DTe Participants from whom each such investor acquired such beneficial interest. ALASKA MUNICiPAL BONO BANK GMll/'ll!1 Obl/g~rton B¢nd Roso/utlon (Amllndod) j\():x:o.'-'ll';":.l(Xll~-=G<I~~I1·t"",~floo.<M""'oo:><l Pago 2 F-2 ALASKA MUNICIPAL BOND BANK GfIIIll/'ll!/ObI/gilt/on Bond Rosolutlon (Amondod) I \OI:>c;·.:ll.=ll"\eoc>l.r'""o...=Go"",," 0<i"'''<I'llIo'>du......"',,""'?d Pago 3 "Business Day" shall mean any day other than a Saturday or Sunday or any other day on which banks in New York, Alaska, or the slate or states in which any Trustee appointed hereunder performs its duties hereunder are authorized or required to be closed or are closed. "Capital Appreciation Bonds" shall mean Bonds, the interest on which (a) is compounded and accumulated at the rates and on the dates set forth in the Series Resolution authorizing the issuance of such Bonds and designating them as Capital Appreciation Bonds, and (b) is payable upon maturity or redemption of such Bonds. "Continuing Disclosure Certificate" shall mean, for each Series, the continuing disclosure certificate executed by the Bank for the purpose of satisfying the continuing disclosure requirements of Rule 15c2-12 of the Securities and Exchange Commission with respect to such Series, as such continuing disclosure certificate is originally executed and as it may be amended from time to time in accordance with its terms. "Counsel's Opinion" shall mean an opinion signed by an attorney or firm of attorneys of nationally recognized standing in the field of law relating to state and municipal financing (who may be counsel to the Bank) selected by the Bank and acceptable to the Trustee. "Credit Enhancement" shall mean a letter of credit, a line of credit, a credit facility, a surety bond, bond insurance, or any other instrument or arrangement obtained in connection with the issuance of a Series of Bonds to further secure the payment of the Bonds of such Series or to satisfy the Reserve Fund Requirement. "Credit Enhancement Agency" shall mean any bank or other institution that provides Credit Enhancement. "Current Interest Bonds" shall mean Bonds not constituting Capital Appreciation Bonds. Interest on Current Interest Bonds shall be payable periodically on the Interest Payment Dates prOVided therefor in a Series Resolution. "Debt Service" shall mean for any Series of Bonds Outstanding, an amount equal to the sum of (a) all interest payable during such period of calculation, plus (b) the Principal Installments, if any, payable during such period of calculation on such Series of Bonds. "Executive Director" shall mean the Executive Director or Acting Executive Director of the Bank. "Fees and Charges" shall mean all fees and charges authorized to be charged by the Bank pursuant to seclion 44.85.080(8), (15) and (16) olthe Act and charged by the Bank to Governmental Units pursuant to the terms and provisions of Loan Agreements. "Fiduciary" or "Fiduciaries" shall mean the Trustee, and Paying Agent, or any or all of them, as may be appropriate. "Fiscal Year" shall mean any twelve (12) consecutive calendar months commencing with the first day of July and ending on the last day of the following June or such other date as is authorized by statute and/or selected by the Bank. "Fitch" shall mean Fitch Ratings, organized and existing under the laws of the State of Delaware, its successors and their assigns, and, if such organization shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "Fitch" shall be deemed to refer to any other nationally recognized securities rating agency (other than Standard & POor's or Moody's) designated by the Authorized Officer."Government Obligations" shall mean direct obligations of, or obligations of the payment of and interest on which are unconditionally guaranteed by, the United States of America. "Governmental Unit" shall mean a municipality or such other entity of which the Bank is authorized by law to purchase its revenue bonds, general obligation bonds, notes, or other forms of indebtedness and which otherwise satisfies conditions found herein and in the Loan Agreement. "Governmental Unit'sAllocable Proportion" shall mean the proportionate amount of the total requirement in respect of which the term is used determined by the ratio that ALASKA MUNICIPAL BOND BANK Gooonli Obi/gilt/on Bond Rosolutlon (Amondfld) 1'=-3T'=l~Io«tv''''"<·=G..".""O';<';;~'''''!looeno<'''''''"w:> d Pago 4 ALASKA MUNICIPAL BOND BANK Grmof'll/ObIlgllt/on Bond RflsolutJon (Arnflndfld) '=\37'='~"'oc<c"",""=G~""""0';< ..."<>,>lJo<>.OR""'c''''''w:>d Pago 5 the Loan then outstanding to such Govemmental Unit bears to the total of all Loans then outstanding to all Governmental Units. "Interest Account" shall mean the account by that name established by Section 602. "Interest Payment Date" shall mean any date upon which interest on any Bonds is payable in accordance with the terms thereof. "Interest Rate Exchange Agreement" shall mean an agreement entered into by the Bank or the Trustee, on behalf of the Bank, providing for an interest rate cap, floor or swap with respect to any Bonds or Municipal Bonds. "Investment Securities" shall mean the following to the extent permitted by the Act and the laws of the State of Alaska: (1) Governmental Obligations; (2) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by anyof the following federal agencies and provided such obligations are backed by by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itsell); (a) Farmers Home Administration ("FmHA") Certificates of Ownership; (b) Federal Housing Administration ("FHA") Debentures; (c) General Services Administration Participation certificates; (d) Government National Mortgage Association ("GNMA" or "Ginnie Mae") GNMA~guaranteed mortgage-backed bonds or GNMAguaranteed pass-through obligations (participation certificates); (e) United States Maritime Administration Guaranteed Title XI financing; (f) United States Department of Housing and Urban Development ("Huon) Project Notes Loeaf Authority Bonds; (3) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following government agencies (stripped securities are only permitted if they have been stripped by the agency itself); (a) Federal Home Loan Bank System. Senior debt obligations (Consolidated debt obligations); (b) Federal Home Loan Mortgage Corporation. ("FHLMC" or "Freddie Mac") rated AM by Standard & Poor's and Aaa by Moody's Participation Certificates (Mortgage~backed securities) Senior debt obligations; (c) Federal National MorfgageAssociation. ("FNMA" or "Fannie Mae") rated AM by Standard & Poor's and Aaa by Moody's Mortgage-backed securities and senior debt obligations (excluded are stripped mortgage securities which are valued greater than par on the portion of unpaid principal); (d) Student Loan MarketAssociation. ("SLMA"or"Sallie Mae") Senior debt obligations; (e) Resolution Funding Corp. ("REFCORP") Only the interest component of REFCORP strips which have been stripped by request of the Federal Reserve Bank of New York in book-entry form are acceptable; and (f) Farm Credit System. Consolidated systemwide bonds. (4) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by S&P of "AAAm-G," "AMm" or "AAm" or by Moody's of "Aaa" including funds from which the Trustee or its affiliates receive fees for investment advisory or other services to such fund; (5) Certificates of Deposit ("CD") secured at all times by collateral described in (a) and/or (b) above. CD's must have a one-year or less maturity. Such certificates must be issued by commercial banks, savings and loan ALASKA MUNICIPAL BOND BANK GOOOnl/Obliglltion Bond Rflsolution (AmoncJgd) 1\Oo<:I\.l7'='~Go""""o:<>;.o"""I.\<>r<:lR<J«i\It.,..,w:>d Pogo 6 F-3 ALASKA MUNICIPAL BOND BANK Grmof'll/ObI/gill/on Bond RosolutJon (Amflndoti) '=\.IT'='\Rooct<.",,''-''''=~W.o;a'_llondll~.,..,''?d Pago 7 associations or mutual savings banks whose short~term obligations are rated "A-I+" or better by sap, and "Prime-1" or better by Moody's. The collateral must be held by a third party and the third party must have a perfected first security interest in the collateral; (6) Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fUlly insured by the Federal Deposit Insurance Corporation ("FDIC"), including Bank Insurance Fund ("BIF") and Savings Association Insurance Fund ("SAIF"); (7) Commercial paper rated "Prime-1" by Moody's and "A-1+" or better by S&P and which matures not more than 270 days after the date of purchase; (8) Bonds or notes issued by any state or municipality which are rated by Moody's and sap in the highest long-term rating category assigned by such agencies; (9) Federal funds or bankers acceptances with a maximum term of one year of any bank which has an unsecured, uninsured and unguaranteed obligation rating of "Prime-1" by Moody's and "A-1+" by sap; ((10) Repurchase agreements providing for the transfer of securities from a dealer bank or securities firm (seller/borrower) to a municipal entity (buyer/lender), and the transfer of cash from a municipal entity to the dealer bank or securities firm with an agreement that the dealer bank or securities firm will repay the cash plus a yield to the municipal entity in exchange for the securities at a specified date; provided, however, that the repurchase agreement must satisfy certain criteria articulated in writing to the Bank by the Rating Agencies and such agreement must be approved in writing prior to its acquisition by each bond insurer then insuring any Series of Bonds; and (11) Investment contracts with providers the long term, unsecured debt obligations of which are rated at least "Aaa" by the Rating Agencies. "Loan" shall mean a loan heretofore or hereafter made by the Bank to a Governmental Unit pursuant to the Actand more particularly described in the applicable Series Resolution. "Loan Agreement" shall mean an agreement, and any amendments thereto, heretofore or hereafter entered into between the Bank and a Governmental Unit setting forth the terms and conditions of a Loan. "Loan Obligation" shall mean that amount of Bonds and the Bonds themselves issued by the Bank for the purchase of Municipal Bonds of a Governmental Unit. "Maximum Annual Debt Service" shall mean, with respect to any Outstanding Series of Bonds, the highest remaining Annual Debt Service for such Series of Bonds. "Moody's" shall mean Moody's Investors Service, Jnc., a corporation duly organized and existing under and by virtue of the laws of the State of Delaware, and its successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency (other than Fitch or Standard & Poor's) designated by the Authorized Officer. "Municipal Bonds" shall mean general obligation bonds, revenue bonds, notes or other evidences of debt issued by any Governmental Unit as now or hereafter defined in the Act which have heretofore been or will hereafter be acquired by the Bank as evidence of a Loan to the Governmental Unit pursuant to the Act. "Municipal Bonds Interest Payment" shall mean that portion of a Municipal Bonds Payment made or required to be made by a Govemmental Unit to the Bank which represents the interest due or to become due on the Governmental Unit's Municipal Bonds. "Municipal Bonds Payment" shall mean the amounts paid or required to be paid, from time to time, for principal and interest by a Governmental Unit to the Bank on the Governmental Unit's Municipal Bonds. ALASKA MUNICIPAL BOND BANK Goooral Obl/glltlon Bond Rosolutlon (Amondlld) ''£>:>or.\)l'=l~""",=,.·=Go,.,,,,,Q:j~o''''''!l<>''''R'''''''''<>o..,., Page 8 ALASKA MUNICIPAL BOND BANK Goooral ObI/gilt/on Bond Rosolutlon (Amondlld) ,'Do¢>·.)l'=l~~=.·=Gc""""Q:j"o\'''' 'lloodll<><d~''"""", Pogo 9 "Municipal Bonds Principal Payment" shall mean that portion of a Municipal Bonds Payment made or required to be made by a Governmental Unit to the Bank which represents the principal due or to become due on the Governmental Unit's Municipal Bonds. "Notes" shall mean any obligations referred to herein issued by the Bank other than Bonds. "Operating Fund" shall mean the fund by that name established by Section 602. "Outstanding" when used with reference to Bonds, other than Bonds referred to in Section 1105 hereof, shall mean, as of any date, all Bonds theretofore or thereupon being authenticated and delivered under this Resolution except: (1) Any Bonds canceled by the Bank or the Trustee at or prior to such date; (2) Bands for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered pursuant to this Resolution; and (3) Bonds deemed to have been paid as provided in subsection (B) of Section 1301. "Paying Agent" for the Bonds of any Series shall mean the bank or trust company and its successor or successors, which may include the Trustee, designated by the Bank as Paying Agent pursuant to the provisions of this Resolution and a Series Resolution or any other resolution of the Bank adopted prior to authentication and delivery of Bands for which such Paying Agent or Paying Agents shall be so appointed. "Principal Account" shall mean the account by that name established by Section 602. "Principal Installment" shall mean, as of any date of calculation and with respect to the Outstanding Bonds of any Series, (i) the principal amount of such Bonds which are due on a certain future date, reduced by the aggregate principal amount of such Bonds which would be retired by reason of the payment when due and application in accordance with this Resolution of Sinking Fund Payments payable before such future date for the retirement of such Bonds or (ii) the unsatisfied balance of any Sinking Fund Payment due on a certain future date for such Bonds, plus the aggregate amount of the premiums, if any, which would be applicable on such future date upon the redemption of such Bonds by application of such Sinking Fund Payments in a principal amount equal to said unsatisfied balance or (iii) if such future dates coincide as to different Bonds of such Series, the sum of such principal amount of Bonds, unsatisfied balance and applicable premiums, if any or (iv) for any particular Series of Bonds the amount specified in the Supplemental Resolution authorizing such Series of Bands. "Put Bond" shall mean any Bond that is part of a Series of Bonds subject to mandatory purchase by the Bank, its agent or a third party from the Owner of the Bond pursuant to provisions of the Series Resolution authorizing the issuance of the Bond. "Rating Agencies" shall mean Moody's, Standard & Poor's and Fitch or their respective successors and assigns and/or such other securities rating agency selected by the Bank to provide a rating with respect to a Series of Bonds, or any portion thereof, which Rating Agency, as of the applicable date, shall have assigned a rating to any Series of Bonds or any portion thereof. "Rebate Calculation Date" shall mean, with respect to each Series of Bonds, the interest payment date next preceding the fifth anniversary of the issue date of such Series of Bonds, each fifth anniversary of the initial Rebate Calculation Date for such Series of Bonds, and the date of retirement of the last bond for such Series. "Rebate Fund" shall mean the fund by that name established by Section 602. "Rebate Reguirement" shall mean the amount of arbitrage profits earned from the investment of gross proceeds of the Bonds in nonpurpose investments described in Section 148(f)(2) of the Code and defined as "Rebate Amount" in Section 1.148-3 of the Treasury Regulations, which are payable to the United States at the times and in the amounts specified in Section 148(0)(3) of the Code and Section 1.148-3 of the Treasury Regulations. "Record Date" shall have the meaning set forth in the Series Resolution authorizing the particular Series of Bonds. ALASKA MUNICIPAL BOND BANK Goollnll Obi/gilt/on Bond Resolut/on (Amondlld) 1\D::>l:s'.;I7'=I'iRKoV'""". =c;o",,<=Q:<..o"<rtBo"<llt-.rl""'''''''' Page 10 F-4 ALASKA MUNICIPAL BOND BANK GOOtnlJ Obligation Bond Resolution (Amondlld) ,.I()oc<'.)7~=1_""",.=c;..",,<=Q:.j.."""!loo<lIl"""""~""..-;xl Pogo 11 "Redemption Account" shall mean the account by that name established by Section 602. "Redemption Price" shall mean, with respect to any Bond, the principal amount thereof, plus the applicable premium, of any, payable upon redemption thereof pursuant to the provisions of such Bond, this Resolution and the Series Resolution pursuant to which the same was issued. "Refunding Bonds" shall mean all Bonds, whether issued in one or more series, authenticated and delivered on original issuance for the purpose of refunding Bonds or other obligations of the Bank and all Bonds thereafter authenticated and delivered upon the transfer or exchange of or in lieu of or in substitution for such Bond pursuant to this Resolution. "Regular Record Date" shall mean, unless otherwise provided in a Series Resolution, with respect to the Bonds, the fifteenth (15th) day immediately preceding each Interest Payment Date (or the Business Day immediately preceding such fifteenth (15th) day, if such fifteenth (15th) day is not a Business Day). nReguired Debt Service Reserve" shall mean as of any date of calculation, the amount required to be on deposit in the Reserve Fund which amount shall be at least equal to the Reserve Fund Requirement. "Reserve Fundn shall mean the 2005 General Obligation Bond Resolution Reserve Account established by Section 602 within the Alaska Municipal Bond Bank Reserve Fund created by Section 44.85.270 of the Act. "Reserve Fund Obligations" shall mean the amount of Bonds issued by the Bank to obtain funds deposited in the Reserve Fund. nReserve Fund Requirement" shall mean the least of (i) Maximum Annual Debt Service with respect to all Bonds Outstanding: (ii) 125% of Average Annual Debt Service with respect to all Bonds Outstanding; (iii) 10% of the initial principal amount of each Series of Bonds then Outstanding, or (iv) such lower amount as may be required by law. The Reserve Fund Requirement may be satisfied entirely, or in part, by Credit Enhancement as provided for herein; provided, however, any Credit Enhancementsatisfying all orany partofthe Reserve Fund Requirement after the initial issuance of Bonds or issued in substitution for any prior Credit Enhancement previously issued shall not, by itself, cause a withdrawal or a downward revision of the ratings maintained by any Rating Agency with respect to the Bonds. "Resolution" shall mean this General Obligation Bond Resolution as from time to time amended or supplemented by Supplemental Resolutions or Series Resolutions in accordance with the terms and provisions hereof. nSecurity Instrumentn shall mean an instrument or other device issued by a Security Instrument Issuer to pay, or to provide security or liquidity for, a Series of Bonds. The term nSecurity Instrument" includes, by way of example and not of limitation, letters of credit, bond insurance policies, standby bond purchase agreements, lines of credit and other security instruments and credit enhancement or liquidity devices; provided, however, that no such device or instrument shall be a nSecurity Instrument" for purposes of this Resolution unless specmcally so designated in a Series Resolution authorizing the use of such device or instrument. "Security Instrument Agreement" shall mean any agreement entered into by the Bank and a Security Instrument Issuer pursuant to a Series Resolution and/or the applicable portions of a Series Resolution providing for the issuance by such Security Instrument Issuer of a Security Instrument. "Security Instrument Costs" shall mean, with respect to any Security Instrument, al! fees, premiums, expenses and similar costs, other than Security Instrument Repayment Obligations, required to be paid to a Security Instrument Issuer pursuant to a Security Instrument Agreement or the Series Resolution authorizing the use of such Security Instrument. Such Security Instrument Agreement or Series Resolution shall specify any fees, premiums, expenses and costs constituting Security Instrument Costs. "Security Instrument Issuer" shall mean any bank or other financial institution, insurance company, surety company or other institution issuing a Security Instrument. ALASKA MUNICIPAL BOND BANK GfII1of;11 Obl/gotlotl 80ltd RfI$olutlolt (Am'ltldod) Pago 12 ALASKA MUNICIPAL BOND BANI< GonOf;1/Obl/gof/olt Botld RlI5olutiotl (Amoltdod) '\I.">:>o;',Jl.=IIl<o»«"'"..,.... --:q"c..,.,.""W,.,.,t=!lo'I<lR""''''"..,..-.x;l Pago 13 nSecurity Instrument Repayment Obligationsn shall mean, as of any date of calculation and with respect to any Security Instrument Agreement, any outstanding amounts payable by the Bank under the Security Instrument Agreement or the Series Resolution authorizing the use of such Security Instrument to repay the Security Instrument Issuer for payments previously or concurrently made by the Security Instrument Issuer pursuant to a Security Instrument. There shall not be included in the calculation of the amount of Security Instrument Repayment Obligations any Security Instrument Costs. Each Security Instrument Agreement or the Series Resolution authorizing the use of such Security Instrument shall specify any amounts payable under it which, when outstanding, shall constitute Security Instrument Repayment Obligations and shall specify the portions of any such amounts that are allocable as principal of and as interest on such Security Instrument Repayment Obligations. nSeries of Bondsnor "Bonds of a Series" or words of similar meaning shall mean the Series of Bonds authorized by a Series Resolution. "Series Resolution" shall mean a resolution ofthe Bank authorizing the issuance of a Series of Bonds in accordance with the terms and provisions hereof and adopted in accordance with Article X. "Sinking Fund Installment" shall mean, as of any particular date of calculation and with respect to the Outstanding Bonds of any Series, the amount required to be paid at all events by the Bank on a single future date for the retirement of Bonds of such Series which mature after said future date, but does not include any amount payable by the Bank by reason only of the maturity of a Bond. "Standard & poor'sn shall mean Standard & Poor's Ratings Services, a Division of The McGraw-Hili Companies, Inc., and its successors and assigns, except that if such corporation or division shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term "Standard & Poor's" shall be deemed to refer to any other nationally recognized securities rating agency (other than Moody's or Fitch) designated by the Authorized Officer. nState" shall mean the State of Alaska. "Supplemental Resolutionn shall mean a resolution supplemental to or amendatory of this Resolution, (other than a Series Resolution) adopted by the Bank in accordance with Article X. nTrusteenshall mean the bank or trust company appointed pursuant to Section 801 to act as trustee hereunder, and its successor or successors and any other bank or trust company at any time substituted in its place pursuant to this Resolution. nVariable Rate Bonds" shall mean, as of any date of calculation, Bonds the terms of which on such date of calculation are such that interest thereon for any future period of time is expressed to be calculated at a rate which is not susceptible to a precise determination. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Unless the context shall otherwise indicate, words importing the singular number shall include the plural number and vice versa, and words importing persons shall include corporations and associations, including public bodies, as well as natural persons. The terms "hereby,n "hereof," "hereto,n "herein," "hereunder," and any similar terms, as used in this Resolution, refer to this Resolution. ARTICLE II AUTHORIZATION AND ISSUANCE OF BONDS Section 201 -Authorization of Bonds and Interest Rate Exchange Agreements. (A) Bonds are hereby authorized for issuance hereunder by the Bank. The Bonds may be issued in one or more Series pursuant to one or more Series Resolutions which shall state the purpose or purposes for which each Series of Bonds is being issued as hereinafter provided without limitation as to amount except as provided in this Resolution or as may be limited by law. Interest Rate Exchange Agreements may only be executed and delivered by the Bank in connection with the issuance and delivery of a Series of Bonds hereunder or in connection with the renewal. substitution or extension of an Interest Rate Exchange Agreement. ALASKA MUN/CIPAL BOND BANK GIIIlIUlil Obligation BOild RlI5olutlotl (Amflltd'ld) 1·.:Joa;',JT.=,~"",,\,,--:q,,(;.""""W>;""""llo>'ICR"<M""''''''' Page 14 F-5 ALASKA MUNICIPAL BOND BANI< GonOf;1/Obllgat/olt BOlld RO$OJut/Oll (Amotldfld) IIDo<:o',Jl'=I~"""""J'OCI:lG_'1IJW'll-=l.l=<l R"""'-'l"""",, Page 15 (B) There is hereby created by this Resolution, in the manner and to the extent provided herein, a continuing pledge and lien to secure the full and final payment of the principal or Redemption Price of, interest on and Sinking Fund Installments for, all of the Bonds issued pursuant to this Resolution. The Bonds shall be general obligations of the Bank payable as to principal or Redemption Price of, interest on, and Sinking Fund Installments forthe Bonds solely from the sources provided in this Resolution and any Series Resolution. The State shall not be liable on the Bonds and the Bonds shall not be a debt or liability, or constitute a pledge or loan of the faith and credit, of the State. The Bonds shall contain on the face thereof a statement to the effect that the Bank is obligated to pay the principal or Redemption Price, if any, of the Bonds and the interest thereon only from revenues or funds of the Bank and that the State is not obligated to pay such principal or Redemption Price, if any, or interest interest and that neither the faith and credit nor the taxing power of the State is pledged to the payment of the principal or Redemption Price, if any, of, or the interest on, the Bonds. Section 202 -Issuance and Delivery of Bonds. After their authorization by a Series Resolution, Bonds of a Series may be executed by or on behalf of the Bank and delivered to the Trustee for authentication and, upon compliance by the Bank with the requirements, if any, set forth in such Series Resolution and with the requirements of Section 203 or, in the case of Refunding Bonds, Section 204, the Trustee shall thereupon authenticate and deliver such Bonds to or upon the order of the Bank. Section 203 -Provisions for Issuance of Bonds. (A) The issuance of the Bonds shall be authorized by a Series Resolution or Series Resolutions of the Bank adopted subsequent hereto and the Bonds may be issued in one or more Series. The Bonds of each Series, including Refunding Bonds, shall, in addition to the title "Alaska Municipal Bond Bank General Obligation Bonds," contain such further appropriate particular designations added to such title and the appropriate Series designation as the Bank may determine in such Series Resolution. Each Bond shall bear upon its face the designations so determined for the Series to which it belongs. (B) Each Series Resolution authorizing the issuance of a Series of Bonds shalt specify:(1) The authorized principal amount of said Series of Bonds; (2) The purposes for which such Series of Bonds is being issued, which shall be one or more of the following: (i) making Loans to Governmental Units, (ii) making payments into the Reserve Fund, (iii) the funding of Notes theretofore issued by the Bank for any purposes for which Bonds may have been issued, (iv) the refunding of Bonds and related purposes, as provided in Section 204, and (v) any other purpose authorized by law; (3) The date and the maturity date or dates and amounts of each maturity of the Bonds of said Series or the method of determining the same; (4) ((i) The interest rate or rates (if any) or maximum interest rate of the Bonds of such Series, or the method of determining such rate or rates (which may be determinable at one or more specified times set forth in the Series Resolution, which may accrete or compound with such frequencies or in such manner as shall be specified in such Series Resolution and which shall be as otherwise specified in the Series Resolution), and the Interest Payment Dates and Record Dates therefor and (ii) a manner of calculating accreted value or compounded principal value during all or any part of the term of the Series of Bonds being authorized, if interest is not payable currently and the Bank determines that it is necessary or appropriate; (5) The denomination or denominations of, and the manner of numbering and lettering, the Bonds of such Series, provided that each Bond shall be of the denomination of $5,000 or a multiple thereof, not exceeding the aggregate principal amount of the Bonds of such Series maturing in the year year of maturity of the Bond for which the denomination is to be specified unless otherwise provided in the Series Resolution authorizing the issuance of such Bonds; (6) The Paying Agent or Paying Agents and the place or places of payment of the principal and Redemption Price, if any, of and interest on the Bonds of such Series or the manner of appointing and designating the same; ALASKA MUNICIPAL BOND BANK Gomllal Obligation Bond RQsohJtion (Amondrxl) ''=~7'='\f.lb<o'V""",=c;~''''''''0::..<.~'''''llo''''ll",""vl,,"..-;.o Page 16 ALASKA MUNICIPAL BOND BANK GOIIor.J1 ObI/gill/on Bond RQ$ohJrJon (Amondod) 1·~'.:l1'='\Hcr"""'="="""C'l>I0::<9't>D11l=d1l"""''''=-..:t PagaH (7) The Redemption Price or Prices, if any, and, subject to the provisions of Article IV, the redemption terms for the Bonds of such Series or the method of determining the same; (8) The amount and due date of each Sinking Fund Installment, if any, for Bonds of like maturity of such Series, or the method of determining such Sinking Fund Installment; (9) The form or forms of the Bonds of such Series and of the Trustee's certificate of authentication; (10) The manner of execution of the Bonds of such Series; (11) If, at the time of issuance of the Bonds of such Series, an Interest Rate Exchange Agreement witt apply to such Bonds or such Bonds are to be secured by Credit Enhancement. the form of Credit Enhancement or Interest Rate Exchange Agreement to be obtained, the identity of the Credit Enhancement Agency or of the counterparty to the Interest Rate Exchange Agreement, and the substantial form of the significant documents relating to the Credit Enhancement or Interest Rate Exchange Agreement; (12) If Bonds of such Series are to contain any tender or put options or the like, whether such Bonds are to be remarketed and, if so, the identity of any remarketing agent and the substantial form of any remarketing agreement relating to such Bonds; and (13) Any other provisions deemed advisable by the Bank, not in conflict with the provisions of this Resolution. All Bonds of each Series of like maturity shall be identical in all respects, except as to denominations, interest rate, and numbers and letters. (C) All (but not less than all) the Bonds of each Series shall be executed by the Bank for issuance under the Resolution and delivered to the Trustee and thereupon shall be authenticated by the Trustee and by it delivered to the Bank or to such other party as may be specified in a written order of the Bank, but only upon the receipt by the Trustee of: (1) A Counsel's Opinion to the effect that (i) the Bank has the right and power to execute and deliver this Resolution and the Series Resolution authorizing such Series under the Act as amended to the date of such Opinion; (ii) this Resolution and such Series Resolution has been duly and lawfully executed and delivered by the Bank, is in full force and effect and is valid and binding upon the Bank and enforceable in accordance with its terms (SUbject, as to enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium, or other laws affecting creditors' rights generally from time to time in effect); (iii) this Resolution and such Series Resolution creates the valid pledge and assignment which it purports to create of the Municipal Bonds, subject to the application thereof to the purposes and on the conditions permitted by this Resolution; (iv) the Bonds of such Series are valid and binding general obligations of the Bank, enforceable in accordance with their terms and the terms of this Resolution and such Series Resolution; and (v) the Bonds of such Series have been duly and validly authorized and issued in accordance with the constitution and statutes of the State, including the Act as amended to the date of such Opinion, and in accordance with this Resolution; (2) A written order as to the delivery of such Bonds, signed by an Authorized Officer;(3) Either an original of the Series Resolution authorizing such Series or a copy thereof certified by an Authorized Officer; (4) Except in the case of Refunding Bonds, a certificate of an Authorized Officer stating that the Bank is not in default in the performance of any of the covenants, conditions, agreements or provisions contained in the Resolution; (5) Such further documents, moneys and securities as are required by the provisions of this Section 203, and Section 204, or Article X, or any Series Resolution or Supplemental Resolution adopted pursuant to Article X. Section 204 -Provisions for Refunding Bonds. (A) All or any part of one or more Series of Refunding Bonds may be authenticated and delivered to refund all Outstanding Bonds or any part of one or more Series of Outstanding Bonds. Refunding ALASKA MUNICIPAL BOND BANK Gonor.Jf Obf/g4t/on Bond RDSolutlon (Amondfld) 1\Doa·.l74=l\ltMDl""""",,,=c;~nl>'1l0::<"'a!>O'1llo<>dR,,,,",,,,=-..:t Page 18 F-6 ALASKA MUNICIPAL BOND BANK GotIlJl1IIl ObI/gilt/on Bond RosohJtion (Amondrld) '\Oo<:l.'.l74=1~·=""....""00l';~_Il"""'\Jl=-..:t Pago 19 Bonds shall be issued in a principal amount sufficient, together with other moneys available therefor, to accomplish such refunding and to make such deposits as are required by the provisions of the Act, this Section and of the Series Resolution authorizing said Series of Refunding Bonds. (B) A Series of Refunding Bonds may be authenticated and delivered only upon receipt by the Trustee (in addition to the receipt by it of the documents required by Section 203) of: (1) Instructions to the Trustee to give due notice of redemption (which notice, in the case of an optional redemption, shall state that the redemption is conditioned by the Trustee on the receipt of sufficient funds for redemption) of all the Bonds to be refunded on the redemption date specified in such instructions; (2) Either (i) moneys (which may include all or a portion of the proceeds of the Refunding Bonds to be issued) in an amount sufficient to effect payment at the applicable Redemption Price of the Bonds orotherobligations to be refunded, together with accrued interest on such Bonds or other obligations to the redemption date, or (ij) direct obligations of (including obligations issued or held in bOOk-entry form on the books of) the Department of the Treasury of the United States of America which are not subject to redemption prior to the dates on which amounts will be needed to make payments on the Bonds or other obligations to be refunded and the principal of and interest on which when due, together with the moneys (which may include all or a portion of the proceeds of the Refunding Bonds to be issued), if any, contemporaneously deposited with the Trustee, will be sufficient to pay when due the applicable Redemption Price of the Bonds or other obligations to be refunded, together with accrued interest on such Bonds or other obligations to the redemption date, which moneys or Investment Securities shall be held by the Trustee or anyone or more of the Paying Agents or an escrow agent or trustee forotherobligations in a separate account irrevocably in trust for and assigned to the respective Holders of the Bonds or other obligations to be refunded; and (3) A certificate of an Authorized Officer containing such additional statements as may be reasonably necessary to show compliance with the requirements of subsection (A) and this subsection (B) of this Section 204. (C) From and after the delivery of the Refunding Bonds of a Series, the Trustee shall make appropriate adjustment between the Interest Account and Principal Account when disbursing and applying Municipal Bonds Payments deposited in the Debt Service Fund pursuant to the provisions of Section 604 to the end that such portion of the Municipal Bonds Payment as shall represent Municipal Bonds Interest Payment not required for deposit in the Interest Account for the purpose of paying interest accruing upon the Bonds shall be deposited in the Principal Account. Any surplus which might result upon and after such deposit shall be disposed of in the manner specified in the Series Resolution authorizing such Series. (0) Neither Investment Securities nor moneys deposited with the Trustee or an escrow agent or trustee for other obligations pursuant to paragraph (B)(2) of this Section nor principal or interest payments on any such Investment Securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the applicable Redemption Price of the Bonds or other obligations to be refunded, together with accrued interest on such Bonds or other obligations to the redemption date. and any cash received from such principal or interest payments, if not then needed for such purpose, shall. to the extent practicable, be reinvested in such Investment Securities as are described in clause (ii) of said paragraph maturing at times and in amounts sufficient to pay when due the applicable Redemption Price of such Bonds or other obligations, together with such accrued interest. ARTICLE III GENERAL TERMS AND PROVISIONS OF BONDS Section 301 -Description of Bonds' Payment. ((A) The Bonds of each Series issued under the provisions hereofmay be issued only as registered bonds and subject to Section 303 hereof, each Bond shall be entitled "General Obligation Bonds" and shall bear such additional letter or number series designation as shall be determined ALASKA MUNICIPAL BOND BANK Grmrua' Obl/glllfon Bond Rosolul/on (AmondrnJ) I \Doa'.:!r-:IOCJ'Jl'R<.o"C,..= .•·=GbM"" 0:<>;;,,,,,,, U<>MJl...","o0w;>:l Pago 20 ALASKA MUNICJPAL BOND BANK GonoflJl ObI/gill/on Bond RQSolutlon (Amrmdod) Pago 21 in the Series Resolution authorizing the Bonds of the Series of which such Bond is one. Unless otherwise specified in the Series Resolution authorizing such Series of Bonds, Bonds of each Series shall be in Authorized Denominations each or any integral multiple thereof, shall be numbered consecutively from 1 upwards and shall bear interest payable on Interest Payment Dates. (B) The Bonds of each Series issued hereunder shall be dated as of and bear interest from the date specified in the Series Resolution that authorized such Series, which date may be contemporaneous with or prior to or after the date of issuance of such Bonds. (C) Both the principal of and the interest on the Bonds shall be payable in any coin or currency of the United States of America, as at the respective time of payment shall be legal tender for payment of public and private debts. Payment of the interest on any Bond shall be made to the person appearing on the Bond registration books of the Bank kept for such purpose by the Trustee, the registrar hereinafter provided for as the Holder thereof, by check or draft mailed to the Holder at her or his address as it appears on such registration books or to owners of $1 ,000,000 or more in aggregate principal amount of Bonds by wire transfer to a bank account designated by the Holder in written instructions furnished to the Trustee. The interest on Bonds so payable, and punctually paid or duly provided for, on any Interest Payment Date will be paid to the person who is the Holder thereof at the close of business on the applicable Record Date for such interest. The principal of and premium, if any, on Bonds are payable upon presentation and surrender thereof at the principal corporate trust office of the Trustee, as paying agent, except as otherwise provided by Series Resolution. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. (D) The Bonds of each Series may contain or have endorsed thereon such provisions, specifications and descriptive words not inconsistent with the provisions hereof as may be necessary or desirable to comply with custom, the rules of any securities exchange or commission or brokerage board or otherwise, as may be specified in the Series Resolution authorizing such Series of Bonds. Section 302 -Legends. The Bonds of each Series shall contain or have endorsed thereon a statement to the effect that the State shall not be liable thereon and that such Bond shall not be a debt of the State and may contain or have endorsed thereon such provisions, specifications and descriptive words not inconsistent with the provisions of this Resolution as may be necessary or desirable to comply with custom, or otherwise, as may be determined by the Bank prior to the delivery thereof to the Bondholder. Sedan 303 -Execution and Authentication. (A) The Bonds shall be executed in the name of the Bank by the manual or facsimile signature of its Chairman or ViceChairman and its corporate seal (or a facsimile thereof) shall be thereunto affixed, imprinted, engraved or otherwise reproduced, and attested by the manual or facsimile signature of its Secretary or such officer or employee of the Bank as shall be directed by the Series Resolution authorizing the issuance thereof, or in such other manner as may be required by law. In case anyone or more of the officers or employees who shall have signed or sealed any of the Bonds shall cease to be such officer or employee before the Bonds so signed and sealed shall have been actually authenticated and delivered by the Trustee, such Bonds may, nevertheless, be authenticated and delivered as herein provided, and may be issued as if the persons who signed or sealed such Bonds had not ceased to hold such offices or be so employed. Any Bonds of a Series may be signed and sealed on behalf of the Bank by such persons as at the actual time of the execution of such Bond shall be duly authorized or hold the proper office in or employment by the Bank, although at the date of the Bonds of such Series such persons may not have been so authorized or have held such office or employment. (B) The Bonds of each Series shall bear thereon a certificate of authentication, in the form set forth in the Series Resolution authorizing such Bonds, executed manually by the Trustee. Only such Bonds as shall bear thereon such certificate of ALASKA MUNICIPAL BOND BANK GOIIlmIl O/)/lgatJOll BOlld RosolutlOil (Amondod) Pago 22 F-7 ALASKA MUNICJPAL BOND BANK GMOt'IJJ ObIlg:rt1Oll BOild RQSolutlOll RQSolutlOll (Amondod) ,·.o::o\Jl':IOCJ'Jl~.oo,·.z:;Q!,G,"""'1IIO: ..<._I>=:lIl...mt.,,,nw;>:l Pago 23 authentication shall be entitled to any right orbenefit under the Resolution and no Bond shall be valid or obligatory for any purpose until such certificate of authentication shall have been duly executed by the Trustee. Such certificate of the Trustee upon any Bond executed on behalf of the Bank shall be conclusive evidence that the Bond so authenticated has been duly authenticated and delivered under the Resolution and that the Holder thereof is entitled to the benefits of the Resolution. Section 304 -Interchangeability of Bonds. Bonds, upon surrender thereof at the corporate trust office of the Trustee with a written instrument of transfer satisfactory to the Trustee, duly executed by the registered owner or their attorney duly authorized in writing, may, at the option of the registered owner thereof, be exchanged for an equal aggregate principal amount of registered Bonds of the same Series, maturity, and interest rate as the surrendered Bond. Section 305 -Negotiability Transfer and Registry. All the Bonds issued under this Resolution shall be negotiable as provided in the Act, subject to the provisions for registration and transfer contained in this Resolution and in the Bonds. So long as any of the Bonds shall remain Outstanding, the Bank shall maintain and keep, at the corporate trust office of the Trustee, books for the registration and transfer of Bonds; and, upon presentation thereof for such purpose at said office, the Bank shall register or cause to be registered therein, and permit to be transferred thereon, under such reasonable regulations as it or the Trustee may prescribe, any Bond entitled to registration or transfer. So long as any of the Bonds remain Outstanding, the Bank shall make all necessary provisions to permit the exchange of Bonds at the corporate trust office of the Trustee. The Bank and each Fiduciary may deem and treat the person in whose name any Bond shall be registered upon the books of the Bank as the absolute owner of such Bond, whether such Bond shall be overdue or not, forthe purpose of receiving payment of, or on account of, the principal and Redemption Price, if any, of and interest on such Bond and for all other purposes, and all such payments so made to any such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum orsums so paid, and neither the Bank nor any Fiduciary shall be affected by any notice to the contrary. The Bank agrees to indemnify and save each Fiduciary harmless from and against any and all loss, cost, charge, expense judgment or liability incurred by it, acting in good faith and without negligence under this Resolution, in so treating any such registered owner. Section 306 -Regulations with Respect to Exchanges and Transfers. In all cases in which the privilege of exchanging Bonds or transferring Bonds is exercised, the Bank shall execute and the Trustee shall authenticate and deliver Bonds in accordance with the provisions of this Resolution. All Bonds surrendered in in any such exchanges or transfers shall forthwith be cancelled by the Trustee. For every such exchange or transfer of Bonds, whether temporary or definitive, the Bank orthe Trustee may, as a condition precedent to the privilege of making such exchange or transfer, make a charge sufficient to reimburse it for any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer. Notwithstanding any other provision of this Resolution the cost of preparing each registered Bond upon each exchange or transfer, and any other expenses of the Bank or the Trustee incurred in connection therewith (except any applicable tax, fee or other governmental charge) shall be paid by the Bank as an Administrative Expense. Neither the Bank or the Trustee shalt be required (i) to make any exchange or transfer of Bonds of any Series during the ten (10) days (or such other period of time as may be specified in the Series Resolution authorizing such Series) next preceding an interest payment date on the Bonds of such Series or preceding any selection of Bond of such Series to be redeemed or (ii) to transfer or exchange any Bonds previously called for redemption. Section 307 -Bonds Mutilated Destroyed Stolen or Lost. In case any Bond shall become mutilated or be destroyed, stolen or lost, the Bank shall execute and the Trustee shall authenticate and deliver a new Bond of like Series, maturity and principal amount as the Bond so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Bond, upon surrenderand cancellation of such mutilated Bond or in lieu of and substitution for the Bond destroyed, stolen or lost, upon filing with ALASKA MUNICIPAL BOND BANK Goooni Obl/glltlon Bond RDSolutlon (Amondod) 1~.)I~=I'~.~=G~""""'OO>gA!>O<'I(\o<I<lII""""',,o..-;.:r Pago 24 ALASKA MUNICIPAL BOND BANK Gffflon/Obi/gilt/on Bond RDSOlutlon (Amllndod) Pago 25 the Bank evidence satisfactory to the Bank and the Trustee that such Bond have been destroyed, stolen or lost and proof of ownership ownership thereof, and upon furnishing the Bank and the Trustee with indemnity satisfactory to them and complying with such other reasonable regulations as the Bank and the Trustee may prescribe and paying such expenses as the Bank and the Trustee may incur in connection therewith. All Bonds so surrendered to the Trustee shall be cancelled by it and evidence of such cancellation shall be given to the Bank. Any such new Bonds issued pursuant to this section in substitution for Bonds alleged to be destroyed, stolen or lost shall constitute original additional contractual obligations on the part of the Bank, regardless of whether the Bonds so alleged to be destroyed, stolen or lost be at any time enforceable by anyone, and shall be equally secured by and entitled to equal and proportionate benefits with all other Bonds issued under this Resolution, in any moneys or securities held by the Bank or the Fiduciaries for the benefit of the Bondholders. If a Bondholder satisfies the conditions set forth in this section for the replacement of a mutilated Bond or a Bond alleged to be destroyed, stolen, or lost and such Bond has matured or all principal thereof and interest thereon shall become due for any other reason, then the Trustee may pay such principal of and interest on such Bond without issuing a replacement Bond. Section 308 -Preparation of Definitive Bonds· Temporary Bonds. Until the definitive Bonds of any Series are prepared, the Bank may execute, in the same manner as is provided in Section 303, and upon the request of the Bank, the Trustee shall authenticate and deliver, in lieu of definitive Bonds, but subject to the same provisions, limitations and conditions as the definitive Bonds, except as to the denominations thereof and as to exchangeability for registered Bonds, one or more temporary Bonds, substantially of the tenor of the definitive Bonds in lieu of which such temporary Bond or Bonds are issued in such denominations as may be authorized by the Bank, and with such omissions, insertions and variations as may be appropriate to temporary Bonds. The Bank at its own expense shall prepare and execute and, upon the surrender thereof of such temporary Bonds to the Trustee. The Trustee shalt authenticate and, without charge to the holder thereof, deliver in exchange therefor definitive Bonds of the same aggregate principal amount and Series and maturity as the temporary Bonds surrendered. Until so exchanged, the temporary Bonds shalt in all respects be entitled to the same benefits and security as definitive Bonds authenticated and issued pursuant to this Resolution. If the Bank shall authorize the issuance of temporary Bonds in more than one denomination, the holder of any temporary Bond or Bonds may, at his option, surrender the same to the Trustee in exchange for another temporary Bond or Bonds of like aggregate principal amount, Series and maturity of any other authorized denomination or denominations, and thereupon the Bank shalt execute and the Trustee shall authenticate and, in exchange for the temporary Bond or Bonds so surrendered and upon payment of the taxes, fees and charges provided for in Section 306, shall deliver a temporary Bond or Bonds of like aggregate principal amount, Series and maturity in such other authorized denomination or denominations as shall be requested by such holder.All temporary Bonds surrendered in exchange either for another temporary Bond or Bonds orfor a definitive Bond or Bonds shall be forthwith cancelled by the Trustee. Section 309 -Cancellation and Destruction of Bonds. All Bonds paid or redeemed, either at or before maturity, shall be delivered to the Trustee when such payment or redemption is made, and such Bonds, together with all Bonds purchased by the Trustee, shall thereupon be promptly cancelled. Bonds so cancelled may, at any time, be cremated or otherwise destroyed by the Trustee, who shall execute a Certificate of cremation or destruction in duplicate by the signature of one of its authorized officers describing the Bonds so cremated or otherwise destroyed, and and one executed Certificate shall be filed with the Bank and the other executed Certificate shall be retained by the Trustee. ALASKA MUNICIPAL 80ND BANK GlH'Ion/Obi/gilt/on Bond RDSOlution {Amondod} I \Ooc<'.:l7~:1!lOOl'RMd~"""".•=G~,,,,"" 00.."'0"> Uoo~RlI«SUtJO<\w;>d Pago 26 F-8 ALASKA MUNICIPAL BOND BANK Gooon/Obl/glltion Bond RQ$olt.ltlon (Amondod) IIDca·JN=l·~..,.".<..~c..",,~O.O.ot><>ollooo<lRCO<d~~JO<\w;>d Pago 27 ARTICLE IV REDEMPTION OF BONDS Section 401 -Redemption Provisions. The Bonds ofeach Series may be subject to redemption prior to maturity at such times and upon such terms as shall be fixed by the related Series Resolution. If less than all of the Bonds of anyone maturity of a Series shall be called for redemption, the particular units of Bonds, as determined in accordance with Section 403 herein, to be redeemed shall be selected by lot by the Trustee, or in any manner as the Trustee, in its sole discretion, may deem appropriate and fair. Section 402 -Notice of Redemption. (A) In the event any of the Bonds are to be redeemed, the Registrar shall cause notice to be given as provided in this Section 402. Unless otherwise specified in the Series Resolution authorizing the issuance of the applicable Series of Bonds, notice of redemption (i) shall be filed with the paying agent designated for the Bonds being redeemed and (ii) shall be mailed by first class mail, postage prepaid, to all Bondholder of Bonds to be redeemed at their addresses as they appear on the registration books of the Trustee, at least thirty (30) days but not more than sixty (60) days prior to the date fixed for redemption. Such notice shall state the following information: (1) the complete official name of the Bonds, including Series, to be redeemed, the identification numbers of Bonds and the CUSIP numbers, if any, of the Bonds being redeemed, provided that any such notice shall state that no representation is made as to the correctness of CUSIP numbers either as printed on such Bonds or as contained in the notice of redemption and that reliance may be placed only on the identification numbers contained in the notice or printed on such Bonds; (2) any other descriptive information needed to identify accurately the Bonds being redeemed, including, but not limited to, the original issue date or dated date of and interest rate on such Bonds; (3) in the case of partial redemption of any Bonds, the respective principal amounts thereof to be redeemed; redeemed; (4) the date of mailing of redemption notices and the redemption date; (5) the redemption price; (6) that on the redemption date the redemption price will become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date; and (7) the place where such Bonds are to be surrendered for payment of the redemption price, designating the name and address of the redemption agent with the name of a contact person and telephone number. (B) In addition to the foregoing, further notice of any redemption of Bonds hereunder shall be given by the Trustee, at least two (2) Business Days in advance of the mailed notice to Bondholders, by registered or certified mail or overnight delivery service, to all registered securities depositories then in the business of holding substantial amounts (as reasonably determined by the Bondholders) of obligations of types comprising the Bonds and to at least two national information services that disseminate notices of redemption of obligations such as the Bonds. Such further notice shall contain the information required in clause (a) above. Failure to give all or any portion of such further notice shall not in any manner defeat the effectiveness of a call for redemption. (C) Upon the payment of the redemption price of Bonds being redeemed, each check or other transfer of funds issued for such purpose shall bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer. (D) If at the time of mailing of any notice of redemption there shall not be on deposit with the Trustee moneys sufficient to redeem all the Bonds called for ALASKA MUNICIPAL BOND BANK Glltloro/Obligation Bond Rosolullon (Amrmdod) l'O<=·~N:"X>:m'l...<..~,,,,,.\.-=c ......,,,, (X;j>;tlt,<>, lIoMR"""''''",,''?d Page 28 ALASKA MUNICIPAL BOND BANK GIltlOr.ll ObI/go/loa Bond Rosolullon (Amondod) 1=·,J7.=1'.'lt1=...,.,n<·=G• ...,""0;>'il.~'M!l<>n<r>l"""''''"'''''?d Paga 29 redemption, such notice shall state that such redemption is subject to the deposit of the redemption moneys with the Trustee not later than the redemption date and that such notice shall be of no effect unless such moneys are so deposited. (E) A second notice of redemption shall be given, not later than ninety (90) days subsequent to the redemption date, to Bondholders of Bonds or portions thereof redeemed but who failed to deliver Bonds for redemption prior to the 60th day following such redemption date. Any notice mailed shall be conclusively presumed to have been dUly given, whether or not the owner of such Bonds receives the notice. Receipt of such notice shall not be a condition precedent to such redemption, and failure so to receive any such notice by any of such Bondholders shall not affect the validity of the proceedings for the redemption of the Bonds. (F) In case any Bond is to be redeemed in part only, the notice of redemption which relates to such Bond shall state also that on or after the redemption date, upon surrender of such Bond, a new Bond in principal amount equal to the unredeemed portion of such Bond will be issued. Section 403 M Partially Redeemed Fully Registered Bonds. Unless otherwise specified in the Series Resolution authorizing the issuance of the applicable Series of Bonds, in case any registered Bond shall be redeemed in part only, upon the presentation of such Bond for such partial redemption, the Bank shall execute and the Trustee shall authenticate and shall deliver or cause to be delivered to or upon the written order of the Holder thereof, at the expense of the Bank, a Bond or Bonds of the same Series, interest rate and maturity, in aggregate principal amount equal to the unredeemed portion of such registered Bond. Unless otherwise provided by Series Resolution, a portion of any Bond of a denomination of more than the minimum Authorized Denomination to be redeemed will be in the principal amount of the minimum Authorized Denomination or an integral multiple thereof, and in selecting portions of such Bonds for redemption, the Trustee will treat each such Bond as representing that number of Bonds of the minimum Authorized Denomination which is obtained by dividing the principal amount of such Bonds by the minimum Authorized Denomination. ARTICLE V CUSTODY AND APPLICATION OF CERTAIN PROCEEDS OF BONDS Section 501 -Application of Certain Proceeds. (A) Each Series Resolution authorizing the issuance of a Series of Bonds, a portion of the proceeds derived from the sale of which is to be applied to the purchase of Municipal Bonds, shall specify the name of each Governmental Unit which is to receive a Loan by the Bank from such proceeds and the amount of such proceeds to be applied to the making of each such Loan which shall be the amount of each such Loan. Contemporaneously with the issuance, sale and delivery of any Series of Bonds, the Bank shall apply the amount of the proceeds derived from the sale of such Series of Bonds, if any, as shall be specified in said Series Resolution for the purpose of making such Loans to each of the Governmental Units specified in the Series Resolution authorizing the issuance of such Series of Bonds. (B) Accrued interest if any, received upon the delivery of such Series of Bonds shall be deposited in the Interest Account. The amount received as a premium over the principal amount of such Series of Bonds, if any, upon the delivery of such Series of Bonds shalt be applied as provided in the Series Resolution authorizing such Series of Bonds. (C) The amount, if any, necessary to cause the amount on deposit in the Reserve Fund to satisfy the Reserve Fund Requirement. (D) Any remaining proceeds derived from the sale of a Series of Bonds shall be applied as provided in the Series Resolution authorizing such Series of Bonds. Section 502 -Loans. (A) A Loan to each Governmental Unit shall be made from the portion of the proceeds derived from the sale of each Series of Bonds specified in the Series Resolution authorizing the issuance of such Series of Bonds and the amount of each such Loan shall be the amount specified in such Series Resolution. All such payments made pursuant to such Series Resolution shall be subject to the provisions ALASKA MUNICIPAL BOND BANK GfNlonl1 ObllgllUon Bond RosoluUO/l (Amondod) l\O:>a;·,JT~=II!lo«<"'...",t-=G_~(X;j~"""!l<>"."."R,,,,,.,,,"?d Page 30 F-9 ALASKA MUNICIPAL BOND BANK Gonorol Obllglll1on Bond Rosolutfoa (Amond~) Page 31 and restrictions of this Article V, and the Bank covenants that it will not cause or permit to be paid from such portion of the proceeds derived from the sale of such Series of Bonds any sums except in accordance with such provisions and restrictions. (B) The Trustee shall pay to each Governmental Unit the amount of the Loan upon receipt by the Trustee of: (1) a written requisition of the Bank signed by an Authorized Officer stating (i) the name of the Governmental Unit to which the payment is to be made; and (ii) the amount to be paid; (2) a certificate signed by an Authorized Officer and attached to the requisition certifying that the terms and provisions of the Loan Agreement providing for such Loan are in compliance with Section 913, and that to the knowledge of such Authorized Officer such Governmental Unit is not in default under any of the terms or provisions of said Loan Agreement; (3) a Counsel's Opinion stating that such Municipal Bonds are valid obligations of such Governmental Unit as required by the Act and that the Loan Agreement has been duly authorized and executed by the Governmental Unit and constitutes a valid and binding obligation of the Governmental Unit enforceable in accordance with its terms; and (4) such Municipal Bonds of such Governmental Unit, registered as to both principal and interest in the name of the Bank or the Trustee and delivered in accordance with the Act. Upon receipt of such requisition, accompanying certificate, Counsel's Opinion and Municipal Bonds, the Trustee shall pay such amount directly to the Governmental Unit entitled thereto as named in such requisition. Section 503 -Retention and Inspection of Documents. All requisitions and certificates and Counsel's Opinions and Municipal Bonds received by the Trustee, as required in this Article V as conditions of payment may be relied upon by and shall be retained in the possession of the Trustee, subject at all times during normal business hours to the inspection of the Bank and, after written request received by the Trustee at least five business days prior to the date of inspection, by any Holder of at least five per cent in principal amount of the Series of Outstanding Bonds. ARTICLE VI ESTABLISHMENT OF FUNDS AND ACCOUNTS AND APPLICATION THEREOF Section 601 -Pledge. (A) The Bonds shall be direct and general obligations of the Bank, and its full faith and credit are pledged to the payment of the principal and redemption premium, if any, of and interest on the Bonds, subject to any agreements heretofore and hereafter made with the Holders of any other notes or bonds of the Bank pledging any particular revenues or assets not pledged under this Resolution. (B) The Municipal Bonds and the Municipal Bonds Payment, the investments thereof and the proceeds of such investments, if any, and all funds and accounts established by this Resolution to be held by the Trustee are hereby pledged and assigned for the payment of the principal of, Redemption Price of, interest on, and Sinking Fund Installments for, the Bonds in accordance with the terms and provisions of this Resolution, subject only to the provisions of this Resolution permitting the application thereof for the purposes and on the terms and conditions set forth in this Resolution authorizing the Bank to create Security Interests in said Municipal Bonds and Municipal Bonds Payment in favor of Credit Enhancement Agencies and counterparties to Interest Rate Exchange Agreements. Subject to the provisions of Section 805 of this Resolution, this pledge shall be valid and binding from and after the date of adoption of this Resolution, and the Municipal Bonds and the Municipal Bonds Payment and all other monies and securities in the funds and accounts established by this Resolution to be held by the Trustee hereby pledged shall immediately be subject to the lien of such pledge without any further act, and such lien shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Bank, regardless of whether such parties have notice notice thereof. Section 602 M Establishment of Funds and Accounts. (A) The Alaska Municipal Bond Bank Debt Service Fund (the "Debt Service Fund") is hereby established and ALASKA MUNICIPAL BOND BANK GanllnJl Obl/gatlon Bond RosohJtlon (Amllndrxi) 1~·JT.noo"il<>"""'~ ton'·=G"""""oo~."«>("",""'ll"""M.,n,,,?, Page 32 ALASKA MUNICIPAL BOND BANK Gononl Obllglllion Bond RosohJt/on (Amondlld) Page 33 shall be maintained and held by the Trustee pursuant to the provisions of this Resolution. There is hereby created and established in the Debt Service Fund an "Interest Account," a "Principal Account" and a "Redemption Account" each of which shall be held by the Trustee. Amounts in the Interest Account, the Principal Account and the Redemption Account shall be used solely for the purpose of paying the principal of, Redemption Price of, interest on and Sinking Fund Installments for, the Bonds and of retiring such Bonds at or prior to maturity in the manner provided herein and in any Series Resolution. Amounts deposited in the Interest Account and the Principal Account shall be disbursed and applied by the Trustee at the times and in the manner provided in this Article VI and in paragraph (3) of Section 203. (B) There is hereby established within the Alaska Municipal Bond Bank Reserve Fund created by Section 44.85.270 of the Act, a 2005 General Obligation Bond Resolution Reserve Account (the "Reserve Fund") which shall be maintained and held by the Trustee pursuant to the provisions of this Resolution. (C) There is hereby established a Rebate Fund, and within such fund, a separate account for each Series of Bonds. (0) There is hereby established an Operating Fund which shall be held by the Bank pursuant to the provisions of this Resolution. Section 603 -Reserve Fund. (A) On or before the first day of each month, the Trustee shall set aside from amounts in the Reserve Fund derived from income or interest earned and profits realized by the Reserve Fund due to the investment thereof, an amount which, when added to the amounts theretofore set aside for such purpose and not paid into the Interest Account, will on such day be equal to the unpaid interest on the Reserve Fund Obligations accrued and to accrue to the last day of such month. If the Trustee so determines, said amounts may be deposited in an account which the Trustee maycreate in the Reserve Fund under the name of "Reserve Fund Obligations Interest Accountn • On or before each interest payment date of the Reserve Fund Obligations, said amounts shall be deposited in the Interest Account. (8) On or before each principal payment date and Sinking Fund Installment payment date of Reserve Fund Obligations, the Trustee shall withdraw from amounts in the Reserve Fund and deposit in the Principal Account, an amount which, when added to the amount then on deposit in the Principal Account and derived from sources other than Municipal Bonds Payment, will be equal to the Principal Installment of the Reserve Fund Obligations falling due on such date. (C) On or before December 31 of each year, after complying with the provisions of paragraphs (1) and (2) above to the extent required by such date, the Trustee shall withdraw from the Reserve Fund, any amount remaining therein derived from income or interest earned and profits realized by the Reserve Fund due to the investment thereof, and pay over said amount to the Bank for deposit in the Operating Fund but only to the extent that there remains after such withdrawal an amount in the Reserve Fund at least equal to the Required Debt Service Reserve. (0) The Reserve Fund Requirement may be satisfied with (i) monies made available by the State and paid to the Bank for the purpose of the Alaska Municipal Bond Bank Reserve Fund created by Section 44.85.270 of the Act in the amount provided by a Series Resolution; (ii) all monies paid to the Bank pursuant to the Act for the purpose of restoring the Reserve Fund to the amount of the Required Debt Service Reserve; (iii) such portion of the proceeds of sale of Bonds, if any, as shall be provided by any Series Resolution; (iv) Credit Enhancement; (v) any other monies which may be made available to the Bank for the purposes of the Reserve Fund from any other source or sources; or (vi) any combination of the foregoing. (E) In the event there shall be, on any interest payment date, a deficiency in the Interest Account, or, in the event there shall be, on any principal payment date or Sinking Fund Installment payment date, a deficiency in the Principal Account, the Trustee shall make up such deficiencies from the Reserve Fund by the withdrawal of cash therefrom for that purpose and by the sale or redemption of securities held in the Reserve Fund, if necessary, in such amounts as will, at the respective times, provide monies in the Interest Account and Principal Account sufficient to make up any such ALASKA MUNICIPAL BOND BANK Gono",' Obligation Bond RflSolufion (Amrmdfld) j'.Do::a·.:l7~nool~"""".'=Ga"''''''0:>~''''''Ilo>ndf{'''''",.,.,.,,,,,,,, Pago 34 F-lO ALASKA MUNICIPAL BOND BANK GanllnJl Obllgllfion Bond RflSolutlon (Amont:1lx1) '\Dea.'Jl'=WbtOC<~~"""~G<I""<Dlo:>"""."Ilondf{""""' ..,.,.,""'" Page 35 deficiency. If a deficiency still exists immediately prior to a debt service payment date and after the withdrawal of cash, the Bank shall then draw from any Credit Enhancement for the Bonds in sufficient amount to make up such difference. Drawings under the Credit Enhancement shall be made on a pro-rata basis (in proportion to the respective maximum coverages) available under the Credit Enhancement. Such draw shall be made at such times and under such conditions as such Credit Enhancement shall provide. Section 604 ~ Interest Account Principal Account and Redemption Account. (A) Except as otherwise provided in paragraph (3) of Section 204, the Trustee shall deposit Municipal Bonds Interest Payments and any other monies availableforthe payment of interest in the Interest Account upon receipt thereof. The Trustee shall, on or before each interest payment date of the Bonds, pay, out of amounts then held for the credit of the Interest Account, to itself and the Paying Agents, the amounts required for the payment by it and such Paying Agents of the interest becoming due on the Bonds on such interest payment date, and such amounts so withdrawn are hereby irrevocably pledged for and shall be applied to the payment of such interest. The Trustee shall also payout of the Interest Account to itself and the appropriate Paying Agents, on or before any redemption date for Bonds being refunded by Refunding Bonds, the amount required for the payment of interest on the Bonds then to be redeemed, to the extent not otherwise provided in this Resolution. (B) The Trustee shall deposit Municipal Bonds Principal Payments and any other monies available for the payment of principal in the Principal Account, upon receipt thereof. The Trustee shall, on or before each principal payment date of or Sinking Fund Installment date for, the Bonds, pay, out of the monies then held for the credit of the Principal Account, to itself and the Paying Agents, the amounts required for the payment by it and such Paying Agents of the principal or Sinking Fund Installment due on the Bonds on such date, and such amounts so withdrawn are hereby irrevocably pledged for and shall be applied to the payment of such principal or Sinking Fund Installment. (C) The Trustee shall establish in the Redemption Account a separate subaccount for the Bonds of each Series Outstanding. (1) Any monies deposited into the Redemption Account from any source other than pursuant to Section 607 or Section 916 shall be applied to the purchase or redemption of Bonds in a manner to be determined by the Bank in accordance with Article IV. Any monies deposited into the Redemption Account pursuant to Section 607 shall be applied to the purchase or redemption of Reserve Fund Obligations in a manner to be determined by the Bank in accordance with Article IV. (2) The Bank shall deposit or cause to be deposited in the Redemption Account such portion of the monies received as the proceeds of sale or redemption of Municipal Bonds, as required by Section 916 hereof, and, upon any such deposit, shall advise the Trustee in writing of the Series of Bonds to which the same relates. Upon receipt, such monies shall be set aside by the Trustee in the appropriate Series sub~account. Monies so held in each separate sub~account by the Trustee shall be applied to the purchase or retirement of the Bonds of the Series in respect of which such sub-account was created as follows: (i) The Trustee shall promptly apply such monies to the purchase of Bonds of the Series in respect of which such sub~account was created having the same maturity date or dates and in the same principal amount within each maturity as the Municipal Bonds Principal Payments required to be made for the Municipal Bonds sold by the Bank or redeemed by the Governmental Unit at the most advantageous price obtainable with reasonable diligence, such price, however, not to exceed the Redemption Price which would be payable on the next ensuing date on which the Bonds of the Series so purchased are redeemable according to their terms. The Trustee shall pay the interest accrued on the Bonds so purchased to the date of sale or redemption of the Municipal Bonds from the Interest account and the balance of the purchase price from the applicable sub-account in the Redemption Account, as hereinabove provided, but no such purchase shall be made by the Trustee within the period of forty-five ALASKA MUNICIPAL BOND BANK GMonl Obligation Bond Rosolutlon (Amondod) 1'=\jI.=1'ito""".,....<'-=Gb"".""0'$"."<>'llor4j("""~.,o)J\"'?'l Page 36 ALASKA MUNICIPAL 80ND BANK GMonl Obllgar/on Bond Rosowfion (Amondod) 1\[)o<:>'JI'='\Ro:r~~.·2X)5Gb""""O:<"",,,,,,I,>o~dl{.,..<>"~".,,w;>d Page 37 (45) days next preceding a date on which such Bonds are subject to redemption under the provisions of the Series Resolution authorizing the issuance thereof. (ii) In the event the Trustee is able to purchase the requisite principal amount of Bonds from a sub~account in accordance with and under the foregoing provisions of this subparagraph (b) at a purchase price less than the sum of the deposits to such sub-account from the proceeds from the sale or redemption of Municipal Bonds and the applicable transfers from the Interest Account, upon the payment by the Trustee of the purchase price of such Bonds, the Trustee shall transfer the balance of monies remaining in such sub~account to the Bank for deposit in the Operating Fund. (iii) In the event the Trustee is unable to purchase the requisite principal amount of Bonds the Trustee shall call for redemption on the next ensuing redemption date such amount of Bonds of the Series in respect of which such sub~account was created having the same maturity date or dates and in the same principal amount within each maturity as the Municipal Bonds Principal Payments required to be made for the Municipal Bonds sold by the Bank or redeemed by the Governmental Unit, as, at the Redemption Price thereof, will exhaust said sub-account as nearly as may be. Such redemption shall be made pursuant to the provisions of Article IV hereof. The Trustee shall pay the interest accrued on the Bonds so redeemed to the date of sale or redemption of the Municipal Bonds from the Interest Account and the balance of such interest to the date of redemption of the Bonds and the Redemption Price from the applicable sub-account. (3) The Bank may, from time to time, by written instructions direct the Trustee to make purchases under subparagraph (b) above only after receipt of tenders. The Bank may specify the length of notice to be given and the date on which tenders are to be accepted or may authorize the Trustee to determine the same in its discretion. All such tenders shall be by sealed proposals and no tenders shall be considered or accepted at any price exceeding the price specified under subparagraph (b) above for the purchase of Bonds. The Trustee shall accept tenders with the lowest price, as determined by the Trustee, and if the monies available for purchase pursuant to such tenders are not sufficient to permit acceptance of all tenders and there shall be tenders at an equal price above the amount of monies available for purchase then the Trustee shall select by lot, in such manner as the Trustee shall determine in its discretion, the Bonds tendered which shall be purchased. No purchase of Bonds, either on tenders or otherwise, shall be made by the Trustee within the period of forty-five (45) days next preceding any date on which such Bonds are subject to redemption. (D) Monies set aside from time to time with the Trustee and Paying Agents for the payment of principal or Redemption Price of, interest on and Sinking Fund Installments for, the Bonds shall be held in trust for the Holders of the Bonds. Until so set aside for the payment of such principal, Redemption Price, interest, and Sinking Fund Installments, all monies in such accounts shall be held in trust for the benefit of the Holders of all Bonds at the time Outstanding equally and ratably and without any preference or distinction as between Bonds of different Series, except that monies on deposit in the separate sub-accounts established in the Redemption Account shall be held in trust for and applied to the payment of the Bonds of the Series for which the applicable sub-account was established. Section 605 -Rebate Fund. (A) The Trustee shall establish and thereafter maintain, so long as the Bonds are Outstanding, a Rebate Fund which shall be held separate and apart from all other funds and accounts established under this Resolution and from all other moneys of the Trustee. (B) All amounts in the Rebate Fund, including income earned from investment of the fund, shall be held by the Trustee free and clear of the lien of this Resolution. In the event the amount on deposit in the Rebate Fund exceeds the aggregate amount of the Rebate Requirement for all Series of Bonds, as verified in writing by an independent public accountant or other qualified professional selected by the Bank at the time the Rebate Requirement is determined, less amounts of the Rebate Requirement theretofore paid to the United States for all Series of Bonds, the Trustee ALASKA MUNICIPAL BOND BANK GonOllIl Obligation Bond RO$owrlon (Amondlld) ! ...ooc.\JI'=!\Ro:rl<>vt""'=G<I""",[O:<".~""~I{,,,,""~<l~"'" Page 38 F-II ALASKA MUNIC/PAL BOND BANK Gonoral ObIlgat/on Bond Rosowflon (Amondod) [\[)o<:>\j7~=I'.Rl>«<iJ'[",'"=Gb""""o:<""""l.l<>'ldl{ow",,,,,,w;>:l Page 39 shall, upon the Bank's request, withdraw from the Rebate Fund and pay to or upon the order of the Bank an amount not to exceed such excess to the Bank for deposit in the Operating Fund. (C) The Bank shall determine the amount of the Rebate Requirement with respect to each Series of Bonds on each applicable Rebate Calculation Date. The Bank shall deposit into the Rebate Fund the Rebate Requirement, ifany, with respect to each Series of Bonds. The Bank shall instruct the Trustee to withdraw from the Rebate Fund and pay over to the United States Government with respect to each Series of Bonds: (1) not Jess frequently than once each five years commencing no later than 60 days after the first Rebate Calculation Date for such Series of Bonds and upon each fifth anniversary of such date, an amount which when added to all previous rebate payments made with respect to such Series of Bonds equals 90% of the sum of the Rebate Requirement pertaining to such Series of Bonds plus the amount, if any, of Rebate Requirement Requirement theretofore paid to the United States with respect to such Series of Bonds, and (2) not later than 60 days after the retirement of the last Bond of such Series, 100% of the Rebate Requirement with respect to such Series. The determination of reba table arbitrage made with respect to each such payment date and with respect to any withdrawal and payment to the Bank from the Rebate Fund pursuant to this Resolution must be verified in writing by an independent public accountant or other qualified professional selected by the Bank. (0) The Trustee shall, at least sixty (60) days prior to each Rebate Calculation Date, notify the Bank of the requirements of this Section. By agreeing to give this notice, the Trustee assumes no responsibility whatsoever for compliance by the Bank with the requirements of Section 148 of the Code or any successor. The Bank expressly agrees that (notwithstanding any other provision of this Resolution) any failure of the Trustee to give any such notice, for any reason whatsoever, shall not cause the Trustee to be responsible for any failure of the Bank to comply with the requirements of said Section 148 or any successor thereof. (E) The Trustee, on behalf of the Bank, shall keep and retain, until the date six years after the retirement of the last of the Bonds of each Series, records with respect to each Series of the Bonds and the investment and expenditure of amounts on deposit with the Trustee to comply with the aforementioned arbitrage rebate requirements, including without limitation a complete list of all investments and reinvestments of amounts on deposit with the Trustee with respect to each Series of the Bonds. For purposes of the computation required above, the Trustee shall, upon request, furnish to the Bank all information in the Trustee's control which is necessary for such computations. (F) The Bank hereby covenants and agrees that it will not enter, and will not cause the Trustee to enter into, any transaction or cause any transaction to be entered into with respect to the investment of gross proceeds of the Bonds, or otherwise, which reduces the amount which may be required to be paid to the United States pursuant to the arbitrage rebate requirements specified herein above, because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the yield on each Series of the Bonds not been relevant to either party. (G) The provisions of this Section may be amended or deleted, with respect to any or all series of the Bonds, from this Resolution upon receipt by the Bank and the Trustee of an opinion of bond counsel that such amendment or deletion will not adversely affect the exclusion from gross income of interest on the Bonds. Section 606 -Operating Fund. There shall be deposited in the Operating Fund all Fees and Charges collected by the Bank or the Trustee, to the extent not otherwise encumbered or pledged, and any other monies which may be made available to the Bank for the purposes of the Operating Fund from any other source or sources including, without limiting the generality of the foregoing, amounts transferred pursuant to paragraph (3) of Section 603, subparagraph (b)(ii) of paragraph (3) of Section 604 and the amount received as a premium over the principal amount of a Series of Bonds, if any, to the extent provided in the Series Resolution authorizjng such Series. Monies ALASKA MUNICIPAL BOND BANK GononJ Obllglltfon Bond RlIsoJution (Amllndlld) I·D"",'-:Jl'='~l<>""".>Oc.<\=Go...."" O':;o:..~~""'!!oM HOW~~",,"'?l Pogo 40 ALASKA MUNICIPAL BOND BANK Gonllr;//Obllglltlon Bond Rosolutlon (Amondlld) 1\!loo::t'.l7~=''RtI«A.'tCC,<'-=G..b..'''''0':<...''''''(\o''''R'''''''''''"''''?l Pogo 41 at any time held for the credit of the Operating Fund shall be used for and applied solely to the following purposes: (a) To pay the Administrative Expenses of the Bank; (b) To pay the fees and expenses of the Trustee and Paying Agents; (c) To pay financing costs incurred with respect to a Series of Bonds, including fees and expenses of the attorneys, initial Trustee's and Paying Agents' fees and expenses, costs and expenses of financial consultants, printing costs and expenses, the payment to any officers, departments, boards, agencies, divisions and commissions of, or reimbursement to, the State of any statement of cost and expense or advances rendered to the Bank pursuant to the Act, and all other financing and other miscellaneous costs; and (d) To pay any expenses in carrying out any other purpose then authorized by the Act.All amounts in the Operating Fund shall be free and clear of any lien or pledge created by this Resolution butshall be held and applied in accordance with this section. Section 607 -Reduction of Required Debt Service Reserve. Whenever the amount of the Required Debt Service Reserve is reduced, the Trustee, only upon the written request of the Bank signed by an Authorized Officer, shall withdraw from any amounts on deposit in the Reserve Fund and deposit in the Redemption Account any amount not exceeding the amount of such reduction of the Required Debt Service Reserve. The amount to be withdrawn from the Reserve Fund in each instance pursuant to the provisions of this paragraph shall be determined by the Bank and the amount thereof certified to the Trustee in writing signed by an Authorized Officer. Section 60B -Trustee's Maintenance of Records on Payment of Bonds. In connection with the payment, redemption or purchase of all Bonds under the provisions of this Resolution, the Trustee shall keep accurate records of the source of the monies used to pay, redeem or purchase such Bonds. Section 609 -Obtaining Credit Enhancements and Interest Rate Exchange Agreements. Except as otherwise provided in a Series Resolution authorizing the issuance of a Series of Bonds, the Bank may obtain Credit Enhancement or an Interest Rate Exchange Agreement with respect to such Bonds either at the time of issuance of the Bonds or any time thereafter. Section 610 -Creation of Additional Funds Accounts and Subaccounts' Separate Credit Enhancement Funds· Pledge with Respect to Credit Enhancements and Interest Rate Exchange Agreements. (A) The Trustee shall establish within any Fund such Accounts in addition to the Accounts herein established as the Bank shall by Series Resolution or Supplemental Resolution determine and shall in like manner establish within any Account such additional subaccounts for the purposes of such Account as the Bank shaH so determine. (B) The Bank may at any time by execution of a Series Resolution or Supplemental Resolution establish a Fund or Account in which to hold any Credit Enhancement and the proceeds thereof or drawings thereunder (a "Credit Enhancement Fund") for the benefit of any Series of Bonds to which such Credit Enhancement has been pledged, which pledge may be (but is not required to be) exclusively for the benefit of such Series of Bonds or certain designated Series of Bonds and not equally and ratably among all the Series of Bonds. Amounts held in a Credit Enhancement Fund shall not be considered a part of the Municipal Bonds Payment but, rather, shall be subject to such lien and pledge as may be created in the Series Resolution creating such Credit Enhancement Fund. (C) If the Bank creates a Credit Enhancement Fund, the Bank may direct, in the Series Resolution creating such Credit Enhancement Fund, that the Trustee pay, and if so directed in writing by the Bank the Trustee shall pay, principal (including premium, if any) of and interest on the Bonds secured by such Credit Enhancement Fund directly from amounts in such Credit Enhancement Fund and that the Trustee reimburse, and if so directed in writing by the Bank the Trustee shall so reimburse, such Credit Enhancement Fund for such payment from the Credit Enhancement Fund; provided, however, that the Bank may, in the Series Resolution authorizjng the Series of Bonds to be secured by Credit Enhancement, treat any, or any part of any, obligation owed or ALASKA MUNICIPAL BOND BANK GfMllntI/Obl/glltJon Sond RllSOJutlon (Amondod) 1\Do<:o'.)7.:llXlQl·.Roiotu'.cn<'.=Go--oo""0,:;0:..r.=lloodH...""'.",..... .,. Page 42 F-12 ALASKA MUNICIPAL BOND BANK Gonon/Obllglltlon Bond RlISoJutJon (Amondod) 1'Doa'-"7~='·ib""'-~=.<'~G""""",O.O.&"""floo'><:H"""''''.,.,,,?,, Pago 43 which may in the future be owed to the Credit Enhancement Agency pursuant to the Credit Enhancement Instrument as the Series of Bonds secured by such Credit Enhancement if the Corporation, at the time of issuance of said Series of Bonds and at the time of the creation of any such obligation satisfies the requirements of Section 203, in which case the Trustee shall pay the principal of and interest on any such obligations in accordance with the terms of this Resolution treating such obligations as a Series of Bonds. In a Series Resolution authorizing a Series of Bonds secured by a Credit Enhancement Fund the Bank may fix provisions relating to such Fund pursuant to the terms of a Series Resolution. In addilion to the foregoing, the Bank may agree to permit a Credit Enhancement Agency to be subrogated 10 the rights of any Bondholders whose Bonds are secured by the Credit Enhancement provided that such Credit Enhancement Agency is not in default under such Credit Enhancement. ARTICLE VII SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS Section 701 -Security for Deposits. All monies held hereunder by the Trustee shall be continuously and fully secured, for the benefit of the Bank and the Holders of the Bonds in such manner as may then be required or permitted by applicable State or federal laws and regUlations regarding the security for, or granting a preference in the case of, the deposit of trust funds. The Trustee or any Paying Agent shall not be required to give security for the deposit of any monies with them held in trust for the payment of the principal or Redemption Price of or interest on any Bonds, or for the Trustee to give security for any monies which shall be represented by obligations purchased under the provisions of this Resolution as an investment of such monies. Section 702 -Investment of Funds and Accounts Held by the Trustee. (A) Upon the deposit of any amounts in any fund or account held by the Trustee under the provisions of this Resolution, in the manner hereinabove prescribed, the Bank may furnish the Trustee with a schedule of dates on which it is estimated by the Bank that such monies in said fund or account will be required to be expended. The Bank may from time to time amend the schedule so furnished. Upon receipt of such schedule or ALASKA MUNICIPAL BOND BANK GllllIUl2/ObI/g~fJon Bond RflSoJut/on (Amrmdod) amended schedule, the Bank may direct the Trustee to, or in the absence of receipt of such schedule or such direction the Trustee shall, invest and reinvest in Investment Securities the monies in said fund or account so that the maturity date or date of redemption at the option of the holder of such obligations shall coincide as nearly as practicable with the times at which monies are needed by the Bank to be so expended. The Bank also may direct the Trustee that all or part of the amounts in the Interest Account and the Principal Account in the Debt Service Fund not be invested for specified periods of time. (B) Obligations purchased as an investment of monies in any fund or account held held by the Trustee under the provisions of this Resolution shall be deemed at all times to be a part of such fund or account and the income or interest earned, profits realized or losses suffered by a fund or account due to the investment thereof shall be retained in, credited or charged, as the case may be, to such fund or account, except that the income or interest earned and profits realized by the Reserve Fund due to the investment thereof shall be transferred by the Trustee in accordance with and to the extent provided by paragraphs (1), (3) and (5) of Section 603. (C) In determining whether or not the amount in the Reserve Fund is at least equal to Ihe Reserve Fund Requirement, the Trustee shall include the amount of interest earned or accrued thereon as of the date of evaluation and shall also include, but only if any other requirement therefor specified in a Series Resolution has been satisfied, the principal component of any Credit Enhancement then on deposit in the Reserve Fund. (D) Except as otherwise provided in the Resolution, the Trustee shall sell at the best price obtainable, or present for redemption or exchange, any obligation purchased by it as an investment pursuant to this Resolution whenever it shall be requested in writing by an Authorized Officer of the Bank to do so or whenever it shall be necessary in order to provide monies to meet any payment or transfer from the fund or account for which such investment was made. The Trustee shall advise the Bank in writing, on or before the twentieth day of each calendar month, of the details of all investments ALASKA MUNICIPAL BOND BANK Gonor.rJ Obllgllffon Bond RflSolutlon (Amondod) Page 44 Page 45 held for the credit of each fund and account in its custody under the provisions of this Resolution as of the end of the preceding month. Section 703 -LiabilityofTrustee for Investments. The Trustee shall not be liable or responsible for the making of any investment authorized by the provisions of this Article, in the manner provided in this Article, Article, or for any loss resulting from any such investment so made except for its own negligence or default. ARTICLE VIII THE TRUSTEE AND THE PAYING AGENTS Section 801 -Appointment and Acceptance of Duties of Trustee. J.P. Morgan Trust Company, National Association, a trust company or bank having the powers of a trust company doing business and having a corporate trust office in Seattle, Washington, is hereby appointed as Trustee for the Holders from time to time of the Bonds. The Trustee shall signify its acceptance of the duties and obligations imposed upon it by this Resolution by executing the certificate of authentication endorsed upon the Bonds, and, by executing such certificate upon any Bond, the Trustee shall be deemed to have accepted such duties and obligations not only with respect to the Bond so authenticated, but with respect to all the Bonds thereafter to be issued, but only, however, upon the terms and conditions set forth in the Resolution. Section 802 -Appointment and Acceptance of Duties Duties of Paying Agents. The Bank shall appoint one or more Paying Agents for the Bondsof any Series in the Series Resolution authorizing such Bonds or shall appoint such Paying Agent or Paying Agents by or pursuant to a resolution of the Bank adopted prior to the authentication and delivery of such Bonds, and may at any time or from time to time appoint one or more other Paying Agents in the manner and subject to the conditions set forth in Section 812 for the appointment of a successor Paying Agent. The Trustee may be appointed to act as Paying Agent notwithstanding that it may then be acting in the capacity of Trustee. Each Paying Agent shall signify its acceptance of the duties and obligations imposed upon it by this Resolution by written instrument of acceptance executed and delivered to the Bank and the Trustee. The principal or corporate trust offices of the Paying Agents are hereby designated as the respective agencies of the Bank for the payment of the interest on and principal or Redemption Price of the Bonds. Section 803 -Responsibilities of Fiduciaries. (A) The recitals of fact herein and in the Bonds contained shall be taken as the statements of the Bank and the Fiduciaries assume any responsibility for the correctness of the same. No Fiduciary shall be deemed to make any representations as to the validity or sufficiency of this Resolution or of any Bonds issued hereunder or in respect of the security afforded by this Resolution, and no Fiduciary shall incur any responsibility in respect thereof. The Trustee shall, however, be responsible for its representations contained in its certificate on the Bonds. No Fiduciary shall be under any responsibility or duty with respect to any other Fiduciary. No Fiduciary shall be under any 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 indemnified to its satisfaction. No Fiduciary shall be liable in connection with the performance of its duties hereunder exceptfor its own negligence or willful misconduct. Neither the Trustee nor any Paying Agent shall be under any responsibility or duty with respect to the application of any moneys paid to anyone of the others or the use or application by the Bank of the Bonds or the proceeds thereof. (B) Except during the continuance of an Event of Default, the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Resolution, and no implied covenants or obligations shall be read into this Resolution against the Trustee, and, in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinion expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Resolution. (C) In case an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Resolution and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of his own affairs. ALASKA MUNICIPAL BOND BANK Gononl Obi/gilt/on Bond Rosolut/on (AmondlXl) l\()::Q'J"<.'OCIO,~oc.=c;o"..-Ioo,..\<>'1Il<l ~.I{...mr.o<\""" Page 46 F-13 ALASKA MUNICIPAL BOND BANK Gllllor.rl ObIlgllffon Bond RflSoluffon (AmontWd) 1'O='J"2CO:l'~"""""'~G.""""OO,.."",Ilo<>.Rao"u'l"""'" Page 47 (D) No provision of this Resolution shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that (1) the Trustee shall not be liable for any error of judgment made in good faith by a responsible officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts, (2) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount of the Outstanding Bonds relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Resolution, and (3) no provision of this Resolution shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Except as otherwise expressly provided herein, the Trustee shall determine whether any conditions or requirements set forth herein for any purpose have been met, and such determination by the Trustee shall be conclusive. (E) Regardless of whether it is therein expressly so provided, every provision of this Resolution, any Series Resolution, or any related document relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Article. (F) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Resolution at the request or direction of any of the Bondholders pursuant to this Resolution, unless such Bondholders shall have offered to the Trustee security or indemnity to its satisfaction against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction, (G) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, orotherpaperordocument. (H) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. (I) The permissive right of the Trustee to do things enumerated in this Resolution shall not be construed as a duty. (J) In accepting the trusts hereby created, the Trustee acts solely as Trustee for the Bondholders and not in its individual capacity and all persons, including, without limitation, the Bondholders and the Bank having any claim against the Trustee arising from this Resolution shall look only to the funds and accounts held by the Trustee or its agent hereunder for payment except as otherwise provided herein. Under no circumstances shall the Trustee be liable in its individual capacity for the obligations evidenced by the Bonds. Section 804 -Evidence on Which Fiduciaries May Act. Each Fiduciary may rely and 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. Each Fiduciary may consult with counsel, who mayor may not be of counsel to the Bank, and the opinion of such shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by it hereunder in good faith and in reliance thereon. Whenever any Fiduc'lary shall deem 'It necessary or desirable that a matter be proved or established prior to taking or suffering or omitting 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 Resolution upon the faith thereof, but in its discretion the Fiduciary may in 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 ALASKA MUNICIPAL BOND BANK GMor.t1 Obl/gllf/on Bond RosohJtlon (Amondod) I \Doc::;·..'!l~=I-.oV.""'<·= G~",,"" Q:i'\l4~,," floOd fI....CM"'"~ Page 48 ALASKA MUNICIPAL 80ND BANK Gonora/Obl/gllf/on Bond RosohJtlon (Amrmdod) '=\J1'=II'll»c<"'.<l"<'=G.""""W".~",,"floMfl.o='~"'""""" Page 49 otherwise expressly provided herein, any request, order, notice or other direction required or permitted to be furnished pursuant to any provision hereof by the Bank to any Fiduciary shall be sufficiently executed if executed in the name of the Bank by an Authorized Officer. Section 805 -Compensation. The Bank shall pay to the Trustee and to each Paying Agent from time to time reasonable compensation for all services rendered under this Resolution, and also all reasonable expenses, charges, counsel fees and other disbursements, induding those of its attorneys, agents and employees, incurred in and about the performance of their powers and duties under this Resolution, and the Trustee and each Paying Agent shall have a lien therefor on any and all funds at any time held by it under this Resolution. The Bank further agrees to indemnify and save the Trustee and each Paying Agent harmless against any liabilities which it may incur in the exercise and performance of its powers and duties hereunder, and which are not due to its negligence or default. Section 806 -Permitted Acts and Functions. The Trustee and any Paying Agent may become the owner of any Bonds, with the same rights it would have if it were not such Trustee or Paying Agent. The Trustee and any Paying Agent may act as depository 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 enforcement of the Bonds or this Resolution, whether or not any such committee shall represent the Holders of a majority in principal amount of the Bonds then Outstanding. Section 807 -Resignation of Trustee. The Trustee may at any time resign and be discharged of the duties and obligations created by this Resolution by giving not less than ninety (90) days' written notice to the Bank and to the registered owners of Bonds, specifying the date when such resignation shall take effect and such resignation shall take effect immediately upon the appointment of a successor Trustee pursuant to Section 809 hereof. Section 808 -Removal of Trustee. The Trustee shall be removed by the Bank if at any time so requested by an instrument or concurrent instruments in writing, filed with the Trustee and the Bank, and signed by the Holders of a majority in principal amount of the Bonds then Outstanding or their attorneys-in-fact duly authorized, excluding any Bonds held by orforthe account of the Bank. The Bank may remove the Trustee at any time, except during the existence of an Event of Default, for such cause as shall be determined in the sole discretion of the Bank by filing with the Trustee an instrument signed by an Authorized Officer of the Bank. Section 809 -Appointment of Successor Trustee. In case at any time the Trustee shall resign or shall be removed or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or if a receiver, liqUidator or conservator of the Trustee, orof its property, shall be appointed, or if any public officer shall take charge or control of the Trustee, or of its property property or affairs, the Bank covenants and agrees that it will thereupon appoint a successor Trustee. The Bank shall provide written notice of such appointment to the registered owners of the Bonds. If in a proper case no appointment of a successor Trustee shall be made pursuant to the foregoing provisions of this Section within forty~five (45) days after the Trustee shall have given to the Bank written notice, as provided in Section 807, or after a vacancy in the office of the Trustee shall have occurred by reason of its inability to act, the Trustee or the Holder of any Bond may apply to any court of competent jurisdiction to appoint a successor Trustee. Said court may thereupon, after such notice, if any, as such court may deem proper and prescribe, appoint a successor Trustee. Any Trustee appointed under the provisions of this Section 809 in succession to the Trustee shall be a trust company or bank in good standing having the powers of a trust company within or outside the State, and having a capital and surplus aggregating at least Fifty Million Dollars ($50,000,000) if there be such a trust company or bank willing and able to accept the office on reasonable and customary terms and authorized by law to perform all the duties imposed upon it by this Resolution. ALASKA MUNICIPAL BOND BANK Gomm,l ObI/gilt/on Bond RD$ohJf/on (Amondod) 11D:>cl.'..'!N=I~=G<o"""IlQ.;.._Ilor:<!R""'..:l""'\\';x:! Pago 50 F-14 ALASKA MUN/CiPAL BOND BANK GMor.t1 Obllgllrlon Bond RlIsoluf/on {Amflndlld} '~'..'!1.=1~<\=(=Ge"""IlQ;~\lo,,"fl.fI«M""''''?<! Page 51 Section 810 -Transfer of Rights and Property to Successor Trustee. Any successor Trustee appointed under this Resolution shall execute, acknowledge and deliver to its predecessor Trustee, and also to the Bank, an instrument accepting such appointment, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become fUlly vested with all monies, estates, properties, rights, powers, duties and obligations of such predecessor Trustee, with like effect as if originally named as Trustee; but the Trustee ceasing to act shall nevertheless, on the written request of the Bank, or of the successor Trustee, execute, acknowledge and deliver such instruments ofconveyance and further assurance and do such otherthings as may reasonably be required for more fully and certainly vesting and confirming in such successor Trustee all the right, titre and interest of the predecessor Trustee in and to any property held by it under this Resolution, and shall pay over, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Should any deed, conveyance or instrument in writing from the Bank be required by such successor Trustee for more fully and certainly vesting in and confirming to such successor Trustee any such estates, rights, powers and duties, any and all such deeds, conveyances and instruments in writing shall, on request, and so far as may be authorized by law, be executed, acknowledged and delivered by the Bank. Any such successor Trustee shall promptly notify the Paying Agents of its appointment as Trustee. The Bank shall pay the expenses of effecting a transfer under this Section. Section 811 -Merger or Consolidation. Any company into which the Fiduciary may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which Fiduciary may sell or transfer all of its corporate trust business, shalt be the successor to such Fiduciary without the execution or filing of any paper or the performance of any further act, provided that such company shall be a trust company or bank which is qualified to be a successor to the Trustee under Section 809 or which is qualified to be a successor to the Paying Agent under Section 812. ALASKA MUNICIPAL BOND BANK Gooor,d ObJIglJtlon Bond RCI$owtlon (Amond(J(J) Pogo 52 to the Trustee or of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which she purports to act, that the person signing such request or other instrument acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer. The authority of the person or persons executing any such instrument on behalf of a corporate Bondholder may be established without further proof if such instrument is signed by a person purporting to be the president or a vice president of such corporation corporation with a corporate seal affixed and attested by a person purporting to be its secretary or an assistant secretary; (2) The amount of Bonds transferable by delivery held by any person executing such request or other instrument as a Bondholder, and the numbers and other identification thereof, and the date of his holding such Bonds, may be proved by a certificate, which need not be acknowledged or verified, satisfactory to the Trustee, executed by an officer of a trust company, bank, financial institution or other depository or member of the National Association of Securities Dealers, Inc. wherever situated, showing that at the date therein mentioned such person exhibited to such officer or had on deposit with such depository the Bonds described in such certificate. Continued ownership after the date stated in such certificate may be proved by the presentation of such certificate if the certificate contains a statement by such officer that the depository held that Bonds therein referred to on the date of the certificate and that they will not be surrendered without the surrender of the certificate to the depository, except with the consent of the Trustee, and a certificate of the Trustee, which need not be acknowledged orverified, that such consent has not been given. (B) Except in the case of Bonds transferable by delivery only, the ownership of Bonds and the amount, numbers and other identification, and date of holding the same shall be proved by the registry books. Any request, consent or vote of the owner of any Section 812 -Resignation or Removal of the Paying Agents and Appointment of Successors. Any Paying Agent may at any time resign and be discharged of the duties and obligations created by this Resolution by giving at least sixty (60) days written notice to the Bank and the Trustee. Any Paying Agent may be removed at any time by an instrument filed with such Paying Agent and the Trustee and signed by an Authorized Officer of the Bank. Any successor Paying Agent shall be appointed by the Bank and shall be a trust company or bank having the powers of a trust company having a capital and surplus aggregating at least FiftyMiIlion Dollars ($50,000,000), and willing and able to accept the office of Paying Agent on reasonable and customary terms and authorized by law to perform all the duties imposed upon it by this Resolution. In the event of the resignation or removal of any Paying Agent, such Paying Agent shall pay over, assign and deliver any monies held by it to its successor, or if there be no successor then appointed, to the Trustee until such successor be appointed. In the event that for any reason there shall be a vacancy in the office of Paying Agent, the Trustee shall act as such Paying Agent. Section 813 -Evidence of Signatures of Bondholders and Ownership of Bonds. (A) Any request, consent or other instrument which this Resolution may require or permit to be signed and executed by the Bondholders may be in one or more instruments of similar tenor, and shall be signed or executed by such Bondholders in person or by their attorneys appointed in writing. Proof of (0 the execution of any such instrument, or of an instrument appointing any such attomey, or (ii) the holding by any person of the Bonds shall be sufficient for any purpose of this Resolution (except as otherwise herein expressly provided) if made in the following manner, but the Trustee may nevertheless in its discretion require further or other proof in cases where it deems the same desirable: (1) The fact and date of the execution by any Bondholder or his attorney of such instrument may be proved by the certificate, which need not be acknowledged or verified, of an officer of a bank or trust company satisfactory ALASKA MUNICIPAL BOND BANK GMoral Obllgtltlon Bond Rl1Sowtlon (Amondod) Pogo 53 Bond shall bind all future owners of such Bond in respect of anything done or suffered to be done by the Bank or any Fiduciary in accordance therewith. ARTICLE IX COVENANTS OF THE BANK The Bank covenants and agrees with the Holders of the Bonds as as follows: Section 901 -Payment of Bonds. The Bank shall duly and punctually payor cause to be paid the principal or Redemption Price, if any, of every Bond and the interest thereon, at the dates and places and in the manner stated in the Bonds according to the true intent and meaning thereof, and shall duly and punctually pay, or cause to be paid, all Sinking Fund Installments, if any, becoming payable with respect to any Series of Bonds. Section 902 -Extension of Payment of Bonds. The Bank shall not directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or the time of payment of any claims for interest by the purchase or funding of such Bonds or claims for interest or by any other arrangement and in case the maturity of any of the Bonds or the time for payment of any claims for interest shall be extended, such Bonds or claims for interest shalt not be entitled in case of any default under this Resolution to the benefit of this Resolution or to any payment out of any assets of the Bank or the funds (except funds held in trust for the payment of particular Bonds or claims for interest pursuant to this Resolution) prior to benefits accorded to or the payment of the principal of all Bonds issued and Outstanding the maturity of which has not been extended and of such portion of the accrued interest on the Bonds as shall not be represented by such extended claims for interest. Nothing herein shall be deemed to limit the right of the Bank to issue Refunding Bonds as provided in Section 203 and such issuance shall not be deemed to constitute an extension of maturity of Bonds. Section 903 -Offices for Servicing Bonds. The Bank shall at all times maintain an office or agency where Bonds may be presented for transfer or exchange, and where notices, presentations and demands upon the Bank in respect of the Bonds or of this Resolution may be served. The Bank hereby appoints the Trustee as its agent ALASKA MUNICIPAL BOND BANK GlHloral Obligation Bond RG$owtlon (Am'nd(J(J) 11l;):;o'-'1'~l~-O"I$=Go....... o,>;._tlo<>dfl~<>i"?d Pogo 54 F-15 ALASKA MUNICIPAL BOND BANK GOOOlllI ObI/gilt/on Bond Rlnoltlr/on (Am,ndld) Page 55 to maintain such office or agency for the transfer or exchange of Bonds and for the service of such notices, presentations and demands upon the Bank and may appoint one or more co-registrars for such purposes. The Bank hereby appoints the Trustee as Paying Agent and hereby appoints the Paying Agent as its agent to maintain such offices or agencies for the payment of Bonds. Section 904 -Further Assurances. At any and all times the Bank shall, so far as it may be authorized by law, pass, make, do, execute, acknowledge and deliver, all and every such further resolutions, acts, deeds, conveyances, assignments, transfers and assurances as may be necessary for the better assuring, conveying, granting, assigning, confirming all and singular the rights, Municipal Bonds Payments, the Municipal Bonds and other monies, securities, funds and property hereby pledged or assigned, or intended so to be, or which the Bank may hereafter become bound to pledge or assign. Section 905 -Power to Issue Bonds and Make Pledges. The The Bank is duly authorized pursuant to law to authorize and issue the Bonds for the purposes herein authorized and to adopt this Resolution and to pledge the Municipal Bonds Payments, the Municipal Bonds and other monies, securities, funds and property purported to be pledged by this Resolution in the manner and to the extent provided in this Resolution. The Municipal Bonds Payments, the Municipal Bonds, and other monies, securities, funds and property so pledged are and will be free and clear of any pledge, lien, charge or encumbrance thereon or with respect thereto prior to. or of equal rank with, the pledge created by this Resolution, except for the liens in favor of the Trustee and Paying Agents provided in Section 805 hereof, and all corporate or other action on the part of the Bank to that end has been duly and will be duly and validly taken. The Bonds and the provisions of this Resolution are and will be the valid and legally enforceable obligations of the Bank in accordance with their terms. The Bank shall at all times, to the extent permitted by law, defend, preserve and protect the pledge of the Municipal Bonds Payments, the Municipal Bonds and other monies, securities, funds and property pledged under this Resolution and all the rights of the Bondholders under this Resolution against all claims and demands of all persons whomsoever. Section 906 -General Covenants of the Bank. (A) The Bank shall do and perform or cause to be done and performed all acts and things required to be done or performed by oron behalf of the Bank under law and this Resolution in accordance with the terms hereof. (B) Upon the date of issuance of any of the Bonds, all conditions, acts and things required by law and this Resolution to exist, to have happened and to have been performed precedent to and in the issuance of such Bonds shall exist, have happened and have been performed and the issue of such Bonds, together with all other indebtedness of the Bank, shall be within every debt and other limit prescribed by the laws of the State. (e) The Bank does hereby pledge to and agree with the Holders of the Bonds that it will not cause the State to limit or alter the rights vested by the Act in the Bank to fulfill the terms of any agreements made with Bondholders, or in any way impair the rights and remedies of such Holders until the Bonds, togelherwith the interest thereon, with interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceeding by or on behalf of such Holders, are fully met and discharged. (0) Upon failure of a Governmental Unit to make any principal or interest payment on the date specified in, and as required by, the applicable Loan Agreement securing payment of the Municipal Bonds, the Trustee shall immediately notify the Executive Director of the Bank who shall then take the following actions: (i) the Executive Directorshall within two days of the Governmental Unit's failure to make the Municipal Bonds Payment pursuant to the terms of the applicable Loan Agreement, contact such Governmental Unit and request payment; ALASKA MUNICIPAL BONO BANK GlIflotlll Obllglltlon Bond Rosolut/on (Amondod) I '.:>:>o&'.J7'=1'J~V'=.~\lOClSC~"."" ""'o;:~'''''' 11<>00 ll"""U"l<>'1 ""'" Page 56 ALASKA MUNICIPAL BOND BANK GIIflIlIllI Obl/glltlon Bond Rosolut/ofl (Amondod) ''=·.JU=l\Ro1<:l"t<m,''=C.'''''''O'JI'...".'IJoO<lIl''''''''''''''..".:l Page 57 (ii) in the event payment is not made by the Governmental Unit pursuant to (i) above, the Trustee shall make up such deficiencies from the Reserve Fund as provided for in Section 603(E) of this Resolution; (iii) in the event payment is not made by the Governmental Unit pursuant to (i) above, and the Reserve Fund is drawn upon to make up such deficiency pursuant to (ii) above, the Executive Director shall initiate intercept proceedings with the applicable State agencies pursuant to Section 917 of this Resolution; (iv) in the event amounts collected pursuant to (iii) above are insufficient to replenish amounts held in the Reserve Fund to the Reserve Fund Requirement, the Executive Directorshall contact the Governor of the State and the State legislature as set forth in Section 911 (B) of this Resolution; and (v) if there remains a deficiency in the Reserve Fund after the Executive Director has exhausted the requirements found in (i) through (iv) above, the Executive Director shall request a loan from the Department of Revenue pursuant to AS 44.85.270(i) and provide for such loan to be used to cause the amount in the Reserve Fund to satisfy the Reserve Fund Requirement. Section 907 -Accounts and Reports. (A) The Bank shall keep, or cause to be kept, proper books of record and account in which complete and correct entries shall be made of its transactions relating to all Municipal Bonds Payments, Municipal Bonds, the Fees and Charges and all funds and accounts established by this Resolution, which shall at all reasonable times be subject to the inspection of the Trustee or the Holders of an aggregate of not less than twenty-five per centum (25%) in principal amount of Bonds then Outstanding or their representatives duly authorized in writing. (B) The Bank shall annually, on or before the last day of January in each year, file with the Trustee a copy of an audit for the preceding Fiscal Year, accompanied by an Accountant's Certificate, and an annual report setting forth in complete and reasonable detail: (a) its operations and accomplishments; (b) its receipts and expenditures during such Fiscal Year in accordance with the categories or classifications established by the Bank for its operating and capital outlay purposes; (c) its assets and liabilities at the end of such Fiscal Year, including a schedule of its Municipal Bonds Payments, Municipal Bonds, Fees and Charges and the status of reserve, funds and the funds and accounts established by this Resolution; and (d) a schedule of its Bonds Outstanding and other obligations outstanding at the end of such Fiscal Year, together with a statement of the amounts paid, redeemed and issued during such Fiscal Year. A copy of each such annual report and Accountant's Certificate shall be mailed promptly thereafter by the Trustee to each Bondholder who shall have filed his name and address with the Bank for such purpose. Section 908 -Personnel and Servicing of Programs. (A) The Bank shall at all times appoint, retain and employ competent personnel for the purpose of carrying out its respective programs and shall establish and enforce reasonable rules, regulations, tests and standards governing the employment of such personnel at reasonable compensation, salaries, fees and charges and all persons employed by the Bank shall be qualified for their respective positions. (B) The Bank may pay to the respective State agency, governmental unit or political subdivision of the State from the Operating Fund such amounts as are necessary to reimburse the respective State agency, governmental unit or political subdivision of the state for the reasonable costs of any services performed for the Bank. Section 909 -Waiver of Laws. The Bank shall not at any time insist upon or plead in any manner whatsoever, or claim or take the benefit or advantage of any stay or extension law now or at any time hereafter in force which may affect the covenants and agreements contained in this Resolution or in any Series Resolution or in the Bonds, and all benefit or advantage of any such lawor laws is hereby expressly waived by the Bank. Section 910 -Fees and Charges. The Bank shall establish, make, maintain and charge such Fees and Charges to each Governmental Unit to which a Loan is made, and shall from time to time revise such Fees and Charges whenever necessary, so that such Fees and Charges actually collected from each such Governmental Unit will at all ALASKA MUNICIPAL BOND BANK GlIIIlInrl Obi/gilt/on Bond RosolutJon (Am"ndfld) 1'<)oes'.JU:;l;X)(l'-..-=<'-=c......""O:<~t<:rI~Il.""",M''''''''" PagD 58 F-16 ALASKA MUNICWAL BOND BANK GIIfl"tlll Obl/glrtion Bond RD$olu1lon (Amond'od) 1\Ooa\l7';'OCQ1~'~C.nl>'1l/O:<...~ll=:llloW""""'..".:l Pago 5 9times produce monies which, together with such Governmental Unit's Allocable Proportion of other monies available under the provisions of this Resolution, and other monies available therefor, including any grants made by the United States of America orany agency or instrumentality thereof or by the State orany agency or instrumentality thereof and amounts applied therefor from amounts transferred to the Operating Fund pursuant to paragraph (3) of Section 603, will be at least sufficient: (a) To pay, as the same become due, the Governmental Unit's Allocable Proportion of the Administrative Expenses of the Bank; and (b) To pay, as the same become due, the Governmental Unit's Allocable Proportion of the fees and expenses of the Trustee and Paying Agents. The Bank shalt provide the Trustee with a schedule of the Fees and Charges to be paid by each Governmental Unit, and of each revision thereof, and shall require each Governmental Unit to make payment of the Fees and Charges required to be paid by it directly to the Trustee. The Trustee shalt promptly advise the Bank of each and every failure of a Governmental Unit to make payment of Fees and Charges when due in accordance with the applicable schedule. Section 911-Administration of Reserve Fund. (A) The Bank shall establish and maintain the Reserve Fund in accordance with the provisions of this Resolution. All monies and securities held in the Reserve Fund shall be used, disbursed and applied only in accordance with the provisions of this Resolution and for no other purpose. Monies and securities held in the Reserve Fund shalt not be withdrawn therefrom at any time in such amount as would reduce the amount in such Fund to an amount less than the Required Debt Service Reserve except as otherwise provided in this Resolution. (B) The Bank shall cause the Chairman of the Board of Directors of the Bank annually, before each January 30, to make and deliver to the Governorofthe State and to the legislature his certificate stating the amount, if any, required to restore the Alaska Municipal Bond Bank Reserve Fund to the amount of the Required Debt Service Reserve and a copy of such certificate shall be promptly delivered by the Bank to the Trustee. Monies received by the Bank from the State pursuant to such a certification, in accordance with the provisions of Section 44.85.270(g) of the Act shalt, to the extent such certification was occasioned by the fact that the amount in the Reserve Fund was less than the Required Debt Service Reserve, be deposited in the Reserve Fund, as required by paragraph (D) of Section 603. (C) The Bank shalt annually submit to the State a budget request for an appropriation to cause, if necessary, amounts held in the Reserve Fund to equal the Reserve Fund Requirement. (Amendment: Effective August 19, 2009) Section 912 -Issuance of Additional Obligations. (A) The Bank shall not subsequent to the issuance of the initial Series of Bonds under this Resolution create or permit the creation of or issue any obligations or create any additional indebtedness which will be secured by a charge and lien on the Municipal Bonds and the Municipal Bonds Payments or which will be payable from the Debt Service Fund or the Reserve Fund, except that additional Series of Bonds may be issued from time to time pursuant to a Series Resolution subsequent to the issuance of the initial Series of Bonds under this Resolution on a parity with the Bonds of such initial Series of Bonds and secured by an equal charge and lien on the Municipal Bonds and the Municipal Bonds Payments and payable equally and ratably from the Debt Service Fund and Reserve Fund for the purposes of (i) making Loans to Governmental Units, (ii) making payments into the Interest Account, (iii) making payments into the Reserve Fund, (iv) funding of Notes theretofore issued by the Bank for any purposes for which Bonds may have been issued, and (v) subject to the provisions and limitations of Section 203, the refunding of any Bonds then Outstanding, under the conditions and subject to the limitations in this Section 912 provided. (B) No additional Series of Bonds shall be issued subsequent to the issuance of the initial Series of Bonds under this Resolution unless: (1) the aggregate principal amount of Bonds and Notes of the Bank outstanding at the time of issuance and delivery of such additional Bonds including the principal amount of such additional Bonds will not exceed any limit thereon imposed by law; ALASKA MUNICIPAL BOND BANK GlItloflll Obllglltlon Bond Roso/utlon (Amondod) I 'D:><o',31';'lX(ll\/l,or,t;<utoo,\=G<l"."" wr.#\""!.\cm~floW"''''"~ Pago 60 ALASKA MUNICIPAL BONO BANK Gonll/llil Obllgat/on Bond Rllsolut/on (Amllndlld) ,'~'.)r.=1~..Ul""=G#",""W'i,l.,,""!l<>-><lfi<»<j~l<'"""" Pago 61 (2) there is at the time of the issuance of such additional Bonds no deficiency in the amounts required by this Resolution or any Series Resolution to be paid into the Debt Service Fund and into the Reserve Fund; (3) the amount of the Reserve Fund, upon the issuance and delivery of such additional Bonds and the deposit deposit in the Reserve Fund of any amount provided therefor in the Series Resolution authorizing the issuance of such additional Bonds, shall not be less than the Required Debt Service Reserve; and (4) the maturities of, or Sinking Fund Installments for, the additional Bonds then being issued representing Loan Obligations, unless such additional Bonds are being issued to refund Outstanding Bonds in accordance with the provisions of Section 203, shall be equal to the scheduled Municipal Bonds Principal Payments to be made in respect of the Loans with respect to which such additional Bonds are to be issued. (C) The Bank expressly reserves the right to adopt one or more other general obligation bond resolutions and reserves the right to issue Notes and any other obligations so long as the same are not a charge or lien on the Municipal Bonds, the Municipal Bonds Payments and the Fees and Charges or payable from the Debt Service Fund or the Reserve Fund created pursuant to this Resolution. Section 913 -Loan Agreement Provisions. No Loan shalt be made by the Bank from the proceeds of the sale of Bonds, and no Bonds shall be issued by the Bank for the purpose of providing funds with which to make a Loan, unless the Loan Agreement under which such Loan is to be made shall comply with, and no Bonds shall be issued by the Bank to fund Notes or to refund Bonds unless the Loan Agreement under which the Loan was made from the proceeds of such Notes or Bonds, shall also comply with, the following terms, conditions, provisions and limitations: (a) The Governmental Unit which is a party to such Loan agreement must be a Governmental Unit as defined by the Resolution and the Loan Agreement must be executed in accordance with existing laws; (b) The Governmental Unit, prior to or simultaneously with the issuance of Bonds of the Bank issued to make a Loan to the Govemmental Unit, shall issue Municipal Bonds which are valid obligations of the Governmental Unit as required by the Act;(c) The Municipal Bonds Interest Payments to be made by the Governmental Unit under such Loan Agreement shalt be not less than the interest payments the Bank is required to make on the Loan Obligation and shalt be scheduled by the Bank in such manner and at such times (notwithstanding the dates of payment as stated in the Municipal Bonds) as to provide funds sufficient to pay interest on the Loan Obligation as the same becomes due; (d) The Municipal Bonds Principal Payments to be made by the Governmental Unit under such Loan Agreement shall be scheduled by the Bank in such manner and at such times (notwithstanding the dates of payment as stated in the Municipal Bonds) as to provide funds sufficient to pay the principal of the Loan Obligation as the same matures; (e) The Governmental Unit shall be obligated to pay Fees and Charges to the Bank at the times and in the amounts which will enable the Bank to comply with the provisions of Section 910; (f) The Governmental Unit shall agree that in the event the amounts referred to in paragraphs (c) and (d) are not not paid by it to the Bank on or before the times specified in the Loan Agreement, any money payable to the Governmental Unit by any department or agency of the State shalt be withheld from such Governmental Unit and paid over directly to the Trustee acting under the General Obligation Bond Resolution and that the said agreement shall be full warrant, authority and direction to make such payment to any official of the State responsible for such payment upon notice to such official by the Bank as provided in the Act: (g) The Bank shall not sell and the Governmental Unit shall not redeem prior to maturity any of the Municipal Bonds with respect to which the Loan is made in an amount greater than the Outstanding Bonds issued with respect to such Loan which are then redeemable, and in the event of any such sale or redemption of such Municipal Bonds, the same shall be in an amount not less than the aggregate of (i) the principal ALASKA MUNICIPAL BOND BANK Goool1lll Obi/gilt/on Bond RQ$olut/on (Amllndod) l'A::o',31'=l~..=c.no<1llWo;,,,",,Ik>"">\""""',,,,,"?'I Page 62 F-17 ALASKA MUNICIPAL BOND BANK GIItlIl/lliI Obligation Bond Rosolutlon (Amllndfxl) ''A::o'Jr'=\~-.t:>''l''-=G~O:<'i,l'''.«tflo<><lJ.lo«<lIt'''"w;>:l Pago 63 amount of the Loan Obligation so to be redeemed, (ii) the interest to accrue on the Loan Obligation so to be redeemed to the next redemption date thereof not previously paid, (iii) the applicable premium, if any, payable on the Loan Obligation so to be redeemed, and (iv) the costs and expenses of the Bank in effecting the redemption of the Loan Obligation so to be redeemed; provided, however, that in the event the Loan Obligation has been refunded and the Refunding Bonds therefor were issued in a principal amount in excess of or less than the Loan Obligation remaining unpaid at the date of issuance of such Refunding Bonds, the amount which the Governmental Unit shall be obligated to payor the Bank shall receive under item (i) above shall be the principal amount of such Refunding Bonds Outstanding. In the event the Loan Obligation has been refunded and the interest the Bank is required to pay on the Refunding Bonds therefor is less than the interest that the Bank was required to pay on the Loan Obligation, the amount which the Governmental Unit shall be obligated to payor the Bank shall receive under item (ii) above shall be the amount of interest to accrue on such Refunding Bonds Outstanding. (h) The Governmental Unit shall give the Bank at least fifty (50) days' notice of intention to redeem its Municipal Bonds. Section 914 -Modification of Loan Agreement Terms. The Bank shall not consent to the modification of, or modify, the rate or rates of interest of, or the amount or time of payment of any installment of principal of or interest on any Municipal Bonds evidencing a Loan, orthe amount or time of payment of any Fees and Charges payable with respect to such Loan, or the security for or any teons or provisions of such Loan or the Municipal Bonds evidencing the same, in a manner which adversely affects or diminishes the rights of the Bondholders; provided, however, that, in the event the Loan Obligation is being or has been refunded and the Refunding Bonds therefor are in a principal amount in excess of or less than the principal amount of the Bonds refunded, the Bank may consent to the modification of and modify the Loan agreement relating to such Loan and the Municipal Bonds evidencing the same, and the Municipal Bonds Payments to be made thereunder so long as such Municipal Bonds Payments are sufficient in amount and payable at the times required for the payment of the principal of and interest on such Refunding Bonds, and further provided, however, that, in the event the Loan Obligation has been refunded and the interest the Bank is required to pay on the Refunding Bonds issued for the purpose of refunding such original Bonds is less than the interest the Bank was required to pay on such original Bonds refunded by the Bank, the Municipal Bonds Interest Payments to be made by the Governmental Unit in respect of such Loan may be reduced so that the amounts required to be paid shall be sufficient to pay interest on such Refunding Bonds Outstanding. Section 915 -Sale of Municipal Bonds by Bank. The Bank shall not sell any Municipal Bonds except as provided in subsection (g) of Section 913. Section 916 -Disposition of the Proceeds of Sale or Redemption of Municipal Bonds. In the event Municipal Bonds orotherobligations securing a Loan shall be sold by the Bank or redeemed by the Governmental Unit in accordance with terms of the applicable Loan Agreement, the Bank shall, upon such sale by the Bank or redemption by the Governmental Unit, deposit the proceeds of such sale or redemption, except an amount thereof equal to the costs and expenses of the Bank in effecting the redemption of the Bonds to be redeemed, into the applicable sub-account or subaccounts in the Redemption Account and shall apply the same to the purchase, retirement or redemption of the appropriate Bonds in accordance with the provisions of this Resolution. The balance in such applicable sub~account or sub~accountsof such proceeds of sale or redemption of Municipal Bonds after the redemption of the Bonds to be redeemed shall be deposited in the Operating Fund. Section 917 -Enforcement of Municipal Bonds. The Bank shall diligently enforce, and take all reasonable steps, actions and proceedings necessary for the enforcement of, all terms, covenants and conditions of all Loan Agreements and the Municipal Bonds evidencing Loans made by the Bank, including the prompt collection, and the giving of notice to the Commissionerof Revenue, ComrnissionerofCommerce, Community and Economic Development and the Commissioner of Administration and any other department or agency of the State which is custodian of any money payable ALASKA MUNICJPAL BOND BANK Gomulil Obllgotlon Bond RflsohJtlon (Amflndod) 1\D:'a:.JT~=\'J~O':,\2005Go,..,"".~.o~'O"!lc<>d>l""o~\cn""", Pago 64 ALASKA MUNICJPAL BOND BANK Gflnllntl ObI/gat/on Bond RosohJtlotl (AmflndQd) '~.;I1'=\'.i-lo<cI...1"''''·'=Go""-''''I:J:>'..._IIo<><l>l'''''''''.,,, ....>:l Pago 65 to the Governmental Unit of any failure or default of the Governmental Unit in the payment of its Municipal Bonds Payment and shall promptly transfer any such monies, upon receipt thereof, to the Trustee and, in such event. or if such monies are paid directly to the Trustee, the Trustee shall deposit any such monies in the Principal Account and Interest Account in place of said unpaid Municipal Bonds Payment or in the event deficiencies in said Accounts created by such default shall have been made up by the Reserve Fund pursuant to paragraph (5) of Section 603, in the Reserve Fund to the extent of such deficiencies. Section 918 -Continuing Disclosure' Bankruptcy. (A) The Bank hereby covenants and agrees thai il will comply with and carry out all the provisions of each Continuing Disclosure Certificate. Notwithstanding any other provision of this Resolution, failure of the Bank to comply wilh any Continuing Disclosure Certificate shall not be considered an Event ofDefaul1. and any Bondholdermay take such actions only as may be provided in such Continuing Disclosure Certificate. (B) The Bank hereby covenants and agrees that it will notify the Rating Agencies then rating the Bonds of any change in the Act which would permit it or require it to declare bankruptcy under the Bankruptcy Code. Section 919 -Tax Covenants. The Bank shall not knowingly take or cause any action to be taken which would cause interest on any Bonds to become taxable for federal income tax purposes. The Bank shall at all times do and perform all acts and things necessary or desirable, including, but not limited to, complying with the rebate provisions of Section 148 of the Code, as applicable, and complying with the provisions of any letter of instructions from bond counsel, in order to assure that interest paid on Bonds shall, for purposes of federal income taxation, be excludable from the gross income of the recipients thereof and exempt from taxation. The Bank shall not permit at any time or times any proceeds of any Bonds or any amounts held hereunder to be used, directly or indirectly, in a manner which would result in the exclusion of any Bond from the treatment afforded by subsection (a) of Section 103 of the Code. ARTICLE X SERIES RESOLUTION AND SUPPLEMENTAL RESOLUTIONS Section 1001 -Modification and Amendment without Consent. Notwithstanding any other provisions of this Article X, or Article Xl, the Bank may adopt at any time or from time to time Series Resolutions or Supplemental Resolutions for anyone or more of the following purposes, and any such Series Resolution or Supplemental Resolution shall become effective in accordance with its teons upon the filing with the Trustee of a copy thereof certified by an Authorized Officer: (A) To provide for the issuance of a Series of Bonds pursuant to the provisions of this Resolution and to specify and determine such matters and things referred to in Article II of this Resolution and to prescribe the terms and conditions pursuant to which such Bonds may be issued, paid or redeemed; (B) To add to the covenants and agreements of the Bank for the purpose of further securing the payment of the Bonds, provided such additional covenants and agreements are not contrary to or inconsistent with the covenants and agreements of the Bank contained in this Resolution; (C) To prescribe further limitations and restrictions upon the issuance of Bonds and the incurring of indebtedness by the Bank which are not contrary to or inconsistent with the limitations and restrictions thereon theretofore in effect; (D) To surrender any right, power or privilege reserved to or conferred upon the Bank by the terms of this Resolution, provided that the surrender of such right, power or privilege is not contrary to or inconsistent with the covenants and agreements of the Bank contained in this Resolution; (E) To confirm as further assurance any pledge under and the subjection to any lien, claim or pledge created or to be created by the provisions of this Resolution of the Municipal Bonds and Municipal Bonds Payments or of any other monies, securities or funds; (F) To modify anyofthe provisions of this Resolution or any previously adopted Series Resolution in any other respect; provided that such modifications shall not be ALASKA MUNICIPAL BOND BANK GonflntJ Obllg4f/on Botld Rfl$o1lJffon (Amondod) 1\Oo:>a·.:I1'='I>le«<"'''''''=Go""""O;;''''''''l3oo~>lOOO\tl'''''...., Pllgc 66 F-18 ALASKA MUNICIPAL BOND BANK GlHlflntl ObJlglltion Bond RosohJtlon (AmDnc1od) !'O::a\J1'=\~n.~Got<vYal():<'9"_IIo<><lROO<M""'''''' Page 67 effective until after all Bonds of any Series of Bonds Outstanding as of the date of adoption of such Series Resolution or Supplemental Resolution shall cease to be Outstanding, and all Bonds issued under such modified resolutions shall contain a specific reference to the modifications; (G) To cure any ambiguity or defect or inconsistent provision in this Resolution or to insert such provisions clarifying matters or questions arising under this Resolution as are necessary or desirable in the event any such modifications are not contrary to or inconsistent with this Resolution as theretofore in effect. Seclion 1002 -Supplemental Resolutions Effective with Consent of Bondholders. The provisions of this Resolution may also be modified or amended at any time or from time to time by a Supplemental Resolution, with the consent of Bondholders in accordance with and subject to the provisions of Article XI which Supplemental Resolution, upon the filing with the Trustee of a copy thereof, certified by an Authorized Officer and upon compliance with the Article XI, shall become fUlly effective in accordance with its terms as provided in said Article. Section 1003 -General Provisions Relating to Series Resolutions and Supplemental Resolutions. This Resolution shall not be modified or amended in any respect except as provided in and in accordance with and subject to the provisions of this Article X and Article XI. Nothing contained in this Article X or Article XI shall affect or limit the rights or obligations of the Bank to adopt, make, do, execute or deliver any resolution, act or other instrument pursuant to the provisions of Section 904 or the right or obligation of the Bank to execute and deliver to the Trustee or any Paying Agent any instrument which elsewhere in this Resolution it is provided or permitted to be delivered to the Trustee or any Paying Agent. A copy of every Series Resolution and Supplemental Resolution adopted by the Bank when filed with the Trustee shall be accompanied bya Counsel's Opinion stating that such Series Resolution or Supplemental Resolution has been duly and lawfully adopted in accordance with the provisions of this Resolution, is authorized or permitted by this Resolution and is valid and binding upon the Bank and enforceable in accordance with its terms (subject, as to enforcement of remedies, to applicable bankruptcy, reorganization, insolvency. moratorium, or other laws affecting creditor's rights generally from time to time in effect). The Trustee is hereby authorized to accept delivery of a certified copy of any Series Resolution or Supplemental Resolution permitted or authorized pursuant to the provisions of this Resolution and to make all further agreements and stipulations which may be contained therein, and, in taking such action, the Trustee shall be fully protected in relying on Counsel's Opinion that such Series Resolution or Supplemental Resolution is authorized or permitted by the provisions of this Resolution. No Series Resolution or Supplemental Resolution changing, amending or modifying any of the rights or obligations of the Trustee or of any Paying Agent may be adopted by the Bank without the written consent of the Trustee or Paying Agent affected thereby. ARTICLE XI AMENDMENTS Section 1101 -Powers of Amendment. Any modification or amendment of this Resolution and of the rights and obligations of the Bank and of the Holders of the Bonds, in any particular, may be made by a Supplemental Resolution, with the written consent given as hereinafter provided in Section 1102, (a) of the Holders of at least two-thirds in principal amount of the Bonds Outstanding at the time such consent is given, or (b) in case less than all of the several Series of Bonds then Outstanding are affected by the modification or amendment, of the Holders of at least two~thirds in principal amount of the Bonds of each Series so affected and Outstanding at the time such consent is given; provided, however, that such modification or amendment shall not (i) permit a change in the terms of redemption or maturity of the principal of any Outstanding Bond or of any installment of interest thereon or Sinking Fund Installment therefor, (ii) or a reduction in the principal amount or the Redemption Price thereof or in the rate of interest thereon, or (iii) a reduction of the percentage of the Holders of which is required to effect any such modification or amendment, or (iv) permit the ALASKA MUNiCiPAL 80ND BANK GlIlJDraf Obllgatfon Bond Rosolutlon (Amondod) 1''OOC''·.31.2OCJO'·J.lo«>''''''''''·.Xff.,C~''''''''(X.;;..''"''ll:>0<!IlPW'''.:m'''?l Pllgo 68 ALASKA MUNICIPAL 80ND BANK Gflnt;ll'#/Obligation Bond RflSolutlon (Amflndod) PDgO 69 creation of any lien prior to or on a parity with the lien created by this Resolution (except in the manner provided by this Resolution) or deprive the Holders of the Bonds of the lien created by this Resolution, without the consent of the Holders of all the Bonds Outstanding or of the Series of Bonds affected by such modification or amendment. For the purposes of this Section, a Series shall be deemed to be affected by a modification or amendment of this Resolution if the same adversely affects or diminishes the rights of the Holders of Bonds of such Series. Section 1102 -Consent of Bondholders. (A) The Bank may at any time adopt a Supplemental Resolution making a modification or amendment permitted by the provisions of Section 1101, to take effect when and as provided in this Section. A copy of such Supplemental Resolution (or brief summary thereof or reference thereto), together with a request to Bondholders for their consent thereto, shall be to by, or on behalf of, the Bank's to Bondholders. Such Supplemental Resolution shall not be effective unless and until there shall have been filed with the Trustee (a) the written consents of Holders of the percentages of Outstanding Bonds specified in Section 1101 and (b) a Counsel's Opinion stating that such Supplemental Resolution has been duly and lawfully adopted and filed by the Bank in accordance with the provisions of this Resolution, is authorized or permitted hereby and is valid and binding upon the Bank and enforceable in accordance with its terms, and (ii) a notice shall have been mailed as hereinafter provided in this Section. (B) The consent of a Bondholder to any modification or amendment shall be effective only if accompanied by proof of the holding, at the date of such consent, of the Bonds with respect to which such consent is given, which proof shall be such as is permitted by Section 813. A certificate or certificates by the Trustee filed with the Trustee that it has examined such proof and that such proof is sufficient in accordance with Section 813 shall be conclusive that the consents have been given by the Holders of the Bonds described in such certificate or certificates of the Trustee. Any such consent shall be binding upon the Holder of the Bonds giving such consent and upon any subsequent Holder of such Bonds and of any Bonds issued in exchange therefor (regardless of whether such subsequent Holder thereof has notice thereof) unless such consent is revoked in writing by the holder of such Bonds giving such consent or a subsequent holder thereof by filing with the Trustee, prior to the time when the written statement of the Trustee hereinafter provided forin this Section is filed, such revocation and, if such Bonds are transferable by delivery, proof that such Bonds are held by the signer of such revocation in the manner permitted by Section 813. The fact that a consent has not been revoked may likewise be proved by a certificate of the Trustee fried with the Trustee to the effect that no revocation thereof is on file with the Trustee. (C) At any time after the Holders of the required percentages of Bonds shall have filed their consents to the Supplemental Resolution, the Trustee shall make and file with the Bank and the Trustee a written statement that the Holders of such required percentages of Bonds have filed such consents. Such written statement shall be conclusive that such consents have been so filed. At any time thereafter notice, stating in substance that the Supplemental Resolution adopted by the Bank on a stated date, a copy of which is on file with the Trustee, has been consented to by the Holders of the required percentages of Bonds and will be effective as provided in this Section, may be given to Bondholders by the Bank by mailing such notice to Bondholders at least once not more than ninety days (90) after the Holders of the required percentages of Bonds shall have filed their consents to the Supplemental Resolution and the written statement of the Trustee hereinabove provided for is filed. The Bank shall file with the Trustee proof of the publication of such notice and, if the same shall have been mailed to Bondholders, of the mailing thereof. A record, consisting of the papers required or permitted by this Section to be filed with the Trustee, shall be proof of the matters therein stated. Such Supplemental Resolution making such amendment or modification shall be deemed conclusively binding upon the Bank, the Fiduciaries and the Holders of all Bonds at the expiration of forty (40) days after the filing with the Trustee of the proof of the first publication of such last mentioned notice, except in the event of a final decree of a court of competent jurisdiction setting aside such Supplemental Resolution in a legal action or equitable proceeding for purpose ALASKA MUNICiPAL BOND BANK Gonllrll/Obllgllt/on Bond RosoJution (Amflndfld) 1"JD:x:s'.37~2OCJO'~'tlOrt<=.G.....""O:;".(><n!lor",Il""<:M"","'?l PDgO 70 F-19 ALASKA MUNICWAL BOND BANK Gflnllrlll ObllglltJon Bond RflSoJution (Amflnded) !\D=·,J7.:l:<Xl1'''~'''''v'..,..."=G~""",O , 'o'l\l"'" l\o1>J:lll"""-'!""..;o:t Pago 71 commenced within such forty day period; except that any Fiduciary and the Bank during such forty day period and any such further period during which any such action or proceeding may be pending shall be entitled in their absolute discretion to take such action, or to refrain from taking such action, with respect to such Supplemental Resolution as they may deem expedient. Section 1103 -Modifications by Unanimous Consent. The terms and provisions of this Resolution and the rights and obligations of the Bank and of the Holders of the Bonds may be mOdified or amended in any respect upon the adoption and filing with the Trustee by the Bank of a copy of a Supplemental Resolution certified by an Authorized Officer and the consent of the Holders of all of the Bonds then Outstanding, such consent to be given as provided in Section 1102, except that no notice to Bondholders either by mailing or publication shall be required provided, however, that no such modification or amendment shall change or modify any of the rights or obligations of the Trustee or Paying Agents without the filing with the Trustee of its written assent thereto in addition to the consent of Bondholders, Section 1104 -Mailing and Publication. Any provision in this Article for the mailing of a notice or other document to Bondholders shall be fully complied with if it is mailed postage prepaid only (i) to each registered owner of Bonds then Outstanding at his address, if any, appearing upon the registry books of the Bank, (ii) to each Holder of any Bond payable to bearer who shall have filed with the Trustee an address for notices, and (iii) to the Trustee. Section 1105 -EXClusion of Bonds. Bonds owned or held by or for the account of the Bank shall not be deemed Outstanding for the purpose of consent or other action or any calculation of Outstanding Bonds provided for in this Resolution, and the Bank shall not be entitled with respect to such Bonds to give any consent or take any other action provided for in this Resolution. At the time of any consent consent or other action taken under this Resolution, the Bank shall furnish the Trustee a certificate of an authorized Officer, upon which the Trustee may rely, describing all Bonds so to be excluded. Section 1106 -Notation on Bonds, Bonds delivered after the effective date of any action taken as in Article X or Xl provided may, and if the Trustee so determines, shall, bear notation by endorsement or otherwise in form approved by the Bank and the Trustee as to such action, and in that case upon demand of the Holder of any Bond Outstanding at such effective date and upon presentation of his Bond for such purpose at the corporate trust office of the Trustee suitable notation shall be made on such Bond by the Trustee as to any such action. If the Bank or the Trustee shall so determine, new Bonds so modified as in the opinion of the Trustee and the Bank to conform to such action shall be prepared and delivered, and upon demand of the Holder of any Bond then Outstanding shall be exchanged, without cost to such Bondholder, for Bonds of the same Series and maturity then Outstanding, upon surrender of such Bonds. ARTICLE XII DEFAULTS AND REMEDIES Section 1201 -Trustee to Exercise Powers of Statutory Trustee. The Trustee shall be and hereby is vested with all of the rights, powers and duties of a trustee appointed by Bondholders pursuant to Section 44.85.310 and 320 of the Act and the right of Bondholders to appoint a trustee pursuant to Section 44.85.310 and 320 of the Act is hereby abrogated pursuant to Section 44.85.220(18) of the Act. Section 1202 -Events of Default. Each of the following events is hereby declared an "Event of Default," that is to say; if (a) the Bank shall default in the payment of the principal or Redemption Price of. Sinking Fund Installment for, or interest on, any Bond when and as the same shall become due whether at maturity or upon call for redemption, or othelWise: or (b) the Bank shall fail or refuse to comply with the provisions of Section 44.85.270(g) of the Act, or such amounts as shall shall be certified by the Chair of the Bank to the Governor and to the Legislature pursuant to such provisions of the Act shall not be appropriated and paid to the Bank prior to the termination of the then current State fiscal year, or ALASKA MUNICIPAL 80ND BANK GlmOr:ll Obllglltlon Bond RflSolutfon (Amondod) 1~\.'I7<=ll'll=i",,,,,,.,=e,;"''1,,,,''O.O.~'"'''"oM~v''' ''''"''' Pnge 72 ALASKA MUNICIPAL BOND BANK Glmor.rl Obllglltion Bond Rosolutlon (AmondfHi) '1l:loe>'..'\U:;'OOOllR<><o<",.,o..~e,;"no""O:>'ol."""ll<>"all"'"t:M"'",,",,, Page 73 (c) the Bank shall fail or refuse to comply with the provisions of the Act, other than as provided in (b) above, or shall default in the performance or observance of any other of the covenants, agreements or conditions on its part in this Resolution, any Series Resolution, any Supplemental Resolution, or in the Bonds contained, and such failure, refusal or default shall continue for a period of forty-five (45) days after written notice thereof by the Trustee or the Holders of not less than twenty-five per centum (25%) in principal amount of the Outstanding Bonds. Provided, however, that an Event of Default shall not be deemed to eX'lst under the provisions of this paragraph (c) upon the failure of the Bank to make and collect Fees and Charges required to be made and collected by the provisions of this Resolution or upon the failure of the Bank to enforce any obligation undertaken by a Governmental Unit pursuant to a Loan Agreement including the making of the stipulated Municipal Bonds Payment so long as the Bank may otherwise be directed by law and so long as the Bank shall be provided with monies from the State or otherwise, other than withdrawals from or reimbursements of the Reserve Fund, sufficient in amount to pay the principal of and interest on all Bonds as the same shall become due during the period for which the Bank shall be directed by law to abstain from making and collecting such Fees and Charges and from enforcing the obligations of a Govemmental Unit under the the applicable Loan Agreement. Section 1203 -Remedies. (A) Upon the happening and continuance of any Event of Default specified in paragraph (a) of Section 1202, the Trustee shall proceed, orupon the happening and continuance of any Event ofDefaul1 specified in paragraphs (b) and (c) of Section 1202, the Trustee may proceed, and upon the written request of the Holders of not less than twenty-five per centum (25%) in principal amount of the Outstanding Bonds shall proceed, in its own name, to protect and enforce its rights and the rights of the Bondholders by such of the following remedies, as the Trustee, being advised by counsel, shall deem most effectual to protect and enforce such rights: (1) by mandamus or other suit, action or proceeding at law or in equity, enforce all rights of the Bondholders, including the right to require the Bank to make and collect Fees and Charges and Municipal Bonds Payments adequate to carry out the covenants and agreements as to, and pledge of, such Fees and Charges and Municipal Bonds Payments, and other properties and to require the Bank to carry out anyothercovenant or agreement with Bondholders and to perform its duties under the Act: (2) by bringing suit upon the Bonds; (3) by action or suit in equity, require the Bank to account as if it were the trustee of an express trust for the Holders of the Bonds; (4) by action or SU'lt in equity, enjoin any acts or things which may be unlawful or in violation of the rights of the Holders of the Bonds: (B) Upon the occurrence of an Event of Default under Section 1202(a), unless the principal of all the Bonds shall have already become due and payable, the Trustee, by notice in writing to the Bank, may, and upon the written request of the Holders of not less than a majority in aggregate principal amount of the Bonds at the time outstanding, shall, in accordance with the provisions of the Act, declare the principal of all the Bonds then outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Resolution or in the Bonds contained to the contrary notwithstanding. This provision, however, is subject to the condition that if, at any time after the principal of the Bonds shall have been so declared due and payable, and before any judgment or decree for the payment of the monies due shall have been obtained or entered, the Bank shall deposit with the Trustee a sum sufficient to pay all principal on the Bonds matured prior to such declaration and all matured installments of interest (if any) upon all the Bonds, with interest on such overdue installments of principal at the rate borne by the respective Bonds, and the reasonable expenses of the Trustee, and any and all other defaults known to the Trustee (other than in the payment of principal of and interest on the Bonds due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall have been made therefor, then, and in ALASKA MUNICIPAL BOND BANK GonOnll ObJlg.!/on Bond Rll5olutJon (Amondod) 1\():)a.1.'I7'=1~.•I.."lXl5Go""""OO ...l:o'>lIo<>dfl....mJ!"""", Pago 74 F-20 ALASKA MUNICIPAL BOND BANK Gonflr:ll ObIlg4ft/on Bond RflSolutJon (Amondfxf) I 'OoaI.'lN2'.lOO11RKoV.cn<'=e,;.""""0:>.....""" llo<\<lf1""""'"","'?<l Page 75 every such case, the Holders of at least a majority in aggregate principal amount of the Bonds then outstanding, by written notice to the Bank and to the Trustee, may, on behalf of the Holders of all of the bonds, rescind and annul such declaration and its consequences and waive such default; but no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon. (C) In the enforcement of any remedy under this Resolution, the Trustee shall be entitled to sue for, enforce payment on and receive any and all amounts then or during any default becoming, and at any time remaining, due from the Bank for principal, Redemption Price, interest or otherwise, under any provision of this Resolution ora Series Resolution or of the Bonds, and unpaid, with interest on overdue payments at the rate or rates of interest specified in such Bonds, together with any and all costs and expenses of collection and of all proceedings hereunder and under such Bonds, without prejudice to any other right or remedy of the Trustee or of the Bondholders, and to recover and enforce a judgment or decree against the Bank for any portion of such amounts remaining unpaid, with interest, costs and expenses, and to collect from any monies available for such purpose, in any manner provided by law, the monies adjudged or decreed to be payable. Section 1204 -Priority of Payments After Default. During the continuance of an Event of Default, in the event that the funds held by the Trustee and Paying Agents shall be 'Insufflcient for the payment of interest and principal or Redemption Price then due on the Bonds, such funds (other than funds held for the payment or redemption of particular Bonds which have theretofore become due at maturity or by call for redemption) and any other monies received or collected by the Trustee acting pursuant to the Act and this Article XII, after making provision for the payment of any expenses necessary in the opinion of the Trustee to protect the interests of the Holders of the Bonds, and for the payment of the charges and expenses and liabilities incurred and advances made by the Trustee or any Paying Agents in the performance of their respective duties under this Resolution, shall be applied as follows: (a) Unless the principal of all of the Bonds shall have become or have been declared due and payable, FIRST: To the payment to the persons entilled thereto of all installments of interest then due in the order of the maturity of such installments, together with interest on overdue installments of interest and, if the amount available shall not be sufficient to pay in full any installment, then to the payment thereof ratably, according to the amounts due on such installment, to the persons entitled thereto, without any discrimination or preference; and SECOND: To the payment to the persons entitled thereto of the unpaid principal or Redemption Price of any Bonds which shall have become due, whether at maturity or by call for redemption, in in the order of their due dates and, if the amounts available shall not be sufficient to pay in full all the Bonds due on any date, then to the payment thereof ratably, according to the amounts of principal or Redemption Price due on such date, to the persons entitled thereto, without any discrimination or preference. (b) If the principal of all of the Bonds shall have become orhave been declared due and payable, to the payment of the principal and interest then due and unpaid upon the Bonds together with interest on overdue installments of interest 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 amounts due respectively for principal and interest, to the persons entitled thereto without any discrimination or preference except as to any difference in the respective rates of interest specified in the Bonds. Whenever monies are to be applied by the Trustee pursuant to the provisions of this Section 1204, such monies 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 monies available for application and the likelihood of additional money becoming available for such application in the future; the deposit of such monies with the Paying Agents, or otherwise setting aside such monies in trust ALASKA MUNICIPAL BOND BANK GOfl(II01I Obllglltlon Bond Resolution (Amon(J{>d) l'Ooc::':'T~:'OOOI'i-lo«N'...",.=e;"".""Q:;/..c·.><>"llo""~""""'''''''''',>d Pago 76 ALASKA MUNICIPAL BOND BANK GMoral Obligation Bond RD5:o/ut/on (AmondDd) ''Doc>~T.2'JCt.I1'_.r..,o.''=Co"."" Q:i ..~_lloM ~""'.."""''''?'' Pogo 77 for the proper purpose, shall constitute proper application by the Trustee; and the Trustee shall incur no liability whatsoever to the Bank, to any Bondholder or to any other person for any delay in applying any such monies, so 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 Resolution as may be applicable at the time of application by the Trustee. Whenever the Trustee shall exercise such discretion in applying such monies, it 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 iffully paid. Interest on overdue installments of interest shall be equal to the rate on the Bond as to which the interest installment is overdue. The provisions of this Section 1204 are in all respects subject to the provisions of Section 902. Section 1205 -Termination of Proceedings. In case any proceeding taken by the Trustee on account of any Event of Default shall have been discontinued or abandoned for any reason, then in every such case the Bank, the Trustee and the Bondholders shall be restored to their former positions and rights hereunder, respectively, and all rights, remedies, powers and duties of the Trustee shall continue as though no such proceeding had been taken. Section 1206 -Bondholders' Direction of Proceedings. Anything in this Resolution to the contrary notwithstanding, the Holders of the majority in principal amount of the Bonds then Outstanding shall have the right by an instrument or concurrent instruments in writing executed and delivered to the Trustee, to direct the method of conducting all remedial proceedings to be taken by the Trustee hereunder, provided that such direction shall not be otherwise then in accordance with law or the provisions of this Resolution, and that the Trustee shall have the right to decline to following any such direction which in the opinion of the Trustee would be unjustly prejudicial to Bondholders not parties to such direction. Section 1207 -Limitation on Rights of Bondholders. No Holderof any Bond shall have any right to institute any suit, action, mandamus or other proceeding in equity or at law hereunder, orfor the protection or enforcement of any right under this Resolution or any right under law unless such Holder shall have given to the Trustee written notice of the event of default or breach of duty on account of which such suit, action or proceeding is to be taken, and unless the Holders of not less than twenty-five per centum (25%) in principal amount of the Bonds then Outstanding shall have made written request of the Trustee after the right to exercise such powers or right of action, as the case may be, shall have occurred, and shalt have afforded the Trustee a reasonable opportunity either to proceed to exercise the powers herein granted or granted under the law or to institute such action, suit or proceeding in its name and unless, also, there shall have been offered to the Trustee reasonable security and indemnity against the costs, expenses and liabilities to be incurred therein or thereby and the Trustee shall have refused or neglected to comply with such request within a reasonable time; and such notification, request and offer of indemnity are hereby declared in every such case, at the option of the Trustee, to be conditions precedent to the execution of the powers under this Resolution orfor any other remedy hereunder or under law. It is understood and intended that no one or more Holders of the Bonds hereby secured shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of this Resolution, or to enforce any right hereunder or under law with respect to the Bonds or this Resolution, except in the manner herein provided, and that all proceedings at law or in equity shall be instituted, had and maintained in the manner herein provided and for the benefit of all Holders of the Outstanding Bonds. Notwithstanding the foregoing provisions ofthis Section or any other provisions of this Article XII, the obligation of the Bank shall be absolute and unconditional to pay the principal or Redemption Price of and interest on the Bonds to ALASKA MUNiCiPAL BOND BANK GIlnDf1Il Obllgltf1on Bond RDSo/utlon (AmDndDd) 1'.Doc>\)1<2'JCt.It\Kc='<tl""'·=co".~""'Il~lIo<>"~0«N.""w;>d. Pago 78 F-21 ALASKA MUNiCiPAL BONO BANK Gllnllnll Obi/gar/on Bond RD5:otution (AmDndfnl) f'Doc>·':'N=""~"''''·=Go".' '''Q:;/..~lloM~......<tl"'''''''' Pago 79 the respective Holders thereof at the respective due dates thereof, and nothing herein shall affect or impair the right of action, which is absolute and unconditional, of such Holders to enforce such payment. Seclion 1208 -Possession of Bonds by Trustee Not Required. All rights of action under this Resolution or under any of the Bonds, enforceable by the Trustee, may be enforced by it without the possession of any of the Bonds or the production thereof on the trial or other proceeding relative thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in its name for the benefit of all the Holders of such Bonds, sUbject to the provisions of this Resolution. Section 1209 -Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee or to the Holders of the Bonds 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 or in equity, or by statute. Section 1210 -No Waiver of Default. No delay or omission of the Trustee or of any Holder of the Bonds to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy given by this Resolution to the Trustee and the Holders of the Bonds, respectively, may be exercised from time to time and as often as may be deemed expedient. Section 1211 -Notice of Event of Default. The Trustee shall give to the Bondholders notice of each Event of Default hereunder known to the Trustee within ninety (90) days after knowledge of the occurrence thereof, unless such Event of 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 or Redemption Price of or interest on any of the Bonds, or in the making of any payment required to be made into the Debt Service Fund or the Reserve Fund, 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 responsible officers of the Trustee in good faith determines that the withholding of such notice is in the interests of the Bondholders. Each such notice of Event of Default shall be given by the Trustee by mailing written notice thereof: (1) to all registered Holders of Bonds, as the names and addresses of such Holders appear upon the books for registration and transfer of Bonds as kept by the Trustee; (2) to such Bondholders as have filed their names and addresses with the Trustee for that purpose; and (3) to such other persons as is required by law. ARTICLE XIII DEFEASANCE Section 1301 -Defeasance. (A) If the Bank shall payor cause to be paid to the Holders of the Bonds, the principal and interest and Redemption Price, if any, to become due thereon, at the times and in the manner stipulated therein and in this Resolution, and also shall payor cause to be paid all other sums payable hereunder by the Bank, including any amounts payable to the United States, then the pledge of any revenues and assets hereby pledged and all other rights granted hereby shall, at the election of the Bank (evidenced by a certificate of an Authorized Officer filed with the Trustee, signifying the intention of the Bank to discharge all such indebtedness and this Resolution and any Supplemental Resolution), and notwithstanding that any Bonds shall not have been surrendered for payment, be discharged and satisfied. In such event, the Trustee shall, upon the written request of the Bank, execute and deliver to the Bank all such instruments as may be desirable to evidence such discharge and satisfaction and the Fiduciaries shall pay over or deliver to the Bank all moneys or securities held by them pursuant to this Resolution which are not required for the payment or redemption of Bonds not theretofore surrendered for such payment or redemption. (B) B) If funds shall have been set aside and shall be held in trust by Fiduciaries for the payment of principal, interest and Redemption Price (through deposit by the Bank offunds for such payment or redemption or otherwise) at the maturity or upon the date upon which such Bonds have been duly called for redemption thereof, such Bonds ALASKA MUNICIPAL BOND BANK GlHlllfill ObI/gilt/on Bond RlISolution (Amllndod) l'fr>e>.'..'II~7.XXllUItJ"""'..,.".\ZXlSG."""" OO~.»1llo<>df1""-"V!"""",, Page 80 ALASKA MUNICIPAL BOND BANK Gonllr.1/ObJlg«llon Bond Rosolul/On (Amondod) Pago 81 shall be deemed to have been paid within the meaning and with the effect expressed in subsection (A) of this Section. All Outstanding Bonds shall, prior to the maturity or redemption date thereof, be deemed to have been paid within the meaning and with the effect expressed in subsection (A) of this Section if (i) in case any of said Bonds are to be redeemed on any date prior to their maturity, the Bank shall have given to the Trustee in form satisfactory to it irrevocable instructions to publish as provided in Article IV notice of redemption on said date of such Bonds, (ii) there shalt have been deposited with the Trustee either funds in an amount which shall be sufflc'lent, or Investment Securities which are not subject to redemption prior to the dates on which amounts will be needed to make payments on the Bonds defeased and the principal of and the interest on which when due will provide moneys which, together with the moneys, if any, deposited with the Trustee at the same time, shall be sufficient in the opinion of an Accountant delivered to the Trustee, to pay when due the principal or Redemption Price, if any, and interest due and to become due on said Bonds on any date prior to the redemption date or maturity date thereof, as the case may be, (iii) in the event said Bonds are not by their terms subject to redemption within the next succeeding sixty (60) days, the Bank shall have given the Trustee in form satisfactory to it irrevocable instructions to mail a notice to the Holders of such Bonds that the deposit required by (ii) above has been made with the Trustee and that said Bonds are deemed to have been paid in accordance with this Section and stating such maturity or redemption date upon which moneys are to be available for the payment of the principal or Redemption Price, if any, of said Bonds and (iv) a Counsel's Opinion stating that all conditions precedent to the satisfaction and discharge of this Resolution have been complied with, the defeasance complies with the terms of this Resolution, and the defeasance will not adversely affect the tax status of the Bonds. Neither Investment Securities or moneys deposited with the Trustee pursuant to this Section nor principal or interest payments on any such Investment Securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal or Redemption Price, if any, of and interest on said Bonds; provided that any cash received from such principal or interest payments on such Investment Securities deposited with the Trustee, if not then needed for such purpose, shall, to the extent practicable, be reinvested in Investment Securities maturing at times and in amounts sufficient to pay when due the principal or Redemption Price, if any, and interest to become due on said Bonds on and prior to such redemption date or maturity date thereof, as the case may be, and interest earned from such reinvestments shall be paid over to the Bank, as received by the Trustee, free and clear of any trust. lien or pledge. (C) If, through the deposit of moneys by the Bank or otherwise, the Fiduciaries shall hold, pursuant to this Resolution, moneys sufficient to pay the principal and interest to maturity on all Outstanding Bonds orto pay, in the case of Bonds in respect of which the Bank shall have taken all action necessary to redeem prior to maturity, the Redemption Price and interest to such redemption date, then at the written request of the Bank all moneys held by any Paying Agent shall be paid over to the Trustee and, together with other moneys held by it hereunder, shall be held by the Trustee for the payment or redemption of Outstanding Bonds. (D) Anything in this Resolution to the contrary notwithstanding, any moneys held by a Fiduciary in trust for the payment and discharge of any of the Bonds which remain unclaimed for one year after the date when all of the Bonds have become due and payable, either at their stated maturity dates or by call for earlier redemption, if such moneys were held by the Fiduciary at such date, or for one year after the date of deposit of such moneys if deposited with the Fiduciary after the said date when all of the Bonds became due and payable, shall be repaid by the Fiduciary to the Bank, as its absolute property and free from trust, and the Fiduciary shall thereupon be released and discharged. (E) The references in this section to "Investment Securities described in clause (1) of the definition thereoF shall include only direct and general obligations of the United States which are not-callable prior to the scheduled maturity in the related escrow deposit agreement where the Outstanding Bonds to be deemed to be paid upon ALASKA MUNICIPAL BOND BANK GlHloral ObI/gill/on Bond Roso/urlon (Amondod) 1IDoa'..'I"7.XXl1~".'=G.......<>I!OoI ...=llo<>dRDut"'.,",,?,! Page 82 F-22 ALASKA MUNICIPAL BOND BANK GlHlflflIl Obllg#t/on Bond RlISolullon (Amllndod) '1Ox>'.J"7.XXl\\f.lo<OV""""ZlO:lGe""<>I!O'...;;.ton6<>'>:lH~"",,,?,! Page 83 the deposit thereof are insured by a municipal bond insurance company licensed and authorized to issue the policy in the State. ARTICLE XIV MISCELLANEOUS Section 1401 -PreselVation and Inspection of Documents. All documents received by the Trustee or any Paying Agent under the provisions of this Resolution or any Series Resolution shall be retained in its possession and shall be subject at all reasonable times to the inspection of the Bank, the Trustee or any Paying Agent and, after written request received by the Trustee at least five business days prior to the date of inspection, by any Holder of five percent in principal amount of any Series of Outstanding Bonds, and their agents and representatives, any of whom may make copies thereof. Section 1402 -Parties of Interest. Nothing in this Resolution or in any Series Resolution adopted pursuant to the provisions hereof, expressed or implied. is intended to or shall be construed to confer upon or to give to any person or party other than the Bank, Trustee, Paying Agents and the Holders of the Bonds, remedies or claims under or by reason of this Resolution or any Series Resolution or any covenants, conditions or stipulations thereof; and all covenants, stipulations, promises and agreements in this Resolution and any Series Resolution contained by or on behalf of the Bank shall be for the sale and exclusive benefit of the Bank, Trustee and Paying Agents and the Holders from time to time of the Bonds. Section 1403 -No Recourse Under Resolution or on Bonds. All covenants, stipulations, promises. agreements and obligations of the Bank contained in this Resolution shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Bank and not of any member, officer or employee of the Bank in his individual capacity, and no recourse shall be had for the payment of the principal or Redemption price of or interest on the Bonds or for any claim based thereon or on this Resolution against any member, officer or employee of the Bank or any natural person executing the Bond. Section 1404 -Severability. If anyone or more of the covenants, stipulations, promises, agreements or obligations, provided in this Resolution on the part of the Bank, Trustee or any Paying Agent to be performed should be determined by a court of competent jurisdiction to be contrary to law, then such covenant or covenants, stipulation or stipulations, promise or promises, agreement or agreements, obligation or obligations shall be deemed and construed to be severable from the remaining covenants, stipulations, promises, agreements and obligations herein contained and shall in no way affect the validity of the other provisions of this Resolution. Section 1405 -Headings. Any headings preceding the texts of the several Articles and Sections hereof, and any table of contents or marginal notes appended to copies hereof, shall be solely for convenience of reference and shall not constitute a part of this Resolution, nor shall they affect its meaning, construction or effect. Section 1406 -Conflict. All resolutions or parts of resolutions or other proceedings of the Bank in conflict herewith be and the same are repealed insofar as such conflict exists. Section 1407 -Governing Law. This Resolution and the Bonds shall be construed in accordance with, and governed by, the laws of the State of Alaska. Section 1408 -Effective Date. This Resolution shall take effect immediately upon its adoption. ALASKA MUNICIPAL BOND BANK GOOllllll Obl/glltlon Bond Resolution (Amrmdod) 1'O:>c:t'-J7.=,~"",.=(;.""""0'''o;'~>C<1llo''<lfl,,,.«v1'''o~ ITHIS PAGE INTE}''TJONALLY LEfT BLANK! Page 84 F-23 ALASKA MUNICIPAL BOND BANK GooOr.l1 Obllglltion Bond RrJSolution (AmondQd) Pago 85 jTUIS P,\GE INIT:.......T10N,\LLY LEFT BLANK] [THIS PAGE INTENTIONALLY LEFT BLANK] APPENDIXG DTC and Book-Entry System [THIS PAGE INTENTIONALLy LEFf BLANK] DTC AND BOOK-ENTRY SYSTEM 1. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the 2011 Series One Bonds. The 20 II Series One Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered certificate will be issued for each maturity of each sub-series of the 20 II Series One Bonds in the aggregate principal amount of such maturity, and will be deposited with DTC. 2. DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org. 3. Purchases of 2011 Series One Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the 20 II Series One Bonds on DTC's records. The ownership interest of each actual purchaser of each 20 II Series One Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the 2011 Series One Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in 20 II Series One Bonds, except in the event that use of the book-entry system for the 2011 Series One Bonds is discontinued. 4. To facilitate subsequent transfers, all 20 II Series One Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of 2011 Series One Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the 2011 Series One Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such 2011 Series One Bonds are credited, G-l which mayor may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf oftheir customers. 5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of 20 11 Series One Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the 2011 Series One Bonds, such as redemptions, tenders, defaults, and proposed amendments to the 2011 Series One Bond documents. For example, Beneficial Owners of2011 Series One Bonds may wish to ascertain that the nominee holding the 2011 Series One Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. 6. Redemption notices shall be sent to DTC. If less than all of the 20 II Series One Bonds within a maturity of a sub-series are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. 7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to 2011 Series One Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Bond Bank as soon as possible after the record date. The Omnibus Proxy assigns Cede & Coo's consenting or voting rights to those Direct Participants to whose accounts 2011 Series One Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8. Payments on the 2011 Series One Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Bond Bank or the Trustee, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Bond Bank or the Trustee, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest payments on the Bonds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Bond Bank or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 9. DTC may discontinue providing its services as depository with respect to the 2011 Series One Bonds at any time by giving reasonable notice to the Bond Bank or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, 2011 Series One Bond certificates are required to be printed and delivered. 10. The Bond Bank may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, 2011 Series One Bond certificates will be printed and delivered to DTC. G-2 11. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the Bond Bank believes to be reliable, but the Bond Bank takes no responsibility for the accuracy thereof. G-3 [THIS PAGE INTENTIONALLY LEFT BLANK] DFSC WWIIIJSC.Otg MIX From responsible sources FSC· C017146 Printed by: ImageMaster. Inc. New Issue Book-Entry Only OFFICIAL STATEMENT DATED FEBRUARY 15, 2011Moody's Rating: Aa2 Fitch Rating: AA (See "Ratings" herein.) In the opinion ofBond Counsel, based on an analysis ofexisting statutes, regulations, rulings and court decisions, and assuming, among other things, compliance by the Bond Bank with its covenants relating to certain requirements in the Internal Revenue Code of1986, as amended (the "Code''), interest on the 2011 Series One Bonds is e.xcludedfrom gross income of owners thereoffor federal income ta.x purposes. Interest on the 2011 Series One Bonds is not treated as a ta.x preference item for purposes of either the individual or corporate alternative minimum ta.x, however, interest in the 2011 Series One Bonds is included in adjusted current earnings for purposes of computing the federal alternative minimum ta.x on certain corporations. See "TAX MATTERS" herein. $8,635,000 ALASKA MUNICIPAL BOND BANK General Obligation Bonds, 2011 Series One Dated: Date of Delivery Due: March 1, as shown on inside cover The Alaska Municipal Bond Bank (the "Bond Bank") General Obligation Bonds, 2011 Series One (the "2011 Series One Bonds") initially will be issued as fully registered bonds, in book-entry fonu only, registered in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"), which will serve as depository ofthe 2011 Series One Bonds. Individual purchases of the 2011 Series One Bonds will be made in principal amounts of $5,000 or integral multiples thereof within a single sub-series and maturity. Purchasers of the 2011 Series One Bonds will not receive certificates representing their beneficial ownership interests in the 2011 Series One Bonds. Interest on the 2011 Series One Bonds will accrue from the date of delivery of the 2011 Series One Bonds, or from the most recent interest payment date to which interest has been paid, and is payable on each March 1 and September 1, commencing September 1, 2011. The Bank of New York Mellon Trust Company, N.A., of Seattle, Washington, as the Trustee and Paying Agent for the 2011 Series One Bonds, will make principal and interest payments to DTC. Disbursement of such payments to DTC's Participants is the responsibility of DTC. Disbursement of such payments to the Beneficial Owners is the responsibility ofthe DTC Participants. See "DESCRIPTION OF THE 2011 SERIES ONE BONDS" and "APPENDIX G-DTC AND BOOK-ENTRY SYSTEM." The2011 Series One Bondsare subjectto redemptionpriortotheirstatedmaturitydates. See "DESCRIPTION OF THE 2011 SERIES ONE BONDS -Optional Redemption, -Mandatory Redemption." The 2011 Series One Bonds are general obligations of the Bond Bank, and the full faith and credit of the Bond Bank are pledged for the punctual payment of the principal of and interest on the 2011 Series One Bonds. The 2011 Series One Bonds are equally and ratably secured by the pledge and assignment ofall Municipal Bonds acquired by the Bond Bank under the Bond Bank's 2005 General Bond Resolution on a parity with other Bonds of the Bond Bank heretofore or hereafter issued under the 2005 General Bond Resolution. The 2011 Series One Bonds are the eighteenth series of Bonds issued under the 2005 General Obligation Bond Resolution. The 2011 Selies One Bonds do not constitute an indebtedness or other liability of the State of Alaska, and the 2011 Series One Bonds do not directly, indirectly or contingently obligate the State of Alaska to levy any form of taxation or make any appropriation for the payment of the 2011 Series One Bonds. Neither the faith and credit nor the taxing power of the State of Alaska is pledged for the payment of the 2011 Series One Bonds. The Bond Bank has no taxing power. See "SECURITY FOR THE 2011 SERIES ONE BONDS." The 2011 Series One Bonds are offered when, as and if issued, subject to the approving legal opinion of Wohlfarth, Johnson, Brecht, Cartledge & Brooking of Anchorage, Alaska, Bond Counsel. Certain legal matters will be passed upon for the Governmental Units by their respective bond counsel. It is expected that the 2011 Series One Bonds in definitive fonu will be issued and available by Fast Automated Securities Transfer for delivery through the facilities of DTC in New York, New York on or about March 1, 2011. Piper]affray® $8,635,000 Alaska Municipal Bond Bank General Obligation Bonds 2011 Series One MATURITIES, AMOUNTS, INTEREST RATES, YIELDS AND CUSIP NUMBERS CUSIP CUSIP Interest Number") Interest Number") Due March 1 Amounts Rate Yield 01179P Due March 1 Amounts Rate Yield 01179P 2012 $295,000 3.00% 0.70% T31 2017 $340,000 3.00% 2.75% T80 2013 305,000 3.00% 1.10% T49 2018 355,000 3.50% 3.12% T98 2014 315,000 3.00% 1.53% T56 2019 365,000 4.00% 3.45% U21 2015 325,000 3.00% 2.05% T64 2020 380,000 4.00% 3.70% U39 2016 745,000 3.00% 2.36% Tn 2021 395,000 4.00% 3.93% U47 $2,125,0004.75% Term Bond due March 1,2026; Yield: 4.80%, Price: 99.469 CUSIP Number 01179P U54 $2,690,0005.125% Term Bond due March 1,2031; Yield: 5.20%, Price: 99.074 CUSIP Number 01179P U62 (1) Copyright © 2010 CUSIP Global Services. CUSIP is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by Standard & Poor's. These numbers are not intended to create a database and do not serve in any way as a substitute for the CUSIP Service. CUSIP numbers are provided for the convenience of reference only. CUSIP numbers are subject to change. The Bond Bank takes no responsibility for the accuracy of such CUSIP numbers. This Official Statement is furnished by the Bond Bank to provide information regarding the sale of the 2011 Series One Bonds referred to herein and may not be reproduced or be used, in whole or in part, for any other purpose. The delivery of this Official Statement does not imply that information herein is correct as of any time subsequent to the date hereof. No dealer, salesman or any other person has been authorized by the Bond Bank to give any information or to make any representation other than as contained in this Official Statement in connection with the offering described herein and, if given or made, such other information or representation must not be relied upon as having been authorized by the foregoing. This Official Statement does not constitute an offer of any securities other than those described on the cover page or an offer to sell or a solicitation of an offer to buy in any jurisdiction in which it is unlawful to make such an offer, solicitation, or sale. The information and expressions of of opinion set forth in this Official Statement have been furnished by the Bond Bank and include information from other sources that the Bond Bank believes to be reliable. Neither this Official Statement nor any statement which may have been made orally is to be construed as a contract with the owners of any ofthe 2011 Series One Bonds. The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information set forth in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. UPON ISSUANCE, THE 2011 SERIES ONE BONDS WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND WILL NOT BE LISTED ON ANY STOCK OR OTHER SECURITIES EXCHANGE. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER FEDERAL, STATE, OR OTHER GOVERNMENTAL ENTITY OR AGENCY, OTHER THAN THE BOND BANK, WILL HAVE PASSED ON THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS OFFICIAL STATEMENT OR APPROVED THE 2011 SERIES ONE BONDS FOR SALE. THE 2005 GENERAL BOND RESOLUTION WILL NOT BE QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED. The remainder ofthis page has intentionally been left blank. ALASKA MUNICIPAL BOND BANK 333 Willoughby Avenue, 11th Floor P.O. Box 110405 Juneau, Alaska 99811-0405 (907) 465-2388 http://www.revenue.state.ak.us/treasury/ambba/Board of Directors Mark Pfeffer -Chair Luke Welles -Vice Chair Gregory Gursey -Member Susan Bell -Member (Ted Leonard -First Delegate to Susan Bell) Bryan Butcher -Member (Jerry D. Burnett -First Delegate to Bryan Butcher) Executive Director Deven J. Mitchell Bond Counsel Wohlforth, Johnson, Brecht, Cartledge & Brooking Anchorage, Alaska Trustee The Bank ofNew York Mellon Trust Company, N.A. Seattle, Washington Financial Advisor Western Financial Group, LLC Lake Oswego, Oregon The reference above to the Bond Bank's website is contact information provided only for convenience. The reference is not a hyperlink and, by this reference, the Bond Bank's website is not incorporated into this Official Statement. TABLE OF CONTENTS Page Introduction I Purpose ofthe 201 I Series One Bonds I Authorization and Purpose I Sources and Uses of Funds 2 Description of the 20 I I Series One Bonds 2 General Description 2 201 I Series One Bonds 2 Optional Redemption 2 Mandatory Redemption 2 Notice of Redemption 3 Selection of 20 I I Series One Bonds for Redemption 3 Security for the 201 I Series One Bonds 4 General 4 Pledge Effected by the 2005 General Bond Resolution 4 Municipal Bonds 5 2005 General Bond Resolution Reserve Fund 5 State Payments 6 Pledge of the State 6 The Alaska Municipal Bond Bank 7 Organization 7 Board of Directors 7 Management 8 Future Financing Plans 8 Debt Payment Record 8 Bonds Outstanding 9 1976 General Bond Resolution 9 2005 General Bond Resolution 9 2010 Municipal Obligation Bond Resolution 9 Revenue Bond Resolutions 9 Coastal Energy Impact Program 9 Direct Loans 10 Total Bond Bank Bonds Issued and Outstanding as of February 1,201 I I I Remaining Debt Capacity After the Issuance of the 20 I I Series One Bonds 11 Debt Service Requirements of Outstanding General Obligation Bonds and the 201 I Series One Bonds 12 Summary of the 2005 General Bond Resolution 13 2005 General Bond Resolution Constitutes Contract.. 13 Obligation of Bonds 13 Pledge 13 Power to Issue Bonds and Make Pledges 13 General 13 Waiver of Laws 14 Loan Agreement Provisions 14 Modification of Loan Agreement Terms 15 Enforcement of Municipal Bonds 15 Funds and Accounts 15 Security for Deposits 17 Payment of Bonds 17 Fees and Charges 17 Issuance of Additional Obligations Including for the Purpose of Refunding 17 Defeasance I8 Supplements and Amendments 18 Events of Default and Remedies 19 Excess Earnings 20 Litigation 20 Certain Legal Matters 21 Underwriting 21 Financial Advisor 21 Financial Statements 21 Tax Matters 21 Ratings 24 Sources of Certain Information 24 Continuing Disclosure Undertaking 24 Prior Compliance with Continuing Disclosure Undertakings Under the Rule 26 Definitions 26 Miscellaneous 27 Official Statement 28 APPENDIX A APPENDIX B APPENDIX C APPENDIXD APPENDIX E APPENDIXF APPENDIXG -Form of Legal Opinion State Payments to Governmental Units -Government Unit Statistics Regarding Participation in the Bond Bank Summaries of Borrowers Representing 10% or More of Outstanding Principal -Financial Statements of the Alaska Municipal Bond Bank for the Year Ended June 30, 2010 -2005 General Obligation Bond Resolution -DTC and Book-Entry System OFFICIAL STATEMENT $8,635,000 ALASKA MUNICIPAL BOND BANK GENERAL OBLIGATION BONDS 2011 SERIES ONE INTRODUCTION This Official Statement is furnished by the Alaska Municipal Bond Bank (the "Bond Bank") to provide information regarding the Bond Bank in connection with the sale of its $8,635,000 General Obligation Bonds, 20 II Series One (the "2011 Series One Bonds"). The Bond Bank was created pursuant to Alaska Statutes 44.85.005 44.85.420, as amended (the "Act"), for the primary purpose of lending money to Governmental Units in the State of Alaska (the "State") including the purchase of Municipal Bonds issued by such Governmental Units. Certain capitalized terms used in this Official Statement, and not otherwise defined herein, are defined under "DEFINITIONS." All references herein to agreements and documents are qualified in their entirety by reference to the definitive forms thereof, and all references to the 2011 Series One Bonds are further qualified by reference to the information with respect thereto contained in the 2005 General Obligation Bond Resolution, adopted by the Board of Directors of the Bond Bank on July 13, 2005 (the "2005 General Bond Resolution") and Resolution No. 2011-01 adopted by the Board of Directors of the Bond Bank on February 1,2011 (the "Series Resolution," and together with the 2005 General Bond Resolution, the "Bond Resolution"). All bonds which are issued under and pursuant to the terms of the 2005 General Bond Resolution are hereafter referred to as the "Bonds." Any statements or information which include matters of opinion or estimates are represented as opinions or estimates in good faith, but no assurance can be given that the facts will materialize as so opined or estimated. Appendix D contains financial, economic and demographic summary information relating to the Governmental Units whose Municipal Bonds represent 10 percent or more of the Loan Obligations outstanding under the 2005 General Bond Resolution. PURPOSE OF THE 2011 SERIES ONE BONDS Authorization and Purpose The 2011 Series One Bonds are being issued pursuant to the terms of the Bond Resolution, and are the eighteenth series of Bonds issued under the 2005 General Bond Resolution. The 20 II Series One Bond proceeds are being loaned to two Governmental Units. Proceeds of the 2011 Series One Bonds will be loaned: (a) to the Kodiak Island Borough for capital improvements to school facilities in the Borough; and (b) to the City and Borough of Wrangell for capital improvements to an elementary school playground. Sources and Uses of Funds The table below presents the sources and uses offunds related to the 2011 Series One Bonds. Sources of Funds: Par Amount of20l1 Series One Bonds Original Issue Premium/(Discount) Total Sources of Funds Uses of Funds: Loan to the Kodiak Island Borough Loan to the City and Borough of Wrangell Deposit to Reserve Fund Underwriter's Discount Total Uses of Funds $8,635,000.00 67,613.80 $8,702,613.80 $8,008,543.64 224,882.57 425,766.84 43,420.75 $8,702,613.80 DESCRIPTION OF THE 2011 SERIES ONE BONDS General Description The 2011 Series One Bonds are issuable only as fully registered bonds, registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC") as securities depository for the 2011 Series One Bonds. Principal of and interest on the 2011 Series One Bonds are payable by The Bank of New York Mellon Trust Company, N.A., of Seattle, Washington, as Trustee under the 2005 General Bond Resolution, to DTC which, in tum, is obligated to disburse such principal and interest payments to its participants (the "DTC Participants") in accordance with DTC procedures. See "Appendix G -DTC and Book-Entry System." 2011 Series One Bonds The 2011 Series One Bonds mature on the dates and bear interest at the rates set forth on the inside cover page of this Official Statement. The 2011 Series One Bonds are issuable in denominations of $5,000 or any integral multiple thereof within a single sub-series and maturity, are dated as of the date of delivery and bear interest from their date payable on September 1, 2011, and semiannually thereafter on each March 1 and September 1 to their date of maturity or prior redemption, whichever may occur first. Optional Redemption The 2011 Series One Bonds maturing on or after March 1, 2022 are subject to redemption in whole or in part at the option of the Bond Bank on any date on or after March 1, 2021 at a price of 100% of the principal amount thereof to be redeemed plus accrued interest to the date of redemption. Each underlying borrower of proceeds of the 2011 Series One Bonds may prepay its loan on terms identical to the redemption provisions associated with the 2011 Series One Bonds. Mandatory Redemption The 2011 Series One Bonds maturing on March 1, 2026 are subject to mandatory sinking fund redemption on March 1 of the years and in the principal amounts set forth in the following table. Any such redemption shall be at a price equal to 100 percent of the principal amount to be redeemed plus accrued and unpaid interest thereon to the date fixed for redemption, but without premium. 2 * Final Maturity Date March 1, 2022 March 1, 2023 March 1, 2024 March 1, 2025 March 1, 2026* Principal Amount $385,000 405,000 425,000 445,000 465,000 The 2011 Series One Bonds maturing on March 1, 2031 are subject to mandatory sinking fund redemption on March 1 of the years and in the principal amounts set forth in the following table. Any such redemption shall be at a price equal to 100 percent of the principal amount to be redeemed plus accrued and unpaid interest thereon to the date fixed for redemption, but without premium. * Final Maturity Notice of Redemption Date March 1, 2027 March 1, 2028 March 1, 2029 March 1,2030 March 1, 203 1* Principal Amount $485,000 510,000 535,000 565,000 595,000 At least 30 days, but not more than 60 days, prior to the date upon which any 2011 Series One Bonds are to be redeemed, the Trustee will mail a notice of redemption to the registered owner of any 2011 Series One Bond all or a portion of which is to be redeemed, at the owner's last address appearing on the registration books of the Bond Bank kept by the Trustee. When all of the 2011 Series One Bonds are held under the DTC book-entry system, such notice will be sent to DTC, and any notice to the beneficial owners of the 2011 Series One Bonds will be the responsibility of DTC Participants. The Bond Bank will not provide redemption notices to the beneficial owners. Selection of2011 Series One Bonds for Redemption If fewer than all of the 2011 Series One Bonds are to be redeemed prior to maturity, the Bond Bank may select the maturity or maturities to be redeemed at the option of the Bond Bank. If, at the time notice of redemption is given the 2011 Series One Bonds are in book-entry form, then the Trustee is required to select the 2011 Series One Bonds for redemption by lot in accordance with the Letter of Representations. The 2005 General Bond Resolution provides that if less than all of the Bonds of anyone maturity of a Series are called for redemption, the Bonds to be redeemed are to be selected by lot by the Trustee or in any manner as the Trustee, in its sole discretion, may deem appropriate and fair. The initial Trustee has deemed the provisions set forth above to be appropriate and fair. However, none of the Bond Bank, the Underwriter, the initial Trustee or any successor Trustee can provide any assurance that any successor Trustee will deem the provisions set forth above to be appropriate and fair or that DTC, DTC's direct and indirect participants or any other intermediary will allocate the redemption of the 2011 Series One Bonds on such basis. See "Appendix G DTC and Book-Entry System." 3 SECURITY FOR THE 2011 SERIES ONE BONDS GeneralThe 2011 Series One Bonds constitute general obligations of the Bond Bank, and the full faith and credit of the Bond Bank are pledged to the payment of the principal of and interest on the 2011 Series One Bonds. The 2011 Series One Bonds do not constitute an indebtedness or other liability of the State of Alaska, and the 2011 Series One Bonds do not directly, indirectly or contingently obligate the State of Alaska to levy any form of taxation or make any appropriation for the payment of the 2011 Series One Bonds. Neither the faith and credit nor the taxing power of the State of Alaska is pledged for the payment of the 2011 Series One Bonds. The Bond Bank has no taxing power. The 20 II Series One Bonds are the eighteenth series of parity Bonds issued under the 2005 General Bond Resolution. As of February 1,2011, not taking into account the issuance of the 2011 Series One Bonds, the Bond Bank will have outstanding $194,995,000 of general obligation bonds issued under its 1976 General Bond Resolution, $443,970,000 of Bonds issued under its 2005 General Bond Resolution and $4,765,000 under its 2010 General Bond Resolution. Moral Obligation. As additional security for payment of principal of and interest on the 2011 Series One Bonds and other Bonds issued under the 2005 General Bond Resolution, the Bond Bank has established a parity Reserve Fund. See "SECURITY FOR THE 2011 SERIES ONE BONDS -2005 General Bond Resolution Reserve Fund." The Act provides that in order to ensure the maintenance of the Reserve Fund Requirement, the Chair of the Bond Bank is annually required (before each January 30) to make and deliver to the Governor and to the State Legislature a certificate stating the amount, if any, required to restore the Reserve Fund to the amount of the Reserve Fund Requirement. Money received by the Bond Bank from the State pursuant to such certification will, to the extent such certification was occasioned by the fact that the amount in the Reserve Fund was less than the Reserve Fund Requirement, be deposited in the Reserve Fund. The State Legislature is legally authorized, but not legally obligated, to appropriate such sums during the then current State fiscal year. This provision of the Act does not create a debt obligation on behalf ofthe State or a legally enforceable obligation of the State. Pledge Effected by the 2005 General Bond Resolution Pursuant to the 2005 General Bond Resolution, all Municipal Bonds, all Municipal Bonds Payments, the investments thereof and the proceeds of such investments, and all funds and accounts established by the 2005 General Bond Resolution, are pledged and assigned to the Trustee, equally and ratably, to secure the payment of the principal of, redemption premium, if any, and interest on all Bonds outstanding under the 2005 General Bond Resolution, subject only to the provisions of the 2005 General Bond Resolution permitting the application thereof for the purposes and on the terms and conditions specified in the 2005 General Bond Resolution. The Act and the 2005 General Bond Resolution provide among other things that (i) any pledge made in respect of the Bonds will be valid and binding from the time the pledge is made, (ii) the Municipal Bonds, the Municipal Bonds Payments and all other money and securities so pledged and thereafter received by the Bond Bank immediately will be subject to the lien of such pledge without any further act, and (iii) the lien of any such pledge will be valid and binding against all parties having any claims of any kind in tort, contract or otherwise against the Bond Bank irrespective of whether the parties have notice. 4 Municipal Bonds Under the provisions of the Act and the 2005 General Bond Resolution, the Bond Bank can purchase Municipal Bonds from any Governmental Unit. The 2005 General Bond Resolution defines Municipal Bonds as "general obligation bonds, revenue bonds, notes or other evidences of debt issued by any Governmental Unit as now or hereafter defined in the Act which have heretofore been or will hereafter be acquired by the Bond Bank as evidence of a Loan to the Governmental Unit pursuant to the Act." For each issue of Municipal Bonds that the Bond Bank purchases, the Bond Bank will obtain a bond counsel's opinion stating that (a) such Municipal Bonds are valid debt obligations of such Governmental Unit as required by the Act and (b) a Loan Agreement has been duly authorized and executed between the Bond Bank and the Governmental Unit that constitutes a valid and binding obligation of the Governmental Unit. Each Loan Agreement obligates a Governmental Unit to (a) make interest payments on its Municipal Bond sufficient in amount and at such times to provide the Bond Bank funds to meet interest payments on its Loan Obligations as they become due; and (b) make principal payments on its Municipal Bond sufficient in amount and at such times to provide the Bond Bank funds to meet principal payments on its Loan Obligations as they become due. Pursuant to the Loan Agreement, the Governmental Unit may be required to pay fees and charges to the Bond Bank to meet the Governmental Unit's allocable portion of certain expenses. Each Loan Agreement also contains restrictions on the sale or redemption of Municipal Bonds. 2005 General Bond Resolution Reserve Fund The 2005 General Bond Resolution established the Reserve Fund to be held by the Trustee and maintained at an amount equal to the Reserve Fund Requirement. The Reserve Fund Requirement is equal to the least of the following: (i) 10% of the initial principal amount of each Series of Bonds then Outstanding; (ii) Maximum Annual Debt Service with respect to all Bonds Outstanding; (iii) 125% of Average Annual Debt Service on all Bonds Outstanding; or (iv) such lower amount as may be required by law. See "DEFINITIONS -Required Debt Service Reserve." The Reserve Fund has been funded with Bond proceeds and cash deposits from the Bond Bank. The Reserve Fund does not contain any surety policies or other forms ofliquidity facility. The Reserve Fund Requirement may, however, be satisfied entirely, or in part, by a letter of credit, line of credit, credit facility, surety bond, bond insurance, or any other instrument or arrangement obtained in connection with the issuance of a Series of Bonds. As of February 1,2011, the Reserve Fund value was approximately $30.86 million (unaudited), an amount sufficient to satisfy the Reserve Fund Requirement. As of that date, approximately 32% of the assets in the Reserve Fund were funded from cash deposits by the Bond Bank. On or before December 31 of each year, and subject to the requirements of the 2005 General Bond Resolution, the Trustee will transfer from the Reserve Fund any amounts remaining in the Reserve Fund derived from income or interest earned and profits realized by the Reserve Fund due to investments thereof to the Operating Fund, but only to the extent that there remains after such transfer an amount in the Reserve Fund equal to the Required Debt Service Reserve. See "SUMMARY OF THE 2005 GENERAL BOND RESOLUTION Funds and Accounts Reserve Fund." The Bond Bank is required to deliver a statement to the Governor and the State Legislature annually, before January 30, stating the amount, if any, necessary to restore the Reserve Fund to the Required Debt Service Reserve. The State Legislature may, but is under no legal obligation to, appropriate money sufficient to restore the Reserve Fund to the Required Debt Service Reserve. The Bond Bank has never reported a deficiency in any of the reserve funds held by the Bond Bank. 5 The State of Alaska's fiscal year 2011 operating budget includes an appropriation to replenish the Reserve Fund in the event of a default by a Government Unit. The Bond Bank has obligated itself to seek this appropriation on an annual basis under the terms of the 2005 General Bond Resolution. The Bond Bank cannot predict whether the State will, in the future, include such appropriation in the State's operating budget. Custodian Account. Money not held by the Trustee in the Reserve Fund or in reserves for bonds issued under other bond resolutions is maintained by the Bond Bank in an account herein referred to as the Custodian Account (the "Custodian Account"). The Custodian Account contains direct State appropriations and investment earnings. As of June 30, 2010, the Custodian Account market value balance (unaudited) was $5,674,117. The statutory earnings transfer generated by activity in fiscal year 2009 and by statute due to the State's general fund in fiscal year 2010 was $819,843. However, the $819,843 was appropriated back to the Bond Bank in the State's fiscal year 2010 operating budget. This marked the second time since 1986 that the State has appropriated funds to the Bond Bank. The entire Custodian Account balance is available for appropriation, at any time, by the State Legislature. State Payments The Act provides that any department or agency of the State, after notice from the Bond Bank that a Governmental Unit is in default on the payment of the principal of or interest on its Municipal Bonds then held or owned by the Bond Bank, will withhold the payment of money held by it and payable to such Governmental Unit and pay over such money to the Bond Bank for the purpose of paying principal of and interest on the bonds of the Bond Bank. State payments to Governmental Units include payments through the School Debt Reimbursement Program and Education Support Funding through the Department of Education and Early Development; and community jail funding through the Department of Corrections. A table appears appears in Appendix B that presents the amount of State payments to communities that have borrowed from the Bond Bank as well as the maximum annual loan payments and associated estimated coverage provided by those State payments. There is no guarantee that State payments will continue or remain at the current levels. The payment and amount of such State payments is uncertain, and Legislative authorization for such payments is subject to appropriation and amendment or repeal. See "APPENDIX B STATE PAYMENTS TO GOVERNMENTAL UNITS." The Bond Bank has never implemented the State payment intercept remedy. Pledge of the State Pursuant to the Act, the State has pledged and agreed with the holders of the Bonds that it will not limit or restrict the rights vested in the Bond Bank by the Act to, among other things, purchase, hold and dispose of Municipal Bonds and fulfill the terms of an agreement (including the 2005 General Bond Resolution) made by the Bond Bank with such holders, or in any way impair the rights or remedies of such holders until the Bonds, including interest on the Bonds and interest on unpaid installments of interest and all costs and expenses in connection with an action or proceeding by or on behalf of such holders, are fully met, paid and discharged. The remainder of this page is intentionally left blank. 6 THE ALASKA MUNICIPAL BOND BANK Organization The powers of the Bond Bank are vested in the Directors. The membership ofthe Bond Bank consists of five Directors: the Commissioners of the Department of Revenue and the Department of Commerce, Community and Economic Development of the State and three Directors appointed by the Governor. The three appointees serve four-year staggered terms and must be qualified voting residents of the State. The Commissioners of the Department of Revenue and the Department of Commerce, Community and Economic Development may appoint delegates to the Bond Bank Board of Directors to serve in their absence. The Directors elect one of their members as chair and one of their members as vice-chair and also elect a secretary and treasurer who need not be Directors. Action may be taken and motions and resolutions adopted by the Bond Bank at any meeting by the affirmative vote of at least three Directors. The Directors appoint an Executive Director to manage the business of the Bond Bank. Board of Directors The Bond Bank's Board of Directors includes members listed below. Mark Pfeffer -Chair. Term expires July 15,2013. Mr. Pfeffer was appointed to the Board on October 10, 2001. Mr. Pfeffer is a registered architect who owns an architectural practice in Anchorage, Alaska. He is active in the development, design and management of commercial real estate projects, many of which include public/private partnerships. He is a partner in the firms Koonce Pfeffer Bettis, Inc. and Venture Development Group, LLC. Mr. Pfeffer received a Bachelor of Architecture Degree from the University ofNebraska in 1980. Luke Welles -Vice-Chair. Term expires July 15,2011. Mr. Welles was appointed to the Board on May 21, 2008. Mr. Welles is Chief Financial Officer of LifeMed Alaska, LLC, which provide medivac services in Alaska. Prior to his current job, Mr. Welles was the Chief Financial Officer for the Yukon Kuskokwim Healthcare Corporation which administers healthcare in 52 rural communities including a hospital located in Bethel, Alaska. He has management experience in healthcare, civil construction and commercial real estate. Over the past 15 years he has served on several economic development commissions in the State, as a city council member in Homer, Alaska and multiple boards. Mr. Welles received a Bachelor of Arts Degree in Foreign Service and International Business from Baylor University in 1989. Gregory Gursey -Member. Term expires July 15,2014. Mr. Gursey was appointed to the Board on June 22, 2009. Mr. Gursey became President of Benefit Brokers, Inc. in 2001, after working as Vice President of Investments for Wedbush Morgan Securities for 11 years. Mr. Gursey also serves as a FINRA industry arbitrator in both civil and industry arbitration cases. After graduating from the University of Alaska Anchorage with a degree in finance, Mr. Gursey became involved with the University of Alaska Foundation. He served as the first Chairman of the UAA College of Fellows, served as a Trustee to the UA Foundation, and was a member of the Investment Committee to the UA Foundation. Mr. Gursey recently completed appointments to both the State of Alaska Dental Examiner's Board and the U.S Treasury Department's Taxpayer Advocacy Panel. He served on the Investment Commission for the Municipality of Anchorage, and has served on several local boards. Ted Leonard -Member. Mr. Leonard is the first delegate for Susan Bell, Commissioner of the Department of Commerce, Community and Economic Development. Mr. Leonard was appointed Executive Director of the Alaska Industrial Development and Export Authority (AIDEA) on May 19, 2008. He was most recently the Deputy Commissioner of the Department of Commerce, Community and Economic Development. In the Deputy Commissioner capacity, he oversaw the regulatory divisions of the department which included the Division of Insurance, the Division of Banking and Securities, and the Division of Corporations, Business and 7 Professional Licensing. He served as the Commissioner's designee on the boards of the Alaska Housing Finance Corporation, Alaska Aerospace Development Corporation, and the Alaska Community Service Commission. Mr. Leonard has worked for the last 19 years in both the government and private sector in the areas of finance and accounting in Alaska including the Mat-Su and Lower Kuskokwim School Districts as well as the City of Dillingham. He also served as the Director of Finance and Administrative Services for the City of Wasilla. He received his undergraduate degree from the College of Idaho and a Masters of Management from Willamette University. He is a Certified Management Accountant and Senior Professional in Human Resources. Jerry Burnett -Member. Deputy Commissioner of the Department of Revenue. Jerry Burnett is the first delegate for Bryan Butcher, Commissioner of the Department of Revenue. Mr. Burnett was appointed to this position in August 2008 after having served as the Administrative Services Director and Legislative Liaison for the Department of Revenue for the previous four years. Other state service includes two years as Administrative Services Director at the Department of Corrections and 12 years as Finance Committee and Budget and Audit Committee staff to the Alaska Legislature. From 1983 to 2002 Mr. Burnett was an adjunct professor of Business at the University of Alaska Southeast and during this time also worked as a Real Estate Broker and Life and Health Insurance Agent. He has a Master of Business Administration and a Master of Public Administration from the University of Alaska, and a Bachelor of Science Degree in Occupational Safety and Health from Central Washington University. Management Deven J. Mitchell, who also serves as State Debt Manager and Investment Officer in the Department of Revenue -Division of Treasury, was appointed Executive Director of the Bond Bank in 1999. Mr. Mitchell has worked for the State Department of Revenue since 1992. He previously held several positions in Alaska financial institutions. Mr. Mitchell holds a Bachelor of Science Degree in Business Administration from Northern Arizona University. Rather than employ staff, the Bond Bank contracts in the private sector for a wide range of professional services. The Executive Director coordinates the activities of these professionals, which include bond counsel, financial advisor, accountants, auditors, fund trustees, bond trustees and investment managers. Future Financing Plans The Bond Bank anticipates issuing additional bonds pursuant to its 2005 General Bond Resolution or other bond resolutions within the next 12 months. The principal amount of such additional bonds depends on the number and size ofthe applications for Bond Bank financing from Governmental Units. The Bond Bank may not issue revenue bonds in excess of $75 million during any fiscal year without State Legislature approval. Revenue refunding bonds are not included in the $75 million fiscal year limitation. No revenue bonds have been issued or are anticipated to be issued in fiscal year 20 II. The total amount of Bond Bank bonds and notes outstanding at anyone time may not exceed $1 billion. As of February 1,2011, the total principal amount of the Bond Bank's bonds and notes outstanding, not including the 20 II Series One Bonds, was $705,982,834. Debt Payment Record The Bond Bank has always made principal and interest payments on its general obligation and revenue bonds when due. No deficiencies have arisen in any Bond Bank debt service fund or reserve fund, nor has there been a need to exercise the provision requiring that State payments to Governmental Units be paid to the Bond Bank. 8 BONDS OUTSTANDING Under the provisions of the Act, the Bond Bank can issue additional series of Bonds under its 2005 General Bond Resolution or issue bonds under other resolutions that the Bond Bank may choose to adopt. The Bond Bank currently has, or is expected to have, bonds outstanding under the following resolutions: 1976 General Bond Resolution As of February 1,2011, the Bond Bank has issued $721,985,000 of general obligation bonds under the 1976 General Bond Resolution, $194,995,000 of which remain outstanding. 2005 General Bond Resolution The 201 I Series One Bonds are the eighteenth issue of Bonds under the 2005 General Bond Resolution. As of February 1, 2011, the Bond Bank has issued $468,600,000 of general obligation bonds under the 2005 General Bond Resolution (not including the principal amount ofthe 2011 Series One Bonds), $443,970,000 of which remains outstanding. 2010 Municipal Obligation Bond Resolution On November 2, 20 I0, the Bond Bank's Board of Directors approved the 2010 Municipal Obligation Bond Resolution ("2010 Resolution"). Bonds issued pursuant to the terms of the 2010 Resolution are general obligation bonds, equally and ratably secured by a pledge and assignment of all obligations acquired by the Bond Bank under the 2010 Resolution. As of February I, 201 I, the Bond Bank has issued $4,765,000 of general obligation bonds under the 2010 General Bond Resolution, $4,765,000 of which remains outstanding. Revenue Bond Resolutions The Authority (with respect to the issuance of revenue bonds the Bond Bank is referred to as the Authority) has issued revenue bonds under stand-alone revenue bond resolutions. The proceeds of these revenue bonds are applied toward the purchase of revenue bonds issued by municipal borrowers. A list of the outstanding revenue bond resolutions, amount of bonds outstanding and obligated municipal borrowers appears in the table titled "TOTAL BOND BANK BONDS ISSUED AND OUTSTANDING AS OF FEBRUARY 1,2011" herein. Coastal Energy Impact Program The Bond Bank issued bonds bonds to provide loans to local governments that qualified for aid under the Coastal Energy Impact Program ("CEIP"). CEIP is a federal program designed to provide financial assistance to coastal states and municipalities facing impacts from offshore oil development. The United States Department of Commerce, National Oceanic and Atmospheric Administration ("NOAA") and the Bond Bank entered into an agreement whereby the Bond Bank was the direct lending agency for the CEIP in the State, with $50 million available to make loans to local governments or to establish reserves for loans to local governments. The Bond Bank issued CEIP bonds, the proceeds of which were used to purchase bonds issued by the Kenai Peninsula Borough, the City of Seward, the City of Nome and the City ofSt. Paul. The total amount ofCEIP bonds outstanding as of June 30, 2010, under the Coastal Energy Impact Loan Program was $10,872,834, consisting of loans to the City ofSt. Paul and the City ofNome. City ofSt. Paul. The Bond Bank issued its its $6,562,878 1983 Series A Coastal Energy Bonds to fund a loan to the City of St. Paul to construct a new bulk fuel farm. The City of St. Paul failed to pay the four annual payments due on May 31,1997,1998,1999 and 2000. The City ofSt. Paul and NOAA restructured the City ofSt. Paul's loan 9 effective December 14, 2000. The City of St. Paul made timely payments on the loan until 2005, when it became delinquent in meeting its CEIP loan obligation. On February 19, 20 I0, NOAA officials agreed to repayment assistance in the form of a moratorium on interest accrued and forbearance on further loan payments, retroactive to April 18,2005 and continuing until March 18,2015. City ofNome. In 1985, the City of Nome, NOAA and the Bond Bank entered into a tripartite agreement which provided the City of Nome with $5 million in CEIP financing to assist in the construction of a $29 million causeway associated with the development of oil and gas resources in Norton Sound near Nome. Under terms of the agreement, the City of Nome would repay the obligation with revenues generated by causeway tariffs resulting from the oil and gas development. The CEIP contained provisions for the forgiveness of loans if expected development did not occur. In 1994, NOAA, the City of Nome and the Bond Bank agreed to a 10-year moratorium on principal and interest payments, with no further accrual of interest during the suspension period. No renewed interest in oil and gas exploration or development has resulted despite repeated leasing opportunities offered by the Federal Minerals Management Service. The moratorium ended in August 2004. As of January 29, 2009, the City of Nome, the Bond Bank and NOAA entered into an amendment of the tripartite agreement under which the City of Nome will repay the loan to NOAA in semi-annual installments over 30 years. Bonds issued for the CEIP are not secured by a pledge of any amounts held by or payable to the Bond Bank under the 2005 General Bond Resolution, including the Reserve Fund, nor are they secured directly or indirectly by any reserve account created under the Act. Direct Loans The Bond Bank has purchased certain bond anticipation notes and defeased certain Bond Bank bonds with money from the Custodian Account while retaining underlying communities' bonds. As of February 1,2011, the Bond Bank holds the principal amount of $290,000 of City and Borough of Yakutat Electric Utility Revenue Bonds in its financial portfolio. It also holds $2,140,664 of City of Galena Electric Utility Revenue Bonds and $232,531 ofCity ofGalena appropriation obligations in its financial portfolio. 10 TOTAL BOND BANK BONDS ISSUED AND OUTSTANDING AS OF FEBRUARY 1,2011 Original Amount Amount Issued Outstanding I. Total 2005 General Resolution G.O. Bonds(l) $477,235,000(1) $452,605,000(1) II. Total 1976 General Resolution G.O. Bonds 721,985,000 194,995,000 III. Total 2010 Municipal Obligation Resolution G.O. Bonds $4,765,000 $4,765,000 IV. Revenue Bonds Municipal Borrower 2000B Resolution City of Seward 3,000,000 140,000 2001A&B Resolution Ketchikan Gateway Borough 4,250,000 2,505,000 2002 Resolution City of Ketchikan 6,250,000 2,930,000 2003B Resolution City of Valdez 19,000,000 15,435,000 2004A Resolution City & Borough ofJuneau 28,845,000 26,165,000 2004B Resolution Municipality of Anchorage 5,365,000 4,745,000 V. Coastal Energy Impact Loan Program 35,456,046 10,872,834 REMAINING DEBT CAPACITY AFTER THE ISSUANCE OF THE 2011 SERIES ONE BONDS Debt Limit (Section 44.85.180 ofthe Act) Less Outstanding Bonds General Obligation Bonds 1976 General Resolution 2010 Municipal Obligation Bond Resolution 2005 General Resolution Revenue Bonds Coastal Energy Loan Program Total Outstanding Debt Remaining Debt Capacity $194,995,000 4,765,000 452,605,000(1) $1,000,000,000(2) 652,365,000(1) 51,380,000 10,872,834 $714,617,834(1) $285,382,166(1) (I) Includes the 20 II Series One Bonds. (2) The limit applies to all outstanding bonds or notes issued by the Bond Bank. II DEBT SERVICE REQUIREMENTS OF OUTSTANDING GENERAL OBLIGATION BONDS AND THE 2011 SERIES ONE BONDS(I) (Fiscal Years Ending June 30) Fiscal Existing 20 I I Series One 20 I I Series One Total Year Debt Service Principal Interest Debt Service 201 I $30,626,346 $30,626,346 2012 40,963,743 $295,000 $366,575 41,625,3 I8 2013 41,781,662 305,000 357,725 42,444,387 2014 40,113,635 3 I5,000 348,575 40,777,210 2015 39,221,944 325,000 339,125 39,886,069 2016 37,027,112 745,000 329,375 38,101,487 2017 36,718,498 340,000 307,025 37,365,523 2018 38,300,323 355,000 296,825 38,952,148 2019 36,206,247 365,000 284,400 36,855,647 2020 34,175,466 380,000 269,800 34,825,266 2021 33,3 I6,592 395,000 254,600 33,966,192 2022 30,625,289 385,000 238,800 31,249,089 2023 31,866,599 405,000 220,513 32,492, I I I 2024 30,762,782 425,000 201,275 31,389,057 2025 29,474,420 445,000 181,088 30,100,507 2026 27,529,965 465,000 159,950 28,154,915 2027 26,373,646 485,000 137,863 26,996,509 2028 27,490,153 510,000 113,006 28,113,159 2029 22,832,262 535,000 86,869 23,454,131 2030 17,402,477 565,000 59,450 18,026,927 2031 16,429,392 595,000 30,494 17,054,886 2032 10,156,163 10,156,163 2033 10,133,580 10,133,580 2034 7,407,428 7,407,428 2035 5,493,148 5,493,148 2036 7,186,293 7,186,293 2037 2,842,114 2,842,114 2038 2,802,235 2,802,235 2039 1,374,228 1,374,228 $716,633,741 $8,635,000 $4,583,331 $729,852,073 (1) Totals may not foot due to rounding. The 2011 Series One Bonds are the eighteenth Series of Bonds issued under the 2005 General Bond Resolution. 12 SUMMARY OF THE 2005 GENERAL BOND RESOLUTION The following is a summary of certain provisions of the 2005 General Bond Resolution, to which reference is made for a complete statement of the provisions or contents of the document. Words and terms used in this summary are defined in the above-mentioned document and will have the same meanings herein as contained in that document, except as defined in this Official Statement. 2005 General Bond Resolution Constitutes Contract The 2005 General Bond Resolution constitutes a contract between the Bond Bank and the owners of the Bonds, and the pledges made in the 2005 General Bond Resolution and the covenants and agreements therein set forth to be performed by the Bond Bank will be for the equal and proportionate benefit, protection and security of the holders of any and all of the Bonds, all of which will be of equal rank without preference, priority or distinction. Obligation of Bonds The Bonds are direct and general obligations of the Bond Bank, and the full faith faith and credit of the Bond Bank are pledged for the payment of the principal or redemption price of, interest on and sinking fund installments for, the Bonds. The State will not be liable for payment on the Bonds, and the Bonds will not be a debt or liability, or constitute a pledge or loan ofthe faith and credit of the State. Pledge The Municipal Bonds and the Municipal Bonds Payments, the investments thereof and the proceeds of such investments, if any, and all funds and accounts established by the 2005 General Bond Resolution to be held by the Trustee are pledged and assigned for the payment of the principal of, redemption price of, interest on, and sinking fund installments for, the Bonds in accordance with the terms and provisions of the 2005 General Bond Resolution, subject only to the provisions of the 2005 General Bond Resolution permitting the application thereof for the purposes and on the terms and conditions set forth in the 2005 General Bond Resolution. The Municipal Bonds and the Municipal Bonds Payments and all other money and securities pledged pursuant to the 2005 General Bond Resolution immediately will be subject to the lien of such pledge without any further act, and such lien will be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Bond Bank, regardless of whether such parties have notice thereof. Power to Issue Bonds and Make Pledges The Bond Bank covenants that it is duly authorized by law to issue the Bonds and to pledge the Municipal Bonds Payments, the Municipal Bonds and other money, securities, funds and property purported to be pledged by the 2005 General Bond Resolution which will be free and clear of any pledge, lien, charge or encumbrance thereon or with respect thereto prior to, or of equal rank with, the pledge created by the 2005 General Bond Resolution, except for the liens in favor of the Trustee and Paying Agent as provided in the 2005 General Bond Resolution. The Bond Bank will at all times, to the extent permitted by law, defend, preserve and protect the pledge of the Municipal Bonds Payments, the Municipal Bonds and other money, securities, funds and property pledged under the 2005 General Bond Resolution and all the rights of the Bondholders under the 2005 General Bond Resolution against all claims and demands of all persons whomsoever. GeneralThe Bond Bank will do and perform or cause to be done and performed all acts and things required to be done or performed by or on behalf of the Bond Bank under law and the 2005 General Bond Resolution in accordance with the terms thereof. 13 The Bond Bank pledges and agrees that it will not cause the State to limit or alter the rights vested by the Act in the Bond Bank to fulfill the terms of any agreements made with Bondholders, or in any way impair the rights and remedies of such Bondholders, until the Bonds, together with the interest thereon, with interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceeding by or on behalf of such holders, are fully met and discharged. Waiver of Laws The Bond Bank will not at any time insist upon or plead in any manner whatsoever, or claim or take the benefit or advantage of any stay or extension of law now or at any time hereafter in force which may affect the covenants and agreements contained in the 2005 General Bond Resolution or in any Series Resolution or in the Bonds, and all benefit or advantage of any such law or laws is hereby expressly waived by the Bond Bank. Loan Agreement Provisions No loan will be made and no Bonds will be issued for the purpose of providing funds with which to make a loan, unless the Loan Agreement under which such loan is to be made will comply with, but not limited to, the following: (a) The Governmental Unit which is a party to such Loan Agreement must be a Governmental Unit as defined by the 2005 General Bond Resolution, and the Loan Agreement must be executed in accordance with existing laws. (b) The Governmental Unit, prior to or simultaneously with the issuance of Bonds, will issue Municipal Bonds which are valid debt obligations of the Governmental Unit as required by the Act. (c) The Municipal Bonds Payments to be made by the Governmental Unit under such Loan Agreement will be not less than the interest and principal payments the Bond Bank is required to make on the Loan Obligations and will be scheduled by the Bond Bank in such manner and at such times as to provide funds sufficient to pay principal and interest on the Loan Obligations as the same become due. (d) The Governmental Unit will be obligated to pay Fees and Charges to the Bond Bank at the times and in the amounts which will enable the Bond Bank to comply with the provisions ofthe 2005 General Bond Resolution. (e) The Governmental Unit will agree that in the event the Municipal Bonds Payments are not paid by it to the Bond Bank on or before the times specified in the Loan Agreement, any money payable to the Governmental Unit by any department or agency of the State will be withheld from such Governmental Unit and paid over directly to the Trustee acting under the 2005 General Bond Resolution. (f) The Bond Bank will not sell, and the Governmental Unit will not redeem prior to maturity, any of the Municipal Bonds with respect to which the Loan is made in an amount greater than the Outstanding Bonds issued with respect to such Loans which are then redeemable, and any such sale or redemption of such Municipal Bond will be in an amount not less than the aggregate of (i) the principal amount of the Loan Obligations to be redeemed, (ii) the interest to accrue on the Loan Obligations so to be redeemed to the next redemption 14 date, (iii) the applicable redemption premium, and (iv) the costs and expenses of the Bond Bank in effecting the redemption of the Loan Obligations. (g) The Government Unit must give the Bond Bank at least fifty days notice of its intent to redeem its Municipal Bonds. Modification of Loan Agreement Terms The Bond Bank will not consent to the modification of, or modifY, the rates of interest of, or the amount or time of payment of any installment of principal of or interest on, any Municipal Bonds evidencing a Loan, or the amount or time of payment of any Fees and Charges payable with respect to such Loan, or the security for or any terms or provisions of such Loan or the Municipal Bonds evidencing the same, in a manner which adversely affects or diminishes the rights of the Bondholders. Enforcement of Municipal Bonds The Bond Bank will diligently enforce, and take all reasonable steps, actions and proceedings necessary for the enforcement of, all terms, covenants and conditions of all Loan Agreements and the Municipal Bonds, including the prompt collection, and the giving of notice to the Commissioner of Revenue, Commissioner of Commerce, Community and Economic Development and the Commissioner of Administration and any other department or agency of the State which is custodian of any money payable to the Governmental Unit of any failure or default of the Governmental Unit in the payment of its Municipal Bonds Payments and will promptly transfer any such money, upon receipt thereof, to the Trustee and the Trustee will deposit any such money in the Principal Account and Interest Account in place of said unpaid Municipal Bonds Payments or in the event deficiencies in said Accounts created by such default will have been made up by the Reserve Fund, into the Reserve Fund to the extent of such deficiencies. Funds and Accounts The 2005 General Bond Resolution established a Debt Service Fund, consisting of an Interest Account, a Principal Account and a Redemption Account; a Reserve Fund, a Rebate Fund, a separate sub-account for each Series of Bonds; and an Operating Fund. The Debt Service Fund, the Rebate Fund and the Reserve Fund are held by the Trustee. The Operating Fund is held by the Bond Bank. Debt Service Fund. The Trustee will deposit Municipal Bonds Interest Payments and any other money available for the payment of interest in the Interest Account upon receipt thereof. The Trustee will, on or before each interest payment date, payout of the Interest Account the amounts required for the payment of the interest becoming due on each series of Bonds on such interest payment date. The Trustee will deposit Municipal Bonds Principal Payments and any other money available for the payment of principal in the Principal Account upon receipt thereof. The Trustee will, on or before each principal payment date or Sinking Fund Installment date, payout of the Principal Account the amounts required for the payment of the principal or Sinking Fund Installment due on each series of Bonds on such date. The Trustee establishes in the Redemption Account a separate sub-account for each Series of Bonds. Any money deposited into the Redemption Account from any source will be applied to the purchase or redemption of Bonds. Any money deposited into the Redemption Account from the Reserve Fund because of a reduction in the Required Debt Service Reserve will be applied to the purchase or redemption of Reserve Fund Obligations. Reserve Fund. Monthly, the Trustee will set aside from amounts in the Reserve Fund derived from investment earnings and profits realized by the Reserve Fund due to investments thereof, an amount which, when added to the amounts theretofore set aside for such purpose and not paid into the Interest Account, will on such 15 date be equal to the unpaid interest on the Reserve Fund Obligations accrued and to accrue to the last day of such month. On or before each principal payment date and Sinking Fund Installment payment date of Reserve Fund Obligations, the Trustee will withdraw from amounts in the Reserve Fund and deposit in the Principal Account an amount which, when added to the amount then on deposit in the Principal Account and derived from sources other than Municipal Bonds Payments, will be equal to the Principal Installment of the Reserve Fund Obligations falling due on such date. On or before December 31 of each year, after satisfying the deposit requirements set forth above, the Trustee will withdraw from the Reserve Fund any amount remaining therein derived from investment earnings or profits due to investments thereof, and pay over said amount to the Bond Bank for deposit in the Operating Fund, but only to the extent that there remains after such withdrawal an amount in the Reserve Fund at least equal to the Reserve Fund Requirement. The Bond Bank will pay into the Reserve Fund (a) money made available by the State and paid by the State for the purpose of the Alaska Municipal Bond Bank Reserve Fund created by the Act in the amount provided by a Series Resolution; (b) all money paid to the Bond Bank pursuant to the Act for the purpose of restoring the Reserve Fund to the amount of the Reserve Fund Requirement; (c) such portion of the proceeds of sale of Bonds, if any, as will be provided by any Series Resolution; (d) Credit Enhancement; and (e) any other money which may be made available to the Bond Bank for the purposes of the Reserve Fund from any other source or sources. The Reserve Fund Requirement may be satisfied entirely, or in part, by a letter of credit, a line or credit, a credit facility, a surety bond, or any other instrument or arrangement obtained in connection with the issuance of a Series of Bonds; provided, however, any credit enhancement satisfying all or any part of the Reserve Fund Requirement after after the initial issuance of Bonds or issued in substitution of any prior credit enhancement previously issued will not, by itself, cause a withdrawal or downward revision of the ratings maintained by any Rating Agency with respect to the Bonds. In the event there will be a deficiency in the Interest Account or in the Principal Account, the Trustee will make up such deficiencies from the Reserve Fund. Administration of Reserve Fund Money and securities held in the Reserve Fund will not be withdrawn therefrom at any time in such amount as would reduce the amount in such Fund to an amount less than the Reserve Fund Requirement except for the payment when due of debt service on Reserve Fund Obligations and to cure a deficiency in the Principal Account or the Interest Account. Whenever the amount in the Reserve Fund is less than the Reserve Fund Requirement, the Bond Bank will transfer from other amounts legally available the amount required to restore the Reserve Fund to the Reserve Fund Requirement. Rebate Fund There will be deposited in the Rebate Fund the amount of the Rebate Requirement for each Series of Bonds, and the Trustee will pay over to the United States Government such amounts as determined by the Bond Bank and as set forth in the 2005 General Bond Resolution. Operating Fund There will be deposited in the Operating Fund all Fees and Charges, to the extent not otherwise encumbered or pledged, and any other money which may be made available to the Bond Bank therefor from any other source or sources. Money at any time held for the credit of the Operating Fund will be used for and applied solely to the following purposes: (a) to pay the Administrative Expenses of the Bond Bank; (b) to pay the fees and expenses of the Trustee and any Paying Agent; (c) to pay financing costs incurred with respect to a Series of Bonds; and (d) to pay any expenses incurred in carrying out any other purpose then authorized by the Act. All amounts in the Operating Fund will be free and clear of any lien or pledge created by the 2005 General Bond Resolution. 16 Security for Deposits All money held by the Trustee will be continuously and fully secured, for the benefit of the Bond Bank and the Bondholders in such manner as may then be required or permitted by applicable State or federal laws and regulations regarding the security for, or granting a preference in the case of, the deposit of trust funds. It will not be necessary for the Trustee or any paying agent to give security for the deposit of any money with them held in trust for the payment of the principal or Redemption Price of or interest on any Bonds, or for the Trustee to give security for any money which will be represented by obligations purchased under the provisions of the 2005 General Bond Resolution as an investment of such money. Payment of Bonds The Bond Bank will duly and punctually payor cause to be paid the principal or Redemption Price, if any, of every Bond and the interest thereon, at the dates and places and in the manner provided in the Bonds according to the true intent and meaning thereof, and will duly and punctually satisfy all Sinking Fund Installments, if any, becoming payable with respect to any Series of Bonds. Fees and Charges The Bond Bank may charge such Fees and Charges to each Governmental Unit to which a Loan is made, and will revise such Fees and Charges if necessary, so that such Fees and Charges actually collected from each such Governmental Unit will at all times produce money which, together with such Governmental Unit's Allocable Proportion of other money available under the provisions of the 2005 General Bond Resolution, and other money available therefor, will be at least sufficient to pay, as the same become due, the Governmental Unit's Allocable Proportion of the Administrative Expenses of the Bond Bank and of the fees and expenses of the Trustee and any Paying Agent. Issuance of Additional Obligations Including for the Purpose of Refunding The Bond Bank may issue additional Bonds and refunding Bonds pursuant to the terms of the 2005 General Bond Resolution; however, no additional series of Bonds will be issued unless: (a) the aggregate principal amount of Bonds and Notes Outstanding at the time of issuance and delivery of such additional Bonds including the principal amount of such additional Bonds, will not exceed any limit thereon imposed by State law; (b) there is at the time of the issuance of such additional Bonds no deficiency in the amounts required by the 2005 General Bond Resolution or any Series Resolution to be paid into the Debt Service Fund and into the Reserve Fund; (c) the amount of the Reserve Fund, upon the issuance and delivery of such additional Bonds, will not be less than the Required Debt Service Reserve; and (d) the maturities of, or Sinking Fund Installments for, the additional Bonds representing Loan Obligations, unless such additional Bonds are being issued to refund Outstanding Bonds, will be equal to the scheduled Municipal Bonds Principal Payments to be made in respect of the Loans with respect to which such additional Bonds are to be issued. issued. The Bond Bank expressly reserves the right to adopt other general bond resolutions and reserves the right to issue notes and any other obligations so long as the same are not a charge or lien on the Municipal Bonds, the Municipal Bonds Payments and the Fees and Charges or payable from the Debt Service Fund or the Reserve Fund. 17 Defeasance If the Bond Bank will payor cause to be paid to the holders of all Bonds then Outstanding, the principal and interest and/or Redemption Price, if any, to become due thereon, at the times and in the manner stipulated therein and in the 2005 General Bond Resolution and also will payor cause to be paid all other sums payable under the 2005 General Bond Resolution, including any amounts payable to the United States, then, at the option of the Bond Bank, as expressed in an instrument in writing signed by an Authorized Officer and delivered to the Trustee, the covenants, agreements and other obligations of the Bond Bank to the Bondholders will be discharged and satisfied. All Outstanding Bonds of any Series will, prior to the maturity or redemption date thereof, be deemed to have been paid if (a) in case any of said Bonds are to be redeemed on any date prior to their maturity, the Bond Bank will have given to the Trustee in form satisfactory to it irrevocable instructions to publish notice of redemption on said date of such Bonds, and (b) there will have been deposited with the Trustee either monies in an amount which will be sufficient or Investment Securities which are not subject to redemption prior to the dates on which amounts will be needed to make payments on the Bonds and described in clause (I) of the definition thereof, the principal of and the interest on which when due will provide money which, together with the money, if any, deposited with the Trustee or Paying Agent at the same time, will be sufficient, to pay, when due, the principal or Redemption Price, if applicable, and interest due and to become due on said Bonds on and prior to the redemption date or maturity date thereof, as may be the case. Supplements and Amendments The Bond Bank may supplement the 2005 General Bond Resolution without the consent of the Bondholders or the Trustee for various purposes not inconsistent with the 2005 General Bond Resolution, to provide for the issuance of additional Series of Bonds, to impose additional limitations or restrictions on the issuance of Bonds, to impose other restrictions on the Bond Bank, to surrender any right, power or privilege, or to confirm any pledge of or lien upon the Municipal Bonds or the Municipal Bonds Payments or any other funds. The Bond Bank may also supplement the 2005 General Bond Resolution to cure any ambiguity, omission or defect in the 2005 General Bond Resolution, provided such modifications are not contrary to or inconsistent with the 2005 General Bond Resolution as theretofore in effect. Any modification or amendment of the 2005 General Bond Resolution and of the rights and obligations of the Bond Bank and of the Bondholders may be made with the written consent (a) of the holders of at least two-thirds in principal amount of the Bonds Outstanding at the time such consent is given, or (b) in case less than all of the several Series of Bonds then Outstanding are affected by the modification or amendment, of the holders of at least two-thirds in principal amount of the Bonds of each Series so affected and Outstanding at the time such consent is given; provided, however, that such modification or amendment will not permit (i) a change in the terms of redemption or maturity of the principal of any outstanding Bond or of any installment of interest thereon or Sinking Fund Installment therefor, (ii) a reduction in the principal amount or the Redemption Price thereof or in the rate of interest thereon, (iii) a reduction of the percentage of the Holders of which is required to effect any such modification or amendment, or (iv) the creation of any lien prior to or on a parity with the lien created by the 2005 General Bond Resolution (except in the manner provided by the 2005 General Bond Resolution) or deprive the Bondholders of the lien created by the 2005 General Bond Resolution, without the consent of the holders of all the Bonds Outstanding or of the Series of Bonds affected by such modification or amendment. To the extent that the full payment of the interest and principal of Bonds of a Series is secured by Credit Enhancement, the Credit Enhancement Agency will be considered to be the Bondholder of all the Bonds of the Series for purposes of exercising any rights with respect to supplements and amendments to the 2005 General Bond Resolution if the Credit Enhancement so provides. 18 Events of Default and Remedies Each ofthe following events is an Event of Default under the 2005 General Bond Resolution: (a) the Bond Bank defaults in the payment of the principal or Redemption Price of, Sinking Fund Installment for, or interest on, any Bond when and as the same will become due whether at maturity or upon call for redemption, or otherwise; (b) the Bond Bank fails or refuses to comply with the provisions of the Act regarding the certification of deficiencies in the 2005 General Bond Resolution Reserve Fund, or such amounts as will be certified to the Governor and to the Legislature pursuant to the Act will not be appropriated and paid to the Bond Bank prior to the termination of the then current State fiscal year; or (c) the Bond Bank fails or refuses to comply with the provisions of the Act, other than as provided in (b) above, or defaults in the performance or observance of any other ofthe covenants, agreements or conditions on its part in the 2005 General Bond Resolution, any Series Resolution, any Supplemental Resolution, or in the Bonds contained, and such failure, refusal or default will continue for a period of 45 days after written notice thereof by the Trustee or the Holders of not less than 25 percent in principal amount of the Outstanding Bonds; provided, however, that an event of default will not be deemed to exist under the provisions of clause (c) above upon the failure of the Bond Bank to make and collect Fees and Charges required to be made and collected by the 2005 General Bond Resolution or upon the failure of the Bond Bank to enforce any obligation undertaken by a Governmental Unit pursuant to a Loan Agreement including the making of the stipulated Municipal Bonds Payments so long as the Bond Bank may be otherwise directed by law and so long as the Bond Bank will be provided with money from the State or otherwise, other than withdrawals from or reimbursements of the Reserve Fund, sufficient in amount to pay the principal of and interest on all Bonds as the same will become due during the period for which the Bond Bank will be directed by law to abstain from making and collecting such Fees and Charges and from enforcing the obligations of a Governmental Unit under the applicable Loan Agreement. Upon the happening and continuance of any event of default specified in paragraph (a) above, the Trustee will proceed, or upon the happening and continuance of any event of default specified in paragraphs (b) and (c) above, the Trustee may proceed, and upon the written request of the holders of not less than 25 percent in principal amount of the Outstanding Bonds will proceed, in its own name, to protect and enforce its rights and the rights of the Bondholders by such of the following remedies as the Trustee, being advised by counsel, will deem most effectual to protect and enforce such rights: (a) by mandamus or other suit, action or proceeding at law or in equity, enforce all rights of the Bondholders, including the right to require the Bond Bank to make and collect Fees and Charges and and Municipal Bonds Payments adequate to carry out the covenants and agreements as to, and pledge of, such Fees and Charges and Municipal Bonds Payments, and other properties and to require the Bond Bank to carry out any other covenant or agreement with Bondholders and to perform its duties under the Act; (b) by bringing suit upon the Bonds; (c) by action or suit in equity, require the Bond Bank to account as if it were the trustee of an express trust for the holders of the Bonds; (d) by action or suit in equity, enjoin any acts or things which may be unlawful or in violation ofthe rights of the holders of the Bonds. 19 Upon the occurrence of an event of default the Trustee may, and upon the written request of the holders of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding will, declare the principal of all the Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same will be immediately due and payable. This provision, however, is subject to the condition that if before any judgment or decree for the payment of the money due will have been obtained or entered, the Bond Bank will deposit with the Trustee a sum sufficient to pay all principal on the Bonds matured prior to such declaration and all matured installments of interest upon all the Bonds, with interest on such overdue installments of principal at the rate borne by the respective Bonds, and the reasonable expenses of the Trustee, and any and all other defaults known to the Trustee will have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate will have been made therefor, then the holders of at least a majority in aggregate principal amount of the Bonds then outstanding, may, on behalf of the holders of all of the Bonds, rescind and annul such declaration and its consequences and waive such default. Bondholders' Direction ofProceedings. The holders of a majority in principal amount of the Bonds then Outstanding will have the right to direct the method of conducting all remedial proceedings to be taken by the Trustee, provided that such direction will not be otherwise than in accordance with law or the 2005 General Bond Resolution, and that the Trustee will have the right to decline to follow any such direction which in the opinion of the Trustee would be unjustly prejudicial to Bondholders not parties to such direction. Limitation on Rights of Bondholders. No holder of any Bond will have any right to institute any suit, action, mandamus or other proceeding in equity or at law under the 2005 General General Bond Resolution, or for the protection or enforcement of any right under the 2005 General Bond Resolution or any right under law unless such holder will have given to the Trustee written notice of the event of default or breach of duty on account of which such suit, action or proceeding is to be taken, and unless the holders of not less than 25 percent in principal amount of the Bonds then Outstanding will have made written request of the Trustee and will have afforded the Trustee a reasonable opportunity either to proceed to exercise the powers granted under the 2005 General Bond Resolution or law or to institute such action, suit or proceeding in its name and unless, also, there will have been offered to the Trustee reasonable security and indemnity against the costs, expenses and liabilities to be incurred thereby, and the Trustee will have refused or neglected to comply with such request within a reasonable time. No holder of the Bonds will have any right to affect, disturb or prejudice the security of the 2005 General Bond Resolution, or to enforce any right with respect to the Bonds or the 2005 General Bond Resolution, except in the manner provided in the 2005 General Bond Resolution, and all proceedings at law or in equity will be instituted, held and maintained in the manner herein provided and for the benefit of all Bondholders. Excess Earnings The Bond Bank covenants and agrees to calculate Rebatable Arbitrage and to pay Rebatable Arbitrage to the United States of America in the manner necessary to comply with the then applicable federal tax law. Within 30 days after the end of every fifth Bond Year, and within 60 days of the date when all of each Series of Bonds have been retired (or at such other time or times as may then be required by the Code and the applicable Income Tax Regulations), the Bond Bank will determine the Rebatable Arbitrage with respect to each Series of Bonds, and pay rebate amounts due the United States of America with respect thereto, as provided in Section 148(f) of the the Code. LITIGATION Upon the delivery of the 2011 Series One Bonds, the Bond Bank will furnish a certificate to the effect that, among other things, there is no litigation pending in any court to restrain or enjoin the issuance or delivery of the 2011 Series One Bonds, or in any way contesting the validity or enforceability of the 2011 Series One Bonds, the 2005 General Bond Resolution or any Bonds or money pledged under the 2005 General Bond Resolution. 20 CERTAIN LEGAL MATTERS Legal matters incident to the authorization, issuance and sale by the Bond Bank of the 20 II Series One Bonds are subject to the approving legal opinion of Wohlforth, Johnson, Brecht, Cartledge & Brooking of Anchorage, Alaska, Bond Counsel to the Bond Bank. The proposed form of the opinion of Bond Counsel is included herein as Appendix A. Certain legal matters will be passed upon for the City and Borough of Wrangell by its counsel, K&L Gates LLP of Seattle, Washington. Certain legal matters will be passed upon for the Kodiak Island Borough by its counsel Birch Horton Bittner & Cherot of Anchorage, Alaska. UNDERWRITING The 2011 Series One Bonds are to be purchased by Piper Jaffray & Co. (the "Underwriter") from the Bond Bank at an aggregate purchase price of $8,659,193.05 (equal to the aggregate principal amount of the 20 II Series One Bonds, plus an original issue premium of $67,613.80, less Underwriter's discount of $43,420.75), subject to the terms of a Bond Purchase Contract between between the Bond Bank and the Underwriter. The Bond Purchase Contract provides that the Underwriter will purchase all of the 2011 Series One Bonds if any are purchased and that the obligation to make such purchase is subject to certain terms and conditions set forth in the Bond Purchase Contract. Piper Jaffray & Co., ("Piper") has entered into an agreement (the "Distribution Agreement") with Advisors Asset Management, Inc. ("AAM") for the distribution of certain municipal securities offerings allocated to Piper at the original offering prices. Under the Distribution Agreement, if applicable to the Bonds, Piper will share with AAM a portion ofthe fee or commission, exclusive of management fees, paid to Piper. FINANCIAL ADVISOR Western Financial Group, LLC has acted as financial advisor (the "Financial Advisor") to the Bond Bank in connection with the issuance of the 2011 Series One Bonds. The Financial Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume responsibility for the accuracy, completeness, or fairness of the information contained in this Official Statement. Western Financial Group, LLC is an independent advisory firm registered with the Securities and Exchange Commission and is not engaged in the business of underwriting, trading, or distributing municipal securities or other public securities. FINANCIAL STATEMENTS The financial statements of the Bond Bank included as Appendix E to this Official Statement have been audited by Elgee Rehfeld Mertz LLC, independent certified public accounts, to the extent and for the periods indicated in their report thereon. Such financial statements have been included in reliance upon the report of Elgee Rehfeld Mertz LLC. The Bond Bank has not requested Elgee Rehfeld Mertz LLC to provide written consent for inclusion of the financial statements in this Official Statement. TAX MATTERS In the opinion of Bond Counsel, based on an analysis of existing laws, regulations, rulings and court decisions and assuming, among other things, compliance with certain covenants, interest on the 2011 Series One Bonds is excludable from gross income for federal income tax purposes. The 2011 Series One Bonds are not private activity bonds, and interest on the 2011 Series One Bonds is not an item of tax preference for purposes of determining alternative minimum taxable income for individuals or corporations under the Code. However, interest 21 in the 2011 Series One Bonds is taken into account in detennining adjusted current earnings for purposes of computing the federal alternative minimum tax imposed on certain corporations. Bond Counsel is also of the opinion, based on existing laws of the State as enacted and construed that interest on the 2011 Series One Bonds is excludable from taxation by the State except for transfer, estate and inheritance taxes. The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the 2011 Series One Bonds. The Bond Bank has covenanted to comply with certain restrictions designed to assure that interest on the 2011 Series One Bonds is excludable from federal gross income. Failure to comply with these covenants may result in interest on the 2011 Series One Bonds being included in federal gross income, possibly from the date of issuance ofthe 2011 Series One Bonds. The opinion of Bond Counsel assumes compliance with these covenants. Bond Counsel has not undertaken to detennine (or to infonn any person) whether any actions taken (or not taken) or events occurring (or not occurring) after the date of issuance of the 2011 Series One Bonds may adversely affect the tax status of interest on the 2011 Series One Bonds. Although Bond Counsel has rendered an opinion that interest on the 2011 Series One Bonds is excludable from gross income for federal income tax purposes, the ownership or disposition of, or the accrual or receipt of interest on, such 2011 Series One Bonds may otherwise affect a 2011 Series One Bond Owner's federal or State tax liability. The nature and extent of these other tax consequences will depend upon the 2011 Series One Bond Owner's particular tax status and the 2011 Series One Bond Owner's other items of income or deduction. Bond Counsel expresses no opinion regarding any other tax consequences relating to the ownership or disposition of, or the accrual or receipt of interest on, the 2011 Series One Bonds. Owners of the 2011 Series One Bonds should consult their tax advisors regarding the applicability of any collateral tax consequences of owning the 2011 Series One Bonds, which may include original issue discount, original issue premium, purchase at market discount or at a premium, taxation upon sale, redemption or other disposition, and various withholding requirements. Backup Withholding. Interest on tax-exempt obligations such as the 2011 Series One Bonds are in many cases subject to information reporting in a manner similar to interest paid on taxable obligations. Backup withholding may be imposed on payments made after March 31, 2007 to any bondholder who fails to provide certain required information including an accurate taxpayer identification number to any person required to collect such infonnation pursuant to Section 6049 of the Code. This reporting requirement does not in and of itself affect or alter the excludability of interest on the 2011 Series One Bonds from gross income for federal income tax purposes or any other federal tax consequence of purchasing, holding or selling tax-exempt obligations. Original Issue Discount. The 2011 Series One Bonds maturing March 1, 2026 and March 1, 2031 (the "Discount Bonds") are being sold at an original issue discount. The difference between the initial public offering prices, as set forth on the cover page, of such Discount Bonds and their stated amounts to be paid at maturity, constitutes original issue discount treated as interest which is excluded from gross income for federal income tax purposes to the same extent as interest on the 2011 Series One Bonds. The amount of original issue discount which is treated as having accrued with respect to such Discount Bond is added to the cost basis of the owner in detennining, for federal income tax purposes, gain or loss upon disposition of such Discount Bond (including its sale, redemption or payment at maturity). Amounts received upon disposition of such Discount Bond which are attributable to to accrued original issue discount will be treated as tax-exempt interest, rather than as taxable gain, for federal income tax purposes. Original issue discount is treated as compounding semiannually, at a rate detennined by reference to the yield to maturity of each individual Discount Bond, on days that are detennined by reference to the maturity date 22 of such Discount Bond. The amount treated as original issue discount on such Discount Bond for a particular semiannual accrual period is equal to the product of (i) the yield to maturity for such Discount Bond (determined by compounding at the close of each accrual period) and (ii) the amount which would have been the tax basis of such Discount Bond at the beginning of the particular accrual period if held by the original purchaser, less the amount of any interest payable for such Discount Bond during the accrual period. The tax basis is determined by adding to the initial public offering price on such Discount Bond the sum of the amounts that have been treated as original issue discount for such purposes during all prior periods. If such Discount Bond is sold between semiannual compounding dates, original issue discount which would have been accrued for that semiannual compounding period for federal income tax purposes is to be apportioned in equal amounts among the days in such compounding period. Owners of Discount Bonds should consult their tax advisors with respect to the determination and treatment of original issue discount accrued as of any date and with respect to the state and local tax consequences of owning a Discount Bond. Original Issue Premium. The 2011 Series One Bonds maturing March 1,2012 through March 1,2021, inclusive (collectively, the "Premium Bonds") are being sold at a premium. An amount equal to the excess of the issue price of a Premium Bond over its stated redemption price at maturity constitutes premium on such Premium Bond. An initial purchaser of a Premium Bond must amortize any premium over such Premium Bond's term using constant yield principles, based on the purchaser's yield to maturity or, in the case of Premium Bonds callable prior to their maturity, by amortizing the premium to the call date, based on the purchaser's yield to the call date and giving effect to the call premium). As premium is amortized, the purchaser's basis in such Premium Bond is reduced by a corresponding amount resulting in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes upon a sale or disposition of such Premium Bond prior to its maturity. Even though the purchaser's basis may be reduced, no federal income tax deduction is allowed. Purchasers of the Premium Bonds should consult with their tax advisors with respect to the determination and treatment of amortizable premium for federal income tax purposes and with respect to the state and local tax consequences of owning a Premium Bond. Changes in Federal Tax Law. From time to time, there are legislative proposals in the Congress and in the states that, if enacted, could alter or amend the federal and state tax matters referred to above or adversely affect the market value of the 20 II Series One Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether if enacted it would apply to bonds issued prior to enactment. In addition, regulatory actions are from time to time time announced or proposed and litigation is threatened or commenced which, if implemented or concluded in a particular manner, could adversely affect the market value of the 2011 Series One Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular litigation or judicial action will be resolved, or whether the 2011 Series One Bonds or the market value thereof would be impacted thereby. Purchasers of the 2011 Series One Bonds should consult their tax advisors regarding any pending or proposed legislation, regulatory initiatives or litigation. The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of issuance and delivery of the 2011 Series One Bonds and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any pending legislation, regulatory initiatives or litigation. Bond Counsel's opinion is not a guarantee of a a result and is not binding on the Internal Revenue Service ("IRS"), rather, the opinion represents its legal judgment based upon its review of existing statutes, regulations, published rulings, and court decisions and the representations and covenants of the Bond Bank. The IRS has an ongoing program of auditing the tax-exempt status of the interest on governmental obligations. If an audit of the 2011 Series One Bonds is commenced, under current procedures, the IRS is likely to treat the Bond Bank as the "taxpayer," and the owners of the 2011 Series One Bonds (the "Owners") would have no right to participate in the audit process. In responding to or defending an audit of the tax-exempt status of the interest on the 2011 Series One Bonds, the Bond Bank may have different or conflicting interests from the Owners. Public awareness of any 23 future audit of the 2011 Series One Bonds could adversely affect the value and liquidity of the 2011 Series One Bonds during the pendency of the audit, regardless of its ultimate outcome. RATINGS Moody's Investors Service Inc. ("Moody's") and Fitch Ratings ("Fitch") have assigned "Aa2" and "AA" ratings, respectively, to the 2011 Series One Bonds. Such ratings reflect only the views of such organizations and any desired explanation of the significance of such ratings should be obtained from the rating agency furnishing the same, at the following addresses: Moody's, 7 World Trade Center, 250 Greenwich Street, New York, New York 10007, (212) 553-0300; Fitch, One State Street Plaza, New York, New York 10004, (212) 908-0500. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance such ratings will continue for any given period of time or that such ratings will not be revised downward or withdrawn withdrawn entirely by the rating agencies if, in the judgment of such rating agencies, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the 2011 Series One Bonds. SOURCES OF CERTAIN INFORMATION As "Obligated Persons" as of the date of this Official Statement, the City of Ketchikan and the City and Borough of Sitka have provided information in this Official Statement appearing in Appendix D. The Bond Bank makes no representation as to the accuracy of information in this Official Statement concerning the City of Ketchikan or the City and Borough of Sitka. CONTINUING DISCLOSURE UNDERTAKING Basic Undertaking to Provide Annual Financial Information and Notice ofMaterial Events. Continuing disclosure is provided for the benefit of beneficial owners. Pursuant to the Securities and Exchange Commission (the "SEC") Rule 15c2-12 (the "Rule"), the Bond Bank will agree to provide, or cause to be provided, to the Municipal Securities Rulemaking Board ("MSRB") annual financial information and operating data as described below. In addition, if any Governmental Unit has outstanding with the Bond Bank an amount of bonds equal to or greater than I0 percent of all Bonds outstanding under the 2005 General Bond Resolution, such Governmental Unit will be deemed an "Obligated Person" under the Rule and will be contractually required, at a minimum, to provide updated financial information of the type included in Appendix D hereof and annual financial statements prepared in accordance with generally accepted accounting principles applicable to the governmental entities, as such principles may be changed from time to time. Not later than 120 days after the end of each Bond Bank fiscal year, the Bond Bank will notify each Governmental Unit that has, or had, an amount of bonds equal to or greater than 10 percent of all Bonds Outstanding under the 2005 General Bond Resolution, of its continuing disclosure undertaking responsibility. A list of Governmental Units deemed Obligated Persons for the prior fiscal year will be included in the Bond Bank's annual financial information filing. The Bond Bank will also undertake to provide or cause to be provided to the MSRB a notice of the occurrence of any of the following events specified by the Rule with respect to the 2011 Series One Bonds within ten business days of the occurrence of the event: (a) principal and interest payment delinquencies; (b) unscheduled draws on debt service reserves reflecting financial difficulties; (c) unscheduled draws on credit enhancements reflecting financial difficulties; (d) substitution of credit or liquidity providers, or their failure to perform; (e) adverse tax opinions or events affecting the tax-exempt status of the 2011 Series One Bonds; (f) defeasances; (g) rating changes; (h) tender offers; (i) bankruptcy, insolvency, receivership or similar proceeding by the Bond Bank or "obligated person". The Bond Bank will also file with the MSRB a notice of any of the 24 following events with respect to the Bonds within ten business days of the occurrence of such event, if material: (a) non-payment related defaults; (b) modification to rights of holders of Bonds; (c) bond calls, other than mandatory, scheduled redemptions not otherwise contingent on the occurrence of an event; (d) release, substitution or sale of property securing repayment of the bonds; (e) other than in the normal course of business, the consummation of a merger, consolidation or acquisition involving an "obligated person," or the sale of all or substantially all of the assets of the Bond Bank or "obligated person," or the entry into a definitive agreement to undertake such an action, or a termination of a definitive agreement relating to any such actions, other than in accordance with its terms; (f) appointment of a successor or additional trustee or the change in name of the for the Bonds. The Bond Bank also will provide to the MSRB timely notice of its failure to provide required annual financial information on or before the date specified below. Type ofAnnual Financial Information Undertaken to be Provided by the Bond Bank. The annual financial information that the Bond Bank undertakes to provide will consist of (a) annual financial statements for the Bond Bank, prepared in accordance with generally accepted accounting principles applicable to governmental entities, as such principles may be changed from time to time; (b) a statement of authorized, issued and outstanding bonded debt; (c) Reserve Fund balance; and (d) Governmental Unit statistics in substantially the same form as Appendix C attached hereto. This information will be provided to the MSRB not later than 210 days after the end of each fiscal year of the Bond Bank (currently, the 12-month period ending June 30), as such fiscal year may be changed as required by State law, commencing with the Bond Bank's fiscal year ending June 30,201 I. Amendment of Undertaking. The Undertaking is subject to amendment after the primary offering of the 20 I I Series One Bonds without the consent of any Beneficial Owner of any 20 I 1 Series One Bond, or any broker, dealer, municipal securities dealer, participating underwriter, rating agency, or the MSRB, if (a) the amendment is made in connection with a change in circumstances that arises from a change in legal requirements, a change in law, or a change in the identity, nature or status of the Bond Bank; (b) the Undertaking, as amended, would have complied with the requirements of the Rule at the time of the primary offering of the 201 I Series One Bonds, after taking into account any amendments or interpretations of the Rule by the SEC and any changes in circumstances; (c) the Bond Bank obtains an opinion of nationally recognized bond counsel to the effect that the amendment will not adversely affect the Bond Bank's compliance with the Undertaking and Rule; and (d) the Bond Bank notifies and provides the MSRB with copies of the opinions and amendments. Such amendment may be adopted without the consent of any Beneficial Owner of any of the 20 I 1 Series One Bonds, notwithstanding any other provision of the Undertakings or the Bond Resolution. The first annual report containing amended operating data or financial information pursuant to an amendment of the Bond Bank continuing disclosure undertaking will explain, in narrative form, the reasons for the amendment and its effect on the type of operating data and financial information being provided. All notices, financial information and operating data required by this undertaking to be provided to the MSRB must be in electronic format as prescribed by the MSRB. All documents provided to the MSRB pursuant to this undertaking must be accompanied by identifYing information as prescribed by the MSRB. Termination. The obligations of the Bond Bank under its undertaking will terminate upon the legal defeasance, prior redemption or payment in full of all ofthe 20 I 1 Series One Bonds. Remedy for Failure to Comply with Undertaking. No failure by the Bond Bank and/or the Obligated Persons identified in Appendix 0 hereto to comply with any provisions of their respective undertakings will constitute a default in respect of the 20 I I Series One Bonds and the sole remedy under the respective undertakings in the event of any failure of the Bond Bank and/or the Obligated Persons identified in Appendix 0 25 hereto to comply with their respective undertaking will be the right to obtain specific performance of the undertaking. Prior Compliance with Continuing Disclosure Undertakings Under the Rule The Bond Bank is in compliance with all of its prior undertakings pursuant to the Rule. DEFINITIONS The following terms are used in this Official Statement with the following meanings: "Act" -The Alaska Municipal Bond Bank Act, codified as Chapter 85, Title 44, of the Alaska Statutes, as amended. "Bond Bank" -The Alaska Municipal Bond Bank, a public corporation and instrumentality of the State of Alaska within the Department of Revenue but with legal existence independent of and separate from the State. "Bonds" -Bonds issued by the Bond Bank under the 2005 General Bond Resolution pursuant to a Series Resolution. These include "Loan Obligations" and "Reserve Fund Obligations" as defined below. "Code" -Internal Revenue Code of 1986 and the regulations thereunder, as amended. "Credit Enhancement" -A letter of credit, a line of credit, a credit facility, a surety bond, bond insurance, or any other instrument or arrangement obtained in connection with the issuance of a Series of Bonds to further secure the payment of the Bonds of such Series or to satisfy the Reserve Fund Requirement. "Credit Enhancement Agency" -Any bank or other institution that provides Credit Enhancement. "Debt Service Fund" -A fund established by the 2005 General Bond Resolution to be maintained and held by the Trustee. The 2005 General Bond Resolution defines and provides that the "Interest Account," "Principal Account" and "Redemption Account" are maintained within the Debt Service Fund. "Fees and Charges" -All fees and charges authorized to be charged by the Bond Bank pursuant to Sections 44.85.080 (8), (15), and (16) of the Act and charged by the Bank pursuant to the terms and provisions of the Loan Agreements. "Governmental Unit" -A municipality or such other entity from which the Bond Bank is authorized by law to purchase its revenue bonds, general obligation bonds, notes, or other forms of indebtedness and which otherwise satisfies conditions found in the 2005 General Bond Resolution and in the Loan Agreement. "Loan Agreement" -An agreement, and any amendments thereto, entered into between the Bond Bank and a Governmental Unit setting forth the terms and conditions of a loan. "Loan Obligations" -The amount of Bonds and the Bonds themselves issued by the Bond Bank for the purchase of Municipal Bonds ofa Governmental Unit. "Municipal Bonds" -General obligation bonds, revenue bonds, notes or other evidence of debt issued by any Governmental Unit, as defined in the Act, which have been acquired by the Bond Bank as evidence of a loan to the Governmental Unit pursuant to the Act. "Municipal Bonds Payment" -The amounts paid or required to be paid, from time to time, for principal and interest by a Governmental Unit to the Bond Bank on the Governmental Unit's Municipal Bonds. 26 "Notes" -Any obligations referred to in the 2005 General Bond Resolution issued by the Bond Bank other than Bonds. "Operating Fund" -A fund established by the 2005 General Bond Resolution. This fund is not held by the Trustee and money therein is not pledged as security for Bonds. "Outstanding" When used with reference to Bonds, shall mean, as of any date, Bonds theretofore or then being delivered under the provisions of the 2005 General Bond Resolution, other than Bonds owned or held by or for the account of the Bond Bank except: (i) any Bonds cancelled by the Trustee at or prior to such date, (ii) any Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been delivered pursuant to the 2005 General Bond Resolution, and (iii) Bonds deemed to have been paid as provided in the 2005 General Bond Resolution. "Reserve Fund" -The reserve account established by the 2005 General Bond Resolution and held by the Trustee pursuant to the provisions ofthe 2005 General Bond Resolution. "Reserve Fund Obligations" -Bonds issued by the Bond Bank to obtain funds to deposited in the Reserve Fund. "Reserve Fund Requirement" -The amount required to be on deposit in the 2005 General Bond Resolution Reserve Fund is the least of the following: (i) 10% of the initial stated principal amount of each Series of Bonds then Outstanding; (ii) maximum annual principal and interest requirements on all Bonds then Outstanding; (iii) 125% of average annual principal and interest requirements on all Bonds then Outstanding; or (iv) such lesser amount as shall be required by law. The Reserve Fund Requirement may be satisfied entirely, or in part, by Credit Enhancement; provided, however, any Credit Enhancement satisfYing all or any part of the Reserve Fund Requirement after the initial issuance ofBonds or issued in substitution for any prior Credit Enhancement previously issued will not, by itself, cause a withdrawal or downward revision of the ratings maintained by any Rating Agency with respect to to the Bonds. "Required Debt Service Reserve" As of any date of calculation, the amount required to be on deposit in the Reserve Fund which amount shall at least be equal to the Reserve Fund Requirement. "Series Resolution" A resolution of the Bond Bank authorizing the issuance of a series of Bonds in accordance with the terms of the 2005 General Bond Resolution. "2005 General Bond Resolution" -The Bond Bank's 2005 General Obligation Bond Resolution adopted July 13, 2005. (The Bond Bank may adopt additional general obligation resolutions for the same or different purposes.) MISCELLANEOUS The summaries or descriptions of provisions in the Bond Resolution and all references to other materials not purporting to be quoted in full are only brief outlines of certain provisions thereof and do not constitute complete statements of such documents or provisions, and reference is hereby made to the complete documents and materials, copies of which will be furnished by the Bond Bank on request. The 2005 General Bond Resolution has been included herein as Appendix F. Any statements made in this Official Statement indicated to involve matters of opinion or estimates are represented as opinions or estimates in good faith. No assurance can be given, however, that the facts will materialize as so opined or estimated. 27 OFFICIAL STATEMENT The Bond Bank has authorized the execution and distribution of this Official Statement. ALASKA~UNI~,P~10.BANK ~ ~! lsi fjfte~i. it 1e~ Executive Director 28 APPENDIX A Form of Legal Opinions [THIS PAGE INTENTIONALLY LEFf BLANK] Wohlforth I Johnson I Brecht Cartledge IBrooking A PROFESSIONAL CORPORATION Julius J. Brecht Cheryl Rawls Brooking Cynthia L. Cartledge Michael Gatti Clyde W. Hutchins Jr. Robert M. Johnson Leila R. Kimbrell Eric E. Wohlforth Board of Directors Alaska Municipal Bond Bank P.O. Box 110405 Juneau, Alaska 99811 Ladies and Gentlemen: ATTORNEYS AT LAW 900 WEST 5TH AVENUE, SUITE 600 ANCHORAGE, ALASKA 99501·2048 March ,2011 Telephone 907.276.6401 Facsimile 907.276.5093 Website www.akatty.com We have acted as Bond Counsel in connection with the issuance by the Alaska Municipal Bond Bank (the "Bank") of $8,635,000 General Obligation Bonds, 2011 Series One (the "Bonds"). We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion, including the opinions of bond counsel to the Governmental Units concerning the validity and enforceability of the Municipal Bonds, and the Loan Agreements securing the Loans financed with the proceeds of the Bonds (as such terms are defined in the Resolutions referred to below). The Bonds are issued under the Alaska Municipal Bond Bank Act, Chapter 85 of Title 44 of the Alaska Statutes, as amended (the "Act"), the General Obligation Bond Resolution of the Bank entitled "A Resolution Creating And Establishing An Issue Of Bonds Of The Alaska Municipal Bond Bank; Providing For The Issuance From Time To Time Of Said Bonds; Providing For The Payment Of Principal Of And Interest On Said Bonds, And Providing For The Rights Of The Holders Thereof," adopted July 13, 2005, as amended August 19, 2009 (the "General Bond Resolution") and Series Resolution No. 2011-01, adopted February 1, 2011 (the "Series Resolution," and together with the General Bond Resolution, the "Resolutions"). A-I Alaska Municipal Bond Bank March __,2011 Page 2 The Bonds are in registered form, are dated the date of delivery, mature on 1st day of March in the years in the respective principal amounts, and bear interest at the rates, as follows: Due Principal Interest March 1 Amount Rate 2012 $295,000 3.000% 2013 305,000 3.000 2014 315,000 3.000 2015 325,000 3.000 2016 745,000 3.000 2017 340,000 3.000 2018 355,000 3.500 2019 365,000 4.000 2020 380,000 4.000 2021 395,000 4.000 2026 2,125,000 4.750 2031 2,690,000 5.125 The Bonds bear interest from the date of delivery, payable on September 1,2011, and semi-annually thereafter on March 1 and September 1 in each year. The Bonds are subject to redemption prior to maturity as provided in the form of Bond. In connection with the issuance of the Bonds, we have reviewed the Resolutions and the federal tax certificate of the Bank dated the date hereof (the "Tax Certificate"), a Certificate of No-Litigation of the Attorney General (counsel to the Bank), certificates of the Bank, Bank, the Trustee and others, and such other documents, opinions and matters to the extent we deemed necessary to render the opinions set forth herein. The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. Such opinions may be affected by actions taken or omitted or events occurring after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur. We disclaim any obligation to update this letter. We have assumed the genuineness of all documents and signatures presented to us (whether as originals or as copies) by any parties other than the Bank and the due and legal execution and delivery thereof by any parties other than the Bank. We have not undertaken to verify independently, and have assumed, the accuracy of the factual matters represented, warranted or certified in the documents referred to in the preceding paragraph. Furthermore, we have assumed compliance with the covenants and agreements contained in the Resolutions and the Tax Certificate, including (without limitation) covenants and agreements compliance with which is necessary to assure that A-2 Alaska Municipal Bond Bank March ,2011 Page 3 future actions, omissions or events will not cause interest on the Bonds to be included in gross income for federal income tax purposes. We call attention to the fact that the rights and obligations under the Bonds, the Loan Agreements, and the Tax Certificate may be subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors' rights generally and to the application of equitable principles. We express no opinion as to the Official Statement or other offering material relating to the Bonds thereto, or relating to the undertaking by the Bank to provide ongoing disclosure pursuant to Securities and Exchange Commission Rule 15c2-12. As to questions of fact material to our opinion, we have relied upon various statements and representations of the Bank contained in the Resolutions and in the certified proceedings and other certifications of public officials furnished to us without undertaking to verify the same by independent investigation. Subject to the foregoing, we are of the opinion that, under existing law: 1. The Bank has the right and power to execute and deliver the Resolutions. 2. The Resolutions have been duly and lawfully executed and delivered by the Bank, are in full force and effect and are valid and binding upon the Bank and enforceable in accordance with their terms (subject, as to enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium, orotherlaws affecting creditors' rights generally from time to time in effect). 3. The Resolutions create the valid pledge and assignment which they purport to create of the Municipal Bonds, subject to the application thereof to the purposes and on the conditions permitted by the Resolutions. 4. The Bonds are valid and binding general obligations of the Bank, enforceable in accordance with their terms and the terms of the Resolutions. 5. The Bonds have been duly and validly authorized and issued in accordance with the constitution and statutes of the State of Alaska, including the Act as amended to the date of this opinion, and in accordance with the Resolutions. 6. The Bonds are not a debt or liability, nor do they constitute a pledge of the faith and credit, of the State of Alaska. 7. Under existing laws, regulations, rulings and judicial decisions, interest on the Bonds is excludable from the gross income of the owners thereof for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. However, interest on the Bonds is A-3 Alaska Municipal Bond Bank March ,2011 Page 4 taken into account in determining adjusted current earnings for purposes of computing the federal alternative minimum tax imposed on certain corporations. The opinion set forth in the first sentence of this paragraph is subject to the condition that the Bank comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The Bank has covenanted to comply with all applicable requirements. Failure to comply with certain of such requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. 8. Under existing laws, interest on the Bonds is free from taxation by the State of Alaska except for transfer, estate and inheritance taxes. Except as expressly stated above, we express no opinion regarding any other federal or state income tax consequences of acquiring, carrying, owning or disposing of the Bonds. Owners of the Bonds should consult their tax advisor regarding the applicability of any collateral tax consequences of owning the Bonds, which may include original issue discount, original issue premium, purchase at a market discount or at a premium, taxation upon sale, redemption or other disposition, and various withholding requirements. This opinion is given as of the date hereof, and we assume no obligation to update, revise or supplement this opinion or reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. Sincerely, WOHLFORTH, JOHNSON, BRECHT, CARTLEDGE &BROOKING Cynthia L. Cartledge A-4 APPENDIXB State Payments to Governmental Units [THIS PAGE INTENTIONALLY LEFT BLANK] Appendix B State Payments to Governmental Units The State of Alaska (the "State") disburses to Alaskan cities and boroughs (the "Governmental Units") funds that generally are available for uses other than paying municipal bond debt service. In the event of default by a Governmental Unit with respect to a Loan Agreement, the Bond Bank can cause such funds, held in custody by the State prior to disbursement, to be paid over to the Bond Bank. However, the State may at any time reduce or terminate the disbursements or programs under which they are made. Four departments of the State disburse money to Governmental Units, as follows: (I) Department of Education and Early Development. The Department of Education and Early Development (DEED) disburses State aid for educational purposes primarily through two programs. The first program provides a system under which the State, subject to annual appropriation by the State Legislature, will reimburse municipalities that operate school districts for certain costs of school construction. State reimbursement applies to debt service on locally issued general obligation school bonds. Timing of reimbursements is determined by municipalities' debt service payments, and is made throughout the year. This program provides generally, subject to certain statutory conditions, that the State will reimburse municipalities for between 60 percent and 100 percent of debt service incurred for such bonds, depending on when such bonds were issued. The State has in the past, and may in the future, appropriate less than the full amount to which the municipalities are entitled. When appropriations are less than 100 percent of the entitlement, funds have been allocated pro rata among the eligible school districts. Under the second program, the State aids local school districts in the payment of operating expenses under the State "K-12 Support" funding which provides education-related aid for programs such as the Public School Foundation, boarding home grants, youth and detention funding, handicapped facilities, pupil transportation, and nutrition programs. The program provides for monthly distributions to the school districts. (2) Department of Revenue. The Department of Revenue disburses local shares of various taxes collected by the State within the jurisdiction of certain Governmental Units including corporate income, amusement, aviation fuel, electric, telephone, liquor and fisheries taxes. Payments are distributed semi-annually in January and July. (3) Department of Commerce, Community and Economic Development. The Department of Commerce, Community and Economic Development (DCCED) administers a payment in lieu of taxes program under which the federal government pays a fee for use of land. The payments received from the federal government are passed through the State to certain Governmental Units. Distributions occur annually in July. The State also disburses money to certain Governmental Units through the DCCED's Capital Matching Grants program to provide assistance in financing capital projects. Distributions are made throughout the year as approved projects are constructed. (4) Department of Corrections. The Department of Corrections transfers monthly amounts to pay operational expenses of local communities that house prisoners in municipal-owned facilities. Sources: State ofAlaska, Department ofAdministration, Division ofFinance; State ofAlaska, Office of Management and Budget; and State ofAlaska, Department ofRevenue, Tax Division B-1 SharcdTaxes& Fees FY2009 DOT Reimbursement Pro~rum FY 2011 School Debl Reimbursement FY2011 Matching Educution Support Grunts Through Communit)· Jails Rel'enue Sharin~ Total Intercept Maximum Annual Debt FY2011 FY2011 FY 2011 FY 21Hl CapubiJity Senice (I) CO~'enlge Ratio3.29 13.18 12,76 4.31 7,M 6.32 2.68 $512,060 13.304.889 S567.708 514.049.476 514.436506 8.898.766 15,503.274 9.16 264.586 1522.978 8.008.480 6,81 250.310 34,547,979 35270,576 5.12 279.968 5,395,015 6.127.812 34.82 590.075 0 2.059.902 2.783290 27.35 1.136.501 0 2,570.118 -1.795.158 4,90 41.194 I27.00{) 233.{)07 3.879.001 12.J3.UI6 11,80 773,729 0 499.001 5.324.664 15Jl76.280 22.156,031 16.56 782.853 0 0 0 13,665,685 '168.795 15,144,179 3.47 0 0 0 0 1.546.327 () 1.843.987 8.35 8251,161 () 837.556 3.402.276 6,696.362 502.348 19,969.358 4,96 560.421 222.868 823,281 4.116.492 8.544298 345.680 321.582 14,93·1.622 7.02 288JJ22 () 0 0 9,732,931 0 459,348 10.480,301 4.04 Kodiak* Kin Co\'e Ketchik1ll1* Dillinnham Peten;bu Nome Belhel City & Borough ofWrnngell (2) Cities ily & Borough of Jun~lU Municipality ofSkagway kutiuIIsEuslBorough Northwest Art:tic Borough Kodiak Island Borough (2) Kelchikun Gateway Borough Kenai Peninsula Borough Umllaska City & Borough ofSilka Cordova Valdez Sewllrd--Soldotna* Wasilla* • Communities that are located in a borough which operates the public schools in the communit)' and receh'es that relaled Education Support Funding. (1) Includes maximum annual debt seryice on ~eneral obligation and rennue·backed loans issued throu~h AMBB. (2) Borrower 10 this issue. Noll,': The only loan made by the Authority to un entily \\ilhout iIltL-rccptable slate fL'\'I...nues is to the Inter-Islund Ferry AUtJlOrity. That loan is, llOwe\'L'f, gum-anto...d by colllltcr<i1 pro\·id...'1.l by the Ketchikan Gateway Borough APPENDIXC Government Unit Statistics Regarding Participation in the Bond Bank [THIS PAGE INTENTIONALLY LEFr BLANK] APPENDIXC GOVERNMENTAL UNIT STATISTICS REGARDING PARTICIPATION IN THE BOND BANK 2005 GENERAL BOND RESOLUTION OUTSTANDING LOAN PRINCIPAL TO GOVERNMENTAL UNIT BORROWERS OF THE ALASKA MUNICIPAL BOND BANK AS OF FEBRUARY 1,2011 (Includes 2011 Series One Bonds) Outstanding Percent of Borrower Par Outstanding City and Borough of Sitka $61,050,000 13.49% City of Ketchikan 52,615,000 11.62% City of Seward 41,185,000 9.10% City of Unalaska 39,350,000 8.69% City and Borough of Juneau 34,875,000 7.71% Ketchikan Gateway Borough 32,495,000 7.18% Aleutians East Borough 25,725,000 5.68% Kenai Peninsula Borough 24,540,000 5.42% Kodiak Island Borough 19,660,000 4.34% South Peninsula Hosp. (KPB) 16,135,000 3.56% City of Cordova 15,920,000 3.52% City of Kodiak 14,515,000 3.21% Northwest Arctic Borough 14,485,000 3.20% City of Dillingham 14,140,000 3.12% City of Nome 5,325,000 1.18% City of Petersburg 5,005,000 1.11% Municipality of Skagway 4,680,000 1.03% City of Bethel 3,345,000 0.74% City of Wasilla 2,805,000 0.62% City of Soldotna 2,500,000 0.55% City of Kenai 2,000,000 0.44% City of King Cove 1,245,000 0.28% Inter-Island Ferry Authority 1,165,000 0.26% City and Borough of Wrangell 220,000 0.05% Reserve Obligations 17,625,000 3.89% Total Outstanding Par $452,605,000 100.00% C-I DEBT SERVICE OF OUTSTANDING GENERAL OBLIGATION LOANS TO GOVERNMENTAL UNIT BORROWERS OF THE ALASKA MUNICIPAL BOND BANK UNDER THE 2005 GENERAL BOND RESOLUTION FISCAL YEARS 2011-2020 (Includes 2011 Series One Bonds) (Table reflects Participant Loan Payments through fiscal ycar 2020. Debt service on bonds issued under the 2005 Resolution continue to 2039.) Borrower 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 City of K('lchikall Ulilily· 2005 Loan 51,309,943 51,318,380 51,317,580 51,315,180 51.330,180 5J.331,680 5J.332,480 City of Nome -2005 Loan 300,738 299,738 298,138 301,338 302,338 302,838 299,838 5301,433 5302,564 5303,114 Kenai Peninsula Borough C(~nL Em. Svrs. Disl. -2{X)6 Loan 192,078 191,378 190,378 190,128 190,728 191,128 191,328 191,171 190,809 190,071 City of Seward -2(X)S Port Loan 119,573 117,135 114,535 116,935 118,435 114,685 116,685 118,405 ]14,899 116,329 City of Seward -2(X)S Refunding 284,575 280,950 281,550 286,750 288,750 City of Sewiud -2006 Port Loan 344,880 344,680 343,880 344,380 346,380 342,980 344,380 345,099 345,405 344,993 City of Ketchikan Port-2006 Loan 2,561,825 2,559,2(Xl 2,560,113 2,559,450 2,556,156 2,555,069 2,556,963 2,553,063 2,548,1163 2,550,()38 Inter-Island Ferry AUlhorily -2(XJ7 Refunding 155,300 156,200 156,900 161,41XJ 160,6-14 154,750 157,938 156,347 159,666 158,100 City of Nome . 2007 Refunding 70,425 178,025 178,325 177,488 181,397 179,894 177,419 180,247 182,859 180,619 Northwest Antic Borough .. 2007 Refunding 256,969 256,769 256,569 256,331 256,094 255,856 1,259,844 1,249,172 1,248,350 1,248,825 City of Petersburg -2007 Refunding 57,769 145,769 141,969 147,181 147,131 141,944 145,919 140,159 144,391 143,681 City of Se.....ard -2007 Refunding 93,075 97,775 2.19,475 241,838 243,859 235,606 241,1J44 241,709 237,394 238,363 City and Borough of Sitka· 2007 Refunding 849,750 851,250 846,850 846,575 845,341 847,319 848,781 851,672 849,219 0 Cily of Wasilla -2007 Refunding 426,544 419,844 422,744 417,744 422,263 420,819 421,681 423,241 424,588 0 Kenai P{)ninsula Borough -2007 Loan 316,325 316,725 311,825 314,538 316,725 313,225 312,625 0 0 0 City of Petersburg. 2007 Loan 92,156 90,356 88,556 91,281 88,925 91,431 88,544 90,778 92,894 90,100 Aleutians East Borough· 2007 Refunding 991,538 1,199,881 1,203,538 1,2116,238 1.203,438 945,438 947,338 1,772,238 1,818,363 1,835,863 South Kenai Peninsula Hospilal-2007 Refunding 147,644 147,081 146,500 145,900 145,300 144,700 144,100 143,500 142,825 146,950 City and Borough of JunNu -2007 JII Dock Loan 752,211 751,394 750,131 753,159 748,813 747,175 749,575 746,875 749,125 745,500 City of Bethel-2CX)7 III Court Facility Loan 294,394 293,975 293,344 292,413 295,225 291,838 293,038 294,125 295,125 290,750 Kenai Peninsula Borough South Hospital Service Area 1,128,419 1,131,425 1,128,475 1,129,569 1.129,600 1,128,569 1,126,475 1,127,363 1,124,313 1.122938 Kodiak M&P Loan 124,921 127,971 125,871 128,621 126,221 128,671 125,971 128,121 125,121 127,521 Kodiak Lifl Loan 244,080 240,780 242,330 243,580 244,530 240,330 240,980 241,330 241,380 241,380 242,030 Kodiak Island Borough 2008 One Loan 623,460 624,710 620,210 625,210 624,210 622,460 624,960 620,160 624,960 623,960 City of Dillingham 2008 One Loan 1,·177,840 1,176,840 1,174,590 1,176,090 J.176,1J90 1,179,590 1,176,340 1,178,540 1,174,540 1,174,540 Kodiak Police Station 2008 One Loan 528,490 525,990 528,240 529,990 531,240 531,990 532,240 529,040 505,640 507,840 City ()fs(~ward Long Term Can:~ 2008 One Loan 1,972,663 1,968,663 1,973,163 1,970,663 1,971,413 1,970,163 1,971,913 1,970,513 1,972,713 1.973,313 City ilnd Borough of Sitka 2008 Two Loan 566,945 562,245 561,945 563,445 562,045 565,245 562,845 564,725 564,625 5M,005 Munidpillity ofSkar,way 2008 Two LOiln 394,735 394,535 393,735 394,235 391,2.15 393,035 394,435 395,210 391,110 395,330 This table continues on the following page. Borrower 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 City of5cward 2008 Two Loan 392,036 396,036 394,436 393,686 393,886 393,886 393,686 393,151 394,751 393,151 City of Unalaska 2009 One Loan 1,306,650 1,922,275 1,915,100 1,914,000 1,916,800 1,909,900 1,912,900 1,909,025 1,908,275 1,905,525 Cily of Kodiak 2009 One Boal Uft Loan 67,438 71,913 71,213 70,413 69,613 68,713 67,713 71,588 70,338 69,088 City of Unalaska 2009 Two Loan 559,625 559,225 563,225 561,425 559,025 558,775 558,8fX) 563,588 560,413 0 Kodiak Island Borough 2009 Two Loan 1,503,200 1,501,800 1,503,400 1,502,BOO 0 City of Cordova 2009 Two Loan 1,369,281 1,372,281 1,369,281 1,370,481 1,370,681 1,371,656 1,367,969 1,369,094 1,371,244 1,369,906 City of Nome 2009 Two Loan 51,863 51,063 55,263 54,263 53,263 52,138 51,075 55,044 53,694 52,269 Cily and Borough of Juneau· 2009 Three Loan 1,501,450 1,498,450 1,449,750 1,479,850 1,493,075 1,500,650 1,485,600 1,495,8(XJ 1,444,800 1,468,800 Kelchikan Gal£'way Borough.2CX)9 Four Loan 1,827,239 1,776,519 1,776,419 1,775,819 1,774,769 1,777,769 1,775,519 1,768,:m 1,754,104 1,743,479 Kenai Peninsula Borough·2009 Four Loan 1,071,928 1,051,450 1,052,950 L055,150 l,055,6(XJ 0 City of Kcnai·20100ne Loan 175,%3 177,348 175,848 178,598 176,198 178,798 175,398 176,998 178,398 172,71).j K{~tchikan Galeway Borough.2010 On£' Loan 725,951 720,950 725,350 729,OIX) 722,050 729,800 725,800 731,000 730,()()0 728,IXX) North\"'est ArcLlc Borough-2010 On(' Loan 280,1).j3 282,215 279,815 281,215 282,465 283,565 283,165 282,565 281,765 280,765 Cily of Petl'rsburg-2010 One Loan 136,105 238,994 236,994 239,419 216,269 238,044 239,094 234,494 234,794 234,894 City of Unalaska-2010 One Loan 427,617 425,849 427,249 426,699 425,999 425,149 427,149 428,749 424,949 425,949 Cily of Ketchikan Utilit)' -2010 Refunding 897,103 891,350 893,850 0 Northwesl Arctic Borough -2010 Refunding 216,418 2,063,8IXl 966,250 970,750 969,350 967,200 0 Cily of Unalaska· 2010 Rdunding 259,958 0 City and Borough of Juneau -2010 Two Loa"-,> 407,242 1,118,319 1,118,319 1,147,719 1,143,819 1,141,794 1,139,319 1,139,029 1,129,772 1,117,534 1,107,744 City of Cordova 2010 Two Loan 9,148 43,480 47,830 46,955 45,905 49,780 48,430 46,859 45,138 48,188 City of King Cove 2010 Two Loan 15,808 43,612 43,212 42,712 42,112 41,512 45,743 44,762 43,686 42,540 Aleulians Easl Borough -2010 Loan 119,074 393,078 399,478 399,778 399,003 397,078 398,878 395,378 3%,578 397,966 Cily of Kine Cove 2010 Three UMn 18,088 58,142 62,592 61,842 60,942 59,892 58,692 62,392 60,992 59,680 Cil)' of Unalaska 2010 Three Loan 130,687 434,317 440,317 435,192 438,892 436,267 437,267 437,867 438,067 433,6()5 Kenai Peninsula Borough 2010 Four Loan 1,359,081 1,494,765 1,487,777 1,477,241 1,468,022 1,459,887 1,4-42,725 1,431,305 1,411,775 City of Ketchikan 2010 Four Loan 581,073 637,981 632,888 631,272 628,044 62.1,153 616,549 608,190 603,5lX) Ketchikan Gateway Borough 2010 Four Loan 285,131 342,594 339,087 334,573 333,976 332,198 324,287 320,209 315,213 Cil)' and Borough of Sitka 2010 Four Loan 3,813,103 4,066,332 4,069,032 4,082,982 4,064,732 4,064,932 4,075,151 4,062,570 4,0·17,570 Cit)' of Soldotna 2010 Four Loan 199,351 220,916 219,162 216,905 219,070 215,646 216,594 211,905 211,752 City and Borough of Wrangell 2011 One Loan 27,475 26,875 26,275 25,675 25,075 24,475 28,875 28,IXlO 27,OIX) Kodiilk Island Borou h 2011 One Loan 621,650 623,4(1) 624,850 626,01)0 621,850 622,550 622,950 621,-100 622,8011 Total Loan Obligation OS 529,849,196 >10,748,993 >10,301,862 539,460,585 537,967,1J.l4 536,309,087 536,320,423 535,477,721 535,364,035 533,488,653 [THIS PAGE INTENTIONALLY LEFT BLANK] APPENDIXD Summaries of Borrowers Representing 10% or More of Outstanding Principal of Bonds Issued Under the 2005 General Bond Resolution [THIS PAGE INTENTIONALLy LEFf BLANK] CITY OF KETCHIKAN KETCHIKAN PUBLIC UTILITIES ENTERPRISE FUND FINANCIAL SUMMARY 2003 2004 2005 2006 2007 2008 2009 Audited Audited Audited Audited Audited Restated Audited ASSETS Utility Plan In-Service $67,621,026 $66,742,145 $65,655,049 $63,472,399 $65,675,153 $65,397,934 $69,718,266 Construction Work in Progress 30,078,405 1,838,196 2,147,195 3,720,138 3,046,020 8,748,881 8,017,706 Cash 14,766,191 14,973,617 15,601,381 18,036,431 17,271,704 15,351,432 13,958,674 Restricted Assets 8,433,752 3,653,916 3,731,971 3,592,407 3,881,216 5,128,164 4,062,167 Other Assets 7,552,144 6,496,443 6,770,815 7,537,978 9,709,775 11,890,125 8,686,219 Total Assets 128,451,518 93,704,317 93,906,411 96,359,353 99,583,868 106,516,536 104,443,032 LIABILITIES AND NET ASSETS Revenue Bonds Payable 26,060,000 23,960,000 22,475,000 20,580,000 20,214,266 20,574,802 19,902,223 Other Liabilities 7,690,314 2,990,668 3,444,420 4,243,388 5,320,524 6,782,025 4,045,215 Totat Liabilities 33,750,314 26,950,668 25,919,420 24,823,388 25,534,790 27,356,827 23,947,438 NET ASSETS 94,701,204 66,753,649 67,986,991 71,535,965 74,049,078 79,159,709 80,495,594 Operating Revenues 27,744,410 27,180,231 27,691,757 31,085,610 30,786,551 33,275,983 33,310,537 Operation and Maintenance 14,604,369 14,874,171 13,974,313 15,188,374 17,777,974 19,912,114 20,861,336 Administrative and General 4,452,846 5,139,468 5,106,907 5,635,363 5,076,384 5,634,660 6,034,476 Depreciation 5,971,682 6,113,112 6,248,245 6,861,088 6,624,656 5,728,819 6,086,514 Payment in Lieu of Taxes 650,000 650,000 Operating Income (Loss) 2,065,513 403,480 2,362,292 3,400,785 1,307,537 328,211 Non-Operating Revenue (Expense) (1,183,143) (1,139,856) (736,471) (108,887) 197,069 75,885 (402,557) Net Income (Loss) Before Contribution 882,370 (736,376) 1,625,821 3,291,898 1,504,606 2,076,275 (74,346) Contributions 16,761,341 1,099,417 257,521 907,076 1,658,507 3,601,635 2,085,231 Special Item 82,721 Transfer of Net Assets -Swan Lake -Lake Tyee Intertie Project (28,310,596) Transfer -Payment In Lieu of Taxes (650,000) (650,000) (650,000) (650,000) (675,000) Change in Net Assets 17,643,711 (27,947,555) 1,233,342 3,548,974 2,513,113 5,110,631 1,335,885 Population of Service Area .-13,685 13,093 13,125 13,174 13,166 12,993 12,984 Population of City 8,002 7,691 7,685 7,662 7,732 7,508 7,503 # of Electric Customers 7,178 7,161 7,202 7,251 7,305 7,346 7,365 # of Telephone Access Lines 10,653 10,131 9,840 9,554 9,039 8,122 7,467 # of Water Customers 2,851 2,905 2,928 3,035 3,230 3,223 3,217 Revenue Bond Coverage 3.02 2.22 3.33 3.92 3.21 2.93 2.30 • Water is only provided within the City .. Change in accounting standards payment in lieu of tax must be reported as a transfer D-l CITY OF KETCHIKAN PORT FINANCIAL SUMMARY 2003 2004 2005 2006 2007 2008 2009 Audited Audited Audited Audited Audited Audited Audited ASSETS Cash $2,895,450 $5,121,067 $7,066,674 $4,529,687 $8,471,112 $4,939,650 $4,827,125 Port Facilities (net) 10,282,618 10,072,444 9,762,409 10,405,568 41,226,714 46,312,527 44,947,620 Construction Work in Progress 2,276,353 2,686,197 1,632,135 26,082,665 3,493,927 832,620 963,018 Restricted Assets 19,872,348 4,743,690 4,215,907 4,819,708 Other Assets 129,455 99,752 47,113 515,697 560,772 2,103,049 1,730,443 Total Assets 15,583,876 17,979,460 18,508,331 61,405,965 58,496,215 58,403,753 57,287,914 LIABILITIES AND NET ASSETS General Obligation Bonds Payable 2,245,000 2,065,000 1,880,000 1,685,000 1,480,000 1,265,000 1,035,000 Revenue Bonds Payable 38,500,000 37,875,000 37,220,000 36,540,000 Other Liabilities 3,261,400 2,541,005 3,759,032 7,105,081 5,130,176 4,191,404 3,147,957 Total Liabilities 5,506,400 4,606,005 5,639,032 47,290,081 44,485,176 42,676,404 40,722,957 NET ASSETS ASSETS 10,077,476 13,373,455 12,869,299 14,115,884 14,011,039 15,727,349 16,564,957 Operating Revenues 1,774,457 5,000,010 7,096,948 6,427,207 7,895,063 8,839,267 8,922,228 Operation and Maintenance 828,052 792,954 1,945,688 2,299,099 1,506,749 3,653,251 5,522,050 Depreciation 610,454 632,143 618,708 657,485 985,775 1,390,850 1,460,265 Payment in Lieu of TaxesfTaxes 102,100 102,100 102,100 102,100 102,100 282,770 290,000 Operating Income (Loss) 233,851 3,472,813 4,430,452 3,368,523 5,300,439 3,512,396 1,649,913 Non-Operating Revenue (Expense) (22,824) (183,706) (68,390) (310,285) (1,697,827) (1,933,922) (1,738,365) Net Income (Loss) Before Contribution 211,027 3,289,107 4,362,062 3,058,238 3,602,612 1,578,474 (88,452) Contributions 41,004 6,872 12,251 42,006 1,864,661 740,672 926,060 Extraordinary Item (2,432,884) Special Item 14,789 Transfers (2,445,585) (1,853,659) (5,572,069) (617,625) Change in Net Assets 252,031 3,295,979 (504,156) 1,246,585 (104,796) 1,716,310 837,608 1.0 x Annual Debt Service/Reserves AccounURepair and Replacement Fund/SPH Lease Payments N/A N/A N/A N/A N/A 1.28 1.12 • Unaudited # of Ships 37 37 37 36 36 37 36 # of Calls/Stops 538 535 562 503 504 508 497 # of Water Passengers 770,663 848,969 921,429 838,880 899,638 941,910 963,220 • Reflects statistical information provided by the Ketchikan Visitors Bureau D-2 City and Borough of Sitka Electric Enterprise Fund Financial Summary 2004 2005 2006 2007 2008 2009 2010 Audited Audited Audited Audited Audited Audited Unaudited Assets Cash 8,143,639 9,387,420 7,413,414 8,458,918 9,393,512 8,993,721 8,868,159 Restricted Assets 6,388,355 6,412,431 6,893,530 6,964,401 7,020,244 7,376,785 7,149,277 Other Assets 1,984,033 1,821,898 2,188,653 2,189,489 3,185,865 3,602,067 4,256,023 Construction in Progress 1,220,488 1,580,484 1,504,571 1,524,810 1,130,584 2,883,684 5,555,467 Utility Plant in Service 71,247,965 69,529,520 69,974,445 69,898,054 67,869,782 66,094,407 64,914,833 TotaI Assets 88,984,480 88,731,753 87,974,613 89,035,672 88,599,987 88,950,664 90,743,759 Liabilities and Net Assets Liabilities Other Liabilities 320,698 492,294 471,531 663,351 654,181 419,304 636,920 Revenue Bonds Payable 39,600,000 38,050,000 36,390,000 34,570,000 32,550,000 30,395,000 28,090,000 Deferred loss on bonds (1,650,996) (1,511,558) (1,372,120) (1,232,682) (1,093,244) (954,781) (815,343) Revenue Note Payable 10,386,520 10,287,213 9,977,213 9,760,076 9,534,167 9,299,130 9,054,598 Total Liabilities 48,656,222 47,317,949 45,466,624 43,760,745 41,645,104 39,158,653 36,966,175 Net Assets 40,328,258 41,413,804 42,507,989 45,274,927 46,954,883 49,792,011 53,777,584 Operating Revenues 9,538,911 9,976,533 9,999,043 10,716,798 10,939,726 11,846,117 10,852,914 Operating Expenses Administrative and General 1,309,195 1,204,058 1,334,555 1,392,512 1,799,393 1,955,508 1,699,737 Operation and Maintenance 2,946,610 3,582,937 3,282,047 3,752,626 4,144,733 4,465,023 4,366,115 Depreciation 1,815,328 1,877,245 1,920,919 2,006,972 2,024,708 1,998,438 1,994,177 Operating Income 3,467,778 3,312,293 3,461,522 3,564,688 2,970,892 3,427,148 2,792,885 Nonoperating revenue (expense) Investment Income 248,638 751,273 450,992 791,965 1,020,133 642,422 523,298 Interest Expense (3,045,411) (2,976,520) (2,881,055) (2,741,335) (2,621,198) (2,469,192) (2,369,426) Other 62,726 50,717 315,931 351,823 208,962 Net Income before contributions and transfers 671,005 1,087,046 1,094,185 1,666,035 1,685,758 1,952,201 1,155,719 Capital contributions 1,300,914 603,582 2,853,752 Extraordinary Item: Net Pension Obligation Relief 281,345 Transfer In (Out) net (186,823) (1,500) (5,802) (23,898) Change In Net Assets 484,182 1,085,546 1,094,185 2,966,949 1,679,956 2,837,128 3,985,573 Population of City and Borough 8,805 8,947 8,833 8,644 8,615 8,627 * # of electric customers 4,975 5,012 5,061 5,113 5,197 5,257 5,278 KwH Sold 94,634,990 95,844,639 98,405,781 106,491,085 109,997,183 114,866,192 108,739,970 Revenue Bond Debt Service 3,949,208 3,987,436 4,111,182 4,024,958 4,113,594 4,106,690 4,108,407 Revenue Bond Coverage (> 1.25) 1.40 1.49 1.43 1.59 1.54 1.56 1.34 * Data not available D-3 [THIS PAGE INTENTIONALLy LEFf BLANK] APPENDIXE Financial Statements of the Alaska Municipal Bond Bank for the Year Ended June 30, 2010 [THIS PAGE INTENTIONALLY LEFT BLANK] ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Management's Discussion and Analysis and Financial Statements For the Year Ended June 30, 2010 Together With Independent Auditors' Report ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Table of Contents Management's Discussion and Analysis Financial Statements Independent Auditors' Report Statement of Net Assets and Governmental Funds Balance Sheets Statement of Activities and Governmental Funds Statements of Revenues, Expenses and Changes in Fund BalancelNet Assets Notes to Financial Statements Supplemental Schedule of Statutory Reserve Accounts Assets, Liabilities, and Account Reserves 1-6 7-8 9 10 11-26 27-30 ALASKA MUNICIPAL BOND BANK AUTHORITY Management's Discussion and Analysis For the Year Ended June 30, 2010 This Management's Discussion and Analysis (MD&A) is required by GASB 34, a rule established by the Governmental Accounting Standards Board. This section is intended to make the financial statements more understandable to the average reader who is not familiar with traditional accounting terminology. This financial report has two integral parts: this MD&A and the financial statements with the accompanying notes that follow. Together, they present the Alaska Municipal Bond Bank Authority's (Bond Bank) financial performance during the fiscal year ended June 30, 2010. Summarized prior fiscal year information is shown within this MD&A, as needed, for comparative purposes. Required financial statements GASB 34 requires two types of financial statements: the Statement of Net Assets and Governmental Fund Balance Sheets and the Statement of Activities and Governmental Fund Revenues, Expenditures and Changes in Fund Balance. These statements report financial information about the Bond Bank's activities using generally accepted accounting principles. Financial Highlights During fiscal year 2010, the Bond Bank approved 12 municipal loan applications for projects in 10 communities, resulting in $85.1 million in bonds being issued and funding $82.7 million worth of loan activity. Bond Bank Bond activity in FY2010 resulted in approximate savings of $9.6 million to the borrowing communities. The activity level and community benefit is comparable to FY2009 when the Bond Bank issued $76.7 million to fund 9 community projects and provided savings of $6.8 million to the borrowing communities. The financial position of the Bond Bank remains strong. All reserves are fully funded and invested. Fiscal year 2010 investment earnings funded fiscal year 2010 operations and will provide for $32,628 excess earnings that is appropriated to the Bond Bank. The Bond Bank holds unrestricted reserves adequate to make up shortfalls in years when investment earnings are not sufficient to fund operations. Statement of Net Assets The Statement of Net Assets, reports assets, liabilities and net assets of the Bond Bank. Assets Assets represent 1) the value of the Bond Bank's investments and investment income receivable on the financial statement dates, recorded at fair market value, and (2) bond principal and interest payments receivable from municipalities. The investments generate income for the Bond Bank to use to meet reserve requirements and pay operating costs. Historically excess operating account earnings have been appropriated to the State of Alaska's (State) general fund each year. House Bill 300 however, for the fiscal year ended June 30, 2010, appropriated the excess earnings of the operating account to the Bond Bank's reserve fund. Interest received on bonds purchased from municipalities is used to pay the Bond Bank's corresponding interest payments on the bonds that it has issued. -1- ALASKA MUNICIPAL BOND BANK AUTHORITY Management's Discussion and Analysis Liabilities Liabilities represent claims against the fund for 1) goods and services provided before the financial statement date but not yet paid for at that date, and 2) interest and bond payments due to purchasers of the Bond Bank's bonds after the financial statement date. Restricted and Unrestricted Net Assets Net assets are comprised of two components. The restricted portion reflects monies maintained in separate trust accounts where their use is limited by applicable bond covenants for repayment of bonds. The unrestricted portion reflects the accumulated excess of the Bond Bank's share of earnings on investments held over those earnings distributed to the State as well as investment income that has not been realized and therefore is not yet subject to distribution to the State's general fund. The following table shows the value of Bond Bank assets summarized as of June 30, 20 I0 and 2009 as well as liabilities and net assets. Changes from 2010 to 2009 As of June 30, Increase/(Decrease) 2010 2009 Dollars Percent Assets: Cash and investments $ 69,319,402 $ 67,000,925 $ 2,318,477 3.46% Bonds and bond interest receivable 618,175,368 571,017,973 47,157,395 8.26% Total assets 687,494,770 638,018,898 49,475,872 7.75% Liabilities: Accounts payable and accrued liabilities 1,656,128 1,505,169 150,959 10.03% Bonds and bond interest payable 641,574,660 592,790,073 48,784,587 8.23% Total liabilities 643,230,788 594,295,242 48,935,546 8.23% Net Assets: Restricted 32,401,674 31,673,324 728,350 2.30% Unrestricted 11,862,308 12,050,332 (188,024) -1.56% Total net assets $ 44,263,982 $ 43,723,656 $ 540,326 1.24% The increase in cash and investments reflects realized and unrealized investment income. The increase in bonds and bond interest receivable, as well as in bonds and bond interest payable, reflects the issuance of approximately $85.1 million in new bonds during the year, net of principal payments on bonds previously issued of almost $38.7 million. Restricted net assets represents appropriations made by the State to fund the Bond Bank, as well as Bond Bank funds placed into separate accounts in accordance with the reserve requirements of each bond indenture. The State original 1986 appropriation of $18,60 I,414, has increased by supplemental -2- ALASKA MUNICIPAL BOND BANK AUTHORITY Management's Discussion and Analysis appropriations, of$855,347, $819,843, and $32,628, for FY08, FY09 and FYI0, respectively. As of June 30,2010 $299,064 was unallocated to specific reserve accounts and was held in the Custodian account. Unrestricted net assets represent accumulated earnings on Bond Bank investments, not used to fund reserves, and unrealized gains that are segregated until realized. The decrease in unrestricted net assets is due primarily to the funding of bond issue reserves. The Bond Bank's investments are all held in U.S. Government securities. Statement of Activities The statement of activities shows the activity that occurred during each of the last fiscal years. Revenues Revenues include total return on investments and interest payments received from municipalities. Earnings on investments include interest on fixed income marketable securities and the change in fair market value of those investments. Expenses Expenses include interest payments made to bond holders who purchased the Bond Bank's bonds, payments made to the State of Alaska and operating expenses. Operating expenses include all expenditures required to issue bonds during the current year and include in-house expenses, as well as external consultant fees. Expenses are subtracted from revenues. The following is a condensed statement of AMBBA's changes in net assets: Changes from 2010 to 2009 AsofJune 30, Increase!(Decrease) 2010 2009 Dollars Percent Revenues: Interest income on bonds receivable $ 27,797,779 $ 24,562,340 $ 3,235,439 13.17% Investment earnings 2,329,330 2,995,730 (666,400) -22.24% Total income 30,127,109 27,558,070 2,569,039 9.32% Expenses: Interest expense on bonds payable 28,844,623 25,449,575 3,395,048 13.34% Operating expenses 742,160 555,235 186,925 33.67% Payments to primary government 32,628 819,843 (787,215) -96.02% Total expenses 29,619,411 26,824,653 2,794,758 10.42% Other financing source -transfer from primary government 32,628 819,843 (787,215) -96.02% Change in in net assets: 540,326 1,553,260 (1,012,934) -65.21% Net assets, beginning ofperiod 43,723,656 42,170,396 1,553,260 3.68% Net assets, end ofperiod $ 44,263,982 $ 43,723,656 $ 540,326 1.24% -3- ALASKA MUNICIPAL BOND BANK AUTHORITY Management's Discussion and Analysis Interest income and expense on bonds receivable and payable are a function of the total amount of bonds outstanding, the age of the bonds and the interest rates at which they are issued. The increases in both these line items are consistent with the net increase in bond interest receivable and payable of $47.2 million and $48.8 million, respectively. Net earnings totaled $1.5 million and $.5 million, at June 30, 2009 and 2010, respectively. Investment earnings are a function of market conditions. The Bond Bank uses other assets to subsidize debt service during times of low investment returns in bond reserve funds. Governmental Funds The governmental funds include the General Fund, which accounts for the primary operations of the Bond Bank, and the Debt Service Fund, which accounts for the resources accumulated and payments made on the long-term debt of the Bond Bank. The primary difference between the governmental funds balance sheet and the statement of net assets is the elimination of inter-fund payables and receivables. Bond proceeds are reported as other financing source in the governmental funds statement of revenues and expenses and this contributes to the change in fund balance. In the statement of net assets, however, issuing debt increases long-term liabilities and does not affect the statement of activities. Similarly, repayment of debt principal is recorded as expenditure in the governmental funds statement of revenues and expenses and reduces the liability in the statement of net assets. The following tables show the changes in governmental funds. General Fund Changes from 2010 to 2009 As of June 30, Increase/(Decrease) 2010 2009 Dollars Percent Assets: Cash and Investments $ 7,007,592 $ 7,485,057 $ (477,465) -6.38% Accrued interest receivable 47,524 46,701 823 1.76% Interfund receivable 5,009,188 5,284,620 (275,432) -5.21% Total assets 12,064,304 12,816,378 (752,074) -5.87% Liabilities: Accounts payable and accrued liabilities 138,292 13,273 125,019 941.90% Total liabilities 138,292 13,273 125,019 941.90% Fund Balance Unreserved 11,926,012 12,803,105 (877,093) -6.85% Total fund balance 11,926,012 12,803,105 (877,093) -6.85% Total liabilities and fund balance $ 12,064,304 $ 12,816,378 $ (752,074) -5.87% -4- ALASKA MUNICIPAL BOND BANK AUTHORITY Management's Discussion and Analysis Debt Service Fund Changes from 2010 to 2009 As ofJune 30, Increasel(Decrease) 2010 2009 Dollars Percent Assets: Cash and Investments and related receivables $ 64,085,099 $ 60,374,381 $ 3,710,718 6.15% Bonds and bond interest receivable 616,354,555 570,516,272 45,838,283 8.03% Total assets 680,439,654 630,890,653 49,549,001 7.85% Liabilities: Accounts payable and accrued liabilities 1,517,836 1,491,896 25,940 1.74% Interfund payables 5,009,188 5,284,620 (275,432) -5.21% Total liabilities 6,527,024 6,776,516 (249,492) -3.68% Fund Balance Reserved 673,912,630 623,710,624 50,202,006 8.05% $ 680,439,654 $ 630,487,140 $ 49,952,514 7.92% General Fund Changes from 201°to 2009 As of June 30, Increase/(D ecrease) 201O 2009 Dollars Percent Revenues Interest income $ 270,376 $ 330,371 $ (59,995) -18.16% Total income 270,376 330,371 (59,995) -18.16% Expenditures Operating expenses 742,160 555,235 186,925 33.67% Payments to primary government 32,628 819,843 (787,215) -96.02% Total expenses 774,788 1,375,078 (600,290) -43.65% Excess ofrevenues over expenditures (504,412) (1,044,707) 540,295 -51.72% Other financing sources (uses) -Transfers (372,681 ) 994,070 (1,366,751) -137.49% Fund balance, beginning ofperiod I 105 12,853,742 (50,637) -0.39% Fund balance, end of period $ 11,926,012 $ 12,803,105 $ (877,093) -6.85% -5- ALASKA MUNICIPAL BOND BANK AUTHORITY Management's Discussion and Analysis Debt Service Fund Changes from 2010 to 2009 As of June 30, Increase/(Decrease) 2010 2009 Dollars Percent Revenues: Interest income on bonds receivable $ 27,713,943 $ 24,537,300 $ 3,176,643 12.95% Investment earnings 2,142,790 2,690,399 (547,609) -20.35% Total income 29,856,733 27,227,699 2,629,034 9.66% Expenditures: Interest payments 26,465,454 24,691,322 1,774,132 7.19% Principal payments 38,729,582 27,318,462 11,411,120 41.77% Total expenses 65,195,036 52,009,784 13,185,252 25.35% Excess of revenues over expenditures (35,338,303) (24,782,085) (10,556,218) 42.60% Other financing sources -Bond proceeds 85,135,000 76,725,000 8,410,000 10.96% Transfers 405,309 (174,227) 579,536 -332.63% Excess of revenues and transfers over expenditures 50,202,006 51,768,688 (1,566,682) -3.03% Fund balance, beginning of period 623,710,624 571,941,936 51,768,688 9.05% Fund balance, end of period $ 673,912,630 $ 623,710,624 $ 50,202,006 8.05% Debt At year end the Bond Bank had $633,627,834 of bonds and notes outstanding up 7.9% from $587,222,416 at June 30, 2009. This debt is secured by the assets of the Bond Bank, except for the Coastal Energy notes payable, see note (5) to the financial statements. The outstanding balance is comprised of the following table of bonds issued for loans and $2.5 million in bonds issued for reserve deposits: GO bonds payable Revenue bonds payable Coastal Energy notes payable As of June 30, 2010 2009 $ 568,900,000 $ 516,555,000 53,855,000 59,705,000 10,872,834 10,962,416 $ 633,627,834 $ 587,222,416 Changes from 2010 to 2009 Increase/(Decrease) Dollars Percent $ 52,345,000 10.13% (5,850,000) -9.80% (89,582) -0.82% $ 46,405,418 7.90% Contacting the Bond Bank's Financial Management This financial report is designed to provide our customers, investors, and creditors with a general overview of the Bond Bank's finances and to demonstrate the Bond Bank's accountability of its assets. If you have any questions about this report or need need additional financial information, contact the Executive Director of the Bond Bank at (907) 465-3750. -6- ELGEEREHFELD MERTZ,LLC CERTIFIED PUBLIC ACCOUNTANTS 9309 Glacier Highway, Suite B-200 • Juneau, Alaska 99801 907.789.3178 • FAX 907.789.7128 • www.ermcpa.com INDEPENDENT AUDITORS' REPORT The Board of Directors Alaska Municipal Bond Bank Authority Juneau, Alaska We have audited the accompanying financial statements of the governmental activities and each major fund of Alaska Municipal Bond Bank Authority (the Authority), a component unit of the State of Alaska, as of and for the year ended June 30, 2010, which collectively comprise the Authority's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the management of the Authority. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Alaska Municipal Bond Bank Authority as of June 30, 2010, and the changes in financial position for the year then ended in conformity with accounting principles generally accepted in the United States of America. Accounting principles generally accepted in the United States of America require that the management's discussion and analysis pages 1 through 6 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively collectively comprise the Authority's financial statements as a whole. The Supplemental Schedule of Statutory Reserve Accounts -Assets, Liabilities and Account Reserves, on pages 27 through 30 are presented for purposes of additional analysis and are not a required part of the financial statements. This Supplementary Schedule is the responsibility of management and was derived from and relate directly to the underlying -7- accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. September 30, 2010 -8- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Statement of Net Assets and Governmental Funds Balance Sheets June 30, 20 I0 Adjustments Statement ofNet General Fund Debt Service Fund Total (Note 7) Assets ASSETS Cash and cash equivalents $ 98,772 $ 8,023,469 $ 8,122,241 $ $ 8,122,241 Investments, at fair value (note 4) 5,548,610 55,648,551 61,197,161 61,197,161 Accrued interest receivable: Bonds receivable 19,656 7,659,721 7,679,377 7,679,377 Investment securities 27,868 413,079 440,947 440,947 Bonds receivable (note 5) 1,360,210 608,694,834 610,055,044 610,055,044 Interfund receivables 5,009,188 5,009,188 (5,009,188) Total assets $ 12,064,304 $ 680,439,654 $ 692,503,958 (5,009,188) 687,494,770 LIABILITIES Accounts payable $ 138,292 $ $ 138,292 138,292 Deferred revenue 1,517,836 1,517,836 1,517,836 Accrued interest payable 7,946,826 7,946,826 Interfund payables 5,009,188 5,009,188 (5,009,188) Long-term liabilities (notes 5 and 6): Portion due or payable within one year: General obligation bonds payable 33,200,000 33,200,000 Revenue bonds payable 2,475,000 2,475,000 Other long-term debt 3,043,246 3,043,246 Portion due or payable after one year: General obligation bonds payable 535,700,000 535,700,000 Revenue bonds payable 51,380,000 51,380,000 Other long-term debt 7,829,588 7,829,588 Total liabilities 138,292 6,527,024 6,665,316 636,565,472 643,230,788 FUND BALANCESfNET ASSETS Fund balances: Reserved 299,064 673,912,630 674,211,694 (674,211,694) Unreserved 11,626,948 11,626,948 (11,626,948) Total fund balances 11,926,012 673,912,630 685,838,642 (685,838,642) Total liabilities and fund balances $ 12,064,304 $ 680,439,654 $ 692,503,958 Net assets: Restricted for debt service 32,401,674 32,401,674 Unrestricted 11,862,308 11,862,308 Total net assets $ 44,263,982 $ 44,263,982 The accompanying notes to the financial statements are an integral part of these statements. -9- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Statement of Activities and Governmental Funds Statements of Revenues, Expenditures, and Changes in Fund BalanceslNet Assets For the Year Ended June 30, 2010 Adjustments Statement of General Fund Debt Service Fund Total (Note 7) Activities Revenues: Investment earnings $ 186,540 $ 2,142,790 $ 2,329,330 $ $ 2,329,330 Interest income on bonds receivable 83,836 27,713,943 27,797,779 27,797,779 Total revenues 270,376 29,856,733 30,127,109 30,127,109 Expenditures /expenses: Debt service: Principal payments 38,729,582 38,729,582 (38,729,582) Interest payments /expense 26,465,454 26,465,454 2,379,169 28,844,623 Payments to Primary Government 32,628 32,628 32,628 Professional services 508,475 508,475 508,475 Personal services 124,665 124,665 124,665 Administrative travel 18,222 18,222 18,222 Printing and advertising 2,000 2,000 2,000 Office expense 493 493 493 Arbitrage interest 88,288 88,288 88,288 Miscellaneous expenses 17 17 17 Total expenditures /expenses 774,788 65,195,036 65,969,824 (36,350,4 I3) 29,619,41 I Excess (deficiency) of revenues over expenditures /expenses (504,412) (35,338,303) (35,842,715) 36,350,413 507,698 Other financing source /(uses): Proceeds of bonds payable 85,135,000 85,135,000 (85, I35,000) Transfers from Primary Government 32,628 32,628 32,628 Transfers to/from Custodial Fund (1,252, I99) 1,252,199 Transfers -internal activities 846,890 (846,890) Total other financing sources /(uses) (372,681) 85,540,309 85,167,628 (85,135,000) 32,628 Excess (deficiency) of revenues and transfers in over expenditures /expenses and transfers out (877,093) 50,202,006 49,324,913 (48,784,587) 540,326 Fund balances /net assets: Beginning of the year 12,803,105 623,710,624 636,513,729 (592,790,073) 43,723,656 End of the year $ 11,926,012 $ 673,912,630 $ 685,838,642 $ (64 I,574,660) $ 44,263,982 The accompanying notes to the financial statements are an integral part of these statements. -10- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements For the Year Ended June 30, 2010 (1) History/Reporting Entity The Alaska Municipal Bond Bank Authority (Authority or Bond Bank) was created pursuant to Alaska Statute, Chapter 85, Title 44, as amended, (Act) as a public corporation and instrumentality of the State of Alaska (State), but with a legal existence independent of and separate from the State. The Authority is a discretely presented component unit of the State of Alaska for purposes of financial reporting. The Authority was created for the purpose of making moneys available to municipalities within the State to finance capital projects or for other authorized purposes by means of issuance of bonds by the Authority and use of proceeds from such bonds to purchase from the municipalities their general obligation and revenue bonds. The Authority commenced operations in August 1975. The bonds are obligations of the Authority, payable only from revenues or funds of the Authority, and the State of Alaska is not obligated to pay principal or interest thereon, and neither the faith and credit nor the taxing power of the State is pledged to the bonds. The municipal bonds and municipal bond payments, investments thereof and proceeds of such investments, if any, and all funds and accounts established by the bond resolution to be held by the Trustee (with the exception of the Coastal Energy Loan Debt Service Program, which is administered by the Authority) are pledged and assigned for the payment of bonds. The Authority may not issue revenue bonds in excess of $75 million in any fiscal year unless the State of Alaska Legislature approves a greater amount. Revenue refunding bonds are not included in the $75 million fiscal year limitation. AS 44.85. 180(c) was enacted in 1975, limiting Bond Bank outstanding bonds at any time to $150 million. This Statue has been periodically amended to raise the limit. In fiscal year 2010, the limit is $1 billion. Total Bond Bank bonds and notes outstanding as of June 30, 2010 are approximately $633.6 million. Thus, the limit on additional bond issuance as of June 30, 2010 is approximately $366.4 million. (2) Summary of Significant Accounting Policies The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial principles. The most significant of the Authority's accounting policies are described below. (a) Government-wide and Fund Financial Statements The statement of net assets and the statement of activities report information on all of the activities of the Authority. For the most part, the effect of interfund activity has been removed from these statements. The balance sheet and statement of revenues, expenditures and changes in fund balances are provided for governmental funds. (b) Measurement Focus, Basis ofAccounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both -11- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 180 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures are recorded only when payment is due. The Authority reports the following major governmental funds: The General Fund is the Authority's primary operating fund. It accounts for all financial resources of the Authority, except those required to be accounted for in another fund. The Authority adopts an annual budget for the operating account only. The Debt Service Fund accounts for the resources accumulated and payments made for principal and interest on long-term debt of the Authority. The Authority does not adopt a budget for the Debt Service Fund because it is not legally required to do so. The purposes of each of these funds are described in the following paragraphs: General Fund The General Fund is comprised of a Custodian Account and an Operating Account. The Custodian Account is established to account for appropriations by the State of Alaska Legislature available to fund the Special Reserve Accounts. The Operating Account is established to account for the ordinary operations of the Authority. Moneys are derived from the following sources: (a) amounts appropriated by the Legislature, (b) fees and charges collected, (c) income on investments of the Statutory Reserve Account in excess of required debt service reserves required by bond resolutions and (d) any other moneys made available for purposes of the General Fund from any other source. Amounts in the Operating Account may be used to pay (a) administrative expenses of the Authority, (b) fees and expenses of the Trustee and paying agents, (c) financing costs incurred with respect to issuance of bonds and (d) any expenses in carrying out any other purpose then authorized by the Act. The excess revenues of the Operating Account are returned to the State of Alaska. The State of Alaska may appropriate the excess revenues to the Bond Bank Custodian Account to fund Special Reserve Accounts. Debt Service Fund Within the Debt Service Fund, separate Debt Service Programs have been established for each bond resolution to account for the portion of bond sale proceeds used to purchase obligations of the municipalities and for the payment of interest and principal on all bonds of the Authority issued under its resolutions. Each program is comprised of an "interest account" and a "principal account", both of which are maintained by a trustee. The receipts of interest and principal from the municipalities and the Statutory Reserve Account are deposited in these programs and are used to pay interest and principal on the Authority bonds. One additional Debt Service Program has been established to account for transactions not involving bond resolutions. This is the Coastal Energy Loan Debt Service Program. The Coastal Energy Loan Debt Service Program is not maintained by a trustee. Payments of interest and principal by municipalities having coastal -12- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements energy loans are made directly to the federal government by the municipalities and are accounted for in the Coastal Energy Loan Debt Service Program. Each debt service fund program contains a Statutory Reserve Account established to account for (a) money available to fund debt service reserves required by future bond sales under various bond resolutions (Custodian Account) and (b) debt service reserves which have already been established under various bond resolutions which are to be used in the case of deficiency in a Debt Service Program in accordance with its respective bond resolution (reserve accounts). Separate reserve accounts exist under each bond resolution as follows: 1976 General Bond Resolution -The amount on deposit in the reserve account is to be the greater of the maximum annual debt service requirement or 10% of all municipal loan obligations outstanding. The reserve account is comprised of an ordinary reserve sub-account and a special reserve sub-account. The ordinary reserve sub-account is created as a result of the Authority increasing each bond issue by the amount necessary to fund up to one-third of the required debt service reserve or with a transfer from the Custodian Account. The special reserve sub-account is created and funded from the Custodian Account at an amount equal at least to two-thirds of the required debt service reserve. Both sub-accounts are maintained by a trustee. On August 23, 1999, the Authority amended the debt service reserve requirement for the 1976 bond resolution that takes effect when all bonds outstanding as of the date of the resolution are retired. Under this new requirement, the reserve must be the least of: (i) 10% of the original stated principal amount of all bonds outstanding; (ii) the maximum annual principal and interest requirements on all bonds then outstanding; (iii) 125% of the average principal and interest requirements on all bonds then outstanding; or (iv) such lesser amount as shall be required to maintain the exemption of interest of all bonds outstanding from inclusion in gross income for federal income tax purposes under the Internal Revenue Code. 1999 Revenue Bond Resolution -Under this resolution a special reserve account was created at an amount equal to the maximum annual debt service of municipal obligations outstanding from moneys made available by legislative appropriation residing in the Custodian Account. 2000 Revenue Bond Resolution -Under this resolution a special reserve account was created at an amount equal to the maximum annual debt service of municipal obligations outstanding from moneys made available by legislative appropriation residing in the Custodian Account. 2001 Revenue Bond Resolution -Under this resolution a special reserve account was created at an amount equal to the maximum annual debt service of municipal obligations outstanding from moneys made available by legislative appropriation residing in the Custodian Custodian Account. 2002 A Revenue Bond Resolution -Under this resolution a special reserve account was created at an amount equal to the maximum annual debt service of municipal obligations outstanding from moneys residing in the Custodian Account. 2003 B Revenue Bond Resolution -Under this resolution a special reserve account was created at an amount equal to the maximum annual debt service of municipal obligations outstanding from moneys residing in the Custodian Account. -13- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements 2004 A Revenue Bond Resolution -Under this resolution a special reserve account was created at an amount equal to the maximum annual debt service of municipal obligations outstanding from moneys residing in the Custodian Account. 2004 B Revenue Bond Resolution -Under this resolution a special reserve account was created at an amount equal to the maximum annual debt service of municipal obligations outstanding from moneys residing in the Custodian Account. 2005 General Bond Resolution -The reserve must be the least of: (i) 10% of the initial principal amount of each Series of Bonds outstanding; (ii) the maximum annual principal and interest requirements on all bonds outstanding; (iii) 125% of the average annual debt service on all bonds then outstanding; or (iv) such lower amount as may be allowed by law. The reserve account is comprised of an ordinary reserve sub-account and a special reserve subaccount. The ordinary reserve sub-account is created as a result of the Authority increasing each bond issue or with a transfer from the Custodian Account. The special reserve subaccount is created and funded from the Custodian Account. Both sub-accounts are maintained by a trustee. Amounts in the Statutory Reserve Account in excess of (a) required debt service reserves, (b) appropriations by the legislature residing in the Custodian Account, and (c) income on nonlegislature-appropriated funds are transferred to the Operating Account. Income on nonlegislature-appropriated funds, representing excess of revenues over expenditures of the ordinary reserve accounts and interest earned on the unreserved investment earnings account is accumulated in the Custodian Account and is available to fund the Special Reserve account. (c) Restricted Assets Certain resources set aside for the repayment of the Authority's bonds, net of certain proceeds from additional bonds issued, are classified as restricted net assets on the statement of net assets because they are maintained in separate trust accounts and their use is limited by applicable bond covenants. Cash and cash equivalents and investments include $32,401,674 of restricted assets. These assets were funded from transfers from the Custodial Account to reserve accounts of Bond Bank equity of $12,092,442 and $20,010,168 of State appropriated equity. Of the original State appropriation of $18,601,414 and fiscal year 2008 and 2009 appropriations of $855,347 and $819,843, respectively, $266,436 was unallocated to a reserve account at June 30, 2010, and is in the Custodial account. As of June 30, 2010, $32,628 of earnings on the original State appropriation was available to allocate to reserve accounts from the Custodial Account. (d) Long-Term Obligations In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the statement of net assets. (e) Fund Equity In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. In the government-wide financial statements, restrictions of net assets are reported when externally imposed. -14- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements (j) Interest Arbitrage Rebate Bonds issued and funds segregated into reserves after August 15, 1986 are subject to Internal Revenue Service income tax regulations which require rebates to the U.S. Government of interest income earned on investments purchased with the proceeds from the bonds or any applicable reserves in excess of the allowable yield of the issue. Amounts owed are expensed when paid and refunds are recorded when received. (g) Income Taxes The Authority is exempt from paying federal and state income taxes. (h) Refunding Gains/Losses The Authority reports gains or losses recognized from the refunding of bonds in interest revenue or expense. (3) Cash The Authority considers all highly liquid investments purchased with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents at June 30, 2010 consist of money market accounts held with various financial institutions. The bank balance of all of the Authority's cash and cash equivalents are collateralized by securities held in the Authority's name by its custodial agent. At June 30, 2010, the amounts recorded in the Authority's general ledger equaled its bank balances. (4) Investments The fair value as of June 30, 2010 of the Authority's investments is $61,197,161. At June 30, 2010 the investments held in the reserve accounts total $55,648,551, and the Custodian account total $5,548,610. The fair value of debt security investments by contractual maturity as of June 30, 2010 is shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalty. u.s. Treasury securities U.S. Government agencies securities Total investments (a) Investment Policies Less than I $ 5,452,309 3,829,875 $ 9,282,184 Investment Maturities (in Years) 1-5 6-10 More than 10 Total $ 37,852,641 $ 485,000 $ $ 43,789,950 13,577,336 17,407,211 $ 51,429,977 $ 485,000 $ $ 61,197,161 The Authority has distinct investment objectives and policies associated with the Custodian Account, Reserve Funds, and municipal debt payments. The three classes of funds are listed below: • Custodian Account -The Custodian Account investment portfolio is designed with the objective of attaining the highest market rate of return subject to the required use of the Custodian Account for -15- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements operation, funding transfers to the state, and funding reserves. When the Custodian Account balance allows, a longer investment horizon is implemented for the Custodian Account, accepting the limited probability of short-term loss in exchange for higher yield on investments. The Custodian Account balance must exceed $15 million, and be forecasted to exceed $15 million for the subsequent six-month period, and an analysis of risk profile and historical benefit between the varying strategies must be undertaken before any shift in the investment strategy of the Account. The Custodian Account has to maintain sufficient liquidity to meet operating requirements, provide the prior fiscal year's state dividend, and to allow transfers to reserves as needed for bond issuance activity. Long-term preservation of principal is the third objective of the Custodian Account's investment program. Investments shall be undertaken in a manner that minimizes the probability of long-term loss. o The Custodian Account balance is a critical component in determining anticipated life, ability to diversify, and investment policy in this account. Accordingly, when the account balance is above $15 million a more aggressive policy will be implemented. When the account balance is below $15 million a more conservative policy will be used. o Shifting from one asset allocation to another may be approved by the Investment Committee when there is a projection of a continued trend in account balance justifying the shift. o There are no arbitrage restrictions. o When the Custodian Account balance is less than $15 million, the following policies apply: • 20% Money Market Fund and 80% government agencies and U.S. Treasuries with maturities of less than 5 years. • Performance benchmark for the 20%: Three month U.S. Treasury Bill. • Performance benchmark for the 80%: Merrill Lynch 1-5 Government Index. o When the Custodian Account balance exceeds exceeds and is expected to remain in excess of $15 million, the following policies apply: • Greater of 10% or a percentage equal to $750,000 in market value: Money Market Fund. • Up to 90%: Broad U.S. Bond Market Fund. .. Performance benchmark for the greater of 10% or the percentage of the fund invested that is benchmarked to Money Market Fund: Three-month U.S. Treasury Bill. .. Performance benchmark for the up to 90%: Lehman Brothers Aggregate Index. o The following transactions are prohibited with the Custodian Account unless those transactions have the prior written consent of the Investment Committee: • Short sale of securities (the sale and settlement of a security not currently owned by the Authority and a formal agreement to borrow the security to facilitate the settlement of the short sale);-16- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements • Purchases of futures, forwards or options for the purpose of speculating (currency futures, forwards and options are permitted only for hedging or to facilitate otherwise permissible transactions); • Borrowing to leverage the return on investments. Extended settlement of securities purchases executed to facilitate or improve the efficiency of a transaction will not be considered borrowing, provided that sufficient cash equivalent securities or receivables are available to facilitate the extended settlement; • Purchases of "private placement" or unrated corporate bonds. • Bond Reserve Funds -Preservation of principal is the foremost objective of the Bond Reserve Funds investment program. These funds shall be managed to ensure that the corpus is preserved. These funds will not be expended until the final maturity of the bond issue they secure, unless there is a failure to pay debt service by a community. As there is limited benefit in maximizing return it is the least important objective of the Bond Reserve Funds. It is anticipated that the Reserve Funds cumulative average return should target the blended arbitrage yield limit of the bond issues secured. o Bond resolutions limit allowed investment of these funds. Investment risk should be examined on an annual basis to ensure that no greater than the minimum level of risk required to achieve the highest probability of earning the arbitrage yield limit on the bonds is incurred. o 100% government agencies and U.S. Treasuries with maturities ofless than 5 years. o Performance benchmark is Merrill Lynch 1-5 Government Index. • Municipal Debt Payments -Preservation of principal and liquidity are the foremost objectives of the Municipal Debt Payments investment program, as these funds will be expended within seven business days of receipt. Return on investment is a benefit of holding these funds for the advance payment period, but not the focus of investing the funds. The bond resolutions limit investments. o 100% Money Market Fund. o Performance benchmark is three-month U.S. Treasury Bill. It is the policy of the Authority to diversify its investments and to ensure the safety and liquidity of the investments by observing the following sound investment practices: • Not more than 5% of the Custodian Account may be invested in the corporate debt of anyone issuer, at the time of purchase. • In the event of a credit downgrade which reduces a security below the required rating written notification will be made to the Investment Committee setting forth the particulars of the downgrade and recommending a course of action. • Not more than 50% of the Custodian Account may be invested in corporate securities, at the time of purchase. • The duration of the Custodian Account must remain within 80 to 120 percent of the duration of the Lehman Brothers Aggregate Index. -17- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements • Purchases of more than 10% of a corporate bond issue shall not be made. (b) Concentration Risk Concentration risk is the risk of loss attributed to the magnitude of the Authority's investment in a single issuer. Concentration limits are not established in the bond indentures and governing agreements for pledged investments. The Authority's policies set out maximum concentration limits for investments managed by the external investment manager. (c) Credit Risk Credit risk is the risk of loss due to the failure of the security or backer. The Authority mitigates its credit risk by limiting investments permitted in the investment policies. U.S. Treasury securities and securities of agencies that are explicitly guaranteed by the U.S. government total $61,197,161, and are not considered to have credit risk. (d) Custodial Credit Risk The Authority assumes levels of custodial credit risk for its deposits with financial institutions, bank investment agreements, and investments. For deposits, custodial credit risk is the risk that, in the event of a bank failure, the Authority's deposits may not be returned. For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the Authority will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The Authority has not established a formal custodial credit risk policy for its investments. The Authority had no investments registered in the name of a counterparty. (e) Interest Rate Risk Interest rate risk is the risk that the market value of investments will decline as a result of changes in general interest rates. For non-pledged investments, the Authority mitigates interest rate risk by structuring its investments' maturities to meet cash requirements, thereby avoiding the need to sell securities in the open market prior to maturity. For investments held held in trust, investment maturities are structured to meet cash requirements as outlined in its bond indentures and contractual and statutory agreements. (f) Modified Duration Modified duration estimates the sensitivity of an investment to interest rate changes. The following table shows the Authority's investments with their weighted average modified duration as of June 30, 2010 by investment type: U.S. Treasury securities U.S. Government agency Total portfolio -18-Investment Fair Values $ 43,789,950 17,407,211 $ 61,197,161 Modified Duration 3.53 3.32 3.43 ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements (5) Bond and Notes Receivable The General Fund includes $1,360,210 of 5% bonds receivable due from the Cities of Yakutat, Galena and Sitka that mature through 2013. Bonds and notes receivable by debt service program at June 30, 2010 mature m varying annual installments as follows: Year ending June 2000B Seward 200 IA Ketchikan 2001 B Ketchikan 2002A Ketchikan 30 1976 General 2005 General Revenue Revenue Revenue Revenue 201 I $ 19,238,000 S 13,585,000 $ 135,000 $ 100,000 $ 150,000 $ 540,000 2012 16,720,000 17,440,000 140,000 105,000 155,000 560,000 2013 15,925,000 17,060,000 110,000 165,000 585,000 2014 14,875,000 16,915,000 115,000 175,000 610,000 2015 14,605,000 16,120,000 125,000 180,000 635,000 2016-2020 69,074,000 78,690,000 555,000 820,000 2021-2025 45,570,000 70,900,000 2026-2030 2,350,000 68,295,000 2031-2035 35,400,000 203 6 and after 11,205,000 $ 198,357,000 $ 345,610,000 $ 275,000 $ 1,110,000 $ 1,645,000 $ 2,930,000 Ycar ending June 2003B Valdez 2004A CBJ 2004B Anchorage Coastal Energy 30 Revenue Revenue Revenue Loan Total Principal 2011 $ 865,000 $ 575,000 $ 110,000 $ 3,043,246 $ 38,341,246 2012 935,000 595,000 115,000 547,061 37,312,061 2013 1,000,000 620,000 120,000 551,032 36,136,032 2014 1,070,000 650,000 125,000 555,165 35,090,165 2015 1,135,000 680,000 130,000 559,467 34,169,467 2016-2020 6,600,000 3,875,000 730,000 1,874,169 162,218,169 2021-2025 4,695,000 4,995,000 905,000 755,542 127,820,542 2026-2030 6,460,000 1,145,000 923,262 79,173,262 2031-2035 8,290,000 1,475,000 1,128,213 46,293,213 2036 and after 935,677 12,140,677 $ 16,300,000 $ 26,740,000 $ 4,855,000 $ 10,872,834 $ 608,694,834 Under the Coastal Energy Loan Program (Program), the Authority issued $5,000,000 1986 Series A Coastal Energy Bonds (Bonds) payable to the National Oceanic and Atmospheric Administration (NOAA). The proceeds of these bonds were used to purchase port revenue bonds from the City of Nome. The City of Nome entered into a tripartite agreement with NOAA and the Authority effective August 2, 1994 to defer payment of the principal and accrual of interest for ten years. Effective January 29,2009 a second amendment to the tripartite agreement was executed. The amendment authorized the issuance of 2009A Bonds for the purpose of refunding by exchange the outstanding City of Nome, Alaska, Port Revenue Bond 1986 Series A. The related loan payable does not represent a general obligation of the Authority as it is payable only from proceeds received from the City ofNome. Also under the Program, the Authority issued $6,563,000 1987 Series A Coastal Energy Bonds payable to NOAA. The proceeds of these bonds were used to purchase port revenue bonds from the City of St. Paul. The City of St. Paul entered into a tripartite agreement with NOAA and the Authority effective -19- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements December 14, 2000 to modifY and amend the repayment terms including principal and interest. On April 18,2005, the City of St. Paul asked for NOAA's recommendation for loan forgiveness which was denied on January 24,2006. Subsequently, on March 17,2009, NOAA issued another determination on request for recommendation of CEIP loan forgiveness but a final agreement has not been reached between the City of St. Paul and NOAA as of June 30, 2010. The related loan payables do not represent a general obligation of the Authority as they are payable only from proceeds received from the City of Nome and St. Paul, respectively. Payment of principal and interest on the Bond Bank's Coastal Energy Bond is not secured by a pledge of any amounts held by or payable to the Bond Bank under the General Bond Resolution, including the Reserve Account, and is not in any way a debt or liability of the Bond Bank. The Coastal Energy Bonds and related accounts are included in the Bond Bank's statutory limit for total bonds outstanding and therefore included in the Bond Bank's financial statements. -20- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements (6) Long -Term Liabilities Issue Debt Service Account Principal Interest rate outstanding Statutory Reserve Account Ordinary Reserve Sub-Account Principal Interest rate outstanding 6.9%-9% 160,000 4.4%-5% 755,000 3.875%-4.75% 2,475,000 3.875%-4.75% 2.5%-4.5% 4,165,000 2.50"10-4.50% 3.875%-4.80% 8,245,000 3.875%-4.80"/0 3.70%-4.80% 6,625,000 4.80% 2.00%-3.625% 2,655,000 2.00"10-3.625% 4.90%-6.00% 10,620,000 4.90"10-6.00% 2.00%-5.25% 7,360,000 2.00%-3.5% 290,000 2.00%-5.00% 18,410,000 3.00%-4.40% 12,460,000 2.00%-4.00% 11,130,000 2.00"10-4.00% '76 General Bond Resolution Program: 1998 Series A Aleutians East, City of 1998 Series B -Cordova, City of 2000 Series C -Northwest Arctic Borough 2000 Seri es D -Petersburg 2000 Series E: Kenai Kodiak Island Borough Lake and Peninsula Wrangell Nome 2000 Series F -Kodiak Island Borough 2001 Series A -Northwest Arctic Borough 2001 Series B -Aleutians East Borough 2002 Series A -Wasilla, City of 2002 Series B Wrangell, City of Northwest Arctic Borough 2003 Series A -Ketchikan Gateway Borough 2003 Series C Kenai Peninsula Borough Lake & Peninsula Borough 2003 Series D -Kenai 2003 Series E Aleutians East Borough Kenai Peninsula Borough 2003 Series F -Seward 2003 Series G -NW Arctic Borough 2004 A Series Fairbanks Sitka 2004 B Seri es Nome Valdez Petersburg Craig Seward 2004 C Seri es Kodiak Island Borough Palmer Petersburg 2004 D Series Adak Kodiak Island Borough 4.625%-6% 4%-4.75% 4.53%-5.75% 4.55%-5.70% 4.75%-5.375% 4.00%-5.00% 3.00%-5.00% -21-$ 205,000 205,000 1,000,000 85,000 1,832,000 11,600,000 10,405,000 5.00"10-5.375% 423,000 285,000 755,000 525,000 305,000 210,000 365,000 225,000 (continued) ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements Debt Service Account Statutory Reserve Account Ordinary Reserve Sub-Account Issue 2005 A Series Cordova Fairbanks Ketchikan Gateway Borough Northwest Arctic Borough Sitka Unalaska 2005 B Series Haines Ketchikan Gateway Borough North Pole, City of Palmer Sitka 2005 C Series Haines Petersburg Northwest Arctic Borough 2006 A Series Aleutians East Borough Ketchikan Gateway Borough Lake & Peninsula Borough Nome Wrangell Total 1976 General Bond Resolution Fund 2005 Series General Bond Resolution Program: 2005 -One Series Ketchi kan, Ci ty of Nome Seward 2006 -One Series Kenai Peninsula Borough Seward 2006-Two Series -Ketchikan, City of 2007-One Series Kenai Peninsula Borough Inter-Island Ferry Authority Nome, City of NW Arctic Borough Petersburg Seward, City of Sitka, City of Wasilla, City of 2007-Two Series Kenai Peninsula Borough Aleutians East Borough Interest rate 2.50%-5.00% 3.00%-5.00% 4.00%-5.00% 4.00%4.35% 3.00%-5.00% 4.00%-6.00% 4.25%4.75% 4.00%-5.50% 3.75%-5.00% -22-Prineipal outstanding 29,275,000 19,350,000 25,705,000 13,345,000 198,357,000 13,625,000 6,080,000 36,540,000 23,765,000 23,945,000 Interest rate 2.75%-5.00"10 5.00% 5.00% 4.00% 3.00%-5.00"10 4.50%-6.00"10 5% 4.00%-5.50"/0 4.50% Prineipal outstanding 1,435,000 465,000 2,185,000 950,000 8,128,000 350,000 390,000 1,765,000 1,290,000 685,000 (continued) ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements StatutoI)' Reserve Account Debt Service Account Ordinal)' Reserve Sub-Account Principal Principal Issue Interest rate outstanding Interest rate outstanding 2007-Three Series 4.25%-5.50% 13,680,000 4.00% 415,000 Bethel, City of Juneau, City and Borough of 2007-Four Series -Kenai Peninsula Borough 4.25%-5.00% 13,605,000 4.25%-4.50% 1,070,000 2007-Five Series -Kodiak, City of 4.00%-<i.00% 5,910,000 2008-0ne Series 4.00%-5.00% 56,350,000 5.00% 4,250,000 Dillingham Kodiak Island Borough Kodiak, City of Seward 2008-Two Series 4.40%-6% 17,200,000 4.75%-6.00"10 1,560,000 Seward Sitka, City of Skagway 2009-0ne Series 3.0%-5.625 25,985,000 4.00%-5.50 % 730,000 Kodiak, City of Unalaska, City of 2009-Two Series 4.0%-6.00% 26,265,000 4.0%-6.00"10 1,825,000 Cordova Nome, City of Unalaska, City of Kodiak, Is land Borough 2009-Three Series -Juneau, City and Borough of 2.0%-4.00% 12,415,000 2.0%-4.00"10 975,000 2009-A-Four Series 3.0%-4.00% 7,855,000 3.0%-4.00"10 840,000 Kenai Peninsula Borough Ketchikan, Gateway Borough 2009-B-Four Series -Ketchikan, Gateway Borough 4.625%-5.40% 20,425,000 201O-A-Series One 2.0%-5.00% 20,085,000 3.00% 335,000 Ketchikan, City of Ketchikan, Gateway Borough Kenai, City of Northwest Arctic Borough Petersburg Unalaska, City of 201O-B Series One 5.993%-<i.341% 7,415,000 Kenai, City of Northwest Arctic Borough Petersburg Unalaska, City of 201O-A Series Two 2.0%-3.0% 3,060,000 3.00% 325,000 Juneau, Ci ty and Borough of Cordova King Cove, City of 201O-B Series Two 3.751%4.907% 11,405,000 Juneau, Ci ty and Borough of Cordova King Cove, City of Total 2005 Series General Bond Resolution Fund 345,610,000 16,805,000 (continued) -23- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements Debt Service Account Statutory Reserve Account Ordinary Reserve Sub-Account Issue 2000B Seward Revenue Bond Resolution Program 2001A Ketchikan Revenue Bond Resolution Program 200lB Ketchikan Revenue Bond Resolution Program 2002A Ketchikan Revenue Bond Public Utilities 2003B Valdez, City of Bond Resolution Program 2004A Juneau, City and Borough of Bond Resolution ProgJ 2004B Anchorage Bond Resolution Program Total Revenue Bonds Coastal Energy Reserve Loan Account: City of Nome Port Facility Revenue Bond City of Saint Paul-Fuel Dock Total Coastal Energy Reserve Loan Account Interest rate 4.35%-5.5% 4.5%4.9% 4.5%4.9% 3.00%-5.00% 2.75%-5.25% 6.25%-4.375% 4.00%4.75% 8.50% 5% Principal outstanding 275,000 1,110,000 1,645,000 2,930,000 16,300,000 26,740,000 4,855,000 53,855,000 4,866,956 6,005,878 10,872,834 $ 608,694,834 Principal Interest rate outstanding $ 24,933,000 During the year ended June 30, 2010 the Authority's long-tenn liabilities changed as follows: Beginning End of year New debt Repayments ofyear General obligation bonds payable $ 516,555,000 $ 85,135,000 $ 32,790,000 $ 568,900,000 Revenue bonds payable 59,705,000 5,850,000 53,855,000 Other long-term debt 10,962,416 89,582 10,872,834 Total $ 587,222,416 $ 85,135,000 $ 38,729,582 $ 633,627,834 General obligation bonds are secured by bonds receivable and by amounts in the ordinary reserve account. The Act further provides that if a municipality defaults on its principal and/or interest payments, upon written notice by the Authority, the State of Alaska must pay to the Authority all funds due from the defaulting municipality from the State in an amount sufficient to clear the default. If the Alaska Municipal Bond Bank Authority must draw on the Alaska municipal bond bank authority reserve fund (AS 44.85.270), 2005 General Bond Resolution Reserve, because of a default by a borrower, an amount equal to the amount drawn from the reserve is appropriated appropriated from the State of Alaska General Fund to the Authority reserve fund (AS 44.85.270). Loans made under the Coastal Energy Loan Program are payable only from proceeds received from the municipalities to which the loans were made. -24- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements The above bonds mature in varying annual installments. The maturities at June 30, 2010 are as follows: 1976 2005 Year ending June 2000B Seward 30 General Reserve General Reserve Revenue 2011 $ 19,238,000 $ 377,000 $ 13,585,000 $ $ 135,000 2012 16,720,000 1,225,000 17,440,000 80,000 140,000 2013 15,925,000 435,000 17,060,000 1,350,000 2014 14,875,000 5,000 16,915,000 595,000 2015 14,605,000 245,000 16,120,000 1,225,000 2016-2020 69,074,000 3,751,000 78,690,000 5,615,000 2021-2025 45,570,000 2,090,000 70,900,000 2,745,000 2026-2030 2,350,000 68,295,000 3,430,000 2031-2035 35,400,000 2036 and after 11,205,000 1,765,000 $ 198,357,000 $ 8,128,000 $ 345,610,000 $ 16,805,000 $ 275,000 Year ending June 2001 A Ketchikan 200lB Ketchikan 2002A Ketchikan 2003B Valdez 2004A CBJ 30 Revenue Revenue Revenue Revenue Revenue 2011 $ 100,000 $ 150,000 $ 540,000 $ 865,000 $ 575,000 2012 105,000 155,000 560,000 935,000 595,000 2013 110,000 165,000 585,000 1,000,000 620,000 2014 115,000 175,000 610,000 1,070,000 650,000 2015 125,000 180,000 635,000 1,135,000 680,000 2016-2020 555,000 820,000 6,600,000 3,875,000 2021-2025 4,695,000 4,995,000 2026-2030 6,460,000 2031-2035 8,290,000 2036 and after $ 1,110,000 $ 1,645,000 $ 2,930,000 $ 16,300,000 $ 26,740,000 2004B Year ending June Anchorage Coastal Energy 30 Revenue Loan Total Principal Total1nterest 2011 $ 110,000 $ 3,043,246 $ 38,718,246 $ 28,510,171 2012 115,000 547,061 38,617,061 27,149,950 2013 120,000 551,032 37,921,032 25,730,392 2014 125,000 555,165 35,690,165 24,090,188 2015 130,000 559,467 35,639,467 22,624,920 2016-2020 730,000 1,874,169 171,584,169 89,775,460 2021-2025 905,000 755,542 132,655,542 53,413,328 2026-2030 1,145,000 923,262 82,603,262 26,210,725 2031-2035 1,475,000 1,128,213 46,293,213 9,990,376 2036 and after 935,677 13,905,677 1,312,179 $ 4,855,000 $ 10,872,834 $ 633,627,834 $ 308,807,689 -25- ALASKA MUNICIPAL BOND BANK AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements (7) Adjustments Certain adjustments are considered to be necessary to the governmental funds in order to present the Authority's financial position and the results of its operations. These adjustments include the elimination of inter-fund payables and receivables. Additionally, bond proceeds are reported as financing sources in governmental funds and thus contribute to the change in fund balance. In the statement of net assets, however, issuing debt increases long-term liabilities and does not affect the statement of activities. Similarly, repayment of principal is an expenditure in the governmental funds and reduces the liability in the statement of net assets. (8) Commitments The amount of Authority receipts determined under AS 44.85.270(h) available for transfer by the Authority for fiscal year 2010 were appropriated to the Bond Bank Authority Reserve Fund (AS 44.85.270(a)) in the amount of $32,628, increasing the cumulative state appropriated amount to $20,042,796 at June 30, 2010. The entire Custodian Account balance is available for appropriation, at any time, by the State Legislature. (9) Subsequent Events Subsequent to June 30, 2010, Senate Bill 230, Section 30, appropriated $2,450,000 from the General Fund to the Alaska Municipal bond Bank for purposes of making a direct loan to the city of Galena. Loan repayments will be included in the statutorily defined revenues of the Bond Bank. This loan closed on July 28, 2010. In addition, the Bond Bank approved loans to communities of Unalaska, Aleutians East Borough and to the City of King Cove in the amount of$11,975,000 scheduled to close on September 16,2010. -26- ALASKA MUNICIPAL BOND BANK AUTHORITY (A Component Unit of the State of Alaska) Supplemental Schedule of Statutory Reserve Accounts -Assets, Liabilities and Account Reserves For the year ended June 30, 2010 2005 Series 1976 General 1976 General Obligation 2005 Series "Ordinary" "Special" Interest Resolution Assets Cash $ 88,550 $ 177,462 $ 616,630 $ 134,391 Accrued interest receivable 62,080 164,746 186,253 Marketable securities 9,445,486 20,738,278 25,464,787 Interaccount receivables 3,909,592 $ 9,596,116 $ 24,990,078 $ 616,630 $ 25,785,431 Liabilities Interaccount payables $ 1,480,431 $ 5,953,305 $ 616,630 $ 668,641 Bond payable 8,128,000 16,805,000 Accrued interest payable 100,401 186,708 9,708,832 5,953,305 616,630 17,660,349 Reserves Special Reserve -State Appropriated 15,663,302 3,720,198 Special Reserve -Unappropriated 3,243,579 4,226,119 Special Reserve -Unrealized gain (loss) 129,892 178,765 Ordinary Reserve -Unallocated (232,541) Ordinary Reserve -Unrealized gain (loss) 119,825 (112,716) 19,036,773 19,036,773 8,125,082 $ 9,596,116 $ 24,990,078 $ 616,630 $ 25,785,431 (continued) See independent auditors' report -27- ALASKA MUNICIPAL BOND BANK AUTHORITY (A Component Unit of the State of Alaska) Supplemental Schedule of Statutory Reserve Accounts -Assets, Liabil ities and Account Reserves For the year ended June 30, 2010 2005 Series 1999A Inter-200lA Investment Island 2000B Seward Ketchikan Assets Cash $ 234,585 $ 97,182 $ 149,441 $ 154,678 Accrued interest receivable Marketable securities Interaccount receivables 1,503,382 7,788 $ 1,737,967 $ 97,182 $ 157,229 $ 154,678 Liabilities Interaccount payables $ 1,737,967 $ 2,770 $ $ 3 Bond payable Accrued interest payable 1,737,967 2,770 3 Reserves Special Reserve -State Appropriated 94,412 147,711 154,675 Special Reserve -Unappropriated Special Reserve -Unrealized gain (loss) 9,518 Ordinary Reserve -Unallocated Ordinary Reserve -Unrealized gain (loss) 94,412 157,229 154,675 $ 1,737,967 $ 97,182 $ 157,229 $ 154,678 See independent auditors' report -28- ALASKA MUNICIPAL BOND BANK AUTHORITY (A Component Unit of the State of Alaska) Supplemental Schedule of Statutory Reserve Accounts -Assets, Liabilities and Account Reserves For the year ended June 30, 2010 200lB 2002A Ketchikan Ketchikan 2003B Valdez 2004A CBJ Assets Cash $ 229,875 $ 625,013 $ 1,780,100 $ 1,875,788 Accrued interest receivable Marketable securities Interaccount receivables 29,639 $ 112 $ 229,875 $ 625,013 $ 1,809,739 $ 1,875,900 Liabilities Interaccount payables $ 5 $ 13 $ Bond payable Accrued interest payable 5 13 Reserves Special Reserve -State Appropriated 229,870 Special Reserve -Unappropriated 625,000 1,780,063 1,875,750 Special Reserve -Unrealized gain (loss) 29,676 150 Ordinary Reserve -Unallocated Ordinary Reserve -Unrealized gain (loss) 229,870 625,000 1,809,739 1,875,900 $ 229,875 $ 625,013 $ 1,809,739 $ 1,875,900 (continued) See independent auditors' report -29- ALASKA MUNICIPAL BOND BANK AUTHORITY (A Component Unit of the State of Alaska) Supplemental Schedule of Statutory Reserve Accounts -Assets, Liabilities and Account Reserves For the year ended June 30, 201O 2004B Anchorage Total Assets Cash $ 341,937 $ 6,505,632 Accrued interest receivable 413,079 Marketable securities 55,648,551 Interaccount receivables 67 5,450,580 $ 342,004 $ 68,017,842 Liabilities Interaccount payables $ $ 10,459,765 Bond payable 24,933,000 Accrued interest payable 287,109 35,679,874 Reserves Special Reserve -State Appropriated 20,010,168 Special Reserve -Unappropriated 341,931 12,092,442 Special Reserve -Unrealized gain (loss) 73 348,074 Ordinary Reserve -Unallocated (232,541) Ordinary Reserve -Unrealized gain (loss) 119,825 342,004 32,337,968 $ 342,004 $ 68,017,842 See independent auditors' report -30- APPENDIXF 2005 General Obligation Bond Resolution [THIS PAGE INTENTIONALLY LEFT BLANK] TABLE OF CONTENTS ARTICLE I STATUTORY AUTHORITY AND DEFINITIONS Section 101 -Authority for This Resolution. . . Section 102 -Resolution Constitutes Contract.. Section 103 -Definitions.. ARTICLE II AUTHORIZATION AND ISSUANCE OF BONDS Section 201 -Authorization of Bonds and Interest Rate Exchange Agreements.. 15 Section 202 -Issuance and Delivery of Bonds.. 16 Section 203 -Provisions for Issuance of Bonds.. 16 Seclion 204 -Provisions for Refunding Bonds.. 19 GENERAL OBLIGATION BOND RESOLUTION ALASKA MUNICIPAL BOND BANK ARTICLE III GENERAL TERMS AND PROVISIONS OF BONDS Section 301 -Description of Bonds; Payment. Section 302 -Legends. Section 303 -Execution and Authentication.. Section 304 -Interchangeability of Bonds. Section 305 -Negotiability, Transfer and Registry.. Section 306 -Regulations with Respect to Exchanges and Transfers.. Section 307 -Bonds Mutilated, Destroyed, Stolen or Lost. . Section 308 -Preparation of Definitive Bonds; Temporary Bonds.. Section 309 -Cancellation and Destruction of Bonds. ARTICLE IV REDEMPTION OF BONDS Section 401 -Redemption Provisions.. Section 402 -Notice of Redemption.. Section 403 -Partially Redeemed Fully Registered Bonds. 21 23 23 24 24 25 25 26 27 28 28 30 Adopted July 13, 2005 ARTICLE V CUSTODY AND APPLICATION OF CERTAIN PROCEEDS OF BONDS Section 501 -Application of Certain Proceeds.. 31 Section 502 -Loans. 31 Section 503 -Retention and Inspection of Documents. 32 ARTICLE VI ESTABLISHMENT OF FUNDS AND ACCOUNTS AND APPLICATION THEREOF Section 601 -Pledge. 33 Section 602 -Establishment of Funds and Accounts.. 33 ALASKA MUNICIPAL BOND BANK Tab/o of Contonts (Amond9d) '0;x;s.'3r.=1''''''''',,',,_,,·=C~''''''''0''' 'Il._l\oflafl.o<..<jc1=w;<l Page 1 ARTICLE VII SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS Section 701 -Security for Deposits. 44 Section 702 -Investment of Funds and Accounts Held by the Trustee. 44 Section 703 -Liability of Trustee for Investments.. 46 Section 603 -Reserve Fund.. . _. _. . . . . . . . . . 34 Section 604 -Interest Account, Principal Account and Redemption Account. 36 Section 605 -Rebate Fund.. 39 Section 606 -Operating Fund. 41 Section 607 -Reduction of Required Debt Service Reserve. 42 Section 608 -Trustee's Maintenance of Records on Payment of Bonds.. 42 Section 609 -Obtaining Credit Enhancements and Interest Rate Exchange Agreements.. . 42 Section 610 -Creation of Additional Funds, Accounts and Subaccounts; Separate Credit Enhancement Funds; Pledge with Respect to Credit Enhancements and Interest Rate Exchange Agreements. 43 ARTICLE VIII THE TRUSTEE AND THE PAYING AGENTS Section 801 -Appo'intment and Acceptance of Duties of Trustee. 46 Section 802 -Appointment and Acceptance of Duties of Paying Agents.. 46 Section 803 -Responsibilities of Fiduciaries. 47 Section 804 -Evidence on Which Fiduciaries May Act. 49 Section 805 -Compensation. 50 Section 806 -PermiUed Acts and Functions.. 50 Section 807 -Resignation of Trustee. . 50 Section 808 -Removal of Trustee. 51 Section 809 -Appointment of Successor Trustee. . 51 Section 810 -Transfer of Rights and and Property to Successor Trustee. 52 Section 811 -Merger or Consolidation. . 52 Section 812 -Resignation or Removal of the Paying Agents and Appointment of Successors. . 53 Section 813 -Evidence of Signatures of Bondholders and Ownership of Bonds.. 53 ARTICLE IX COVENANTS OF THE BANK Section 901 -Payment of Bonds. Section 902 -Extension of Payment of Bonds.. Section 903 -Offices for Servicing Bonds. Section 904 -Further Assurances. Section 905 -Power to Issue Bonds and Make Pledges. Section 906 -General Covenants of the Bank... _ 55 55 55 56 56 57 Section 907 -Accounts and Reports. 58 Section 908 -Personnel and Servicing of Programs, 59 Section 909 -Waiver of Laws.. 59 Section 910 -Fees and Charges. 59 Section 911 -Administralion of Reserve Fund. . 60 Section 912 -Issuance of Additional Obligations.. 61 Section 913 -Loan Agreement Provisions. . 62 Section 914 -Modification of Loan Agreement Terms. . 64 Section 915 -Sale of Municipal Bonds by Bank.. 65 Section 916 -Disposition of the Proceeds of Sale or Redemption of Municipal Bo~s.. 65 Section 917 -Enforcement of Municipal Bonds. 65 Section 918 -Continuing Disclosure; Bankruptcy.. 66 Section 919 -Tax Covenants.. 66 ARTICLE X SERIES RESOLUTION AND SUPPLEMENTAL RESOLUTIONS Section 1001 -Modification and Amendment without Consent. 67 Section 1002 -Supplemental Resolutions Effective with Consent of Bondholders. 68 Section 1003 -General Provisions Relating to Series Resolutions and Supplemental Resolutions. 68 ARTICLE XI AMENDMENTS Section 11 01 ~ Powers of Amendment.. 69 Section 1102 -Consent of Bondholders.. 70 Section 1103 ~ Modifications by Unanimous Consent. 72 Section 1104 ~ Mailing and Publication.. 72 Section 1105 -Exclusion of Bonds.. 72 Section 1106 -Notation on Bonds. 73 ARTICLE XII DEFAULTS AND REMEDIES Section 1201 -Trustee to Exercise Powers of Statutory Trustee.. 73 Section 1202 ~ Events of Default. 73 Section 1203 -Remedies.. 74 Section 1204 ~ Priority of Payments After Default. 76 Section 1205 -Termination of Proceedings. . . 78 Section 1206 -Bondholders' Direction of Proceedings.. 78 Section 1207 -Limitation on Rights of Bondholders.. 79 Section 1208 -Possession of Bonds by Trustee Not Required. 80 Section 1209 -Remedies Not Exclusive.. 80 ALASKA MUNICIPAL BOND BANK TlJblo of Cont8llts (Amend9d) 1'.!)<x:o."~7.=1~. ,.",.·=G<t ....""oo>;~!lo<>df1DW"'''''''?d Page 2 F-I ALASKA MUNICIPAL BOND BANK TlJb/e of Cont8llts-(Amonded) llOoa·-31.='~""'.=G~oo>;; .......,Ilo<'>Ilf1...mrt.,.,"?d Page 3 Section 1210 -No Waiver of Default. Section 1211 -Notice of Event of Default.. ARTICLE XIII DEFEASANCE Section 1301 -Defeasance. ARTICLE XIV MISCELLANEOUS Section 1401 -Preservation and Inspection of Documents. Section 1402 -Parties of Interest.. Section 1403 -No Recourse Under Resolution or on Bonds.. Section 1404 -Severability.. Section 1405 -Headings. Section 1406 -Conflict. . Section 1407 -Governing Law.. Section 1408 -Effective Date.. ALASKA MUNICIPAL BOND BJlNK TIIb/o ofContGIIts (Amondod) 1\();:>eI.\:)N=1\1~-=.<=GM.,,"O':>r,;"'''>''!lo~no<t>'''''''''' '?d 80 80 81 84 84 84 85 85 85 85 85 P1lgo4 GENERAL OBLIGATION BOND RESOLUTION A RESOLUTION CREATING AND ESTABLISHING AN ISSUE OF BONDS OF THE ALASKA MUNICIPAL BOND BANK; PROVIDING FOR THE ISSUANCE FROM TIME TO TIME OF SAID BONDS; PROVIDING FOR THE PAYMENT OF PRINCIPAL OF AND INTEREST ON SAID BONDS; AND PROVIDING FOR THE RIGHTS OF THE HOLDERS THEREOF. BE IT RESOLVED by the Board of Directors of the Alaska Municipal Bond Bank as follows: ARTICLE I STATUTORY AUTHORITY AND DEFINITIONS Section 101 -Authority for This Resolution. This Resolution is adopted pursuant to the provisions of the Act. Section 102 -Resolution Constitutes Contract. In consideration of the purchase and acceptance of the Bonds by those who shall hold the same from time to time, the provisions of this Resolution shall be a part of the contract of the Bank with the Holders of Bonds and shall be deemed to be and shall constitute a contract between the Bank, the Trustee and the Holders from time to time of the Bonds. The pledge hereof and the provisions, covenants and agreements herein set forth to be performed by or on behalf of the Bank shall be for the benefit, protection and security of the Holders of any and all of such Bonds. Each Bond, Credit Enhancement facility, and Interest Rate Exchange Agreement, regardless of the time or times of its issue or maturity, shall be of equal rank without preference. priority or distinction over any other Bond, Credit Enhancement facility, or Interest Rate Exchange Agreement except as expressly provided in this Resolution. Section 103 -Definitions. The following terms shall, for all purposes of this Resolution. have the following meanings unless the context shall clearly indicate some other meaning: "Accountant's Certificate" shall mean a certificate signed by an independent certified public accountant or a firm of independent certified public accountants selected by the Bank. "Accreted Amount" shall mean, with respect to Capital Appreciation of Bonds of any Series and as of the date of calculation, the amount established pursuant to the Series Resolution authorizing such Capital Appreciation Bonds as the amount representing the initial public offering price, plus the accumulated and compounded principal and interest on such Bonds. "Act" shall mean the Alaska Municipal Bond Bank Authority Act, constituting Chapter 85, Title 44, of the Alaska Statutes, as amended to the date of adoption of this Resolution. "Administrative Expenses" shall mean the Bank's expenses of carrying out and administering its powers, duties and functions, as authorized by the Act, and shall include, without limiting the generality of the foregoing: administrative and operating expenses, legal, accounting and consultant's services and expenses, payments to pension, retirement, health and hospitalization funds, and any other expenses required or permitted to be paid by the Bank under the provisions of the Act or this Resolution or otherwise. "Aggregate Debt Service" for any period shall mean, as of any date of calculation and with respect to all Bonds, the sum of the amounts of Debt Service for such period. "Annual Debt Service" shall mean the total amount of Debt Service for any Outstanding Bonds in any Fiscal Year. "Authorized Denominations" with respect to any Series of Bonds issued hereunder, has the meaning specified in the related Series Resolution. "Authorized Officer" shall mean the Chairman, Vice Chairman, Executive Secretary, or Executive Director of the Bank and any other director, officer or employee of the Bank authorized by resolution of the Bank to perform such act or discharge such debt. "Bank" shall mean the Alaska Municipal Bond Bank, a public body corporate and politic constituted as a public corporation and instrumentality of the State of Alaska within the Department of Revenue but having a legal existence independent of and separate from the State exercising pUblic and essential governmental functions and created by the Act, or any body, agency or instrumentality of the State which shall hereafter succeed to the powers, duties and functions of the Bank. ~Beneficial Owner" shall mean the person in whose name a Bond is recorded as the beneficial owner of such Bond by the respective systems of DTC and the DTC Participants or the Holder of the Bond if the Bond is not then held in book-entry form. "Bond~ or"Bonds~ shall mean any Alaska Municipal Bond Bank Bond or Bonds, or Alaska Municipal Bond Bank Authority Bond or Bonds. as the case may be, authenticated and delivered under this Resolution pursuant to a Series Resolution. "Bondholder" or "Holder" or words of similar import, when used with reference to a Bond or Bonds, shall mean any person who shall be the registered owner of any Outstanding Bond or Bonds issued in fUlly registered form or the bearer of any Bond or Bonds issued in bearer form or registered to bearer. When all Bonds of a Series are held by a securities depository, "Bondholder" or "Holder" shall mean the beneficial owner of the Series in question determined under the rules ofthat securities depository; otherwise "Bondholder" or "Holder" means owner of record on the bond register maintained by the Paying Agent. To the extent that the full payment of the interest on and principal of Bonds of a Series is secured by Credit Enhancement, the Credit Enhancement Agency shalf be considered to be the "Bondholder" or "Holder" of all the Bonds of that Series for purposes of exercising any rights with respect to supplements and amendments to this Resolution if the Credit Enhancement Agreement so provides. "Bond Year" shall mean each one-year period that ends on an anniversary of the date of issue of the Bonds. "Book-Entry System" shall mean the system in which the Bonds (represented by one Bond certificate for each maturity of the Bonds) are delivered into the possession ofDTC and are issued and fully-registered as to principal and interest in the name of Cede & Co., and whereby beneficial interests in the Bonds are purchased by investors through DTC Participants, such interests shown and transfers thereof effected only through the records maintained by the respective DTC Participants from whom each such investor acquired such beneficial interest. ALASKA MUNICIPAL BONO BJlNK Gooofill Obi/gilt/on Bond Rosolut/on (Am"ndod) 1'=\J1.=1'Rb<1;j~""",.'-<~G<I"",,"0':>r,;='-'<>'IJlori<!no«l~"""''''?<' Page 2 F-2 ALASKA MUNICIPAL BOND BANK GoootlJl Obi/gilt/on Bond RllSollJtlon (Amondod) '1Oo<:>·.)7'=1~-"""·=G_""OO'il"'_!\o<'>:l..~<>'vTcn~ Page 3 "Business Day" shall mean any day other than a Saturday or Sunday or any other day on which banks in New York, Alaska, or the state or states in which any Trustee appointed hereunder performs its duties hereunder are authorized or required to be closed or are closed. "Capital Appreciation Bonds" shall mean Bonds, the interest on which (a) is compounded and accumulated at the rates and on the dates set forth in the Series Resolution authorizing the issuance of such Bonds and designating them as Capital AppreciaUon Bonds, and (b) is payable upon maturity or redemption of such Bonds. "Continuing Disclosure Certificate" shall mean, for each Series, the continuing disclosure certificate executed by the Bank forthe purpose of satisfying the continuing disclosure requirements of Rule 15c2-12 of the Securities and Exchange Commission with respect to such Series, as such continuing disclosure certificate is originally executed and as it may be amended from time to time in accordance with its terms. "Counsel's Opinion" shall mean an opinion signed by an attorney or firm of attorneys of nationally recognized standing in the field of law relating to state and municipal financing (who may be counsel to the Bank) selected by the Bank and acceptable to the Trustee. "Credit Enhancement" shall mean a letter of credit, a line of credit, a credit facility, a surety bond, bond insurance, or any other instrument or arrangement obtained in connection with the issuance of a Series of Bonds to further secure the payment of the Bonds of such Series or to satisfy the Reserve Fund Requirement. "Credit Enhancement Agency" shall mean any bank or other institution that provides Credit Enhancement. "Current Interest Bonds" shall mean Bonds not constituting Capital Appreciation Bonds. Interest on Current Interest Bonds shall be payable periodically on the Interest Payment Dates provided therefor in a Series Resolution. "Debt Service" shaH mean for any Series of Bonds Outstanding, an amount equal to the sum of (a) all interest payable during such period of calculation, plus (b) the Principal Installments. if any, payable during such period of calculation on such Series of Bonds. "Executive Director" shall mean the Executive Director or Acting Executive Director of the Bank. "Fees and Charges" shall mean all fees and charges authorized to be charged by the Bank pursuant to section 44.85.080(8), (15) and (16) of the Act and charged by the Bank to Govemmental Units pursuant to the terms and provisions of Loan Agreements. "Fiduciary" or "Fiduciaries" shalt mean the Trustee, and Paying Agent, or any or all of them, as may be appropriate. "Fiscal Year" shalt mean any twelve (12) consecutive calendar months commencing with the first day of July and ending on the last day of the foHowing June or such other date as is authorized by statute and/or selected by the Bank. "Fitch" shall mean Fitch Ratings, organized and existing under the laws of the State of Delaware, its successors and their assigns, and, if such organization shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "Fitch" shall be deemed to refer to any other nationally recognized securities rating agency (other than Standard & Poor's or Moody's) designated by the Authorized Officer."Government Obligations" shall mean direct obligations of, or obligations of the payment of and interest on which are unconditionally guaranteed by, the United States of America. "Governmental Unit" shall mean a municipality or such other entity of which the Bank is authorized by law to purchase its revenue bonds, general obligation bonds, notes, or other forms of indebtedness and which otherwise satisfies conditions found herein and in the Loan Agreement. "Governmental Unit's Allocable Proportion" shall mean the proportionate amount of the total requirement in respect of which the term is used determined by the ratio that ALASKA MUNICIPAL eONO BANK Gononll Obllglttlofl Bond Rosolutlon (Amondod) 1,=·,JIQ00011Rto""",=.~G"""""ooo;,,:',,, ll<>-.<:Il"",,,,,,.,, ..,,,,,,, Pogo 4 ALASKA MUNICIPAL BOND BANK Grmoral Obl/glttlon Bond Rosolutlon (Amondod) 1·J;);>c;'-1U<'!XlOI~\""."•·~"'I:lO:>G~',,,,'" o:.:..~,,,,, !lo<"I<I1ln>cM""''''.></Poga 5 the Loan then outstanding to such Governmental Unit bears to the total of all Loans then outstanding to all Governmental Units. "Interest Account" shall mean the account by that name established by Section 602. "Interest Payment Date" shall mean any date upon which interest on any Bonds is payable in accordance with the terms thereof. "Interest Rate Exchange Agreement" shall mean an agreement entered into by the Bank or the Trustee, on behalf of the Bank, providing for an interest rate cap, floor or swap with respect to any Bonds or Municipal Bonds. "Investment Securities" shall mean the following to the extent permitted by the Act and the laws of the State of Alaska: (1) Governmental Obligations; (2) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itselD: (a) Farmers Home Administration ("FmHA") Certificates of Ownership; (b) Federal Housing Administration ("FHA") Debentures; (c) General SeNices Administration Participation certificates; (d) Govemment National Mortgage Association ("GNMA" or "Ginnie Mae") GNMA-guaranteed mortgage-backed bonds or GNMAguaranteed pass~through obligations (participation certificates): (e) United States Maritime Administration Guaranteed Title Xl financing; (f) United States Department of Housing and Urban Development ("HUD"j Project Notes Local Authority Bonds; (3) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following govemment agencies (stripped securities are only permitted if they have been stripped by the agency itself); (a) Federal Home Loan Bank System. Senior debt obligations (Consolidated debt obligations); (b) Federal Home Loan Mortgage Corporation. ("FHLMC" or "Freddie Mac") rated AAA by Standard & Poor's and Aaa by Moody's Participation Certificates (Mortgage-backed seCUrities) Senior debt obligations; (c) Federal National Mortgage Association. ("FNMA" or "Fannie Mae") rated AAA by Standard & Poor's and Aaa by Moody's Mortgage~backed securities and senior debt obligations (excluded are stripped mortgage securities which are valued greater than par on the portion of unpaid principal); (d) Student Loan MarketAssociation. ("SLMA"or"Sallie Mae") Senior debt obligations; (e) Resolution Funding Corp. ("REFCORP") Only the interest component of REFCORP strips which have been stripped by request of the Federal Reserve Bank of New York in book-entry form are acceptable; and (f) Farm Credit System. Consolidated systemwide bonds. (4) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by SSP of "AAAm-G," "AAAm" or "AAm" or by Moody's of "Aaa" including funds from which the Trustee or its affiliates receive fees for investment advisory or other services to such fund; (5) Certificates of Deposit ("CD") secured at all times by collateral described in (a) and/or (b) above. CD's must have a one-year or less maturity. Such certificates must be issued by commercial banks, savings and loan JlLASKA MUNICIPAL eOND BANK GIlfI"11I1 Obligation Bond RQ$olution (Am"ndod) 1\OoQ;',JI';'l)()011Rto"""'"",,~c..r-o:>o;:.o1J<>'t!lo<"l<lRow"''''''''''''' Pogo 6 F-3 ALASKA MUNICIPAL BOND BANX Gonet'lll ObJigetion Bond RQ$oJutlon (Amondod) 1\Oo<::<'''I'=W_",o''=G~""''''OO.9''~",~IlO'W'''O'\"",,, Pogo 7 associations or mutual savings banks whose short-term obligations are rated "A-I+" or better by S&P, and "Prime-1" or better by Moody's. The collateral must be held by a third party and the third party must have a perfected first security interest in the collateral; (6) Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fUlly insured by the Federal Deposit Insurance Corporation ("FDIC"), including Bank Insurance Fund ("BIF") and Savings Association Insurance Fund ("SAIF"); (7) Commercial paper rated "Prime-1" by Moody's and "A-1 +" or better by S&P and which matures not more than 270 days after the date of purchase; (8) Bonds or notes issued by any state or municipality which are rated by Moody's and S&P in the highest long-term rating category assigned by such agencies; (9) Federal funds or bankers acceptances with a maximum term of one year of any bank which has an unsecured, uninsured and unguaranteed obligation rating of "Prime-1" by Moody's and "A-1+" by S&P; P; (10) Repurchase agreements providing for the transfer of securities from a dealer bank or securities firm (seller/borrower) to a municipal entity (buyer/lender), and the transfer of cash from a municipal entity to the dealer bank or securities firm with an agreement that the dealer bank or securities firm will repay the cash plus a yield to the municipal entity in exchange for the securities at a specified date; provided, however, that the repurchase agreement must satisfy certain criteria articulated in writing to the Bank by the Rating Agencies and such agreement must be approved in writing prior to its acquisition by each bond insurer then insuring any Series of Bonds; and (11) Investment contracts with providers the long term, unsecured debt obligations of which are rated at least "Aaa" by the Rating Agencies. "Loan" shall mean a loan heretofore or hereafter made by the Bank to a Governmental Unit pursuant to the Act and more particularly described in the applicable Series Resolution. "Loan Agreement" shall mean an agreement, and any amendments thereto, heretofore or hereafter entered into between the Bank and a Governmental Unit setting forth the terms and conditions of a Loan. "Loan Obligation" shall mean that amount of Bonds and the Bonds themselves issued by the Bank for the purchase of Municipal Bonds of a Governmental Unit. "Maximum Annual Debt Service" shall mean, with respect to any Outstanding Series of Bonds, the highest remaining Annual Debt Service for such Series of Bonds. "Moody's" shall mean Moody's Investors Service, Inc., a corporation duly organized and existing under and by virtue of the laws of the State of Delaware, and its successors and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term "Moody's" shall be deemed to refer to any other nationally recognized securities rating agency (other than Fitch or Standard & Poor's) designated by the Authorized Officer. "Municipal Bonds" Bonds" shall mean general obligation bonds, revenue bonds, notes or other evidences of debt issued by any Governmental Unit as now or hereafter defined in the Act which have heretofore been orwill hereafter be acquired by the Bank as evidence of a Loan to the Governmental Unit pursuant to the Act. "Municipal Bonds Interest Payment" shall mean that portion of a Municipal Bonds Payment made or required to be made by a Governmental Unit to the Bank which represents the interest due or to become due on the Governmental Unit's Municipal Bonds. "Municipal Bonds Payment" shall mean the amounts paid or required to be paid, from time to time, for principal and interest by a Governmental Unit to the Bank on the Governmental Unit's Municipal Bonds. ALASKA MUNICIPAL BOND BANK GII{lI1r.l1 Obligation Bond Rosolurlon (Amondod) 1'.::>ocr.:lr~ZJOO"~""""=~""Q:;<>;Q"C>'tIlQ,,,,J;""'~'''''''''?'l Pogo 8 ALASKA MUNICIPAL BOND BANK Grmrmll Obligation Bond Rosolutlon (Amondod) '>.Ooc>·.:lr~='~~wI<Jt"""=G"""""C b"'>;.''''IIo<'>OJ;"""""",,,.,,,,?<, Pogo 9 "Municipal Bonds Principal Payment" shall mean that portion of a Municipal Bonds Payment made or required to be made by a Governmental Unit to the Bank which represents the principal due or to become due on the Governmental Unit's Municipal Bonds. "Notes" shall mean any obligations referred to herein issued by the Bank other than Bonds. "Operating Fund" shall mean the fund by that name established by Section 602. "Outstanding" when used with reference to Bonds, other than Bonds referred to in Section 1105 hereof, shall mean, as of any date, all Bonds theretofore or thereupon being authenticated and delivered under this Resolution except: (1) Any Bonds canceled by the Bank or the Trustee at or prior to such date; (2) Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered pursuant to this Resolution; and (3) Bonds deemed to have been paid as provided in subsection (B) of Section 1301. "Paying Agent" for the Bonds of any Series shall mean the bank or trust company and its successor or successors, which may inClude the Trustee, designated by the Bank as Paying Agent pursuant to the provisions of this Resolution and a Series Resolution or any other resolution of the Bank adopted prior to authentication and delivery of Bonds for which such Paying Agent or Paying Agents shall be so appointed. "Principal Account" shall mean the account by that name established by Section 602. "Principal Installment" shall mean, as of any date of calculation and with respect to the Outstanding Bonds of any Series, (i) the principal amount of such Bonds which are due on a certain future date, reduced by the aggregate principal amount of such Bonds which would be retired by reason of the payment when due and application in accordance with this Resolution of Sinking Fund Payments payable before such future date for the retirement of such Bonds or (ii) the unsatisfied balance of any Sinking Fund Payment due on a certain future date for such Bonds, plus the aggregate amount of the premiums, if any, which would be applicable on such future date upon the redemption of such Bonds by application of such Sinking Fund Payments in a principal amount equal to said unsatisfied balance or (iii) if such future dates coincide as to different Bonds of such Series, the sum of such principal amount of Bonds, unsatisfied balance and applicable premiums, if any or (iv) for any particular Series of Bonds the amount specified in the Supplemental Resolution authorizing such Series of Bonds. "Put Bond" shall mean any Bond that is part of a Series of Bonds subject to mandatory purchase by the Bank, its agent or a third party from the Owner of the Bond pursuant to provisions of the Series Resolution authorizing the issuance of the Bond. "Rating Agencies" shall mean Moody's, Standard & Poor's and Fitch or their respective successors and assigns and/or such other securities rating agency selected by the Bank to provide a rating with respect to a Series of Bonds, or or any portion thereof. which Rating Agency, as of the applicable date, shall have assigned a rating to any Series of Bonds or any portion thereof. "Rebate Calculation Date" shall mean, with respect to each Series of Bonds, the interest payment date next preceding the fifth anniversary of the issue date of such Series of Bonds, each fifth anniversary of the initial Rebate Calculation Date for such Series of Bonds, and the date of retirement of the last bond for such Series. "Rebate Fund" shall mean the fund by that name established by Section 602. "Rebate Requirement" shall mean the amount of arbitrage profits earned from the investment of gross proceeds of the Bonds in nonpurpose investments described in Section 148(f)(2) of the Code and defined as "Rebate Amount" in Section 1.148-3 of the Treasury Regulations, which are payable to the United States at the times and in the amounts specified in Section 148(0)(3) of the Code and Section 1.148-3 of the Treasury Regulations. "Record Date" shall have the meaning set forth in the Series Resolution authorizing the particular Series of Bonds. ALASKA MUNICIPAL BOND BANK Gooor.ll Obligation Bond Resolution (Amondl1d) 1\C>:>cs'.:l7~=1~.·=Go""""""'>;"""'Il<w.!Hou;l ..,,,,,,,,,,,, Poge 10 F-4 ALASKA MUNICIPAL BOND BANK GlI{lor.l1 Obligation Bond Resolution (Amondod) ''Dool'.:lI.=llR1noV''''''''=G.""",, ""'..ato= lloodRc«w.""''''''' Page 11 "Redemption Account" shall mean the account by that name established by Section 602. "Redemption Price" shall mean, with respect to any Bond, the principal amount thereof, plus the applicable premium, of any, payable upon redemption thereof pursuant to the provisions of such Bond, this Resolution and the Series Resolution pursuant to which the same was issued. "Refunding Bonds" shall mean all Bonds, whether issued in one or more series, authenticated and delivered on original issuance for the purpose of refunding Bonds or other obligations of the Bank and all Bonds thereafter authenticated and delivered upon the transfer or exchange of or in lieu of or in substitution for such Bond pursuant to this Resolution. "Regular Record Date" shall mean, unless otherwise provided in a Series Resolution, with respect to the Bonds, the fifteenth (15th) day immediately preceding each Interest Payment Date (or the Business Day immediately preceding such fifteenth (15th) day, if such fifteenth (15th) day is not a Business Day). "Required Debt Service Reserve" shall mean as of any date of calculation, the amount required to be on deposit in the Reserve Fund which amount shall be at least equal to the Reserve Fund Requirement. "Reserve Fund" shaH mean the 2005 General Obligation Bond Resolution Reserve Account established by Section 602 within the Alaska Municipal Bond Bank Reserve Fund created by Section 44.85.270 of the Act. "Reserve Fund Obligations" shall mean the amount of Bonds issued by the Bank to obtain funds deposited in the Reserve Fund. "Reserve Fund Requirement" shall mean the least of (i) Maximum Annual Debt Service with respect to all Bonds Outstanding; (ii) 125% of Average Annual Debt Service with respect to all Bonds Outstanding; (iii) 10% of the initial principal amount of each Series of Bonds then Outstanding, or (iv) such lower amount as may be required by law. The Reserve Fund Requirement may be satisfied entirely, or in part, by Credit Enhancement as provided for herein; provided, however, any Credit Enhancement satisfying all orany part of the Reserve Fund Requirement after the initial issuance of Bonds orissued in substitution for any prior Credit Enhancement previously issued shall not, by itself, cause a withdrawal or a downward revision of the ratings maintained by any Rating Agency with respect to the Bonds. "Resolution" shall mean this General Obligation Bond Resolution as from time to time amended or supplemented by Supplemental Resolutions or Series Resolutions in accordance with the terms and provisions hereof. "Security Instrument" shall mean an instrument or other device issued by a Security Instrument Issuer to pay, or to provide security or liquidity for, a Series of Bonds, The term "Security Instrument" includes, by way of example and not of limitation, letters of credit, bond insurance policies, standby bond purchase agreements, lines of credit and other security instruments and credit enhancement or liquidity devices; provided, however, that no such device or instrument shall be a "Security Instrument" for purposes of this Resolution unless specifically so designated in a Series Resolution authorizing the use of such device or instrument. "Security Instrument Agreement" shall mean any agreement entered into by the Bank and a Security Instrument Issuer pursuant to a Series Resolution and/or the applicable portions of a Series Resolution providing for the issuance by such Security Instrument Issuer of a Security Instrument. "Security Instrument Costs" shall mean, with respect to any Security Instrument, all fees, premiums, expenses and similar costs, other than Security Instrument Repayment Obligations, required to be paid to a Security Instrument Issuer pursuant to a Security Instrument Agreement or the Series Resolution authorizing the use of such Security Instrument. Such Security Instrument Agreement or Series Resolution shall specify any fees, premiums, expenses and costs constituting Security Instrument Costs. "Security Instrument Issuer" shall mean any bank or other financial institution, insurance company, surety company or other institution issuing a Security Instrument. ALASKA MUNICIPAL 80NO BANK GlIIIonll ObI/Qat/on Bond RosohJtlon (Amrmdod) 1\O:>:$'.)7'~1'J.lo<o'~",",·.2l:'X'l:;G<I""""w>;~\'''''!l<>-"I<l'l""mr.","\\';>O Pllga 12 ALASKA MUNICIPAL BOND BANK Ganeml Obligation Bond RflSohJtJon (Amondod) I '.Doco',Jr'="Ro-><>ul=,'2005Co""<u< oo>;ot<>'\(\c.'<!Il"""""""''''''' Pllgo 13 "Security Instrument Repayment Obligations" shall mean, as of any date of calculation and with respect to any Security Instrument Agreement, any outstanding amounts payable by the Bank under the Security Instrument Agreement or the Series Resolution authorizing the use of such Security Instrument to repay the Security Instrument Issuer for payments previously or concurrently made by the Security Instrument Issuer pursuant to a Security Instrument. There shall not be included in the calculation of the amount of Security Instrument Repayment Obligations any Security Instrument Costs. Each Security Instrument Agreement or the Series Resolution authorizing the use of such Security Instrument shall specify any amounts payable under it which, when outstanding, shall constitute Security Instrument Repayment Obligations and shall specify the portions of any such amounts that are allocable as principal of and as interest on such Security Instrument Repayment Obligations, "Series of Bonds" or "Bonds of a Series" or words of similar meaning shall mean the Series of Bonds authorized by a Series Resolution. "Series Resolution" shall mean a resolution ofthe Bank authorizing the issuance of a Series of Bonds in accordance with the terms and provisions hereof and adopted in accordance with Article X, "Sinking Fund Installment" shall mean, as of any particular date of calculation and with respect to the Outstanding Bonds of any Series, the amount required to be paid at all events by the Bank on a single future date for the retirement of Bonds of such Series which mature after said future date, but does not include any amount payable by the Bank by reason only of the maturity of a Bond. "Standard & Poor's" shall mean Standard & Poor's Ratings Services. a Division of The McGraw-Hill Companies. Inc.. and its successors and assigns, except that if such corporation or division shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term "Standard & Poor's" shall be deemed to refer to any other nationally recognized securities rating agency (other than Moody'S or Fitch) designated by the Authorized Officer. "State" shall mean the State of Alaska. "Supplemental Resolution" shall mean a resolution supplemental to or amendatory of this Resolution. (other than a Series Resolution) adopted by the Bank in accordance with Article X. "Trustee" shall mean the bank or trust company appointed pursuant to Section 801 to act as trustee hereunder, and its successor or successors and any other bank or trust company at any time substituted in its place pursuant to this Resolution. "Variable Rate Bonds" Bonds" shall mean, as of any date of calculation, Bonds the terms of which on such date of calculation are such that interest thereon for any future period of time is expressed to be calculated at a rate which is not susceptible to a precise determination, Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders, Unless the context shall otherwise indicate, words importing the singularnumbershall include the plural number and vice versa, and words importing persons shall include corporations and associations. including public bodies, as well as natural persons. The terms "hereby," "hereof," "hereto," "herein," "hereunder," and any similar terms, as used in this Resolution, refer to this Resolution, ARTICLE II AUTHORIZATION AND ISSUANCE OF BONDS Section 201 -Authorization of Bonds and Interest Rate Exchange Agreements. (A) Bonds are hereby authorized forissuance hereunderby the Bank. The Bonds may be issued in one or more Series pursuant to one or more Series Resolutions which shall state the purpose or purposes for which each Series of Bonds is being issued as hereinafter provided without limitation as to amount except as provided in this Resolution or as may be limited by law. Interest Rate Exchange Agreements may only be executed and delivered by the Bank in connection with the issuance and delivery of a Series of Bonds hereunder or in connection with the renewal, substitution or extension of an Interest Rate Exchange Agreement. ALASKA MUNICIPAL BOND BANK Gononrl ObllQ;atlon Bond Rosolutlon (AmondlX1) 1'.Cic>c<',JT~~1_.......,..,.'~G_~w>;~"""llonaHD<d~",o>r;>:l Pllgo 14 F-5 ALASKA MUNICIPAL BONO BANK GanQnll ObligatIon Bond RflSolution (AmondOd) 1'.Doco\:J7'=1~""",.'.=C"""""O:;"'_Ilc<>:lIl"""~1""'-:>O' Pago 15 (B) There is hereby created by this Resolution, in the manner and to the extent provided herein, a continuing pledge and lien to secure the full and final payment of the principal or Redemption Price of, interest on and Sinking Fund Installments for, all of the Bonds issued pursuant to this Resolution. The Bonds shall be general obligations of the Bank payable as to principal or Redemption Price of, interest on, and Sinking Fund Installments forthe Bonds solely from the sources provided in this Resolution and any Series Resolution. The State shall not be liable on the Bonds and the Bonds shall not be a debt or liability, or constitute a pledge or loan of the faith and credit, of the State. The Bonds shall contain on the face thereof a statement to the effect that the Bank is obligated to pay the principal or Redemption Price, if any, of the Bonds and the interest thereon only from revenues or funds of the Bank and that the State is not obligated to pay such principal or Redemption Price, if any, or interest interest and that neither the faith and credit nor the taxing power of the State is pledged to the payment of the principal or Redemption Price, if any, of, or the interest on, the Bonds. Section 202 ~ Issuance and Delivery of Bonds. After their authorization by a Series Resolution, Bonds of a Series may be executed by or on behalf of the Bank and delivered to the Trustee for authentication and, upon compliance by the Bank with the requirements, if any, set forth in such Series Resolution and with the requirements of Section 203 or, in the case of Refunding Bonds, Section 204, the Trustee shall thereupon authenticate and deliver such Bonds to or upon the order of the Bank. Section 203 -Provisions for Issuance of Bonds. (A) The issuance of the Bonds shall be authorized by a Series Resolution or Series Resolutions of the Bank adopted subsequent hereto and the Bonds may be issued in one or more Series. The Bonds of each Series, including Refunding Bonds, shall, in addition to the title "Alaska Municipal Bond Bank General Obligation Bonds," contain such further appropriate particular designations added to such titre and the appropriate Series designation as the Bank may determine in such Series Resolution. Each Bond shall bear upon its face the designations so determined for the Series to which it belongs. (B) Each Series Resolution authorizing the issuance of a Series of Bonds shall specify:(1) The authorized principal amount of said Series of Bonds; (2) The purposes for which such Series of Bonds is being issued, which shall be one or more of the following: (i) making Loans to Governmental Units, (ii) making payments into the Reserve Fund, (iii) the funding of Notes theretofore issued by the Bank for any purposes for which Bonds may have been issued, (iv) the refunding of Bonds and related purposes, as provided in Section 204, and (v) any other purpose authorized by law; (3) The date and the maturity date or dates and amounts of each maturity of the Bonds of said Series or the method of determining the same; (4) 4) (i) The interest rate or rates (if any) or maximum interest rate of the Bonds of such Series, or the method of determining such rate or rates (which may be determinable at one or more specified times set forth in the Series Resolution, which may aecrete or compound with such frequencies or in such manner as shall be specified in such Series Resolution and which shall be as otherwise specified in the Series Resolution), and the Interest Payment Dates and Record Dates therefor and (ii) a mannerof calculating accreted value or compounded principal value during all or any part of the term of the Series of Bonds being authorized, if interest is not payable currently and the Bank determines that it is necessary or appropriate; (5) The denomination or denominations of, and the manner of numbering and lettering, the Bonds of such Series, provided that each Bond shall be of the denomination of $5,000 or a multiple thereof, not exceeding the aggregate principal amount of the Bonds of such Series maturing in the year of maturity of the Bond for which the denomination is to be specified unless otherwise provided in the Series Resolution authorizing the issuance of such Bonds; (6) The Paying Agent or Paying Agents and the place or places of payment of the principal and Redemption Price, if any, of and interest on the Bonds of such Series or the manner of appointing and designating the same; ALASKA MUNICIPAL 80NO BANK GQflQ/lII Obligation 80nd Rrnohttlon (Amondod) 1'=·Jr'20001~o,~Go""""(J<; ..."""'8<Y>O~M<M"'o,,,?<! Page 16 ALASKA MUNICIPAL BOND BANK GQfl8~1 Obi/gilt/on Bond Rosoluflon (AmondDd) 11D=I.·J7'=I~~"""..=t;.""""O:>'iA""'tlo'>~~"""'<Jt"'~'*?" Page 17 (7) The Redemption Price or Prices, if any, and, subject to the provisions of Article IV, the redemption terms for the Bonds of such Series or the method of determining the same; (8) The amount and due date of each Sinking Fund Installment, if any, for Bonds of like maturity of such Series, or the method of determining such Sinking Fund Installment; (9) The form or or forms of the Bonds of such Series and of the Trustee's certificate of authentication; (10) The manner of execution of the Bonds of such Series; (11) If, at the time of issuance of the Bonds of such Series, an Interest Rate Exchange Agreement will apply to such Bonds or such Bonds are to be secured by Credit Enhancement, the form of Credit Enhancement or Interest Rate Exchange Agreement to be obtained, the identity of the Credit Enhancement Agency or of the counterparty to the Interest Rate Exchange Agreement, and the substantial form of the significant documents relating to the Credit Enhancement or Interest Rate Exchange Agreement; (12) If Bonds of such Series are to contain any tender or put options or the like, whether such Bonds are to be remarketed and, if so, the identity of any remarketing agent and the substantial form of any remarketing agreement relating to such Bonds; and (13) Any other provisions deemed advisable by the Bank, not in conflict with the provisions of this Resolution. All Bonds of each Series of like maturity shall be identical in all respects, except as to denominations, interest rate, and numbers and letters. (C) All (but not less than all) the Bonds of each Series shall be executed by the Bank for issuance under the Resolution and delivered to the Trustee and thereupon shall be authenticated by the Trustee and by it delivered to the Bank or to such other party as may be specified in a written order of the Bank, but only upon the receipt by the Trustee of: (1) A Counsel's Opinion to the effect that (i) the Bank has the right and power to execute and deliver this Resolution and the Series Resolution authorizing such Series under the Act as amended to the date of such Opinion; (ii) this Resolution and such Series Resolution has been duly and lawfUlly executed and delivered by the Bank. is in full force and effect and is valid and binding upon the Bank and enforceable in accordance with its terms (SUbject, as to enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium, or other laws affecting creditors' rights generally from time to time in effect); (iii) this Resolution and such Series Resolution creates the valid pledge and assignment which it purports to create of the Municipal Bonds. subject to the application thereof to the purposes and on the conditions permitted by this Resolution; (iv) the Bonds of such Series are valid and binding general obligations of the Bank, enforceable in accordance with their terms and the terms of this Resolution and such Series Resolution; and (v) the Bonds of such Series have been duly and validly authorized and issued in accordance with the constitution and statutes ofthe State, including the Act as amended to the date of such Opinion, and in accordance with this Resolution; (2) A written order as to the delivery of such Bonds, signed by an Authorized Officer;(3) Either an original of the Series Resolution authorizing such Series or a copy thereof certified by an Authorized Officer; (4) Except in the case of Refunding Refunding Bonds, a certificate of an Authorized Officer stating that the Bank is not in default in the performance of any of the covenants, conditions, agreements or provisions contained in the Resolution; (5) Such further documents, moneys and securities as are required by the provisions of this Section 203, and Section 204, or Article X, or any Series Resolution or Supplemental Resolution adopted pursuant to Article X. Section 204 -Provisions for Refunding Bonds. (A) All or any part of one or more Series of Refunding Bonds may be authenticated and delivered to refund all Outstanding Bondsorany part of one or more Series of Outstanding Bonds. Refunding ALASKA MUNICIPAL 80NO BANK G0fl8flJI Obllglltion Bond RllSohttlon (Amondod) 1·0Xs',)r'20001'Rbt<>'''''''''',·.:'lXOGooot!Zl(J<;..."''''8<Y>O~.....<ft''''''''?<! Page 18 F-6 ALASKA MUNICIPAL BOND BANK Gonor.ll Obligation Bond RllSohttlon (Amondfld) llD::a',)r'=I'ito«nt'..oo"'=~O';<'il""'C>'I.\"M~""""\t.""''';>::! Page 19 Bonds shall be issued in a principal amount sufficient, together with other moneys available therefor, to accomplish such refunding and to make such deposits as are required by the provisions of the Act, this Section and of the Series Resolution authorizing said Series of Refunding Bonds. (B) A Series of Refunding Bonds may be authenticated and delivered only upon receipt by the Trustee (in addition to the receipt by it of the documents required by Section 203) of: (1) Instructions to the Trustee to give due notice of redemption (which notice, in the case of an optional redemption, shaff state that the redemption is conditioned by the Trustee on the receipt of sufficient funds for redemption) of all the Bonds to be refunded on the redemption date specified in such instructions; (2) Either (i) moneys (which may include all or a portion of the proceeds of the Refunding Bonds to be issued) in an amount sufficient to effect payment at the applicable Redemption Price of the Bonds orotherobligations to be refunded, together with accrued interest on such Bonds or other obligations to the redemption date, or (ii) direct obligations of (including obligations issued or held in book-entry form on the books of) the Department of the Treasury of the United States of America which are not subject to redemption prior to the dates on which amounts will be needed to make payments on the Bonds or other obligations to be refunded and the principal of and interest on which when due, together with the moneys (which may include all or a portion of the proceeds of the Refunding Bonds to be issued), if any, contemporaneously deposited with the Trustee, will be sufficient to pay when due the applicable Redemption Price of the Bonds orotherobligations to be refunded, together with accrued interest on such Bonds or other obligations to the redemption date, which moneys or Investment Securities shall be held by the Trustee or anyone or more of the Paying Agents or an escrow agent or trustee forotherobligations in a separate account irrevocably in trust for and assigned to the respective Holders of the Bonds or other obligations to be refunded: and (3) A certificate of an Authorized Officer containing such additional statements as may be reasonably necessary to show compliance with the requirements of subsection (A) and this subsection (B) of this Section 204. (C) From and after the delivery of the Refunding Bonds of a Series, the Trustee shall make appropriate adjustment between the Interest Account and Principal Account when disbursing and applying Municipal Bonds Payments deposited in the Debt Service Fund pursuant to the provisions of Section 604 to the end that such portion of the Municipal Bonds Payment as shall represent Municipal Bonds Interest Payment not reqUired for deposit in the Interest Account for the purpose of paying interest accruing upon the Bonds shall be deposited in the Principal Account. Any surplus which might result upon and after such deposit shall be disposed of in the manner specified in the Series Resolution authorizing such Series. (D) Neither Investment Securities nor moneys deposited with the Trustee or an escrow agent or trustee for other obligations pursuant to paragraph (B)(2) of this Section nor principal or interest payments on any such Investment Securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the applicable Redemption Price of the Bonds or other obligations to be refunded, together with accrued interest on such Bonds or other obligations to the redemption date, and any cash received from such principal or interest payments, if not then needed for such purpose, shall, to the extent practicable, be reinvested in such Investment Securities as are described in clause (ii) of said paragraph maturing at times and in amounts sufficient to pay when due the applicable Redemption Price of such Bonds or other obligations, together with such accrued interest. ARTICLE III GENERAL TERMS AND PROVISIONS OF BONDS Section 301 -Description of Bonds' Payment. (A) The Bonds of each Series issued under the provisions hereof may be issued only as registered bonds and subject to Section 303 hereof, each Bond shall be entitled "General Obligation Bonds" and shall bear such additional letter or number series designation as shall be determined ALASKA MUNICIPAL BONO BANK GQlfOflll Obllgltflon Bond Rosoluflon (AmondlXl) 1~·..)I'=l\lUr""~""""=(;n""""w>;."""l\ohdl..1."~",,,"'?d Page 20 ALASKA MUNICIPAL BOND BANK GQlfl1n/Obllglttlon Bond Rosolu/lon (Aml1ndlXl) 1.\Cb::>;·J7l:1OOO1111<1""""""o,·=Go""""w>;.'-"" ,ll<>""Il,,,",*.Jtco "?'l Pago 21 in the Series Resolution authorizing the Bonds of the Series ofwhich such Bond is one. Unless otherwise specified in the Series Resolution authorizing such Series of Bonds, Bonds of each Series shall be in Authorized Denominations each or any integral multiple thereof, shaff be numbered consecutively from 1 upwards and shall bear interest payable on Interest Payment Oates. (B) The Bonds of each Series issued hereunder shall be dated as of and bear interest from the date specified in the Series Resolution that authorized such Series, wh'lch date may be contemporaneous with or prior to or after the date of issuance of such Bonds. (C) Both the principal of and the interest on the Bonds shall be payable in any coin or currency of the United States of America, as at the respective time of payment shall be legal tender for payment of public and private debts. Payment of the interest on any Bond shall be made to the person appearing on the Bond registration books of the Bank kept for such purpose by the Trustee, the registrar hereinafter provided for as the Holder thereof, by check or draft mailed to the Holder at her or his address as it appears on such registration books or to owners of $1 ,000,000 or more in aggregate principal amount of Bonds by wire transfer to a bank account designated by the Holder in written instructions furnished to the Trustee. The interest on Bonds so payable, and punctually paid or dUly provided for, on any Interest Payment Date will be paid to the person who is the Holder thereof at the close of business on the applicable Record Date for such interest. The principal of and premium, if any, on Bonds are payable upon presentation and surrender thereof at the principal corporate trust office of the Trustee, as paying agent, except as othervvise provided by Series Resolution. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. (0) The Bonds of each Series may contain or have endorsed thereon such provisions, specifications and descriptive words not inconsistent with the provisions hereof as may be necessary or desirable to comply with custom, the rules of any securities exchange or commission or brokerage board or otherwise, as may be specified in the Series Resolution authorizing such Series of Bonds. Section 302 -Legends. The Bonds of each Series shaff contain or have endorsed thereon a statement to the effect that the State shall not be liable thereon and that such Bond shall not be a debt of the State and may contain or have endorsed thereon such provisions, specifications and descriptive words not inconsistent with the provisions of this Resolution as may be necessary or desirable to comply with custom, or otherwise, as may be determined by the Bank prior to the delivery thereof to the Bondholder. Section 303 -Execution and Authentication. (A) The Bonds shall be executed in the name of the Bank by the manual or facsimile signature of ils Chairman or ViceChairman and its corporate seal (or a facsimile thereof) shall be thereunto affixed, imprinted, engraved or otherwise reproduced, and attested by the manual or facsimile signature of its Secretary or such officer or employee of the Bank as shall be directed by the Series Resolution authorizing the issuance thereof, or in such other manner as may be required by law. In case anyone or more of the officers or employees who shall have signed or sealed any of the Bonds shall cease to be such officer or employee before the Bonds so signed and sealed shall have been actually authenticated and delivered by the Trustee, such Bonds may, nevertheless, be authenticated and delivered as herein provided, and may be issued as if the persons who signed or sealed such Bonds had not ceased to hold such offices or be so employed. Any Bonds of a Series may be signed and sealed on behalf of the Bank by such persons as at the actual time of the execution of such Bond shall be duly authorized or hold the proper office in or employment by the Bank, although at the date of the Bonds of such Series such persons may not have been so authorized or have held such office or employment. (B) The Bonds of each Series shall bear thereon a certificate of authentication, in the form set forth in the Series Resolution authorizing such Bonds, executed manually by the Trustee. Only such Bonds as shall bear thereon such certificate of ALASKA MUNICIPAL BOND BANK GfHloflll Obllglltlon Bond Rosolu/lon (Amondfld) 1·.ooa.·,Jl.=l',R"........"""..=Go""""wo;..""'l\ohdll""'~.,..,"'O'd Pago 22 F-7 ALASKA MUNICIPAL BOND BANK GMonl Obllgnion Bond Rosoluflon (Amondl1d) I\D"a\3T'=1~"=G_""O:>'Il.,,,,,l\<>f'I(!l1""''''-O'\'''?d Page 23 authentication shall be entilled to any right or benefit under the Resolution and no Bond shall be valid or obligatory for any purpose until such certificate of authentication shall have been duly executed by the Trustee. Such certificate of the Trustee upon any Bond executed on behalf of the Bank shall be conclusive evidence that the Bond so authenticated has been duly authenticated and delivered under the Resolution and that the Holder thereof is entitled to the benefits of the Resolution. Section 304 -Interchangeability of Bonds. Bonds, upon surrender thereof at the corporate trust office of the Trustee with a written instrument of transfer satisfactory to the Trustee, duly executed by the registered owner or their attorney duly authorized in writing, may, at the option of the registered owner thereof, be exchanged for an equal aggregate principal amount of registered Bonds of the same Series, maturity, and interest rate as the surrendered Bond. Section 305 -Negotiability Transfer and Registry. All the Bonds issued under this Resolution shall be negotiable as provided in the Act, subject to the provisions for registration and transfer contained in this Resolution and in the Bonds. So long as any of the Bonds shall remain Outstanding, the Bank shall maintain and keep, at the corporate trust office of the Trustee, books for the registration and transfer of Bonds; and, upon presentation thereof for such purpose at said office, the Bank shall register or cause to be registered therein, and permit to be transferred thereon, under such reasonable regulations as it or the Trustee may prescribe, any Bond entitled to reg'lstration or transfer. So long as any of the Bonds remain Outstanding, the Bank shall make all necessary provisions to permit the exchange of Bonds at the corporate trust office of the Trustee. The Bank and each Fiduciary may deem and treat the person in whose name any Bond shall be registered upon the books of the Bank as the absolute owner of such Bond, whether such Bond shall be overdue or not, forthe purpose of receiving payment of, oron account of, the principal and Redemption Price, if any, of and interest on such Bond and for all other purposes, and all such payments so made to any such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the Bank nor any Fiduciary shall be affected by any notice to the contrary. The Bank agrees to indemnify and save each Fiduciary harmless from and against any and all loss, cost, charge, expense judgment or liability incurred by it. acting in good faith and without negligence under this Resolution, in so treating any such registered owner. Section 306 -Regulations with Respect to Exchanges and Transfers. In all cases in which the privilege of exchanging Bonds or transferring Bonds is exercised, the Bank shall execute and the Trustee shall authenticate and deliver Bonds in accordance with the provisions of this Resolution. All Bonds surrendered in any such exchanges or transfers shall forthwith be cancelled by the Trustee. For every such exchange ortransfer of Bonds, whether temporary or definitive, the Bank orthe Trustee may, as a condition precedent to the privilege of making such exchange or transfer, make a charge sufficient to reimburse it for any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer. Notwithstanding any other provision of this Resolution the cost of preparing each registered Bond upon each exchange or transfer, and any other expenses of the Bank or the Trustee incurred in connection therewith (except any applicable tax, fee or other governmental charge) shall be paid by the Bank as an Administrative Expense. Neither the Bank or the Trustee shall be required (i) to make any exchange or transfer of Bonds of any Series during the ten (10) days (or such other period of time as may be specified in the Series Resolution authorizing such Series) next preceding an interest payment date on on the Bonds of such Series or preceding any selection of Bond of such Series to be redeemed or (ii) to transfer or exchange any Bonds previously called for redemption. Section 307 -Bonds Mutilated Destroyed Stolen or Lost. In case any Bond shall become mutilated or be destroyed, stolen or lost. the Bank shall execute and the Trustee shall authenticate and deliver a new Bond of like Series, maturity and principal amount as the Bond so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Bond, upon surrender and cancellation of such mutilated Bond or in lieu of and substitution for the Bond destroyed, stolen or lost, upon filing with ALASKA MUNICIPAL BONO BANK Gooorol ObI/gilt/on Bond ROsoNtJon (Amond9d) 1\D:>o::!.\)7.=tlll.,...OV..",.\2C(6G~""'II,o::;.;.t""'Bondll ...""'"",~ Page 24 ALASKA MUNICIPAL BONO BANK Gonorol Obllgat/on Bond Rnso/ulfon (Amondod) '\C>'x:o.',J7.XIOO1_v''''~,'-"':Y..l 5~o''''''W.;h'=lklo<.:..R<t<.rt'''o~ Page 25 the Bank evidence satisfactory to the Bank Bank and the Trustee that such Bond have been destroyed, stolen or lost and proof of ownership thereof, and upon furnishing the Bank and the Trustee with indemnity satisfactory to them and complying with such other reasonable regulations as the Bank and the Trustee may prescribe and paying such expenses as the Bank and the Trustee may incur in connection therewith. All Bonds so surrendered to the Trustee shall be cancelled by it and evidence of such cancellation shall be given to the Bank. Any such new Bonds issued pursuant to this section in substitution for Bonds alleged to be destroyed, stolen or lost shall constitute original additional contractual obligations on the part of the Bank, regardless of whether the Bonds so alleged to be destroyed, stolen or lost be at any time enforceable by anyone, and shall be equally secured by and entitled to equal and proportionate benefits with all other Bonds issued under this Resolution, in any moneys or securities held by the Bank or the Fiduciaries for the benefit benefit of the Bondholders, If a Bondholder satisfies the conditions set forth in this section for the replacement of a mutilated Bond or a Bond alleged to be destroyed, stolen, or lost and such Bond has matured or all principal thereof and interest thereon shall become due for any other reason, then the Trustee may pay such principal of and interest on such Bond without issuing a replacement Bond. Section 308 ~ Preparation of Definitive Bonds' Temporary Bonds. Until the definitive Bonds of any Series are prepared, the Bank may execute, in the same manner as is provided in Section 303, and upon the request of the Bank, the Trustee shall authenticate and deliver, in lieu of definitive Bonds, but subject to the same provisions, limitations and conditions as the definitive Bonds, except as to the denominations thereof and as to exchangeability for registered Bonds, one or more temporary Bonds, substantially of the tenor of the definitive Bonds in lieu ofwhich such temporary Bond or Bonds are issued in such denominations as may be authorized by the Bank, and with such omissions, insertions and variations as may be appropriate to temporary Bonds. The Bank at its own expense shall prepare and execute and, upon the surrender thereof of such temporary Bonds to the Trustee. The Trustee shall authenticate and, without charge to the holder thereof, deliver in exchange therefor definitive Bonds of the same aggregate principal amount and Series and maturity as the temporary Bonds surrendered. Until so exchanged, the temporary Bonds shall in all respects be entitled to the same benefits and security as definitive Bonds authenticated and issued pursuant to this Resolution. If the Bank shall authorize the issuance of temporary Bonds in more than one denomination, the holder of any temporary Bond or Bonds may, at his option, surrender the same to the Trustee in exchange for another temporary Bond or Bonds of like aggregate principal amount, Series and maturity of any other authorized denomination or denominations, and thereupon the Bank shall execute and the Trustee shall authenticate and, in exchange for the temporary Bond or Bonds so surrendered and upon payment of the taxes, fees and charges provided for in Section 306, shall deliver a temporary Bond or Bonds of like aggregate principal amount, Series and maturity in such other authorized denomination or denominations as shall be requested by such holder.All temporary Bonds surrendered in exchange eitherforanothertemporary Bond or Bonds or for a definitive Bond or Bonds shall be forthwith cancelled by the Trustee. Section 309 -Cancellation and Destruction of Bonds. All Bonds paid or redeemed, either at or before maturity, shall be delivered to the Trustee when such payment or redemption is made, and such Bonds, together with all Bonds purchased by the Trustee, shall thereupon be promptly cancelled. Bonds so cancelled may, at any time, be cremated or otherwise destroyed by the Trustee, who shall execute a Certificate of cremation or destruction in duplicate by the signature of one of its authorized officers describing the Bonds so cremated or otherwise destroyed, and one executed Certificate shall be filed with the Bank and the other executed Certificate shall be retained by the Trustee. ALASKA MUNICIPAL BOND BANK GOOImlI Obl/gaflon Bond RnsolutJon (Amfmded) 1.\Doo:s·,J1.=11l-loo<>V..",. \""'XI5G.....,..,OO.;....<O'Illond:ll"""''''.,,,~ Pago 26 F-8 ALASKA MUNICIPAL BONO BANK Gonoral Obllgaflon Bond RnsolutJorr (Amondod) '\OooI·,JN=\\I·\h«l<,,'.m.'2005G.""""OO~8o"~f1O«M""'~ Page 27 ARTICLE IV REDEMPTION OF BONDS Section 401 -Redemption Provisions. The Bonds ofeach Series may be subject to redemption prior to maturity at such times and upon such terms as shall be fixed by the related Series Resolution. If less than all of the Bonds of anyone maturity of a Series shalt be called for redemption, the particular units of Bonds, as determined in accordance with Section 403 herein, to be redeemed shall be selected by lot by the Trustee, or in any manner as the Trustee, in its sale discretion, may deem appropriate and fair. Section 402 -Notice of Redemption. (A) In the event any of the Bonds are to be redeemed, the Registrar shall cause notice to be given as provided in this Section 402. Unless otherwise specified in the Series Resolution authorizing the issuance of the applicable Series of Bonds, notice of redemption (i) shall be filed with the paying agent designated for the Bonds being redeemed and (ii) shall be mailed by first class mail, postage prepaid, to all Bondholder of Bonds to be redeemed at their addresses as they appear on the registration books of the Trustee, at least thirty (30) days but not more than sixty (60) days prior to the date fixed for redemption. Such notice shall state the following information: (1) the complete official name of the Bonds, including Series, to be redeemed, the identification numbers of Bonds and the CUSIP numbers, if any, of the Bonds being redeemed, provided that any such notice shall state that no representation is made as to the correctness of CUSIP numbers either as printed on such Bonds or as contained in the notice of redemption and that reliance may be placed only on the identification numbers contained in the notice or printed on such Bonds: (2) any other descriptive information needed to identify accurately the Bonds being redeemed, including, but not limited to, the original issue date or dated date of and interest rate on such Bonds: (3) in the case of partial redemption of any Bonds, the respective principal amounts thereof to be redeemed: redeemed: (4) the date of mailing of redemption notices and the redemption date; (5) the redemption price; (6) that on the redemption date the redemption price will become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date: and (7) the place where such Bonds are to be surrendered for payment of the redemption price, designating the name and address of the redemption agent with the name of a contact person and telephone number. (B) In addition to the foregoing, further notice of any redemption of Bonds hereunder shall be given by the Trustee, at least two (2) Business Days in advance of the mailed notice to Bondholders, by registered or certified mail or overnight delivery service, to all registered securities depositories then in the business of holding substantial amounts (as reasonably determined by the Bondholders) of obligations of types comprising the Bonds and to at least two national information services that disseminate notices of redemption of obligations such as the Bonds. Such further notice shall contain the information required in clause (a) above. Failure to give all or any portion of such further notice shalt not in any manner defeat the effectiveness of a call for redemption. (C) Upon the payment of the redemption price of Bonds being redeemed, each check or other transfer of funds issued for such purpose shall bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer. (D) If at the time of mailing of any notice of redemption there shall not be on deposit with the Trustee moneys sufficient to redeem all the Bonds called for ALASKA MUNICJPAL BOND BANK Gqn9r.11 ObI/gilt/on Bond RO$olutfon (Amrmdfld) 1~·.'I7'<'<XY.l\·~""n.\XmCe.,,,,,,,,():;;,..,,,,,!lo""f<<><.<j, ,,,,",,,,,,, Pagc 28 ALASKA MUNICIPAL 80ND 8ANK Gflmu:l1 Obligation Bond RosoJutlon (Amondod) 1=·.'I7.="_~""n.·~"':loZGo"",,"r:;,:;",.3<.".., !lo"'!~oW"'''''w;<l Pago Pago 29 redemption, such notice shall state that such redemption is subject to the deposit of the redemption moneys with the Trustee not later than the redemption date and that such notice shall be of no effect unless such moneys are so deposited. (E) A second notice of redemption shall be given, not later than ninety (90) days subsequent to the redemption date, to Bondholders of Bonds or portions thereof redeemed but who failed to deliver Bonds for redemption prior to the 60th day following such redemption date. Any notice mailed shall be conclusively presumed to have been duly given, whether or not the owner of such Bonds receives the notice. Receipt of such notice shalt not be a condition precedent to such redemption, and failure so to receive any such notice by any of such Bondholders shall not affect the validity of the proceedings for the redemption of the Bonds. (F) In case any Bond is to be redeemed in part only, the notice of redemption which relates to such Bond shall state also that on or after the redemption date, upon surrender of such Bond, a new Bond in principal amount equal to the unredeemed portion of such Bond will be issued. Section 403 -Partially Redeemed Fully Registered Bonds. Unless otherwise specified in the Series Resolution authorizing the issuance of the applicable Series of Bonds, in case any registered Bond shall be redeemed in part only, upon the presentation of such Bond for such partial redemption, the Bank shall execute and the Trustee shall authenticate and shall deliver or cause to be delivered to or upon the written order of the Holder thereof, at the expense of the Bank, a Bond or Bonds of the same Series, interest rate and maturity, in aggregate principal amount equal to the unredeemed portion of such registered Bond. Unless otherwise provided by Series Resolution, a portion of any Bond of a denomination of more than the minimum Authorized Denomination to be redeemed will be in the principal amount of the minimum Authorized Denomination or an integral multiple thereof, and in selecting portions of such Bonds for redemption, the Trustee will treat each such Bond as representing that number of Bonds of the minimum Authorized Denomination which is obtained by dividing the principal amount of such Bonds by the minimum Authorized Denomination. ARTICLE V CUSTODY AND APPLICATION OF CERTAIN PROCEEDS OF BONDS Section 501 -Application of Certain Proceeds. (A) Each Series Resolution authorizing the issuance of a Series of Bonds, a portion of the proceeds derived from the sale of which is to be applied to the purchase of Municipal Bonds, shall specify the name of each Governmental Unit which is to receive a Loan by the Bank from such proceeds and the amount of such proceeds to be applied to the making of each such Loan which shall be the amount of each such Loan. Contemporaneously with the issuance, sale and delivery of any Series of Bonds, the Bank shall apply the amount of the proceeds derived from the sale of such Series of Bonds, if any, as shall be specified in said Series Resolution for the purpose of making such loans to each of the Governmental Units specified in the Series Resolution authorizing the issuance of such Series of Bonds. (B) Accrued interest. if any, received upon the delivery of such Series of Bonds shall be deposited in the Interest Account. The amount received as a premium over the principal amount of such Series of Bonds, if any, upon the delivery of such Series of Bonds shall be applied as provided in the Series Resolution authorizing such Series of Bonds. (C) The amount, if any, necessary to cause the amount on deposit in the Reserve Fund to satisfy the Reserve Fund Requirement. (D) Any remaining proceeds derived from the sale of a Series of Bonds shall be applied as provided in the Series Resolution authorizing SUch Series of Bonds. Section 502 -Loans. (A) A Loan to each Governmental Unit shall be made from the portion of the proceeds derived from the sale of each Series of Bonds specified in the Series Resolution authoriZing the issuance of such Series of Bonds Bonds and the amount of each such Loan shall be the amount specified in such Series Resolution. All such payments made pursuant to such Series Resolution shall be subject to the provisions ALASKA MUNICIPAL BOND BANK GllnflTll/Obllglttion Bond Roso/utfon (Amflndfld) 1~·.'IT'=Wl.,,,,,,,,,-,,,,,,.,=e....-. o:<,..,,,,,,!l<>""~...a,,,,_w;<l Pagc 30 F-9 ALASKA MUNICJPAL 80ND BANK GllIl9Tl1J Obligation Bond RO$olUt/on (AmondQd) 11Doa\.'l7'ZXX:ll'I-lo«lM""'''~G._():>"""""\lon(lIl'''''''',,,,,w;<l Pago 31 and restrictions of this Article V, and the Bank covenants that it will not cause or permit to be paid from such portion of the proceeds derived from the sale of such Series of Bonds any sums except in accordance with such provisions and restrictions. (B) The Trustee shaff pay to each Governmental Unit the amount of the Loan upon receipt by the Trustee of: (1) a written requisition of the Bank signed by an Authorized Officer stating (i) the name of the Governmental Unit to which the payment is to be made; and (ii) the amount to be paid; (2) a certificate signed by an Authorized Officer and attached to the requisition certifying that the terms and provisions of the Loan Agreement providing for such Loan are in compliance with Section 913, and that to the knowledge of such Authorized Officer such Governmental Unit is not in default under any of the terms or provisions of said Loan Agreement; (3) a Counsel's Opinion stating that such Municipal Bonds are valid obligations of such Governmental Unit as required by the Act and that the Loan Agreement has been duly authorized and executed by the Governmental Unit and constitutes a valid and binding obligation of the Governmental Unit enforceable in accordance with its terms; and (4) such Municipal Bonds of such Governmental Unit, registered as to both principal and interest in the name of the Bank or the Trustee and delivered in accordance with the Act. Upon receipt of such requisition, accompanying certificate, Counsel's Opinion and Municipal Bonds, the Trustee shall pay such amount directly to the Governmental Unit entitled thereto as named in such requisition. Section 503 ~ Retention and Inspection of Documents. All requisitions and certificates and Counsel's Opinions and Municipal Bonds received by the Trustee, as required in this Article V as conditions of payment may be relied upon by and shaff be retained in the possession of the Trustee, subject at all times during normal business hours to the inspection of the Bank and, after written request received by the Trustee at least five business days prior to the date of inspection, by any Holder of at least five per cent in principal amount of the Series of Outstanding Bonds. ARTICLE VI ESTABLISHMENT OF FUNDS AND ACCOUNTS AND APPLICATION THEREOF Section 601 -Pledge. (A) The Bonds shall be direct and general obligations of the Bank, and its full faith and credit are pledged to the payment of the principal and redemption premium, if any, of and interest on the Bonds, subject to any agreements heretofore and hereafter made with the Holders of any other notes or bonds of the Bank pledging any particular revenues or assets not pledged under this Resolution. (B) The Municipal Bonds and the Municipal Bonds Payment, the investments thereof and the proceeds of such investments, if any, and all funds and accounts established by this Resolution to be held by the Trustee are hereby pledged and assigned for the payment of the principal of, Redemption Price of, interest on, and Sinking Fund Installments for, the Bonds in accordance with the terms and provisions of this Resolution, subject only to the provisions of this Resolution permitting the application thereof for the purposes and on the terms and conditions set forth in this Resolution authorizing the Bank to create Security Interests in said Municipal Bonds and Municipal Bonds Payment in favor of Credit Enhancement Agencies and counterparties to Interest Rate Exchange Agreements. Subject to the provisions of Section 805 of th'ls Resolution, this pledge shall be valid and binding from and after the date of adoption of this Resolution, and the Municipal Bonds and the Municipal Bonds Payment and all other monies and securities in the funds and accounts established by this Resolution to be held by the Trustee hereby pledged shall immediately be subject to the lien of such pledge without any further act, and such lien shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Bank, regardless of whether such parties have notice thereof. Section 602 -Establishment of Funds and Accounts. (A) The Alaska Municipal Bond Bank Debt Service Fund (the "Debt Service Fund") is hereby established and ALASKA MUNICIPAL BOND BANK GWlol1l1 Obllglltlon Bond RrI$oluflon (AmondDd) Page 32 ALASKA MUNICJPAL BOND BANK GWlonl Obl/gilt/rm Bond RrI$oluflon (Amondod) I 1D<='.J7.=1'.Mo00i:l.t=.· <Z);6{;e,..,,,,, 0;<0;;''''''' llo<'d fl""'''''''''''?l Pago 33 shall be maintained and held by the Trustee pursuant to the provisions of this Resolution. There is hereby created and established in the Debt Service Fund an "Interest Account," a "Principal Account" and a "Redemption Account" each of which shall be held by the Trustee. Amounts in the Interest Account, the Principal Account and the Redemption Account shall be used solely for the purpose of paying the principal of, Redemption Price of, interest on and Sinking Fund Instalfments for, the Bonds and of retiring such Bonds at or prior to maturity in the manner provided herein and in any Series Resolution. Amounts deposited in the Interest Account and the Principal Account shall be disbursed and applied by the Trustee at the times and in the manner provided in this Article VI and in paragraph (3) of Section 203. (B) There is hereby established within the Alaska Municipal Bond Bank Reserve Fund created by Section 44.85.270 of the Act, a 2005 General Obligation Bond Resolution Reserve Account (the "Reserve Fund") which shaff be maintained and held by the Trustee pursuant to the provisions of this Resolution. (C) There is hereby established a Rebate Fund, and within such fund, a separate account for each Series of Bonds. (D) There is hereby established an Operating Fund which shall be held by the Bank pursuant to the provisions of this Resolution. Section 603 -Reserve Fund. (A) On or before the first day of each month, the Trustee shall set aside from amounts in the Reserve Fund derived from income or interest earned and profits realized by the Reserve Fund due to the investment thereof, an amount which, when added to the amounts theretofore set aside for such purpose and not paid into the Interest Account, will on such day be equal to the unpaid interest on the Reserve Fund Obligations accrued and to accrue to the last day of such month. If the Trustee so determines, said amounts may be deposited in an account which the Trustee may create in the Reserve Fund under the name ofnReserve Fund Obligations Interest Account". On or before each interest payment date of the Reserve Fund Obligations, said amounts shall be deposited in the Interest Account. (B) On or before each principal payment date and Sinking Fund Installment payment date of Reserve Fund Obligations, the Trustee shall withdraw from amounts in the Reserve Fund and deposit in the Principal Account, an amount which, when added to the amount then on deposit in the Principal Account and derived from sources other than Municipal Bonds Payment, will be equal to the Principallnstalfment of the Reserve Fund Obligations falling due on such date. (C) On or before December 31 of each year, after complying with the provisions of paragraphs (1) and (2) above to the extent required by such date, the Trustee shall withdraw from the Reserve Fund, any amount remaining therein derived from income or interest earned and profits realized by the Reserve Fund due to the investment thereof, and pay over said amount to the Bank for deposit in the Operating Fund but only to the extent that there remains after such withdrawal an amount in the Reserve Fund at least equal to the Required Debt Service Reserve. (D) The Reserve Fund Requirement may be satisfied with (i) monies made available by the State and paid to the Bank for the purpose of the Alaska Municipal Bond Bank Reserve Fund created by Section 44.85.270 of the Act in the amount provided by a Series Resolution; (ii) all monies paid to the Bank pursuant to the Act for the purpose of restoring the Reserve Fund to the amount of the Required Debt Service Reserve; (iii) such portion of the proceeds of sale of Bonds, if any, as shall be provided by any Series Resolution; (iv) Credit Enhancement; (v) any other monies which may be made available to the Bank for the purposes of the Reserve Fund from any other source or sources; or (vi) any combination of the foregoing. (E) In the event there shall be, on any interest payment date, a deficiency in the Interest Account, or, in the event there shalf be, on any principal payment date or Sinking Fund Installment payment date, a deficiency in the Principal Account, the Trustee shall make up such deficiencies from the Reserve Fund by the withdrawal of cash therefrom for that purpose and by the sale or redemption of securities held in the Reserve Fund, if necessary, in such amounts as will, at the respective times, provide monies in the Interest Account and Principal Account sufficient to make up any such ALASKA MUNICIPAL BOND BANK Gllnotlll ObI/glltJon Bond RrI$olutlon (Amondfld) 1·=\:lN2OOQ1'RMdl.".",.\7.IO:5{;......""o::<~a"""B<>-.(!I«IW~'.".,"'?d Page 34 F-IO ALASKA MUNlCJPAL BOND BANK Gllnwal ObIlflMlon Bond Rosolufion (Amondfld) 11Doa'.37.2OOQ1\Rao""""""'...=l.>"""""OO...."""l:\orI'!J.I...."'''''''''?d Page 35 deficiency. If a deficiency still exists immediately prior to a debt service payment date and after the withdrawal of cash, the Bank shalt then draw from any Credit Enhancement for the Bonds in sufficient amount to make up such difference. Drawings under the Credit Enhancement shalt be made on a pro~rata basis (in proportion to the respective maximum coverages) available under the Credit Enhancement. Such draw shall be made at such times and under such conditions as such Credit Enhancement shalt provide. Section 604 ~ Interest Account Principal Account and Redemption Account. (A) Except as otherwise provided in paragraph (3) of Section 204, the Trustee shall deposit Municipal Bonds Interest Payments and any other monies available forthe payment of interest in the Interest Account upon receipt thereof. The Trustee shall, on or before each interest payment date of the Bonds, pay, out of amounts then held for the credit of the Interest Account, to itself and the Paying Agents, the amounts required for the payment by it and such Paying Agents of the interest becoming due on the Bonds on such interest payment date, and such amounts so withdrawn are hereby irrevocably pledged for and shall be applied to the payment of such interest. The Trustee shalt also payout of the Interest Account to itself and the appropriate Paying Agents, on or before any redemption date for Bonds being refunded by Refunding Bonds, the amount required for the payment of interest on the Bonds then to be redeemed, to the extent not otherwise provided in this Resolution. (B) The Trustee shall deposit Municipal Bonds Principal Payments and any other monies available for the payment of principal in the Principal Account, upon receipt thereof. The Trustee shalt, on or before each principal payment date of or Sinking Fund Installment date for, the Bonds, pay, out of the monies then held for the credit of the Principal Account, to itself and the Paying Agents, the amounts required for the payment by it and such Paying Agents of the principal or Sinking Fund Installment due on the Bonds on such date, and such amounts so withdrawn are hereby irrevocably pledged for and shall be applied to the payment of such principal or Sinking Fund Installment. (C) The Trustee shalt establish in the Redemption Account a separate subaccount for the Bonds of each Series Outstanding. (1) Any monies deposited into the Redemption Account from any source other than pursuant to Section 607 or Section 916 shall be applied to the purchase or redemption of Bonds in a manner to be determined by the Bank in accordance with Article IV. Any monies deposited into the Redemption Account pursuant to Section 607 shall be applied to the purchase or redemption of Reserve Fund Obligations in a manner to be determined by the Bank in accordance with Article IV. (2) The Bank shall deposit or cause to be deposited in the Redemption Account such portion of the monies received as the proceeds of sale or redemption of Municipal Bonds, as required by Section 916 hereof, and, upon any such deposit, deposit, shall advise the Trustee in writing of the Series of Bonds to which the same relates. Upon receipt, such monies shall be set aside by the Trustee in the appropriate Series sub-account. Monies so held in each separate sub-account by the Trustee shall be applied to the purchase or retirement of the Bonds of the Series in respect of which such sub-account was created as follows: (i) The Trustee shalt promptly apply such monies to the purchase of Bonds of the Series in respect of which such sub-account was created having the same maturity date or dates and in the same principal amount within each maturity as the Municipal Bonds Principal Payments required to be made for the Municipal Bonds sold by the Bank or redeemed by the Governmental Unit at the most advantageous price obtainable with reasonable diligence, such price, however, not to exceed the Redemption Price which would be payable on the next ensuing date on which the Bonds of the Series so purchased are redeemable according to their terms. The Trustee shall pay the interest accrued on the Bonds so purchased to the date of sale or redemption of the Municipal Bonds from the Interest account and the balance of the purchase price from the applicable sub~account in the Redemption Account. as hereinabove provided, but no such purchase shall be made by the Trustee within the period of forty-five ALASKA MUNICIPAL BOND BANK G0I10nl'/Obllgaflon Bond RosolutJon (Amondod) 1\();;>co;·.;jl'z;t:):)I'.<bt<.Ql"'''o.=Co....''''OO.o,;..._BoMIl......m.1oo..,,::! Page 36 ALASKA /,fUNICIPAL BOND BANK GonOnl/Obi/gM/on Bond Rosolutlon (Amondod) Page 37 (45) days next preceding a date on which such Bonds are subject to redemption under the provisions of the Series Resolution authorizing the issuance thereof. (ii) In the event the Trustee is able to purchase the requisite principal amount of Bonds from a sub~account in accordance with and under the foregoing provisions of this subparagraph (b) at a purchase price less than the sum of the deposits to such sub~account from the proceeds from the sale or redemption of Municipal Bonds and the applicable transfers from the Interest Account, upon the payment by the Trustee of the purchase price of such Bonds, the Trustee shall transfer the balance of monies remaining in such sub-account to the Bank for deposit in the Operating Fund. (iii) In the event the Trustee is unable to purchase the requisite principal amount of Bonds the Trustee shall call for redemption on the next ensuing redemption date such amount of Bonds of the Series in respect of which such sub-account was created having the same maturity date or dates and in the same principal amount within each maturity as the Municipal Bonds Principal Payments required to be made for the Municipal Bonds sold by the Bank or redeemed by the Governmental Unit, as, at the Redemption Price thereof, will exhaust said sub-account as nearly as may be. Such redemption shall be made pursuant to the provisions of Article IV hereof. The Trustee shall pay the interest accrued on the Bonds so redeemed to the dale of sale or redemption of the Municipal Bonds from the Interest Account and the balance of such interest to the date of redemption of the Bonds and the Redemption Price from the applicable Sub-account. (3) The Bank may, from time to time, by written instructions direct the Trustee to make purchases under subparagraph (b) above only after receipt of tenders. The Bank may specify the length of notice to be given and the date on which tenders are to be accepted or may authorize the Trustee to determine the same in its discretion. All such tenders shall be by sealed proposals and no tenders shalt be considered or accepted at any price exceeding the price specified under subparagraph (b) above for the purchase of Bonds. The Trustee shall accept tenders with the lowest price, as determined by the Trustee, and if the monies available for purchase pursuant to such tenders are not sufficient to permit acceptance of all tenders and there shall be tenders at an equal price above the amount of monies available for purchase then the Trustee shalt select by lot, in such manner as the Trustee shall determine in its discretion, the Bonds tendered which shall be purchased. No purchase of Bonds, either on tenders or otherwise, shall be made by the Trustee within the period of forty~five (45) days next preceding any date on which such Bonds are subject to redemption. (0) Monies set aside from time to time with the Trustee and Paying Agents for the payment of principal or Redemption Price of, interest on and Sinking Fund Installments for, the Bonds shall be held in trust for the Holders of the Bonds. Until so set aside for the payment of such principal, Redemption Price, interest, and Sinking Fund Installments, atl monies in such accounts shall be held in trust for the benefit of the Holders of all Bonds at the time Outstanding equally and ratably and without any preference or distinction as between Bonds of different Series, except that monies on deposit in the separate sub-accounts established in the Redemption Redemption Account shall be held in trust for and applied to the payment of the Bonds of the Series for which the applicable sub~account was established. Section 605 -Rebate Fund. (A) The Trustee shall establish and thereafter maintain, so long as the Bonds are Outstanding, a Rebate Fund which shall be held separate and apart from all otherfunds and accounts established under this Resolution and from all other moneys of the Trustee. (B) All amounts in the Rebate Fund, including income earned from investment of the fund, shalt be held by the Trustee free and clear of the lien of this Resolution. In the event the amount on deposit in the Rebate Fund exceeds the aggregate amount of the Rebate Requirement for all Series of Bonds, as verified in writing by an independent public accountant or other qualified professional selected by the Bank at the time the Rebate Requirement is determined, less amounts of the Rebate Requirement theretofore paid to the United States for all Series of Bonds, the Trustee ALASKA MUNICAPAL BOND BANK Gonon:rl Obllgllt/on Bond Rrnolurfon (Amllndod) Pago 38 F-II ALASKA MUN/CAPAL BOND BANK G0I10nl't Obi/gMton Bond RDSolution (AmoncNd) 1="37~="~·""o.·-=Go""~O«QlI.=ll<>o<lRol.."l"'.".,""'" Page 39 shall, upon the Bank's request, withdraw from the Rebate Fund and pay to or upon the order of the Bank an amount not to exceed such excess to the Bank for deposit in the Operating Fund. (C) The Bank shall determine the amount of the Rebate Requirement with respect to each Series of Bonds on each applicable Rebate Calculation Date. The Bank shall deposit into the Rebate Fund the Rebate Requirement. if any, with respect to each Series of Bonds. The Bank shall instruct the Trustee to withdraw from the Rebate Fund and pay over to the United States Government with respect to each Series of Bonds: (1) not less frequently than once each five years commencing no later than 60 days after the first Rebate Calculation Date for such Series of Bonds and upon each fifth anniversary of such date, an amount which when added to all previous rebate payments made with respect to such Series of Bonds equals 90% of the sum of the Rebate Requirement pertaining to such Series of Bonds plus the amount, if any, of Rebate Requirement theretofore paid to the United States with respect to such Series of Bonds, and (2) not later than 60 days after the retirement of the last Bond of such Series, 100% of the Rebate Requirement with respect to such Series. The detennination of reba table arbitrage made with respect to each such payment date and with respect to any withdrawal and payment to the Bank from the Rebate Fund pursuant to this Resolution must be verified in writing by an independent public accountant or other qualified professional selected by the Bank. (0) The Trustee shall, at least sixty (60) days prior to each Rebate Calculation Date, notify the Bank of the requirements of this Section. By agreeing to give this notice, the Trustee assumes no responsibility whatsoever for compliance by the Bank with the requirements of Section 148 of the Code or any successor. The Bank expressly agrees that (notwithstanding any other provision of this Resolution) any failure of the Trustee to give any such notice, for any reason whatsoever, shall shall not cause the Trustee to be responsible for any failure of the Bank to comply with the requirements of said Section 148 or any successor thereof. (E) The Trustee, on behalf of the Bank, shall keep and retain, until the date six years after the retirement of the last of the Bonds of each Series, records with respect to each Series of the Bonds and the investment and expenditure of amounts on deposit with the Trustee to comply with the aforementioned arbitrage rebate requirements, including without limitation a complete list of all investments and reinvestments of amounts on deposit with the Trustee with respect to each Series of the Bonds. For purposes of the computation required above, the Trustee shall, upon request, furnish to the Bank all information in the Trustee's control which is necessary for such computations. (F) The Bank hereby covenants and agrees that it will not enter, and will not cause the Trustee to enter into, any transaction or cause any transaction to be entered into with respect to the investment of gross proceeds of the Bonds, or otherwise, which reduces the amount which may be required to be paid to the United States pursuant to the arbitrage rebate requirements specified herein above, because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the yield on each Series of the Bonds not been relevant to either party. (G) The provisions of this Section may be amended or deleted, with respect to any or all series of the Bonds, from this Resolution upon receipt by the Bank and the Trustee of an opinion of bond counsel that such amendment or deletion will not adversely affect the exclusion from gross income of interest on the Bonds. Section 606 -Operating Fund. There shall be deposited in the Operating Fund all Fees and Charges collected by the Bank or the Trustee, to the extent not otherwise encumbered or pledged, and any other monies which may be made available to the Bank for the purposes of the Operating Fund from any other source or sources including, without limiting the generality of the foregoing, amounts transferred pursuant to paragraph (3) of Section 603, subparagraph (b)(ii) of paragraph (3) of Section 604 and the amount received as a premium over the principal amount of a Series of Bonds, if any, to the extent provided in the Series Resolution authorizing such Series. Monies ALASKA MUNICIPAL BOND BANK GMoral Obligation Bond Rosolut/on (Amondod) 1'.Do<>'31':r.:«lI'J.l<><oI>Jt>::>o.~G"""""O:-"~'Q'1!lo<'JlIl""<M"o""" Page 40 ALASKA MUNICIPAL BOND BANK Gonol'lll Obliglltlon Bond RQ$olur/on (Amondotl) Page 41 at any time held for the credit of the Operating Fund shall be used for and applied solely to the following purposes: (a) To pay the Administrative Expenses of the Bank: (b) To pay the fees and expenses of the Trustee and Paying Agents: (c) To pay financing costs incurred with respect to a Series of Bonds, including fees and expenses of the attorneys, initial Trustee's and Paying Agents' fees and expenses, costs and expenses of financial consultants, printing costs and expenses, the payment to any officers, departments, boards, agencies, divisions and commissions of, or reimbursement to, the State of any statement of cost and expense or advances rendered to the Bank pursuant to the Act, and all other financing and other miscellaneous costs: and (d) To pay any expenses in carrying out any other purpose then authorized by theAc!.All amounts in the Operating Fund shall be free and clear of any lien or pledge created by this Resolution butshall be held and applied in accordance with this section. Section 607 -Reduction of Required Debt Service Reserve. Whenever the amount of the Required Debt Service Reserve is reduced, the Trustee, only upon the written request of the Bank signed by an Authorized Officer, shall withdraw from any amounts on deposit in the Reserve Fund and deposit in the Redemption Account any amount not exceeding the amount of such reduction of the Required Debt Service Reserve. The amount to be withdrawn from the Reserve Fund in each instance pursuant to the provisions of this paragraph shall be determined by the Bank and the amount thereof certified to the Trustee in writing signed by an Authorized Officer. Section 608 -Trustee's Maintenance of Records on Payment of Bonds. In connection with the payment, redemption or purchase of all Bonds under the provisions of this Resolution, the Trustee shall keep accurate records of the source of the monies used to pay, redeem or purchase such Bonds. Section 609 ~ Obtaining Credit Enhancements and Interest Rate Exchange Agreements. Except as otherwise provided in a Series Resolution authorizing the issuance of a Series of Bonds, the Bank may obtain Credit Enhancement or an Interest Rate Exchange Agreement with respect to such Bonds either at the time of issuance of the Bonds or any time thereafter. Section 610 -Creation of Additional Funds Accounts and Subaccounts; Separate Credit Enhancement Funds' Pledge with Respect to Credit Enhancements and Interest Rate Exchange Agreements. (A) The Trustee shall establish within any Fund such Accounts in addition to the Accounts herein established as the Bank shall by Series Resolution or Supplemental Resolution determine and shall in like manner establish within any Account such additional subaccounts for the purposes of such Account as the Bank shall so determine. (B) The Bank may at any time by execution of a Series Resolution or Supplemental Resolution establish a Fund or Account in which to hold any Credit Enhancement and the proceeds thereof or drawings thereunder (a "Credit Enhancement Fund") for the benefit of any Series of Bonds to which such Credit Enhancement has been pledged, which pledge may be (but is not required to be) exclusively for the benefit of such Series of Bonds or certain designated Series of Bonds and not equally and ratably among all the Series of Bonds. Amounts held in a Credit Enhancement Fund shall not be considered a part of the Municipal Bonds Payment but, rather, shall be subject to such lien and pledge as may be created in the Series Resolution creating such Credit Enhancement Fund. (C) If the Bank creates a Credit Enhancement Fund, the Bank may direct, in the Series Resolution creating such Credit Enhancement Fund, that the Trustee pay, and if so directed in writing by the Bank the Trustee shall pay, principal (incfuding premium, if any) of and interest on the Bonds secured by such Credit Enhancement Fund directly from amounts in such Credit Enhancement Fund and that the Trustee reimburse, and if so directed in writing by the Bank the Trustee shall so reimburse, such Credit Enhancement Fund for such payment from the Credit Enhancement Fund; provided, however, that the Bank may, in the Series Resolution authorizing the Series of Bonds to be secured by Credit Enhancement, treat any, or any part of any, obligation owed or ALASKA MUNICIPAL BOND BANK GOtUlral Obllgllt/on Bond RosolutJon (Amondod) 1',()c:a.·.3I'='~<=G-""O:>..#_~J.Ibw"'''''''?d Page 42 F-12 ALASKA MUNICIPAL BOND BANK GM(/n1l Obi/gilt/on Bond RQ$oJut/on (Am(/ndod) Page 43 which may in the future be owed to the Credit Enhancement Agency pursuant to the Credit Enhancement Instrument as the Series of Bonds secured by such Credit Enhancement if the Corporation, at the time of issuance of said Series of Bonds and at the time of the creation of any such obligation satisfies the requirements of Section 203, in which case the Trustee shall pay the principal of and interest on any such obligations in accordance with the terms of this Resolution treating such obligations as a Series of Bonds. In a Series Resolution authorizing a Series of Bonds secured by a Credit Enhancement Fund the Bank may fix provisions relating to such Fund pursuant to the terms of a Series Resolution. In addition to the foregoing, the Bank may agree to permit a Credit Enhancement Agency to be subrogated to the rights of any Bondholders whose Bonds are secured by the Credit Enhancement provided that such Credit Enhancement Agency is not in default under such Credit Enhancement. ARTICLE VII SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS Section 701 -Security for Deposits. All monies held hereunder by the Trustee shall be continuously and fUlly secured, for the benefit of the Bank and the Holders of the Bonds in such manner as may then be required or permitted by applicable State or federal laws and regulations regarding the security for, or granting a preference in the case of, the deposit of trust funds. The Trustee or any Paying Agent shall not be required to give security for the deposit of any monies with them held in trust for the payment of the principal or Redemption Price of or interest on any Bonds, or for the Trustee to give security for any monies which shall be represented by obligations purchased under the provisions of this Resolution as an investment of such monies. Section 702 -Investment of Funds and Accounts Held by the Trustee. (A) Upon the deposit of any amounts in any fund or account held by the Trustee under the provisions of this Resolution, in the manner hereinabove prescribed, the Bank may furnish the Trustee with a schedule of dates on which it is estimated by the Bank that such monies in said fund or account will be required to be expended. The Bank may from time to time amend the schedule so furnished. Upon receipt of such schedule or amended schedule, the Bank may direct the Trustee to, or in the absence of receipt of such schedule or such direction the Trustee shall, invest and reinvest in Investment Securities the monies in said fund or account so that the maturity date or date of redemption at the option of the holder of such obligations shall coincide as nearty as practicable with the times at which monies are needed by the Bank to be so expended. The Bank also may direct the Trustee that all or part of the amounts in the Interest Account and the Principal Account in the Debt Service Fund not be invested for specified periods of time. (B) Obligations purchased as an investment of monies in any fund or account held by the Trustee under the provisions of this Resolution shall be deemed at all times to be a part of such fund or account and the income or interest earned, profits realized or losses suffered by a fund or account due to the investment thereof shall be retained in, credited or charged, as the case may be. to such fund or account, except that the income or interest earned and profits realized by the Reserve Fund due to the investment thereof shall be transferred by the Trustee in accordance with and to the exlent provided by paragraphs (1), (3) and (5) of Seclion 603. (C) In determining whether or not the amount in the Reserve Fund is at least equal to the Reserve Fund Requirement, the Trustee shall include the amount of interest earned or accrued thereon as of the date of evaluation and shall also include, but only if any other requirement therefor specified in a Series Resolution has been satisfied, the principal component of any Credit Enhancement then on deposit in the Reserve Fund. (0) Except as otherwise provided in the Resolution, the Trustee shall sell at the best price obtainable, or present for redemption or exchange, any obligation purchased by it as an investment pursuant to this Resolution whenever it shall be requested in writing by an Authorized Officer of the Bank to do so or whenever it shall be necessary in order to provide monies to meet any payment or transfer from the fund or account for which such investment was made. The Trustee shall advise the Bank in writing, on or before the twentieth day of each calendar month, of the details of all investments ALASKA MUNiCiPAL BOND BANK GlltIlln/Obllglllion Bond Rosolutlon (Amrmdod) 1·.::>o<:>·~U::,(XXH'Ro"""''''''',·=Co''''''''W+;:·'''''Ilo-oOfl"""",,,,,,''')<l Pogo 44 ALASKA MUNICIPAL eOND BANK GOflllTlit Obtlgatlon Bond Roso/utlan (Amondod) !=·.37'='\.'l<no'~'"",.~Co<w>""():;<.;.t'OOBooOH,,,,,'c~.,"r,><l Page 45 held for the credit of each fund and account in its custody under the provisions of this Resolution as of the end of the preceding month. Section 703 -Uability of Trustee for Investments. The Trustee shall not be be liable or responsible for the making of any investment authorized by the provisions of this Article, in the manner provided in this Article, or for any loss resulting from any such investment so made except for its own negligence or default. ARTICLE VIII THE TRUSTEE AND THE PAYING AGENTS Section 801 -Appointment and Acceptance of Duties of Trustee. J.P. Morgan Trust Company, National Association, a trust company or bank having the powers of a trust company doing business and having a corporate trust office in Seatue, Washington, is hereby appointed as Trustee for the Holders from time to time of the Bonds. The Trustee shall signify its acceptance of the duties and obligations imposed upon it by this Resolution by executing the certificate of authentication endorsed upon the Bonds, and, by executing such certificate upon any Bond, the Trustee shall be deemed to have accepted such duties and obligations not only with respect to the Bond so authenticated, but with respect to all the Bonds thereafter to be issued, but only, however, upon the terms and conditions set forth in the Resolution. Section 802 -Appointment and Acceptance of Duties of Paying Agents. The Bank shall appoint one or more Paying Agents for the Bondsof any Series in the Series Resolution authorizing such Bonds or shall appoint such Paying Agent or Paying Agents by or pursuant to a resolution of the Bank adopted prior to the authentication and delivery of such Bonds, and may at any time or from time to time appoint one or more other Paying Agents in the manner and subject to the conditions set forth in Section 812 for the appointment of a successor Paying Agent. The Trustee may be appointed to act as Paying Agent notwithstanding that it may then be acting in the capacity of Trustee. Each Paying Agent shall signify its acceptance of the duties and obligations imposed upon it by this Resolution by written instrument of acceptance executed and delivered to the Bank and the Trustee. The principal or corporate trust offices of the Paying Agents are are hereby designated as the respective agencies of the Bank forthe payment of the interest on and principal or Redemption Price of the Bonds. Section 803 -Responsibilities of Fiduciaries. (A) The recitals of fact herein and in the Bonds contained shall be taken as the statements of the Bank and the Fiduciaries assume any responsibility for the correctness of the same. No Fiduciary shall be deemed to make any representations as to the validity or sufficiency of this Resolution or of any Bonds issued hereunder or in respect of the security afforded by this Resolution, and no Fiduciary shall incur any responsibility in respect thereof. The Trustee shall, however, be responsible for its representations contained in its certificate on the Bonds. No Fiduciary shall be under any responsibility or duty with respect to any other Fiduciary. No Fiduciary shall be under any 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 indemnified to its satisfaction. No Fiduciary shall be liable in connection with the performance of its duties hereunder except for its own negligence or willful misconduct. Neitherthe Trustee nor any Paying Agent shall be under any responsibility or duty with respect to the application of any moneys paid to anyone of the others or the use or application by the Bank of the Bonds or the proceeds thereof. (B) Except during the continuance of an Event of Default, the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Resolution, and no implied covenants or obligations shall be read into this Resolution against the Trustee, and, in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinion expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Resolution. (C) In case an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Resolution and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of his own affairs. ALASKA MUNICIPAL BOND BANK GlHIlInIl Obl/glltlon Brmd Rosolut/on (Amllndild) 1'Doc:s·Jl'=l,_",,,,,,·.=c.,,,,,,,,Q:j~a.:,.,Ol{,,,,,,,~~,,,,,r,><l Page 46 F-13 ALASKA MUNICIPAL BOND BANK GlHlllnr/Obligation Bond RosolutJon (Amllndod) l\Oo::>c<'.37'=\·~"~C4~00:<1<O"""'Boo<!R"""''''"",or;>l Pago 47 (D) No provision of this Resolution shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that (1) the Trustee shall not be liable for any error of judgment made in good faith by a responsible officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts, (2) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance wilh the direction of the Holders of a majority in principal amount of the Outstanding Bonds relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Resolution, and (3) no provision of this Resolution shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Except as otherwise expressly provided herein, the Trustee shall determine whether any conditions or requirements set forth herein for any purpose have been met, and such determination by the Trustee shall be conclusive. (E) Regardless of whether it is therein expressly so provided, every provision of this Resolution, any Series Resolution, or any related document relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Article. (F) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Resolution at the request or direction of any of the Bondholders pursuant to this Resolution, unless such Bondholders shall have offered to the Trustee security or indemnity to its satisfaction against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. (G) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, orotherpaperordocument. (H) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. (I) The permissive right of the Trustee to do things enumerated in this Resolution shall not be construed as a duty. (J) In accepting the trusts hereby created, the Trustee acts solely as Trustee for the Bondholders and not in its individual capacity and all persons, including, without limitation, the Bondholders and the Bank having any claim against the Trustee arising from this Resolution shall look only to the funds and accounts held by the Trustee or its agent hereunder for payment except as otherwise provided herein. Under no circumstances shall the Trustee be liable in its individual capacity for the obligations evidenced by the Bonds. Section 804 -Evidence on Which Fiduciaries May Act. Each Fiduciary may rely and 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. Each Fiduciary may consult with counsel, who mayor may not be of counsel to the Bank, and the opinion of such shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by it hereunder in good faith and in reliance thereon. Whenever any Fiduciary shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or omitting 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 Resolution upon the faith thereof, but in its discretion the Fiduciary may in 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 ALASKA MUNICIPAL BOND BANK GlIflllr.ll Obllglltlofl8ond Roso/Ut/rm (Amondod) I =\J7':1OOO1~lb<d"""",,'-=G.,..,"" 0';;>;10= ll<>"Il """"~1",o-..o Pago 48 ALASKA MUNICIPAL BOND BANK GlIflor.ll Obligation Bond Roso/Utlofl (Amondod) 1\Cloa.".37'=1~"""'·.7.lQ5c.o""""O';;o;;O~oo!l<t<ldll","<:Iut""."?d Page 49 otherwise expressly provided herein, any request, order, notice or other direction required or permitted to be furnished pursuant to any provision hereof by the Bank to any Fiduciary shall be sufficiently executed if executed in the name of the Bank by an Authorized Officer. Section 805 -Compensation. The Bank shall pay to the Trustee and to each Paying Agent from time to time reasonable compensation for all services rendered under this Resolution, and also all reasonable expenses, charges, counsel fees and other disbursements, including those of its attorneys, agents and employees, incurred in and about the performance of their powers and duties under this Resolution, and the Trustee and each Paying Agent shall have a lien therefor on any and all funds at any time held by it under this Resolution. The Bank further agrees to indemnify and save the Trustee and each Paying Agent harmless against any liabilities which it may incur in the exercise and performance of its powers and duties hereunder, and which are not due to its negligence or default. Section 806 -Permitted Acts and Functions. The Trustee Trustee and any Paying Agent may become the owner of any Bonds, with the same rights it would have if it were not such Trustee or Paying Agent. The Trustee and any Paying Agent may act as depository 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 enforcement of the Bonds or this Resolution, whether or not any such committee shall represent the Holders of a majority in principal amount of the Bonds then Outstanding. Section 807 -Resignation of Trustee. The Trustee may at any time resign and be discharged of the duties and obligations created by this Resolution by giving not less than ninety (90) days' written notice to the Bank and to the registered owners of Bonds, specifying the date when such resignation shall take effect and such resignation shall take effect immediately upon the appointment of a successor Trustee pursuant pursuant to Section 809 hereof. Section 808 -Removal of Trustee. The Trustee shall be removed by the Bank if at any time so requested by an instrument or concurrent instruments in writing, filed with the Trustee and the Bank, and signed by the Holders of a majority in principal amount of the Bonds then Outstanding or their attorneys-in-fact duly authorized, excluding any Bonds held by or for the account of the Bank. The Bank may remove the Trustee at any time, except during the existence of an Event of Default, for such cause as shall be detennined in the sale discretion of the Bank by filing with the Trustee an instrument signed by an Authorized Officer of the Bank. Section 809 -Appointment of Successor Trustee. In case at any time the Trustee shall resign or shall be removed or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or if a receiver, liquidator or conservator of the Trustee, orof its property, shall be appointed, or if any public officer shall take charge or control of the Trustee. or of its property or affairs, the Bank covenants and agrees that it will thereupon appoint a successor Trustee. The Bank shall provide written notice of such appointment to the registered owners of the Bonds. If in a proper case no appointment of a successor Trustee shall be made pursuant to the foregoing provisions of this Section within forty-five (45) days after the Trustee shall have given to the Bank written notice, as provided in Section 807, or after a vacancy in the office of the Trustee shall have occurred by reason of its inability to act, the Trustee or the Holder of any Bond may apply to any court of competent jurisdiction to appoint a successor Trustee. Said court may thereupon, after such notice, if any, as such court may deem proper and prescribe, appoint a successor Trustee. Any Trustee appointed under the provisions of this Section 809 in succession to the Trustee shall be a trust company or bank in good standing having the powers of a trust company within or outside the State, and having a capital and surplus aggregating at least Fifty Million Dollars ($50,000,000) if there be such a trust company or bank willing and able to accept the office on reasonable and customary terms and authorized by law to perform all the duties imposed upon it by this Resolution, ALASKA MUNICIPAL BOND BANK G9flOr.ll Obllgllt/on BOfld RllSolutfOtl (AmondDd) 1\Cloa.\37.=lIIlO<"M",,,.'.7.lQ5G__ 0';;>;1_=ll<>"Illl •••:M<>I\"?d Pago 50 F-14 ALASKA MUNICIPAL BOND BANK GlIflOr.ll Obllglltlon Bond Roso/UtlOtl (AmondDd) '\Clo<;<'.37'=1~"",,".7.lQ5G_~O';;o;o"'OOll<>"Il""'<:M<)(l"?d Pago 51 Section 810 -Transfer of Rights and Property to Successor Trustee. Any successor Trustee appointed under this Resolution shall execute, acknowledge and deliver to its predecessor Trustee, and also to the Bank, an instrument accepting such appointment, and thereupon such successor Trustee, without any further act. deed or conveyance, shall become fully vested with all monies, estates, properties, rights, powers, duties and obligations of such predecessor Trustee, with like effect as if originally named as Trustee; but the Trustee ceasing to act shaH nevertheless, on the written request of the Bank, or of the successor Trustee, execute, acknowledge and deliver such instruments of conveyance and further assurance and do such other things as may reasonably be required for more fully and certainly vesting and confirming in such successor Trustee all the right, title and interest of the predecessor Trustee in and to any property held by it under this Resolution, and shall pay over, assign and deliver to the successor Trustee any money or other property SUbject to the trusts and conditions herein set forth. Should any deed, conveyance or instrument in writing from the Bank be required by such successor Trustee for more fully and certainly vesting in and confirming to such successor Trustee any such estates, rights, powers and duties, any and all such deeds, conveyances and instruments in writing shall, on request, and so far as may be authorized by law, be executed, acknowledged and delivered by the Bank. Any such successor Trustee shall promptly notify the Paying Agents of its appointment as Trustee. The Bank shall pay the expenses of effecting a transfer under this Section. Section 811 -Merger or Consolidation. Any company into which the Fiduciary may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which Fiduciary may sell or transfer all of its corporate trust business, shall be the successor to such Fiduciary without the execution or filing of any paper or the performance of any further act, provided that such company shall be a trust company or bank which is qualified to be a successor to the Trustee under Section 809 or which is qualified to be a successor to the Paying Agent under Section 812. Section 812 -Resignation or Removal of the Paying Agents and Appointment of Successors. Any Paying Agent may at any time resign and be discharged of the duties and obligations created by this Resolution by giving at least sixty (50) days written notice to the Bank and the Trustee. Any Paying Agent may be removed at any time by an instrument filed with such Paying Agent and the Trustee and signed by an Authorized Officer of the Bank, Any successor Paying Agent shall be appointed by the Bank and shall be a trust company or bank having the powers of a trust company having a capital and surplus aggregating at least Fifty Million Dollars ($50,000,000), and willing and able to accept the office of Paying Agent on reasonable and customary terms and authorized by law to perform all the duties imposed upon it by this Resolution. In the event of the resignation or removal of any Paying Agent. such Paying Agent shall pay over, assign and deliver any monies held by it to its successor, or if there be no successor then appointed, to the Trustee until such successor be appointed. In the event that for any reason there shall be a vacancy in the office of Paying Agent, the Trustee shall act as such Paying Agent. Section 813 -Evidence of Signatures of Bondholders and Ownership of Bonds. (A) Any request, consent or other instrument which this Resolution may require or permit to be signed and executed by the Bondholders may be in one or more instruments of similar tenor, and shall be signed or executed by such Bondholders in person or by their attorneys appointed in wn"ling. Proof of (i) the execution of any such instrument, or of an instrument appointing any such attorney, or (ii) the holding by any person of the Bonds shall be sufficient for any purpose of this Resolution (except as otherwise herein expressly provided) if made in the following manner, but the Trustee may nevertheless in its discretion require further or other proof in cases where it deems the same desirable: (1) The fact and date of the execution by any Bondholder or his attorney of such instrument may be proved by the certificate, which need not be acknowledged or verified, of an officer of a bank or trust company satisfactory ALASKA MUNICIPAL BOND BANK GlHlonl Obllgotlon Bond RnsohJtlon (Amondod) 1'=\31'2'.lOO1~~""''=G<t,...''''w~",,,,,l,lo""R",,,,,,,,,,,O Q:l Pogo 52 ALASKA MUNICJPAL BOND BANK GlHlon/Obi/gilt/on Bond RosohJfJon (AmondfJd) Pogo 53 to the Trustee or of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which she purports to act, that the person signing such request or other instrument acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer. The authority of the person or persons executing any such instrument on behalf of a corporate Bondholder may be established without further proof if such instrument is signed by a person purporting to be the president or a vice president of such corporation with a corporate seal affixed and attested by a person purporting to be its secretary or an assistant secretary; (2) The amount of Bonds transferable by delivery held by any person executing such request or other instrument as a Bondholder, and the numbers and other identification thereof, and the date of his holding such Bonds, may be proved by a certificate, which need not be acknowledged or verified, satisfactory to the Trustee, executed by an officer of a trust company, bank, financial institution or other depository or member of the National Association of Securities Dealers, Inc. wherever situated, showing that at the date therein mentioned such person exhibited to such officer or had on deposit with such depository the Bonds described in such certificate. Continued ownership after the date stated in such certificate may be proved by the presentation of such certificate if the certificate contains a statement by such officer that the depository held that Bonds therein referred to on the date of the certificate and that they will not be surrendered without the surrender of the certificate to the depository, except with the consent of the Trustee, and a certificate of the Trustee, which need not be acknowledged or verified, that such consent has not been given, (B) Except in the case of Bonds transferable by delivery only, the ownership of Bonds and the amount, numbers and other identification, and date of holding the same shall be proved by the registry books. Any request, consent or vote of the owner of any Bond shall bind all future owners of such Bond in respect of anything done or suffered to be done by the Bank or any Fiduciary in accordance therewith. ARTICLE IX COVENANTS OF THE BANK The Bank covenants and agrees with the Holders of the Bonds as follows: Section 901 -Payment of Bonds, The Bank shall duly and punctually payor cause to be paid the principal or Redemption Price, if any, of every Bond and the interest thereon, at the dates and places and in the manner stated in the Bonds according to the true intent and meaning thereof, and shall duly and punctually pay, or cause to be paid, all Sinking Fund Installments, if any, becoming payable with respect to any Series of Bonds. Section 902 -Extension of Payment of Bonds. The Bank shall not directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or the time of payment of any claims for interest by the purchase orfunding of such Bonds or claims for interest or by any other arrangement and in case the maturity of any of the Bonds or the time for payment of any claims for interest shall be extended, such Bonds or claims for interest shall not be entitled in case of any default under this Resolution to the benefit of this Resolution or to any payment out of any assets of the Bank or the funds (except funds held in trust for the payment of particular Bonds or claims for interest pursuant to this Resolution) prior to benefits accorded to or the payment of the principal of all Bonds issued and Outstanding the maturity of which has not been extended and of such portion of the accrued interest on the Bonds as shall not be represented by such extended claims for interest. Nothing herein shall be deemed to limit the right of the Bank to issue Refunding Bonds as provided in Section 203 and such issuance shall not be deemed to constitute an extension of maturity of Bonds. Section 903 -Offices for Servicing Bonds. The Bank shall at all times maintain an office or agency where Bonds may be presented for transfer or exchange, and where notices, presentations and demands upon the Bank in respect of the Bonds or of this Resolution may be served. The Bank hereby appoints the Trustee as its agent ALASKA MUNICJPAL BOND BANK GlHlonl GlHlonl ObllglJt/on Bond RtI5olut/on (Amondod) 1'lDo::J.\:!;'=ll'lnoV"",r.=c.no""Wr.".<O'llo<'><lR...w.Jl""OQ:l Pogo 54 F-15 ALASKA MUNlCJPAL BOND BANK GlHlonl Obi/gilt/on Bond RlISohJtlon (AmondfJd) 1~.:J"=\'-"''''''''=G_'''I(b:~''.<O'llo''ClR''''''''''''''?:! Pogo 55 to maintain such office or agency for the transfer or exchange of Bonds and for the service of such notices, presentations and demands upon the Bank and may appoint one or more co-regislrars for such purposes. The Bank hereby appoints the Trustee as Paying Agent and hereby appoints the Paying Agent as its agent to maintain such offices or agencies for the payment of Bonds. Section 904 -Further Assurances. At any and all times the Bank shall, so far as it may be authorized by law, pass, make, do, execute, acknowledge and deliver, all and every such further resolutions, acts, deeds, conveyances, assignments, transfers and assurances as may be necessary for the better assuring, conveying, granting, assigning, confirming all and singular the rights, Municipal Bonds Payments, the Municipal Bonds and other monies, securities, funds and property hereby pledged or assigned, or intended so to be, or which the Bank may hereafter become bound to pledge or assign. Section 905 -Power to Issue Bonds and Make Pledges. The The Bank is duly authorized pursuant to law to authorize and issue the Bonds for the purposes herein authorized and to adopt this Resolution and to pledge the Municipal Bonds Payments, the Municipal Bonds and other monies, securities, funds and property purported to be pledged by this Resolution in the manner and 10 the extent provided in this Resolution. The Municipal Bonds Payments, the Municipal Bonds, and other monies, securities, funds and property so pledged are and will be free and clear of any pledge, lien, charge or encumbrance thereon or with respect thereto prior to, or of equal rank with, the pledge created by this Resolution, except for the liens in favor of the Trustee and Paying Agents provided in Section 805 hereof, and all corporate or other action on the part of the Bank to that end has been duly and will be duly and validly taken. The Bonds and the provisions of this Resolution are and will be the valid and legally enforceable obligations of the Bank in accordance with their terms. The Bank shall at all times, to the extent permitted by law, defend, preserve and protect the pledge of the Municipal Bonds Payments, the Municipal Bonds and other monies, securities, funds and property pledged under this Resolution and all the rights of the Bondholders under this Resolution against all claims and demands of all persons whomsoever. Section 906 -General Covenants of the Bank. (A) The Bank shall do and perform or cause to be done and performed all acts and things required to be done or performed by oron behalf of the Bank under law and this Resolution in accordance with the terms hereof. (B) Upon the date of issuance of any of the Bonds, all conditions, acts and things required by law and this Resolution to exist, to have happened and to have been performed precedent to and in the issuance of such Bonds shall exist, have happened and have been performed and the issue of such Bonds, together with all other indebtedness of the Bank, shall be within every debt and other limit prescribed by the laws of the State. (C) The Bank does hereby pledge to and agree with the Holders of the Bonds that it will not cause the State to Iimi! or alter the rights vested by the Act in the Bank to fulfill the terms of any agreements made with Bondholders, or in any way impair the rights and remedies of such Holders until the Bonds, together with the interest thereon, with interest on any unpaid installments of interest. and all costs and expenses in connection with any action or proceeding by or on behalf of such Holders, are fUlly met and discharged. (0) Upon failure of a Governmental Unit to make any principal or interest payment on the date specified in, and as required by, the applicable Loan Agreement securing payment of the Municipal Bonds, the Trustee shall immediately notify the Executive Director of the Bank who shall then take the following actions: (i) the Executive Directorshall within two days of the Governmental Unit's failure to make the Municipal Bonds Payment pursuant to the terms of the applicable Loan Agreement, contact such Governmental Unit and request payment; ALASKA MUNICIPAL 80ND BANK Gommll Oblig;,t/on Bond Resolurlon (Amondod) I \D,=\.'I7'7.IOO\'.Ko""",~.·~"'.:JCbG~no "" 0<>.0;"""" Elccd 1lO<.<MC'\w;>:' Pago 56 ALASKA MUNICIPAL BOND BANK Gononll Obligation Bond Rosa/urian (Amondod) , IO='J7'7,X)(l\~l<><oV'>o''''.1OC!5 Go",,"" O<>o;o=llooa R..<J~I"'" w;>:' Pllgo 57 (ii) in the event payment is not made by the Governmental Unit pursuant to (i) above, the Trustee shall make up such deficiencies from the Reserve Fund as provided for in Section 603(E) of this Resolution; (iii) in the event payment is not made by the Governmental Unit pursuant to (i) above, and the Reserve Fund is drawn upon to make up such deficiency pursuant to (ii) above, the Executive Director shall initiate intercept proceedings with the applicable State agencies pursuant to Section 917 of this Resolution; (iv) in the event amounts collected pursuant to (i'li) above are insufficient to replenish amounts held in the Reserve Fund to the Reserve Fund Requirement, the Executive Directorshall contact the Governor of the State and the State legislature as set forth in Section 911 (B) of this Resolution; and (v) if there remains a deficiency in the Reserve Fund after the Executive Director has exhausted the requirements found in (i) through (iv) above, the Executive Director shall request a loan from the Department of Revenue pursuant to AS 44.85.270(i) and provide for such loan to be used to cause the amount in the Reserve Fund to satisfy the Reserve Fund Requirement. Section 907 -Accounts and Reports. (A) The Bank shall keep, or cause to be kept, proper books of record and account in which complete and correct entries shall be made of its transactions relating to all Municipal Bonds Payments, Municipal Bonds, the Fees and Charges and all funds and accounts established by this Resolution, which shall at all reasonable times be subject to the inspection of the Trustee orthe Holders of an aggregate of not less than twenty-five per centum (25%) in principal amount of Bonds then Outstanding or their representatives duly authorized in writing. (B) The Bank shall annually, on or before the last day of January in each year, file with the Trustee a copy of an audit for the preceding Fiscal Year, accompanied by an Accountant's Certificate, and an annual report setting forth in complete and reasonable detail: (a) its operations and accomplishments; (b) its receipts and expenditures during such Fiscal Year in accordance with the categories or classifications established by the Bank for its operating and capital outlay purposes; (c) its assets and liabilities at the end of such Fiscal Year, including a schedule of its Municipal Bonds Payments, Municipal Bonds, Fees and Charges and the status of reserve, funds and the funds and accounts established by this Resolution; and (d) a schedule of its Bonds Outstanding and other obligations outstanding at the end of such Fiscal Year, together with a statement of the amounts paid, redeemed and issued during such Fiscal Year. A copy of each such annual report and Accountant's Certificate shall be mailed promptly thereafter by the Trustee to each Bondholder who shall have filed his name and address with the Bank for such purpose. Section 90B -Personnel and Servicing of Programs. (A) The Bank shall at all times appoint, retain and employ competent personnel for the purpose of carrying out its respective programs and shall establish and enforce reasonable rules, regulations, tests and standards governing the employment of such personnel at reasonable compensation, salaries, fees and charges and all persons employed by the Bank shall be qualified for their respective positions. (B) The Bank may pay to the respective State agency, governmental unit or political subdivision of the State from the Operating Fund such amounts as are necessary to reimburse the respective State agency, governmental unit or political subdivision of the state for the reasonable costs of any services performed for the Bank. Section 909 -Waiver of Laws. The Bank shall not at any time insist upon or plead in any manner whatsoever, or claim or take the benefit or advantage of any stay or extension law now or at any time hereafter in force which may affect the covenants and agreements contained in this Resolution or in any Series Resolution or in the Bonds, and all benefit or advantage of any such lawor laws is hereby expressly waived by the Bank. Section 910 -Fees and Charges. The Bank shall establish, make, maintain and charge such Fees and Charges to each Governmental Unit to which a Loan is made, and shall from time to time revise such Fees and Charges whenever necessary, so that such Fees and Charges actually collected from each such Governmental Unit will at all ALASKA MUNICIPAL BOND BANK GMenll ObIlg;,rlon Bond RlISoluUon (Amendod) 1\Doc<'"')T~7,X)(l\'Ro«:/"'"""",'=G"""""o:<o;~!:<rIlloOdIl""'",,,,,,'"?d Page 58 F-16 ALASKA MUNICIPAL BOND BANK GMf/nll Obllglltlon Bond RllSolurion (Amondod) ,\Doe1;·J7~7.IOO\~.·-=G--..rCl:io;ot><>'lIlo"<lRO><f>Jl""''''''' Pago 59 times produce monies which, together with such Governmental Unit's Allocable Proportion of other monies available under the provisions of this Resolution, and other monies available therefor, including any grants made by the United States of America orany agency or instrumentality thereof or by the State or any agency or instrumentality thereof and amounts applied therefor from amounts transferred to the Operating Fund pursuant to paragraph (3) of Section 603, will be at least sufficient: (a) To pay, as the same become due, the Governmental Unit's Allocable Proportion of the Administrative Expenses of the Bank; and (b) To pay, as the same become due, the Governmental Unit's Allocable Proportion of the fees and expenses of the Trustee and Paying Agents. The Bank shall provide the Trustee with a schedule of the Fees and Charges to be paid by each Governmental Unit, and of each revision thereof, and shall require each Governmental Unit to make payment of the Fees and Charges required to be paid by it directly to the Trustee. The Trustee shall promptly advise the Bank of each and every failure of a Governmental Unit to make payment of Fees and Charges when due in accordance with the applicable schedule. Section 911 -Administration of Reserve Fund. (A) The Bank shall establish and maintain the Reserve Fund in accordance with the provisions of this Resolution. All monies and securities held in the Reserve Fund shall be used, disbursed and applied only in accordance with the provisions of this Resolution and for no other purpose. Monies and securities held in the Reserve Fund shall not be withdrawn therefrom at any time in such amount as would reduce the amount in such Fund to an amount less than the Required Debt Service Reserve except as otherwise provided in this Resolution. (8) The Bank shall cause the Chairman of the Board of Directors of the Bank annually, before each January 30, to make and deliver to the Governorof the State and to the legislature his certificate stating the amount, if any, required to restore the Alaska Municipal Bond Bank Reserve Fund to the amount of the Required Debt Service Reserve and a copy of such certificate shall be promptly delivered by the Bank to the Trustee. Monies received by the Bank from the State pursuant to such a certification, in accordance with the provisions of Section 44.85.270(g) of the Act shall, to the extent such certification was occasioned by the fact that the amount in the Reserve Fund was less than the Required Debt Service Reserve, be deposited in the Reserve Fund, as reqUired by paragraph (0) of Section 603. (C) The Bank shall annually submit to the State a budget request for an appropriation to cause, if necessary, amounts held in the Reserve Fund to equal the Reserve Fund Requirement. (Amendment: Effective August 19, 2009) Section 912 -Issuance of Additional Obligations. (A) The Bank shall not subsequent to the issuance of the initial Series of Bonds under this Resolution create or permit the creation of or issue any obligations or create any additional indebtedness which will be secured by a charge and lien on the Municipal Bonds and the Municipal Bonds Payments or which will be payable from the Debt Service Fund or the Reserve Fund, except that additional Series of Bonds may be issued from time to time pursuant to a Series Resolution subsequent to the issuance of the initial Series of Bonds under this Resolution on a parity with the Bonds of such initial Series of Bonds and secured by an equal charge and lien on the Municipal Bonds and the Municipal Bonds Payments and payable equally and ratably from the Debt Service Fund and Reserve Fund for the purposes of (i) making Loans to Governmental Units, (ii) making payments into the Interest Account, (iii) making payments into the Reserve Fund, (iv) funding of Notes theretofore issued by the Bank for any purposes for which Bonds may have been issued, and (v) SUbject to the provisions and limitations of Section 203, the refunding of any Bonds then Outstanding, under the conditions and subject to the limitations in this Section 912 provided. (B) No additional Series of Bonds shall be issued subsequent to the issuance of the initial Series of Bonds under this Resolution unless: (1) the aggregate principal amount of Bonds and Notes of the Bank outstanding at the time of issuance and delivery of such additional Bonds including the principal amount of such additional Bonds will not exceed any limit thereon imposed by law; ALASKA MUNICIPAL BOND BANK Grmlu::Il Obllgllrlon Bond ROsoWllon (AmondO<1) Pago 60 AlASKA MUNICIPAL BOND BANK Grmor.ll Obl/Qillion Bond RlI$oJuflon (AmondO<1) llOo<>l'.)I.=NIo"""'.oo".2OO'\C~""<:<""'',1c''''''B<l<>:lf1'''''''''"",,,..r. Page 61 (2) there is at the time of the issuance of such additional Bonds no deficiency in the amounts required by this Resolution or any Series Resolution to be paid into the Debt Service Fund and into the Reserve Fund; (3) the amount of the Reserve Fund, upon the issuance and delivery of such additional Bonds and the deposit in the Reserve Fund of any amount proVided therefor in the Series Resolution authorizing the issuance of such additional Bonds, shall not be less than the Required Debt Service Reserve; and (4) the maturities of, or Sinking Fund Installments for, the additional Bonds then being issued representing Loan Obligations, unless such additional Bonds are being issued to refund Outstanding Bonds in accordance with the provisions of Section 203, shall be equal to the scheduled Municipal Bonds Principal Payments to be made in respect of the Loans with respect to which such additional Bonds are to be issued. (C) The Bank expressly reselVes the right to adopt one or more other general obligation bond resolutions and reserves the right to issue Notes and any other obligations so long as the same are not a charge or lien on the Municipal Bonds, the Municipal Bonds Payments and the Fees and Charges or payable from the Debt Service Fund or the Reserve Fund created pursuant to this Resolution. Section 913 -Loan Agreement Provisions. No Loan shall be made by the Bank from the proceeds of the sale of Bonds, and no Bonds shall be issued by the Bank for the purpose of providing funds with which to make a Loan, unless the Loan Agreement under which such Loan is to be made shall comply with, and no Bonds shall be issued by the Bank to fund Notes or to refund Bonds unless the Loan Agreement under which the Loan was made from the proceeds of such Notes or Bonds, shall also comply with, the following terms, conditions, provisions and limitations: (a) The Governmental Unit which is a party to such Loan agreement must be a Governmental Unit as defined by the Resolution and the Loan Agreement must be executed in accordance with existing laws; (b) The Governmental Unit, prior to or simultaneously with the issuance of Bonds of the Bank issued to make a Loan to the Governmental Unit, shall issue Municipal Bonds which are valid obligations of the Governmental Unit as required by the Act;(c) The Municipal Bonds Interest Payments to be made by the Governmental Unit under such Loan Agreement shall be not less than the interest payments the Bank is required to make on the Loan Obligation and shall be scheduled by the Bank in such manner and at such times (notwithstanding the dates of payment as stated in the Municipal Bonds) as to provide funds sufficient to pay interest on the Loan Obligation as the same becomes due; (d) The Municipal Bonds Principal Payments to be made by the Governmental Unit under such Loan Agreement shall be scheduled by the Bank in such manner and at such times (notwithstanding the dates of payment as stated in the Municipal Bonds) as to provide funds sufficient to pay the principal of the Loan Obligation as the same matures; (e) The Governmental Unit shall be obligated to pay Fees and Charges to the Bank at the times and in the amounts which will enable the Bank to comply with the provisions of Section 910; (f) The Governmental Unit shall agree that in the event the amounts referred to in paragraphs (c) and (d) are not paid by it to the Bank on or before the times specified in the Loan Agreement, any money payable to the Governmental Unit by any department or agency of the State shall be withheld from such Governmental Unit and paid over directly to the Trustee acrlng under the General Obligation Bond Resolution and that the said agreement shall be full warrant, authority and direction to make such payment to any official of the State responsible for such payment upon notice to such official by the Bank as provided in the Act: (g) The Bank shall not sell and the Governmental Unit shall not redeem prior to maturity any of the Municipal Bonds with respect to which the Loan is made in an amount greaterthan the Outstanding Bonds issued with respect to such Loan which are then redeemable, and in the event of any such sale or redemption of such Municipal Bonds, the same shall be in an amount not less than the aggregate of (i) the principal ALASKA MUNICIPAL BOND BANK GllfIoflll ObltgIJtlon Bond RO$oWtlon (AmGl1dO<1) 1'Dcc:r.\31.='IIlncI<J'..,..,...=c......'2I!O'>~Il=<lRllWwl""O<;>d Page 62 F-17 ALASKA MUNICIPAL BONO BANK GrmQr.l1 ObllQlltlon Bond RO$oJutlon {AmQndod} 1\Dl:>co'.)7'='~".200SCeno~""''Il__ 6<Y><:lf1DS.<Moow;<l Page 63 amount of the Loan Obligation so to be redeemed, (ii) the interest to accrue on the Loan Obligation so to be redeemed to the next redemption date thereof not previously paid, (iii) the applicable premium, if any, payable on the Loan Obligation so to be redeemed, and (iv) the costs and expenses of the Bank in effecting the redemption of the Loan Obligation so to be redeemed; provided, however, that in the event the Loan Obligation has been refunded and the Refunding Bonds therefor were issued in a principal amount in excess of or less than the Loan Obligation remaining unpaid at the date of issuance of such Refunding Bonds, the amount which the Governmental Unit shall be obligated to payor the Bank shall receive under item (i) above shall be the principal amount of such Refunding Bonds Outstanding, In the event the Loan Obligation has been refunded and the interest the Bank is required to pay on the Refunding Bonds therefor is less than the interest that the Bank was required to pay on the Loan Obligation, the amount which the Governmental Unit shall be obligated to payor the Bank shall receive under item (ii) above shall be the amount of interest to accrue on such Refunding Bonds Outstanding. (h) The Governmental Unit shall give the Bank at least fifty (50) days' notice of intention to redeem its Municipal Bonds, Section 914 -Modification of Loan Agreement Terms. The Bank shall not consent to the modification of, or modify, the rate or rates of interest of, or the amount or time of payment of any installment of principal of or interest on any Municipal Bonds evidencing a Loan, or the amount or time of payment of any Fees and Charges payable with respect to such Loan, or the security for or any terms or provisions of such Loan or the Municipal Bonds evidencing the same, in a manner which adversely affects or diminishes the rights of the Bondholders; provided, however, that, in the event the Loan Obligation is being or has been refunded and the Refunding Bonds therefor are in a principal amount in excess of or less than the principal amount of the Bonds refunded, the Bank may consent to the modification of and modify the Loan agreement relating to such Loan and the Municipal Bonds evidencing the same, and the Municipal Bonds Payments to be made thereunder so long as such Municipal Bonds Payments are sufficient in amount and payable at the times required for the payment of the principal of and interest on such Refunding Bonds, and further provided, however, that, in the event the Loan Obligation has been refunded and the interest the Bank is required to pay on the Refunding Bonds issued for the purpose of refunding such original Bonds is less than the interest the Bank was required to pay on such original Bonds refunded by the Bank, the Municipal Bonds Interest Payments to be made by the Governmental Unit in respect of such Loan may be reduced so that the amounts required to be paid shall be sufficient to pay interest on such Refunding Bonds Outstanding. Section 915 -Sale of Municipal Bonds by Bank, The Bank shall not sell any Municipal Bonds except as provided in subsection (g) of Section 913. Section 916 -Disposition of the Proceeds of Sale or Redemption of Municipal Bonds. In the event Municipal Bonds or other obligations securing a Loan shall be sold by the Bank or redeemed by the Governmental Unit in accordance with terms of the applicable Loan Agreement, the Bank shall, upon such sale by the Bank or redemption by the Govemmental Unit, deposit the proceeds of such sale or redemption, except an amount thereof equal to the costs and expenses of the Bank in effecting the redemption of the Bonds to be redeemed, into the applicable sub-account or subaccounts in the Redemption Account and shall apply the same 10 the purchase, retirement or redemption of the appropriate Bonds in accordance with the provisions of this Resolution. The balance in such applicable sub·account or sub-accounts of such proceeds of sale or redemption of Municipal Bonds after Ihe redemption of the Bonds to be redeemed shall be deposited in the Operating Fund. Section 917 -Enforcement of Municipal Bonds. The Bank shall diligently enforce, and take all reasonable steps, actions and proceedings necessary for the enforcement of, all terms, covenants and conditions of all Loan Agreements and the Municipal Bonds evidencing Loans made by the Bank, including the prompt collection, and the giving of notice to the Commissioner of Revenue, Commissioner of Commerce, Community and Economic Development and the Commissioner of Administration and any other department or agency of the State which is custodian of any money payable ALASKA MUNICJPAL BOND BANK Gl/fIll/a/Obl/glltlon Bond Resolution (Amf1ndod) 1~.:l7':/!X1.l\'il.O<>'vt<:I<'.="""""'O:<<;<lt<>'1!l<>'>df'l~""W;>:: Page 64 ALASKA MUNICIPAL BOND BANK Gf1nf1r.J1 Obligation Bond Resolution (Amf1ndod) '~'.)I.=II>lo=v.<>".'.:«l:>C~""_""O'.;<;;.t",,,ll<l"<l'lO>d~''''''W;>:: Page 65 to the Governmental Unit of any failure or default of the Governmental Unit in the payment of its Municipal Bonds Payment and shall promptly transfer any such monies, upon receipt thereof, to the Trustee and, in such event, or if such monies are paid directly to the Trustee, the Trustee shall deposit any such monies in the Principal Account and Interest Account in place of said unpaid Municipal Bonds Payment or in the event deficiencies in said Accounts created by such default shall have been made up by the Reserve Fund pursuant to paragraph (5) of Section 603, in the Reserve Fund to the extent of such deficiencies. Section 918 -Continuing Disclosure' Bankruptcy. (A) The Bank hereby covenants and agrees that it will comply with and carry out all the provisions of each Continuing Disclosure Certificate. Notwithstanding any other provision of this Resolution, failure of the Bank to comply with any Continuing Disclosure Certificate shall not be considered an Event of Default, and any Bondholder may take such actions only as may be provided in such Continuing Disclosure Certificate. (B) The Bank hereby covenants and agrees that it will notify the Rating Agencies then rating the Bonds of any change in the Act which would permit it or require it to declare bankruptcy under the Bankruptcy Code. Section 919· Tax Covenants. The Bank shall not knowingly take or cause any action to be taken which would cause interest on any Bonds to become taxable for federal income tax purposes. The Bank shaJJ at all times do and perform all acts and things necessary or desirable, including, but not limited to, complying with the rebate provisions of Section 148 of the Code, as applicable, and complying with the provisions of any letter of instructions from bond counsel, in order to assure that interest paid on Bonds shall, for purposes of federal income taxation, be excludable from the gross income of the recipients thereof and exempt from taxation. The Bank shall not permit at any time or times any proceeds of any Bonds or any amounts held hereunder to be used, directly or indirectly, in a manner which would result in the exclusion of any Bond from the treatment afforded by subsection (a) of Section 103 of the Code. ARTICLE X SERIES RESOLUTION AND SUPPLEMENTAL RESOLUTIONS Section 1001 -Modification and Amendment without Consent. Notwithstanding any other provisions of this Article X, or Article Xl, the Bank may adopt at any time or from time to time Series Resolutions or Supplemental Resolutions for anyone or more of the following purposes, and any such Series Resolution or Supplemental Resolution shall become effective in accordance with its terms upon the filing with the Trustee of a copy thereof certified by an Authorized Officer: (A) To provide for the issuance of a Series of Bonds pursuant to the provisions of this Resolution and to specify and determine such matters and things referred to in Article II of this Resolution and to prescribe the terms and conditions pursuant to which such Bonds may be issued, paid or redeemed; (B) To add to the covenants and agreements of the Bank for the purpose of further securing the payment of the Bonds, provided such additional covenants and agreements are not contrary to or inconsistent with the covenants and agreements of the Bank contained in this Resolution; (C) To prescribe further limitations and restrictions upon the issuance of Bonds and the incurring of indebtedness by the Bank which are not contrary to or inconsistent with the limitations and restrictions thereon theretofore in effect; (0) To surrender any right, power or privilege reserved to or conferred upon the Bank by the terms of this Resolution, prov'lded that the surrender of such right, power or privilege is not contrary to or inconsistent with the covenants and agreements of the Bank contained in this Resolution: (E) To confirm as further assurance any pledge under and the subjection to any lien. claim or pledge created or to be created by the provisions of this Resolution of the Municipal Bonds and Municipal Bonds Payments or of any other monies, securities or funds; (F) To modify any of the provisions of this Resolution or any previously adopted Series Resolution Resolution in any other respect; provided that such modifications shall not be ALASKA MUNICIPAL BOND BANK Gonf1r111 Obl/glltlon Bond Ruotutlon (AmfHIdod) 1'.1;):;Q.',J7'=l'Rowv'.<>"'\""lXlSG<ln'I',.o:<,..l:<>1Bondf'loW.t."",-..;>:! Page 66 F-18 ALASKA MUNICIPAL BOND BANK GIIIlf1ll1l Obligation Bond Rvsolutlon (Amlmdod) '\Vooo'J7,=I~"=""""""O:<<;;'l=IIo"<lf'l"""~""""'?'! Page 67 effect'lve until after all Bonds of any Series of Bonds Outstanding as of the date of adoption of such Series Resolution or Supplemental Resolution shall cease to be Outstanding, and all Bonds issued under such modified resolutions shall contain a specific reference to the modificaUons; (G) To cure any ambiguity or defect or inconsistent provision in this Resolution or to insert such provisions clarifying matters or questions arising under this Resolution as are necessary or desirable in the event any such modifications are not contrary to or inconsistent with this Resolution as theretofore in effect. Section 1002 -Supplemental Resolutions Effective with Consent of Bondholders. The provisions of this Resolution may also be modified or amended at any time or from time to time by a Supplemental Resolution, with the consent of Bondholders in accordance with and subject to the provisions of Article XI which Supplemental Resolution, upon the filing with the Trustee of a copy thereof, certified by an Authorized Officer and upon compliance with the Article XI, shall become fUlly effective in accordance with its terms as provided in said Article. Section 1003 -General Provisions Relating to Series Resolutions and Supplemental Resolutions. This Resolution shall not be modified or amended in any respect except as provided in and in accordance with and subject to the provisions of this Article X and Article XI. Nothing contained in this Article X or Article Xl shall affect or limit the rights or obligations of the Bank to adopt, make, do, execute or deliver any resolution, act or other instrument pursuant to the provisions of Section 904 or the right or obligation of the Bank to execute and deliver to the Trustee or any Paying Agent any instrument which elsewhere in this Resolution it is provided or permitted to be delivered to the Trustee or any Paying Agent. A copy of every Series Resolution and Supplemental Resolution adopted by the Bank when filed with the Trustee shall be accompanied bya Counsel's Opinion stating that such Series Resolution or Supplemental Resolution has been duly and lawfully adopted in accordance with the provisions of this Resolution, is authorized or permitted by this Resolution and is valid and binding upon the Bank and enforceable in accordance with its terms (subject, as to enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium, or other laws affecting creditor's rights generally from time to time in effect). The Trustee is hereby authorized to accept delivery of a certified copy of any Series Resolution or Supplemental Resolution permitted or authorized pursuant to the provisions of this Resolution and to make all further agreements and stipUlations which may be contained therein, and, in taking such action, the Trustee shall be fully protected in relying on Counsel's Opinion that such Series Resolution or Supplemental Resolution is authorized or permitted by the provisions of this Resolution. No Series Resolution or Supplemental Resolution changing, amending or modifying any of the rights or obligations of the Trustee or of any Paying Agent may be adopted by the Bank without the written consent of the Trustee or Paying Agent affected thereby. ARTICLE XI AMENDMENTS Section 1101 -Powers of Amendment. Any modification or amendment of this Resolution and of the rights and obligations of the Bank and of the Holders of the Bonds, in any particular, may be made by a Supplemental Resolution, with the written consent given as hereinafter provided in Section 1102, (a) of the Holders of at least two-thirds in principal amount of the Bonds Outstanding at the time such consent is given, or (b) in case less than all of the several Series of Bonds then Outstanding are affected by the modification or amendment, of the Holders of at least two-thirds in principal amount of the Bonds of each Series so affected and Outstanding at the time such consent is given; provided, however, that such modification or amendment shall not (i) permit a change in the terms of redemption or maturity of the principal of any Outstanding Bond or of any installment of interest thereon or Sinking Fund Installment therefor, (ii) or a reduction in the principal amount or the Redemption Price thereof or in the rate of interest thereon, or (iii) a reduction of the percentage of the Holders of which is required to effect any such modification or amendment, or (iv) permit the ALASKA MUNICIPAL BOND BANK Ganllral Obl/gatlon Bond RlIsolufion (Amllndlld) l·o=·.:n'=l"t1>"""""""\"~Go...,""..~.~~'m!Jo.'dl{<r«fuO ..,"""", Page 68 ALASKA MUNICIPAL BONO BANK GMllral Obllglltlon Bond Resolution (Amllndrxi) '\o<>::<·.;lI.mol~1""'''~G''''''''''~o;'''''''l»\dH'''''M'''''''''''' Pago 69 creation of any lien prior to oron a parity with the lien created by this Resolution (except in the manner provided by this Resolution) or deprive the Holders of the Bonds of the lien created by this Resolution, without the consent of the Holders of all the Bonds Outstanding or of the Series of Bonds affected by such modification or amendment. For the purposes of this Section, a Series shall be deemed to be affected by a modification or amendment of this Resolution if the same adversely affects or diminishes the rights of the Holders of Bonds of such Series. Section 1102 -Consent of Bondholders. (A) The Bank may at any time adopt a Supplemental Resolution making a modification or amendment permitted by the provisions of Section 1101, to take effect when and as provided in this Section. A copy of such Supplemental Resolution (or brief summary thereof or reference thereto), together with a request to Bondholders for their consent thereto, shall be to by, or on behalf of, the Bank's to Bondholders. Such Supplemental Resolution shall not be effective unless and until there shall have been filed with the Trustee (a) the written consents of Holders of the percentages ofOutstanding Bonds specified in Section 1101 and (b) a Counsel's Opinion stating that such Supplemental Resolution has been duly and lawfully adopted and filed by the Bank in accordance with the provisions of this Resolution, is authorized or permitted hereby and is valid and binding upon the Bank and enforceable in accordance with its terms, and (ii) a notice shall have been mailed as hereinafter provided in this Section. (B) The consent of a Bondholder to any modification or amendment shall be effective only if accompanied by proof of the holding, at the date of such consent, of the Bonds with respect to which such consent is given, which proof shall be such as is permitted by Section 813. A certificate or certificates by the Trustee filed with the Trustee that it has examined such proof and that such proof is sufficient in accordance with Section 813 shall be conclusive that the consents have been given by the Holders of the Bonds described in such certificate or certificates of the Trustee. Any such consent shall be binding upon the Holder of the Bonds giving such consent and upon any subsequent Holder of such Bonds and of any Bonds issued in exchange therefor (regardless of whether such subsequent Holder thereof has notice thereof) unless such consent is revoked in writing by the holder of such Bonds giving such consent or a subsequent holder thereof by filing with the Trustee, prior to the time when the written statement of the Trustee hereinafter provided forin this Section is filed, such revocation and, if such Bonds are transferable by delivery, proof that such Bonds are held by the signer of such revocation in the manner permitted by Section 813. The fact that a consent has not been revoked may likewise be proved by a certificate of the Trustee filed with the Trustee to the effect that no revocation thereof is on file with the Trustee. (C) At any time after the Holders of the required percentages of Bonds shall have filed their consents to the Supplemental Resolution, the Trustee shall make and file with the Bank and the Trustee a written statement that the Holders of such required percentages of Bonds have filed such consents. Such written statement shall be conclusive that such consents have been so filed. At any time thereafter notice, stating in substance that the Supplemental Resolution adopted by the Bank on a stated date, a copy of which is on file with the Trustee, has been consented to by the Holders of the required percentages of Bonds and will be effective as provided in this Section, may be given to Bondholders by the Bank by mailing such notice to Bondholders at least once not more than ninety days (90) after the Holders of the required percentages of Bonds shall have filed their consents to the Supplemental Resolution and the written statement of the Trustee hereinabove provided for is filed. The Bank shall file with the Trustee proof of the publication of such notice and, if the same shall have been mailed to Bondholders, of the mailing thereof. A record, consisting of the papers required or permitted by this Section to be filed with the Trustee, shall be proof of the matters therein stated. Such Supplemental Resolution making such amendment or modification shall be deemed conclusively binding upon the Bank, the Fiduciaries and the Holders of all Bonds at the expiration of forty (40) days after the filing with the Trustee of the proof of the first publication of such last mentioned notice, except in the event of a final decree of a court of competent jurisdiction setting aside such Supplemental Resolution in a legal action or equitable proceeding for purpose ALASKA MUNICIPAL BOND BANK GMQIltI Obllglfflon Bond RQSolutlon (Am'mdrxi) 1\O<>::<\3r.:.tIOOI·_v'JO"'=Gtt_O'::I....l<>'1~I{"u:M""'''''''' Page 70 F-19 ALASKA MUNICIPAL BOND BANK GMIIIltI Obllgllt/on Bond RlI$olutlon (AmQndlld) '\Ooc$'.)7'='~"""·~G""""'OOo;at'O'\!loodl{"""~~"",,,,,,,, Page 71 commenced within such forty day period: except that any Fiduciary and the Bank during such forty day period and any such further period during which any such action or proceeding may be pending shall be entitled in their absolute discretion to take such action, or to refrain from taking such action, with respect to such Supplemental Resolution as they may deem expedient. Section 1103 -Modifications by Unanimous Consent. The terms and provisions of this Resolution and the rights and obligations of the Bank and of the Holders of the Bonds may be modified or amended in any respect upon the adoption and filing with the Trustee by the Bank of a copy of a Supplemental Resolution certified by an Authorized Officer and the consent of the Holders of all of the Bonds then Outstanding, such consent to be given as provided in Section 1102, except that no notice to Bondholders either by mailing or publication shall be required provided, however, that no such modification or amendment shall change or modify any of the rights or obligations of the Trustee or Paying Agents without the filing with the Trustee of its written assent thereto in addition to the consent of Bondholders. Section 1104 -Mailing and Publication. Any provision in this Article for the mailing of a notice or other document to Bondholders shall be fully complied with if it is mailed postage prepaid only (i) to each registered owner of Bonds then Outstanding at his address, if any, appearing upon the registry books of the Bank, (ii) to each Holder of any Bond payable to bearer who shall have filed with the Trustee an address for notices, and (iii) to the Trustee. Section 11 05 ~ Exclusion of Bonds. Bonds owned or held by or for the account of the Bank shall not be deemed Outstanding for the purpose of consent or other action or any calculation of Outstanding Bonds provided for in this Resolution, and the Bank shall not be entitled with respect to such Bonds to give any consent or take any other action provided for in this Resolution. At the time of any consent or olher aelion taken under this Resolution, the Bank shall furnish the Trustee a certificate of an authorized Officer, upon which the Trustee may rely, describing all Bonds so to be excluded. Section 1106 -Notation on Bonds. Bonds delivered after the effective date of any action taken as in Article X or XI provided may, and if the Trustee so determines, shall, bear notation by endorsement or otherwise in form approved by the Bank and the Trustee as to such action, and in that case upon demand of the Holder of any Bond Outstanding at such effective date and upon presentation of his Bond for such purpose at the corporate trust office of the Trustee suitable notation shall be made on such Bond by the Trustee as to any such action. If the Bank or the Trustee shall so determine, new Bonds so modified as in the opinion of the Trustee and the Bank to conform to such action shall be prepared and delivered, and upon demand of the Holder of any Bond then Outstanding shall be exchanged, without cost to such Bondholder, for Bonds of the same Series and maturity then Outstanding, upon surrender of such Bonds. ARTICLE XII DEFAULTS AND REMEDIES Section 1201 -Trustee to Exercise Powers of Statutory Trustee. The Trustee shall be and hereby is vested with all of the rights, powers and duties of a trustee appointed by Bondholders pursuant to Section 44.85.310 and 320 of the Act and the right of Bondholders to appoint a trustee pursuant to Section 44.85.310 and 320 of the Act is hereby abrogated pursuant to Section 44.85.220(18) of the Act. Section 1202 -Events of Default. Each of the following events is hereby declared an "Event of Default," that is to say; if (a) the Bank shall default in the payment of the principal or Redemption Price of, Sinking Fund Installment for, or interest on, any Bond when and as the same shall become due whether at maturity or upon call for redemption, or otherwise; or (b) the Bank shall fail or refuse to comply with the provisions of Section 44.85.270(g) oflhe Act, or such amounts as shall be certified by the Chair of the Bank to the Governor and to the Legislature pursuant to such provisions of the Act shall not be appropriated and paid to the Bank prior to the termination of the then current State fiscal year; or ALASKA MUNiCiPAL BONO BANK GlHIl/r.ll Obligation Bond RI/solutlon (Amondl/d) 1=<'3U=1~""n<·'=Go",,""«;<..."""!l<>:'dfl"""vton~ Page 72 ALASKA MUNiCiPAL BOND BANK GI/Illltal ObI/galion Bond Reso1ut/on (Aml/ndlld) j·oi,):x:o.'-"!I.;"COO1'Ro«A<"""""'=c.o",,,,,, «;<0;0-,,'" !\o~~ fl<»«uton~ Page 73 (c) the Bank shall fail or refuse to comply with the provisions of the Act, other than as provided in (b) above, or shall default in the performance or observance of any other of the covenants, agreements or conditions on its part in this Resolution, any Series Resolution, any Supplemental Resolution, or in the Bonds contained, and such failure, refusal or default shall continue for a period of forty-five (45) days after written notice thereof by the Trustee or the Holders of not less than twenty-five per centum (25%) in principal amount of the Outstanding Bonds. Provided, however, that an Event of Default shall not be deemed to exist under the provisions of this paragraph (c) upon the failure of the Bank to make and collect Fees and Charges required to be made and collected by the provisions of this Resolution or upon the failure of the Bank to enforce any obligation undertaken by a Governmental Unit pursuant to a Loan Agreement including the making of the stipulated Municipal Bonds Payment so long as the Bank may otherwise be directed by law and so long as the Bank shall be provided with monies from the Stale or otherwise, olher than withdrawals from or reimbursements of the Reserve Fund, sufficient in amount to pay the principal of and interest on all Bonds as the same shall become due during the period for which the Bank shall be directed by law to abstain from making and collecting such Fees and Charges and from enforcing the obligations of a Governmental Unit under the applicable Loan Agreement. Agreement. Section 1203 -Remedies. (A) Upon the happening and continuance of any Event of Defaull specified in paragraph (a) of Section 1202, the Trustee shall proceed, or upon the happening and continuance of any Event of Default specified in paragraphs (b) and (c) of Section 1202, the Trustee may proceed, and upon the written request of the Holders of not less than twenty-five per centum (25%) in principal amount of the Outstanding Bonds shall proceed, in its own name, to protect and enforce its rights and the rights of the Bondholders by such of the following remedies, as the Trustee, being advised by counsel, shall deem most effectual to protect and enforce such rights: (1) by mandamus or other suit, action or proceeding at law or in equity, enforce all rights of the Bondholders, including the right to require the Bank to make and collect Fees and Charges and Municipal Bonds Payments adequate to carry out the covenants and agreements as to, and pledge of, such Fees and Charges and Municipal Bonds Payments, and other properties and to require the Bank to carry out any other covenant or agreement with Bondholders and to perform its duties under the Act; (2) by bringing suit upon the Bonds; (3) by action or suit in equity, require the Bank to account as if it were the trustee of an express trust for the Holders of the Bonds; (4) by action or suit in equity, enjoin any acts or things which may be unlawful or in violation of the rights of the Holders of the Bonds; (B) Upon the occurrence of an Event of Default under Section 1202(a), unless the principal of all the Bonds shall have already become due and payable, the Trustee, by notice in writing to the Bank, may, and upon the written request of the Holders of not less than a majority in aggregate principal amount of the Bonds at the time outstanding, shall, in accordance with the provisions of the Act, declare the principal of all the Bonds then outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Resolution or in the Bonds contained to the contrary notwithstanding. This provision, however, is subject to the condition that if, at any time after the principal of the Bonds shall have been so declared due and payable, and before any judgment or decree for the payment of the monies due shall have been obtained or entered, the Bank shall deposit with the Trustee a sum sufficient to pay all principal on the Bonds matured prior to such declaration and all matured installments of interest (if any) upon all the Bonds, with interest on such overdue installments of principal at the rate borne by the respective Bonds, and the reasonable expenses of the Trustee, and any and all other defaults known to the Trustee (other than in the payment of principal of and interest on the Bonds due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to to be adequate shall have been made therefor, then, and in ALASKA MUNICIPAL BOND BANK GIIfII//lII Obl/glltlon Bond Rl/$o1ullon (Aml/ndfld) 1'='.:J7'=I'~n<~C"",,""D:«;"JO"!l<>:'dflOWvlon~ Pago 74 F-20 ALASKA MUNiCiPAL BONO BANK Gllflenl Ob/lgMion Bond Rl/$o1utlrm (Aml/ndlld) 1\o:>¢.:Ju2000'~<·=C_""00"~6ond~CP><lvt""'w;xl Pago 75 every such case, the Holders of at least a majority in aggregate principal amount of the Bonds then outstanding, by written notice to the Bank and to the Trustee, may, on behalf of the Holders of all of the bonds, rescind and annul such declaration and its consequences and waive such default; but no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon. (C) In the enforcement of any remedy under this Resolution, the Trustee shall be entitled to sue for, enforce payment on and receive any and all amounts then or dUring any default becoming, and at any time remaining, due from the Bank for principal, Redemption Price, interest or otherwise, under any provision of this Resolution or a Series Resolution orofthe Bonds, and unpaid, with interest on overdue payments at the rate or rates of interest specified in such Bonds, together with any and all costs and expenses of collection and of all proceedings hereunder and under such Bonds, without prejudice to any other right or remedy of the Trustee or of the Bondholders, and to recover and enforce a judgment or decree against the Bank for any portion of such amounts remaining unpaid, with interest, costs and expenses, and to collect from any monies available for such purpose, in any manner provided by law, the monies adjudged or decreed to be payable. Section 1204 -Priority of Payments After Default. During the continuance of an Event of Default. in the event that the funds held by the Trustee and Paying Agents shall be insufficient for the payment of interest and principal or Redemption Price then due on the Bonds, such funds (other than funds held for the payment or redemption of particular Bonds which have theretofore become due at maturity or by call for redemption) and any other monies received or collected by the Trustee acting pursuant to the Act and this Article XII, after making provision for the payment of any expenses necessary in the opinion of the Trustee to protect the interests of the Holders of the Bonds, and for the payment of the charges and expenses and liabilities incurred and advances made by the Trustee or any Paying Agents in the performance of their respective duties under this Resolution, shall be applied as follows: (a) Unless the principal of all of the Bonds shall have become or have been declared due and payable, FIRST: To the payment to the persons entitled thereto of all installments of interest then due in the order of the maturity of such installments, together with interest on overdue installments of interest and, if the amount available shall not be sufficient to pay in full any installment, then to the payment thereof ratably, according to the amounts due on such installment, to the persons entitled thereto, without any discrimination or preference; and SECOND: To the payment to the persons entitled thereto of the unpaid principal or Redemption Price of any Bonds which shall have become due, whether at maturity or by call for redemption, in the order of their due dates and, if the amounts available shall not be sufficient to pay in full all the Bonds due on any date, then to the payment thereof ratably, according to the amounts of principal or Redemption Price due on such date, to the persons entitled thereto, without any discrimination or preference. (b) If the principal of all of the Bonds shall have become or have been declared due and payable, to the payment of the principal and interest then due and unpaid upon the Bonds together with interest on overdue installments of interest 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 amounts due respectively for principal and interest, to the persons entitled thereto without any discrimination or preference except as to any difference in the respective rates of interest specified in the Bonds. Whenever monies are to be applied by the Trustee pursuant to the provisions of this Section 1204, such monies shall be applied by the Trustee at such times, and from time to time, as the Trustee in its sale discretion shall determine, having due regard to the amount of such monies available for application and the likelihood of additional money becoming available for such application in the future; the deposit of such monies with the Paying Agents, or otherwise setting aside such monies in trust ALASKA MUNICIPAL BOND BANK GOIloflll Db/lgotion Bond Roso/u!Jon (Amondod) 1·=·.:I1'=l~="·"=G"""""O',<,,",""'UoMfl"""''''.c~....,::1 Poge 76 ALASKA MUNICIPAL BOND BANK GIlIIBflll Ob/fglltJon Bond R&SohJtlon (Amondod) 1'D:t::<\J7'=1~=.,","OO:iG"""""(Y.;.I.~~""UortaH"""'''''",?,, Pago 77 for the proper purpose, shall constitute proper application by the Trustee; and the Trustee shall incur no liability whatsoever to the Bank, to any Bondholder or to any other person for any delay in applying any such monies, so 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 Resolution as may be applicable at the time of application by the Trustee. Whenever the Trustee shall exercise such discretion in applying such monies, it 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 forthe 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 orforcancetlation if fully paid. Interest on overdue installments of interest shall be equal to the rate on the Bond as to which the interest installment is overdue. The provisions of this Section 1204 are in all respects subject to the provisions of Section 902. Section 1205 -Termination of Proceedings. In case any proceeding taken by the Trustee on account of any Event of Default shall have been discontinued or abandoned for any reason, then in every such case the Bank, the Trustee and the Bondholders shall be restored to their former positions and rights hereunder, respectively, and all rights, remedies, powers and duties of the Trustee shall continue as though no such proceeding had been taken. Section 1206 -Bondholders' Direction of Proceedings. Anything in this Resolution to the contrary notwithstanding, the Holders of the majority in principal amount of the Bonds then Outstanding shall have the right by an instrument or concurrent instruments in writing executed and delivered to the Trustee, to direct the method of conducting all remedial proceedings to be taken by the Trustee hereunder, provided that such direction shall not be otherwise then in accordance with law or the provisions of this Resolution, and that the Trustee shall have the right to decline to following any such direction which in the opinion of the Trustee would be unjustly prejudicial to Bondholders not parties to such direction. Section 1207 -Limitation on Rights of Bondholders. No Holderof any Bond shall have any right to institute any suit, action, mandamus or other proceeding in equity or at law hereunder, orfor the protection or enforcement of any right under this Resolution or any right under law unless such Holder shall have given to the Trustee written notice of the event of default or breach of duty on account of which such suit, action or proceeding is to be taken, and unless the Holders of not less than twenty-five per centum (25%) in principal amount of the Bonds then Outstanding shall have made written request of the Trustee after the right to exercise such powers or right of action, as the case may be, shall have occurred, and shall have afforded the Trustee a reasonable opportunity either to proceed to exercise the powers herein granted or granted under the law or to institute such action, suit or proceeding in its name and unless, also, there shall have been offered to the Trustee reasonable security and indemnity against the costs, expenses and liabilities to be incurred therein or thereby and the Trustee shall have refused or neglected to comply with such request within a reasonable time; and such notification, request and offer of indemnity are hereby declared in every such case, at the option of the Trustee, to be conditions precedent to the execution of the powers under this Resolution orfor any other remedy hereunder or under law. It is understood and intended that no one or more Holders of the Bonds hereby secured shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of this Resolution, or to enforce any right hereunder or under law with respect to the Bonds or this Resolution, except in the manner herein provided, and that all proceedings at law or in equity shall be instituted, had and maintained in the manner herein provided and for the benefit of all Holders of the Outstanding Bonds. Notwithstanding the foregoing provisions of this Section orany other provisions of this Article XII, the obligation of the Bank shall be absolute and unconditional to pay the principal or Redemption Price of and interest on the Bonds to ALASKA MUNICIPAL BOND BANK GlmOr.l/Ob/IQlltion Bond Rosolu!Jon (Amondod) 1\():x;s\31.=l\..\,...."rt.",.·.2005~""oe<...._""'lloMH"""'""Dn....,::1 Pogo 78 F-21 ALASKA MUNICIPAL BOND BANK Glmonl Ob/lglltlon Bond RO$olution (AmrmtkW) I IDoc.IJI'=l\"wtotu'.c<:.·-=G--..O:<.....><t'5on<lHII<d"'"",-,>d Pogo 79 the respective Holders thereof at the respective due dates thereof, and nothing herein shalt affect or impair the right of action, which is absolute and unconditional, of such Holders to enforce such payment. Section 1208 -Possession of Bonds by Trustee Not Required. All rights of action under this Resolution or under any of the Bonds, enforceable by the Trustee, may be enforced by it without the possession of any of the Bonds or the production thereof on the trial or other proceeding relative thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in its name for the benefit of all the Holders of such Bonds, subject to the provisions of this Resolution. Section 1209 -Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee or to the Holders of the Bonds 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 or in equity, or by statute. Section 1210 -No Waiver of Default. No delay or omission of the Trustee or of any Holder of the Bonds to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy given by this Resolution to the Trustee and the Holders of the Bonds, respectively, may be exercised from time to time and as often as may be deemed expedient. Section 1211 -Notice of Event of Default. The Trustee shall give to the Bondholders notice of each Event of Default hereunder known to the Trustee within ninety (90) days after knowledge of the occurrence thereof, unless such Event of 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 or Redemption Price of or interest on any of the Bonds, or in the making of any payment required to be made into the Debt Service Fund or the Reserve Fund, 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 responsible officers of the Trustee in good faith determines that the withholding of such notice is in the interests of the Bondholders. Each such notice of Event of Default shall be given by the Trustee by mailing written notice thereof: (1) to all registered Holders of Bonds, as the names and addresses of such Holders appear upon the books for registration and transfer of Bonds as kept by the Trustee; (2) to such Bondholders as have filed their names and addresses with the Trustee for that purpose; and (3) to such other persons as is required by law, ARTICLE XIII DEFEASANCE Section 1301 -Defeasance. (A) If the Bank shall payor cause to be paid to the Holders of the Bonds, the principal and interest and Redemption Price, if any, to become due thereon, at the times and in the manner stipulated therein and in this Resolution, and also shall payor cause to be paid all other sums payable hereunder by the Bank, including any amounts payable to the United States, then the pledge of any revenues and assets hereby pledged and all other rights granted hereby shall. at the election of the Bank (evidenced by a certificate of an Authorized Officer filed with the Trustee, signifying the intention of the Bank to discharge all such indebtedness and this Resolution and any Supplemental Resolution), and notwithstanding that any Bonds shall not have been surrendered for payment, be discharged and satisfied. In such event, the Trustee shall, upon the written request of the Bank, execute and deliver to the Bank all such instruments as may be desirable to evidence such discharge and satisfaction and the Fiduciaries shall pay over or deliver to the Bank all moneys or securities held by them pursuant to this Resolution which are not required for the payment or redemption of Bonds not theretofore surrendered for such payment or redemption. (B) B) If funds shall have been set aside and shall be held in trust by Fiduciaries for the payment of principal, interest and Redemption Price (through deposit by the Bank of funds for such payment or redemption or otherwise) at the maturity or upon the date upon which such Bonds have been duly called for redemption thereof, such Bonds ALASKA MUN/OPAL BONO BANK GllflllflIl Obllglltlon Bond RlIsolUtlon (AmQndlld) !~·J.7~=I'J.lo.WoJ1",n,'--"005G~"""'ICt.i.#""'UoOOOl"",,,,,,,n ..?<, Pago 80 ALASKA MUNICIPAL BOND BANK Gonoflll Obl/glltlon Bond RflSolUtlon (AmllmJod) '~·J.l.='IIl.o<cI~·=.'=G~"'~O<;'i1."""ll=OR""""''',"""", Pago 81 shall be deemed to have been paid within the meaning and with the effect expressed in subsection (A) of this Section. All Outstanding Bonds shall, prior to the maturity or redemption date thereof, be deemed to have been paid within the meaning and with the effect expressed in subsection (A) of this Section if (i) in case any of said Bonds are to be redeemed on any date prior to their maturity, the Bank shall have given to the Trustee in form satisfactory to it irrevocable instructions to publish as provided in Article IV notice of redemption on said date of such Bonds, (ii) there shall have been deposited with the Trustee either funds in an amount which shall be sufficient, or Investment Securities which are not subject to redemption prior to the dates on which amounts will be needed to make payments on the Bonds defeased and the principal of and the interest on which when due will provide moneys which, together with the moneys, if any, deposited with the Trustee at the same time, shall be sufficient in the opinion of an Accountant delivered to the Trustee, to pay when due the principal or Redemption Price, if any, and interest due and to become due on said Bonds on any date prior to the redemption date or maturity date thereof, as the case may be, (iii) in the event said Bonds are not by their terms subject to redemption within the next succeeding sixty (60) days, the Bank shall have given the Trustee in form satisfactorY to it irrevocable instructions to mail a notice to the Holders of such Bonds that the deposit required by Oi) above has been made with the Trustee and that said Bonds are deemed to have been paid in accordance with this Section and stating such maturity or redemption date upon which moneys are to be available for the payment of the principal or Redemption Price. if any. of said Bonds and (iv) a Counsel's Opinion stating that all conditions precedent to the satisfaction and discharge of this Resolution have been complied with, the defeasance complies with the terms of this Resolution, and the defeasance will not adversely affect the tax status of the Bonds. Neither Investment Securities or moneys deposited with the Trustee pursuant to this Section nor principal or interest payments on any such Investment Securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal or Redemption Price, if any, of and interest on said Bonds; provided that any cash received from such principal or interest payments on such Investment Securities deposited with the Trustee, if not then needed for such purpose, shall, to the extent practicable, be reinvested in Investment Securities maturing at times and in amounts sufficient to pay when due the principal or Redemption Price, if any, and interest to become due on said Bonds on and prior to such redemption date or maturity date thereof, as the case may be. and interest earned from such reinvestments shall be paid over to the Bank, as received by the Trustee. free and clear of any trust, lien or pledge. (C) If, through the deposit of moneys by the Bank or otherwise, the Fiduciaries shall hold, pursuant to this Resolution, moneys sufficient to pay the principal and interest to maturity on all Outstanding Bonds or to pay, in the case of Bonds in respect of which the Bank shall have taken all action necessary to redeem prior to maturity, the Redemption Price and interest to such redemption date, then at the written request of the Bank all moneys held by any Paying Agent shall be paid over to the Trustee and, together with other moneys held by it hereunder, shall be held by the Trustee for the payment or redemption of Outstanding Bonds. (0) Anything in this Resolution to the contrary notwithstanding, any moneys held by a Fiduciary in trust for the payment and discharge of any of the Bonds which remain unclaimed for one year after the date when all of the Bonds have become due and payable, either at their stated maturity dates or by call for earlier redemption, if such moneys were held by the Fiduciary at such date, or for one year after the date of deposit of such moneys if deposited with the Fiduciary after the said date when all of the Bonds became due and payable, shall be repaid by the Fiduciary to the Bank, as its absolute property and free from trust. and the Fiduciary shall thereupon be released and discharged. (E) The references in this section to "Investment Securities described in clause clause (1) of the definition thereoF shall include only direct and general obligations of the United States which are not-callable prior to the scheduled maturity in the related escrow deposit agreement where the Outstanding Bonds to be deemed to be paid upon ALASKA MUNIGJPAL BONO BANK Gonllnl Obligation Bond ResolUtion (AmQndfld) 1\Do:w:$'J7~2000II>\not""""".'.=~0<;;..a"",_0l""""".","'?d Pago 82 F-22 ALASKA MUNlGJPAL BOND BANK Goollnl abliaiU/on Bond ResolUtion (AmllndrxJ) '~J7~20001_.a"'="·-=G~""r1IIO<;'Il"",,,ll=ORGt<I"''''''''?d Pago 83 the deposit thereof are insured by a municipal bond insurance company licensed and authorized to issue the policy in the State. ARTICLE XIV MISCELLANEOUS Section 1401 -Preservation and Inspection of Documents. All documents received by the Trustee or any Paying Agent under the provisions of this Resolution or any Series Resolution shall be retained in its possession and shaff be subject at all reasonable times to the inspection of the Bank, the Trustee or any Paying Agent and, after written request received by the Trustee at least five business days prior to the date of inspection, by any Holder of five percent in principal amount of any Series of Outstanding Bonds, and their agents and representatives, any of whom may make copies thereof. Section 1402 -Parties of Interest. Nothing in this Resolution or in any Series Resolution adopted pursuant to the provisions hereof, expressed or implied, is intended to or shaff be construed to confer upon or to give to any person or party other than the Bank, Trustee, Paying Agents and the Holders of the Bonds, remedies or claims under or by reason of this Resolution or any Series Resolution or any covenants, conditions or stipulations thereof; and all covenants, stipulations, promises and agreements in this Resolution and any Series Resolution contained by or on behalf of the Bank shall be for the sole and exclusive benefit of the Bank, Trustee and Paying Agents and the Holders from time to time of the Bonds. Section 1403 -No Recourse Under Resolution or on Bonds. All covenants, stipulations, promises, agreements and obligations of the Bank contained in this Resolution shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Bank and not of any member, officer or employee of the Bank in his individual capacity, and no recourse shall be had for the payment of the principal or Redemption price of or interest on the Bonds or for any claim based thereon or on this Resolution against any member, officer or employee of the Bank or any natural person executing the Bond. Section 1404 -Severability. If anyone or more of the covenants, stipulations, promises, agreements or obligations, provided in this Resolution on the part of the Bank, Trustee or any Paying Agent to be performed should be determined by a court of competent jurisdiction to be contrary to law, then such covenant or covenants, stipulation or stipulations, promise or promises, agreement or agreements, obligation or obligations shall be deemed and construed to be severable from the remaining covenants, stipulations, promises, agreements and obligations herein contained and shall in no way affect the validity of the other provisions of this Resolution. Section 1405 -Headings. Any headings preceding the texts of the several Articles and Sections hereof, and any table of contents or marginal notes appended to copies hereof, shaH be solely for convenience of reference and shall not constitute a part of this Resolution, nor shall they affect its meaning, construction or effect. Section 1406 -Conflict. All resolutions or parts of resolutions or other proceedings of the Bank in conflict herewith be and the same are repealed insofar as such connict exists. Section 1407 -Governing Law. This Resolution and the Bonds shall be construed in accordance with, and governed by, the laws of the State of Alaska. Section 1408 -Effective Date. This Resolution shaff take effect immediately upon its adoption. ALASKA MUNICIPAL BOND BANK Goooral ObI/gat/on Bond Rosolutlon (Amandod) 1=·.;l7(=lV~...".,.=Go""""O:;"""Ct'l!l<>MIl""""'""",..;>:I [THIS PAGE INTE~"'IONALLY LEFT BLANK] Pago 84 F-23 ALASKA MUNICIPAL BOND BANK Gonorlll Obi/gat/on Bond Rosolutlon (Amandod) '·Doo'''.;lr'=I~W<ot<J''''",·=Ge",,''''Cf...>~~ll<><>oll'''''''''C"w;><' [TuIS PAGE INTI:l'.'TIONALLY LErTBLANK] Pago 85 [THIS PAGE INTENTIONALLY LEFT BLANK] APPENDIXG DTC and Book-Entry System [THIS PAGE INTENTIONALLY LEFf BLANK] DTC AND BOOK-ENTRY SYSTEM 1. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the 2011 Series One Bonds. The 20 II Series One Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered certificate will be issued for each maturity of each sub-series of the 2011 Series One Bonds in the aggregate principal amount of such maturity, and will be deposited with DTC. 2. DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org. 3. Purchases of 2011 Series One Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the 20 II Series One Bonds on DTC's records. The ownership interest of each actual purchaser of each 20 II Series One Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the 20 II Series One Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in 20 II Series One Bonds, except in the event that use of the book-entry system for the 2011 Series One Bonds is discontinued. 4. To facilitate subsequent transfers, all 2011 Series One Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of 20 II Series One Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the 2011 Series One Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such 20 II Series One Bonds are credited, G-I which mayor may not be the Beneficial Owners. The Direct and Indirect Participants wi11 remain responsible for keeping account of their holdings on behalf oftheir customers. 5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of 20 II Series One Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the 20 II Series One Bonds, such as redemptions, tenders, defaults, and proposed amendments to the 2011 Series One Bond documents. For example, Beneficial Owners of2011 Series One Bonds may wish to ascertain that the nominee holding the 2011 Series One Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. 6. Redemption notices shall be sent to DTC. If less than all of the 20 II Series One Bonds within a maturity of a sub-series are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. 7. Neither DTC nor Cede & Co. (nor any other DTC nominee) wi11 consent or vote with respect to 2011 Series One Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Bond Bank as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts 2011 Series One Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8. Payments on the 20 II Series One Bonds wiJI be made made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Bond Bank or the Trustee, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and wiJI be the responsibility of such Participant and not of DTC, the Bond Bank or the Trustee, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest payments on the Bonds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Bond Bank or the Trustee, disbursement of such payments to Direct Participants wi11 be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 9. DTC may discontinue providing its services as depository with respect to the 2011 Series One Bonds at any time by giving reasonable notice to the Bond Bank or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, 2011 Series One Bond certificates are required to be printed and delivered. 10. The Bond Bank may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, 2011 Series One Bond certificates will be printed and delivered to DTC. G-2 ] 1. The infonnation in this section concerning DTC and DTC's book-entry system has been obtained from sources that the Bond Bank believes to be reliable, but the Bond Bank takes no responsibility for the accuracy thereof. G-3 [THIS PAGE INTENTIONALLY LEFr BLANK] DFSC www.lsc.org MIX From responsible sources FSC· C017146 Printed by: ImageMaster LOAN AGREEMENT THIS AGREEMENT, dated as of the 1st day of March, 2011, between the Alaska Municipal Bond Bank (the "Bank"), a body corporate and politic constituted as an instrumentality of the State of Alaska (the "State") exercising public and essential governmental functions, created pursuant to the provisions of Chapter 85, Title 44, Alaska Statutes, as amended (the "Act"), having its principal place of business at Juneau, Alaska, and the Kodiak Island Borough, Alaska, a duly constituted Second Class Borough of the State (the "Borough"): WIT N E SSE T H: WHEREAS, pursuant to the Act, the Bank is authorized to make loans of money (the "Loan" or "Loans") to governmental units; and WHEREAS, the Borough is a Governmental Unit as defined in the General Bond Resolution of the Bank hereinafter mentioned and pursuant to the Act is authorized to accept a Loan from the Bank to be evidenced by its municipal bonds; and WHEREAS, the Borough desires to borrow money from the Bank in the amount of not to exceed $8,000,000 and has submitted an application to the Bank for a Loan in the amount of not to exceed $8,000,000, and the Borough has duly authorized the issuance of its fully registered bond in the aggregate principal amount of $8,000,000 (the "Municipal Bond"), which bond is to be purchased by the Bank as evidence of the Loan in accordance with this Agreement; and WHEREAS, the application of the Borough contains the information requested by the Bank; and WHEREAS, to provide for the issuance of bonds of the Bank in order to obtain from time to time money with which to make Loans, the Bank has adopted the General Obligation Bond Resolution on July 13, 2005, as amended August 19, 2009 (the "General Bond Resolution") and Series Resolution No. 2011-01, approved on February 1, 2011 (together with the General Bond Resolution, the "Bond Resolution"), authorizing the making of such Loan to the Borough and the purchase of the Municipal Bond. NOW, THEREFORE, the parties agree: 1. The Bank hereby makes the Loan and the Borough accepts the Loan in the aggregate principal amount of $8,000,000. As evidence of the Loan made to the Borough and such money borrowed from the Bank by the Borough, the Borough hereby sells to the Bank the Municipal Bond in the principal amount, with the principal installment payments, and bearing interest from its date at the rate or rates per annum, stated in Exhibit A appended hereto. For purposes of this Loan Agreement, the interest on the Municipal Bond will be computed without regard to the provision in Section 7 hereof for the Borough to make funds available to the Trustee acting under the General Bond Resolution for the payment of principal and interest due at least seven (7) business days prior to each respective principal and interest payment date. 2. The Borough represents that it has duly adopted or will adopt all necessary ordinances or resolutions, including Resolution No. FY2011-18, adopted on February 3, 2011 (the "Borough Resolution"), and has taken orwill take all proceedings required by law to enable it to enter into this Loan Agreement and issue its Municipal Bond to the Bank and that the Municipal Bond will constitute a general obligation bond, secured by the full faith and credit of the Borough, duly authorized by Borough's Resolution. 3. Subject to any applicable legal limitations, the amounts to be paid by the Borough pursuant to this Loan Agreement representing interest due on its Municipal Bond (the "Municipal Bond Interest Payments") shall be computed at the same rate or rates of interest borne by the corresponding maturities of the bonds sold by the Bank in order to obtain the money with which to make the Loan and to purchase the Municipal Bond (the "Loan Obligations") and shall be paid by the Borough at least seven (7) business days before the interest payment date so as to provide funds sufficient to pay interest as the same becomes due on the Loan Obligation. 4. The amounts to be paid by the Borough pursuant to this Loan Agreement representing principal due on its Municipal Bond (the "Municipal Bond Principal Payments"), shall be paid at least seven (7) business days before the payment date stated in the Municipal Bond so as to provide funds sufficient to pay the principal of the Loan Obligations as the same matures based upon the maturity schedule stated in Exhibit A appended hereto. 5. In the event the amounts referred to in Sections 3 and 4 hereof to be paid by the Borough pursuant to this Loan Agreement are not made available at any time specified herein, the Borough agrees that any money payable to it by any department or agency of the State may be withheld from it and paid over directly to the Trustee acting under the General Bond Resolution, and this Loan Agreement shall be full warrant, authority and direction to make such payment upon notice to such department or agency by the Bank, with a copy provided to the Borough, as provided in the Act. 6. In the event Loan Obligations have been refunded and the interest rates the Bank is required to pay on its refunding bonds in any year are less than the interest rates payable by the Borough on the Municipal Bond for the corresponding year pursuant to the terms of the Municipal Bond, then both the Municipal Bond Interest Payments and the Municipal Bond Principal Payments will be adjusted in such a manner that (i) the interest rate paid by the Borough on any principal installment of the Municipal Bond is equal to the interest rate paid by the Bank on the corresponding principal installment of the Bank's refunding bonds and (ii) on a present value basis the sum of the adjusted Municipal Bond AMBB/General Obligation Bonds, 2011 Series One Loan Agreement 1:\Docs\37421723\Loan Agreement with Kodiak.wpd Page 2 Interest Payments and Municipal Bond Principal Payments is equal to or less than the sum of the Municipal Bond Interest Payments and Municipal Bond Principal Payments due over the remaining term of the Municipal Bond as previously established under this Loan Agreement. In the event of such a refunding of Loan Obligations, the Bank shall present to the Borough for the Borough's approval, a revised schedule of principal installment amounts and interest rates for the Municipal Bond. If approved by the Borough the revised schedule shall be attached hereto as Exhibit A and incorporated herein in replacement of the previous Exhibit A detailing said principal installment amounts and interest rates. 7. The Borough is obligated to pay to the Bank Fees and Charges. Such Fees and Charges actually collected from the Borough shall be in an amount sufficient, together with the Borough's Allocable Proportion (as defined below) of other money available therefor under the provisions of the Bond Resolution, and other money available therefor, including any specific grants made by the United States of America or any agency or instrumentality thereof or by the State or any agency or instrumentality thereof and amounts applied therefor from amounts transferred to the Operating Fund pursuant to Section 606 of the General Bond Resolution: (a) to pay, as the same become due, the Borough's Allocable Proportion of the Administrative Expenses of the Bank; and (b) to pay, as the same become due, the Borough's Allocable Proportion of the fees and expenses of the Trustee and paying agent for the Loan Obligations. The Borough's Allocable Proportion as used herein shall mean the proportionate amount of the total requirement in respect to which the term is used determined by the ratio that the principal amount of the Municipal Bond outstanding bears to the total of all Loans then outstanding to all Governmental Units under the General Bond Resolution, as certified by the Bank. The waiver by the Bank of any fees payable pursuant to this Section 7 shall not constitute a subsequent waiver thereof. 8. The Borough is obligated to make the Municipal Bond Principal Payments scheduled by the Bank. The first such Municipal Bond Principal Payment is due at least seven (7) business days prior to the date indicated on Exhibit A appended hereto, and thereafter on the anniversary thereof each year. The Borough is obligated to make the Municipal Bond Interest Payments scheduled by the Bank on a semi-annual basis commencing seven (7) business days prior to the date indicated on Exhibit A appended hereto, and to pay any Fees and Charges imposed by the Bank within 30 days of receiving the invoice of the Bank therefor. 9. The Bank shall not sell and the Borough shall not redeem prior to maturity any portion of the Municipal Bond in an amount greater than the Loan Obligations which are then outstanding and which are then redeemable, and in the event of any such sale or redemption, the same shall be in an amount not less than the aggregate of (i) the AMBB/General Obligation Bonds, 2011 Series One Loan Agreement 1:\Docs\37421723\Loan Agreement with Kodiak.wpd Page 3 principal amount of the Municipal Bond (or portion thereof) to be redeemed, (ii) the interest to accrue on the Municipal Bond (or portion thereof) to be redeemed to the next redemption date thereof not previously paid, (iii) the applicable premium, if any, payable on the Municipal Bond (or portion thereof) to be redeemed, and (iv) the cost and expenses of the Bank in effecting the redemption of the Municipal Bond (or portion thereof) to be redeemed. The Borough shall give the Bank at least 50 days' notice of intention to redeem its Municipal Bond. In the event the Loan Obligations with respect to which the sale or redemption prior to maturity of such Municipal Bond is being made have been refunded and the refunding bonds of the Bank issued for the purpose of refunding such Loan Obligations were issued in a principal amount in excess of or less than the principal amount of the Municipal Bond remaining unpaid at the date of issuance of such refunding bonds, the amount which the Borough shall be obligated to payor the Bank shall receive under item (i) above shall be the principal amount of such refunding bonds outstanding. In the event the Loan Obligations have been refunded and the interest the Bank is required to pay on the refunding bonds is less than the interest the Bank was required to pay on the Loan Obligations, the amount which the Borough shall be obligated to payor the Bank shall receive under item (ii) above shall be the amount of interest to accrue on such refunding bonds outstanding. In the event the Loan Obligations have been refunded, the amount which the Borough shall be obligated to payor the Bank shall receive under item (iii) above, when the refunded Loan Obligations are to be redeemed, shall be the applicable premium, if any, on the Loan Obligations to be redeemed. Nothing in this Section shall be construed as preventing the Borough from refunding the Municipal Bond in exchange for a new Municipal Bond in conjunction with a refunding of the Loan Obligations. 10. Simultaneously with the delivery of the Municipal Bond to the Bank, the Borough shall furnish to the Bank evidence satisfactory to the Bank which shall set forth, among other things, that the Municipal Bond will constitute a valid and binding general obligation of the Borough, secured by the full faith and credit of the Borough. 11. Invoices for payments under this Loan Agreement shall be addressed to the Kodiak Island Borough, Attention: Karleton Short, Finance Director, 710 Mill Bay Road, Kodiak, Alaska 99615. The Borough shall give the Bank and the corporate trust office of the Trustee under the General Bond Resolution at least 30 days' written notice of any change in such address. 12. The Borough hereby agrees to keep and retain, until the date six years after the retirement of the Municipal Bond, or any bond issued to refund the Municipal Bond, or AMBB/General Obligation Bonds, 2011 Series One Loan Agreement 1:\Docs\37421723\Loan Agreement with Kodiak.wpd Page 4 such longer period as may be required by the Borough's record retention policies and procedures, records with respect to the investment, expenditure and use of the proceeds derived from the sale of its Municipal Bond, including without limitation, records, schedules, bills, invoices, check registers, cancelled checks and supporting documentation evidencing use of proceeds, and investments and/or reinvestments of proceeds. The Borough agrees that all records required by the preceding sentence shall be made available to the Bond Bank upon request. 13. Prior to payment of the amount of the Loan or any portion thereof, and the delivery of the Municipal Bond to the Bank or its designee, the Bank shall have the right to cancel all or any part of its obligations hereunder if: (a) Any representation, warranty or other statement made by the Borough to the Bank in connection with its application to the Bank for a Loan shall be incorrect or incomplete in any material respect. (b) The Borough has violated commitments made by it in the terms of this Loan Agreement. (c) The financial position of the Borough has, in the opinion of the Bank, suffered a materially adverse change between the date of this Loan Agreement and the scheduled time of delivery of the Municipal Bond to the Bank. 14. The obligation of the Bank under this Loan Agreement is contingent upon delivery of its General Obligation Bonds, 2011 Series One (the "2011 Series One Bonds") and receipt of the proceeds thereof. 15. The Borough agrees that it will provide the Bank with written notice of any default in covenants under the Borough's Resolution within 30 days from the date thereof. 16. The Borough shall not take, or omit to take, any action lawful and within its power to take, which action or omission would cause interest on the Municipal Bond to become subject to federal income taxes in addition to federal income taxes to which interest on such Municipal Bond is subject on the date of original issuance thereof. The Borough shall not permit any of the proceeds of the Municipal Bond, or any facilities financed with such proceeds, to be used in any manner that would cause the Municipal Bond to constitute a "private activity bond" within the meaning of Section 141 of the Code. The Borough shall make no use or investment of the proceeds of the Municipal Bond which will cause the Municipal Bond to be an "arbitrage bond" under Section 148 of the Code. So long as the Municipal Bond is outstanding, the Borough, shall comply with all requirements of said Section 148 and all regulations of the United States Department AMBB/General Obligation Bonds, 2011 Series One Loan Agreement 1:\Docs\37421723\Loan Agreement with Kodiak.wpd Page 5 of Treasury issued thereunder, to the extent that such requirements are, at the time, applicable and in effect. The Borough shall indemnify and hold harmless the Bank from any obligation of the Borough to make rebate payments to the United States under said Section 148 arising from the Borough's use or investment of the proceeds ofthe Municipal Bond. 17. The Borough agrees that if it is one of the Governmental Units that has a ten percent or greater amount of outstanding bonds held by the Bank under its General Bond Resolution, it shall execute a continuing disclosure agreement for purposes of Securities and Exchange Commission Rule 15c2-12, adopted under the Securities and Exchange Act of 1934, and provide the Bank for inclusion in future official statements, upon request, financial information generally of the type included in Appendix 0, under the heading "Summaries of Borrowers Representing 10% or More of Outstanding Principal of Bonds Issued Under the 2005 General Bond Resolution," to the Official Statement and attached hereto as Exhibit B. 18. If any provision of this Loan Agreement shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such provision shall not affect any of the remaining provisions of this Loan Agreement and this Loan Agreement shall be construed and enforced as if such invalid or unenforceable provision had not been contained herein. 19. This Loan Agreement may be executed in one or more counterparts, any of which shall be regarded for all purposes as an original and all of which constitute but one and the same instrument. Each party agrees that it will execute any and all documents or other instruments, and take such other actions as are necessary, to give effect to the terms of this Loan Agreement. 20. No waiver by either party of any term or condition of this Loan Agreement shall be deemed or construed as a waiver of any other term or condition hereof, nor shall a waiver of any breach of this Loan Agreement be deemed to constitute a waiver waiver of any subsequent breach, whether of the same or of a different section, subsection, paragraph, clause, phrase or other provision of this Loan Agreement. 21. In this Loan Agreement, unless otherwise defined herein, all capitalized terms which are defined in Article I of the General Bond Resolution shall have the same meanings, respectively, as such terms are given in Article I of the General Bond Resolution. 22. This Loan Agreement merges and supersedes all prior negotiations, representations and agreements between the parties hereto relating to the subject matter hereof and constitutes the entire agreement between the parties hereto in respect thereof. AMBB/General Obligation Bonds, 2011 Series One Loan Agreement 1:\Docs\37421723\Loan Agreement with Kodiak.wpd Page 6 IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written. ANK KODIAK ISLAND BOROUGH, ALASKA By:~~~~~~~ _ AMBB/General Obligation Bonds, 2011 Series One Loan Agreement 1:\Docs\37421723\Loan Agreement with Kodiak.wpd Page 7 EXHIBIT A $8,000,000 Kodiak Island Borough, Alaska General Obligation School Bond, 2011 Series A Due March 1 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Principal Amount $275,000 285,000 295,000 305,000 310,000 320,000 330,000 340,000 355,000 370,000 385,000 405,000 425,000 445,000 465,000 485,000 510,000 535,000 565,000 595,000 Interest Rate 3.000% 3.000 3.000 3.000 3.000 3.000 3.500 4.000 4.000 4.000 4.750 4.750 4.750 4.750 4.750 5.125 5.125 5.125 5.125 5.125 Principal installments shall be payable on March 1 in each of the years, and in the amounts set forth above. Interest on the Municipal Bond shall be payable on September 1, 2011, and thereafter on March 1 and September 1 of each year. Prepayment Provisions: The Municipal Bond maturing on or after March 1, 2022 is subject to prepayment in whole or in part at the option of the Borough on any date on or after March 1, 2021 at a price of 100 percent of the principal amount thereof to be prepaid plus plus accrued interest to the date of prepayment. AMBB/General Obligation Bonds, 2011 Series One Loan Agreement -Exhibit A 1:\Docs\37421723\Loan Agreement with Kodiak.wpd Page A-1 EXHIBIT B APPENDIXD Summaries ofBorrowers Representing 10% or More of Outstanding Principal ofBonds Issued Under the 2005 General Bond Resolution Page 1 of 4 EXHIBIT B CITY OF KETCHIKAN KETCHIKAN PUBLIC UTILITIES ENTERPRISE FUND FINANCIAL SUMMARY 2003 2004 2005 2006 2007 2008 2009 Audited Audited Audiled Audiled Audiled Restaled Audiled ASSETS Ulility Plan In-Service $67,621,026 $66,742,145 $65,655,049 $63,472,399 $65,675,153 $65,397,934 $69,718,266 Construction Work: in Progress 30.078,405 1,838,196 2,147,195 3,720,138 3,046.020 8,748,881 8,017,706 Cash 14,766,191 14,973,617 15,601,361 18,036.431 17,271,704 15,351,432 13,958,674 Restlicted Assets 8,433,752 3,653,916 3,731,971 3,592,407 3.881,216 5,128,164 4,062,167 Olher Assets 7,552,144 6,496,443 6,770,815 7,537,978 9.709,775 11,890,125 8,686,219 Total Assels 128,451,518 93,704,317 93.906,411 96,359,353 99,583,868 106,516,536 104,443,032 LIABILITIES AND NET ASSETS Revenue Bonds Payable 26,060,000 23,960,000 22,475,000 20,580,000 20,214,266 20,574,802 19,902,223 Other Liabilities 7,690,314 2,990,668 3,444,420 4,243,388 5,320,524 6,782,025 4,045,215 Total Liabilities 33,750,314 26,950.668 25,919,420 24,823,388 25,534,790 27,356,827 23,947.438 NET ASSETS 94,701,204 66,753,649 67,986,991 71,535,965 74,049,078 79,159,709 80,495.594 Operatin9 Revenues 27,744,410 27,180,231 27,691,757 31,085,610 30,786,551 33,275,983 33,310,537 Operation and Maintenance 14,604,369 14,874,171 13,974,313 15,186,374 17,777,974 19,912,114 20.861,336 Administrative and General 4,452,846 5,139,468 5,106,907 5,635,363 5,076,384 5,634,660 6,034,476 Deprecialion 5,971,682 6,113,112 6,248,245 6,661,088 6,624,656 5,728,819 6,086,514 Payment In Lieu of Taxes 650,000 650,000 Operating Income (Loss) 2,065.513 403,480 2,362,292 3,400,785 1,307,537 2,000,390 328,211 Non-Operating Revenue (Expense) (1,183.143) (1,139,856) (736,471) (108,887) 197,069 75,885 (402,557) Net Income (Loss) Before Contlibution 862,370 (736,376) 1,625,621 3,291,898 1,504,606 2,076,275 (74,346) Contributions 16,761,341 1,099,417 257,521 907,076 1,658,507 3,601,635 2,085,231 Speciaillem 82,721 Transfer of Nel Assets -Swan Lake -Lake Tyee Intertie Projeci (26.310,596) Transfer-Payment In Lieu of Taxes (650,000) (650,000) (650,000) (650,000) (675,000) Change in Net Assets 17,643,711 (27,947,555) 1,233,342 3,548,974 2.513,113 5,110,631 1,335,885 Population of Service Area -13,685 13,093 13,125 13,174 13,166 12,993 12,984 Population of City 8,002 7,691 7,685 7,662 7,732 7,508 7,503 # of Electric Cuslomers 7,178 7,161 7,202 7,251 7,305 7,346 7,365 # oFTelephone Access Lines 10,653 10,131 9,840 9,554 9,039 8,122 7,467 # of Water Customers 2,851 2,905 2.928 3,035 3,230. 3,223 3,217 Revenue Bond Coverage 3,02 2.22 3.33 3,92 3.21 2.93 2.30 • Water is only provided wilhin the City U Change in accounting standards payment In lieu of tax must be reported as a transfer D-l Page 2 of 4 EXHIBIT B CITY OF KETCHIKAN PORT FINANCIAL SUMMARY 2003 2004 2005 2006 2007 2008 2009 Audited Audited AUdited Audited Audited Audited Audited ASSETS Cash $2,895,450 $5,121,067 $7,066,674 $4,529,687 $8,471,112 $4,939,650 $4,827,125 Port Facilities (net) 10,282,618 10,072,444 9,762,409 10,405,568 41,226,714 46,312,527 44,947,620 Construction Work in Progress 2,276,353 2,686.197 1,632,135 26,082,665 3,493,927 832,620 963,018 Restricted Assets 19,872,348 4,743,690 4,215,907 4.819,708 Other Assets 129,455 99,752 47,113 515,697 560,772 2.103,049 1,730,443 Total Assets 15,583,876 17,979,460 18,508,331 61,405,965 58,496,215 58,403,753 57,287,914 LIABILITIES AND NET ASSETS General Obligation Bonds Payable 2,245,000 2,065,000 1,880,000 1,685,000 1,480,000 1,265,000 1,035,000 Revenue Bonds Payable 38,500,000 37,875,000 37,220,000 36,540,000 Other Liabilities 3,261,400 2,541,005 3,759,032 7,105,081 5,130,176 4,191,404 3,147,957 Total Liabilities 5,506,400 4.606,005 5.639,032 47,290,081 44,485.176 42,676,404 40,722,957 NET ASSETS 10,077,476 13,373,455 12,869,299 14,115,864 14,011,039 15,727,349 16,564,957 Operating Revenues 1,774,457 5,000,010 7,096,948 6,427,207 7,895,063 8,839,267 8,922,228 Operation and Maintenance 828,052 792,954 1,945,688 2,299,099 1,506,749 3,653,251 5,522,050 Depreciation 610,454 832,143 618.708 657,485 985,775 1,390,850 1,460,265 Payment in Lieu of Taxesrraxes 102.100 102.100 102.100 102,100 102,100 282,770 290,000 Operating Income (Loss) 233,851 3,472,813 4,430,452 3,368,523 5,300,439 3,512,396 1,649,913 Non-Operating Revenue (Expense) (22,824) (183,706) (68,390) (310.285) (1,697,827) (1,933,922) (1,738,365) Net Income (Loss) Before Contribution 211,027 3,289,107 4,362,062 3,058,238 3,602,612 1,578,474 (88,452) Contributions 41,004 6,872 12,251 42,006 1,864,661 740,672 926,060 Extraordinary Item (2,432,884) Special Item 14,789 Transfers (2.445,585) (1,853,659) (5,572,069) (617,625) Change in Net Assets 252,031 3,295.979 (504,156) 1,246.585 (104,796) 1,716,310 837,608 1.0 x Annual Debt Service/Reserves AccounVRepair and Replacement Fund/SPH Lease Payments N/A NIA NlA N/A N/A 1,28 1,12 * Unaudited #ofShips 37 37 37 36 36 37 36 # of Calls/Stops 538 535 562 503 504 508 497 # of Water Passengers 770,663 848.969 921,429 838.880 899.638 941,910 963.220 • Rellects statistical information provided by the Ketchikan Visitors Bureau D-2 Page 3 of 4 EXHIBIT B City and Borough of Sitka Electric Enterprise Fund Financial Summary 2004 2005 2006 2007 2008 2009 2010 Audited Audited Audited Audited Audited Audited Unaudited Assets Cash 8,143,639 9,387,420 7,413,414 8,458,918 9,393,512 8,993,721 8,868,159 Restricted Assets 6,388,355 6,412,431 6,893,530 6,964,401 7,020,244 7,376,785 7,149,277 Other Assets 1,984,033 1,821,898 2,188,653 2,189,489 3,185,865 3,602,067 4,256,023 Construction in Progress 1,220,488 1,580,484 1,504,571 1,524,810 1,130,584 2,883,684 5,555,467 Utility Plant in Service 71,247,965 69,529,520 69,974,445 69,898,054 67,869,782 66,094,407 64,914,833 Total Assets 88,984,480 88,731,753 87,974,613 89,035,672 88,599,987 88,950,664 90,743,759 Liabilities and Net Assets Liabilities Other Liabilities 320,698 492,294 471,531 663,351 654,181 419,304 636,920 Revenue Bonds payabie 39,600,000 38,050,000 36,390,000 34,570,000 32,550,000 30,395,000 28,090,000 Deferred ioss on bonds (1,650,996) (1,511,558) (1,372,120) (1,232,682) (1,093,244) (954,781) (815,343) Revenue Note Payable 10,386,520 10,287,213 9,977,213 9,760,076 9,534,167 9,299,130 9,054,598 Total Liabilities 48,656,222 47,317,949 45,466,624 43,760,745 41,645,104 39,158,653 36,966,175 Net Assets 40,328,258 41,413,804 42,507,989 45,274,927 46,954,883 49,792,011 53,777,584 Operating Revenues 9,538,911 9,976,533 9,999,043 10,716,798 10,939,726 11,846,117 10,852,914 Operating Expenses Administrative and General 1,309,195 1,204,058 1,334,555 1,392,512 1,799,393 1,955,508 1,699,737 Operation and Maintenance 2,946,610 3,582,937 3,282,047 3,752,626 4,144,733 4,465,023 4,366,115 Depreciation 1,815,328 1,877,245 1,920,919 2,006,972 2,024,708 1,998,438 1,994,177 Operating Income 3,467,778 3,312,293 3,461,522 3,564,688 2,970,892 3,427,148 2,792,885 Nonoperating revenue (expense) investment income 248,638 751,273 450,992 791,965 1,020,133 642,422 523,298 interest Expense (3,045,411) (2,976,520) (2,881,055) (2,741,335) (2,621,198) (2,469,192) (2,369,426) Other 62,726 50,717 315,931 351,823 208,962 Net Income before contributions and transfers 671,005 1,087,046 1,094,185 1,666,035 1,685,758 1,952,201 1,155,719 Capital contributions 1,300,914 603,582 2,853,752 Extraordinary Item: Net Pension Obligation Relief 281,345 Transfer in (Out) net (186,823) (1,500) (5,802) (23,898) Change in Net Assets 484,182 1,085,546 1,094,185 2,966,949 1,679,956 2,837,128 3,985,573 Population of City and Borough 8,805 8,947 8,833 8,644 8,615 8,627 # of electriC customers 4,975 5,012 5,061 5,113 5,197 5,257 5,278 KwH Said 94,634,990 95,844,639 98,405,781 106,491,085 109,997,183 114,866,192 108,739,970 Revenue Bond Debt Service 3,949,208 3,987,436 4,111,182 4,024,958 4,113,594 4,106,690 4,108,407 Revenue Bond Coverage (> 1.25) 1.40 1.49 1.43 1.59 1.54 1.56 1.34 • Data not available D-3 Page 4 of 4 LOAN AGREEMENT THIS AGREEMENT, dated the 1st day of March, 2011, between the Alaska Municipal Bond Bank (the "Bank"), a body corporate and politic constituted as an instrumentality of the State of Alaska (the "State") exercising public and essential governmental functions, created pursuant to the provisions of Chapter 85, Title 44, Alaska Statutes, as amended (the "Act"), having its principal place of business at Juneau, Alaska, and the City and Borough of Wrangell, Alaska, a duly constituted Unified Home Rule Borough of the State (the "Borough"): WIT N E SSE T H: WHEREAS, pursuant to the Act, the Bank is authorized to make loans of money (the "Loan" or "Loans") to governmental units; and WHEREAS, the Borough is a Governmental Unit as defined in the General Bond Resolution of the Bank hereinafter mentioned and pursuant to the Act is authorized to accept a Loan from the Bank to be evidenced by its municipal bonds; and WHEREAS, the Borough desires to borrow money from the Bank in the amount of not to exceed $225,000 and has submitted an application to the Bank for a Loan in the amount of not to exceed $225,000, and the Borough has duly authorized the issuance of its fully registered bond in the aggregate principal amount of $220,000 (the "Municipal Bond"), which bond is to be purchased by the Bank as evidence of the Loan in accordance with this Agreement; and WHEREAS, the application of the Borough contains the information requested by the Bank; and WHEREAS, to provide for the issuance of bonds of the Bank in order to obtain from time to time money with which to make Loans, the Bank has adopted the General Obligation Bond Resolution on July 13, 2005, as amended August 19, 2009 (the "General Bond Resolution") and Series Resolution No. 2011-01, approved on February 1, 2011 (together with the General Bond Resolution, the "Bond Resolution"), authorizing the making of such Loan to the Borough and the purchase of the Municipal Bond. NOW, THEREFORE, the parties agree: 1. The Bank hereby makes the Loan and the Borough accepts the Loan in the aggregate principal amount of $220,000. As evidence of the Loan made to the Borough and such money borrowed from the Bank by the Borough, the Borough hereby sells to the Bank the Municipal Bond in the principal amount, with the principal installment payments, and bearing interest from its date at the rate or rates per annum, stated in Exhibit A appended hereto. For purposes of this Loan Agreement, the interest on the Municipal Bond will be computed without regard to the provision in Section 7 hereof for the Borough to make funds available to the Trustee acting under the General Bond Resolution for the payment of principal and interest due at least seven (7) business days prior to each respective principal and interest payment date. 2. The Borough represents that it has duly adopted or will adopt all necessary ordinances or resolutions, including Ordinance No. 846 passed on June 22, 2010 (approved by the voters at an election held in the Borough on October 5, 2010), and Resolution No. 01-11-1216, adopted on January25, 2011 (the "Borough Legislation"), and has taken or will take all proceedings required by law to enable it to enter into this Loan Agreement and issue its Municipal Bond to the Bank and that the Municipal Bond will constitute a general obligation bond, secured by the full faith and credit of the Borough, duly authorized by the Borough Legislation. 3. Subject to any applicable legal limitations, the amounts to be paid by the Borough pursuant to this Loan Agreement representing interest due on its Municipal Bond (the "Municipal Bond Interest Payments") shall be computed at the same rate or rates of interest borne by the corresponding maturities of the bonds sold by the Bank in order to obtain the money with which to make the Loan and to purchase the Municipal Bond (the "Loan Obligations") and shall be paid by the Borough at least seven (7) business days before the interest payment date so as to provide funds sufficient to pay interest as the same becomes due on the Loan Obligation. 4. The amounts to be paid by the Borough pursuant to this Loan Agreement representing principal due on its Municipal Bond (the "Municipal Bond Principal Payments"), shall be paid at least seven (7) business days before the payment date stated in the Municipal Bond so as to provide funds sufficient to pay the principal of the Loan Obligations as the same matures based upon the maturity schedule stated in Exhibit A appended hereto. 5. In the event event the amounts referred to in Sections 3 and 4 hereof to be paid by the Borough pursuant to this Loan Agreement are not made available at any time specified herein, the Borough agrees that any money payable to it by any department or agency of the State may be withheld from it and paid over directly to the Trustee acting under the General Bond Resolution, and this Loan Agreement shall be full warrant, authority and direction to make such payment upon notice to such department or agency by the Bank, with a copy provided to the Borough, as provided in the Act. 6. In the event Loan Obligations have been refunded and the interest rates the Bank is required to pay on its refunding bonds in any year are less than the interest rates payable by the Borough on the Municipal Bond for the corresponding year pursuant to the terms of the Municipal Bond, then both the Municipal Bond Interest Payments and the Municipal Bond Principal Payments will be adjusted in such a manner that (i) the interest rate paid by the Borough on any principal installment of the Municipal Bond is equal to the AMBB/General Obligation Bonds, 2011 Series One Loan Agreement 1:\Docs\37421723\Loan Agreement with Wrangell.wpd Page 2 interest rate paid by the Bank on the corresponding principal installment of the Bank's refunding bonds and (ii) on a present value basis the sum of the adjusted Municipal Bond Interest Payments and Municipal Bond Principal Payments is equal to or less than the sum of the Municipal Bond Interest Payments and Municipal Bond Principal Payments due over the remaining term of the Municipal Bond as previously established under this Loan Agreement. In the event of such a refunding of Loan Obligations, the Bank shall present to the Borough for the Borough's approval, a revised schedule of principal installment amounts and interest rates for the Municipal Bond. If approved by the Borough the revised schedule shall be attached hereto as Exhibit A and incorporated herein in replacement of the previous Exhibit A detailing said principal installment amounts and interest rates. 7. The Borough is obligated to pay to the Bank Fees and Charges. Such Fees and Charges actually collected from the Borough shall be in an amount amount sufficient, together with the Borough's Allocable Proportion (as defined below) of other money available therefor under the provisions of the Bond Resolution, and other money available therefor, including any specific grants made by the United States of America or any agency or instrumentality thereof or by the State or any agency or instrumentality thereof and amounts applied therefor from amounts transferred to the Operating Fund pursuant to Section 606 of the General Bond Resolution: (a) to pay, as the same become due, the Borough's Allocable Proportion of the Administrative Expenses of the Bank; and (b) to pay, as the same become due, the Borough's Allocable Proportion of the fees and expenses of the Trustee and paying agent for the Loan Obligations. The Borough's Allocable Proportion as used herein shall mean the proportionate amount of the total requirement in respect to which the term is used determined by the ratio that the principal amount of the Municipal Bond outstanding bears to the total total of all Loans then outstanding to all Governmental Units under the General Bond Resolution, as certified by the Bank. The waiver by the Bank of any fees payable pursuant to th is Section 7 shall not constitute a subsequent waiver thereof. 8. The Borough is obligated to make the Municipal Bond Principal Payments scheduled by the Bank. The first such Municipal Bond Principal Payment is due at least seven (7) business days prior to the date indicated on Exhibit A appended hereto, and thereafter on the anniversary thereof each year. The Borough is obligated to make the Municipal Bond Interest Payments scheduled by the Bank on a semi-annual basis commencing seven (7) business days prior to the date indicated on Exhibit A appended hereto, and to pay any Fees and Charges imposed by the Bank within 30 days of receiving the invoice of the Bank therefor. 9. The Bank shall not sell and the Borough shall not redeem prior to maturity any portion of the Municipal Bond in an amount greater than the Loan Obligations which AMBB/General Obligation Bonds, 2011 Series One Loan Agreement 1:\Docs\37421723\Loan Agreement with Wrangell.wpd Page 3 are then outstanding and which are then redeemable, and in the event of any such sale or redemption, the same shall be in an amount not less than the aggregate of (i) the principal amount of the Municipal Bond (or portion thereof) to be redeemed, (ii) the interest to accrue on the Municipal Bond (or portion thereof) to be redeemed to the next redemption date thereof not previously paid, (iii) the applicable premium, if any, payable on the Municipal Bond (or portion thereof) to be redeemed, and (iv) the cost and expenses of the Bank in effecting the redemption of the Municipal Bond (or portion thereof) to be redeemed. The Borough shall give the Bank at least 50 days' notice of intention to redeem its Municipal Bond. In the event the Loan Obligations with respect to which the sale or redemption prior to maturity of such Municipal Bond is being made have been refunded and the refunding bonds of the Bank issued for the purpose of refunding such Loan Obligations were issued in a principal amount in excess of or less than the principal amount of the Municipal Bond remaining unpaid at the date of issuance of such refunding bonds, the amount which the Borough shall be obligated to payor the Bank shall receive under item (i) above shall be the principal amount of such refunding bonds outstanding. In the event the Loan Obligations have been refunded and the interest the Bank is required to pay on the refunding bonds is less than the interest the Bank was required to pay on the Loan Obligations, the amount which the Borough shall be obligated to payor the Bank shall receive under item (ii) above shall be the amount of interest to accrue on such refunding bonds outstanding. In the event the Loan Obligations have been refunded, the amount which the Borough shall be obligated to payor the Bank shall receive under item (iii) above, when the refunded Loan Obligations are to be redeemed, shall be the applicable premium, if any, on the Loan Obligations to be redeemed. Nothing in this Section shall be construed as preventing the the Borough from refunding the Municipal Bond in exchange for a new Municipal Bond in conjunction with a refunding of the Loan Obligations. 10. Simultaneously with the delivery of the Municipal Bond to the Bank, the Borough shall furnish to the Bank evidence satisfactory to the Bank which shall set forth, among other things, that the Municipal Bond will constitute a valid and binding general obligation of the Borough, secured by the full faith and credit of the Borough. 11. Invoices for payments under this Loan Agreement shall be addressed to the City and Borough of Wrangell, Attention: Jeff Jabusch, Finance Director, Box 531 Wrangell, Alaska 99929. The Borough shall give the Bank and the corporate trust office of the Trustee under the General Bond Resolution at least 30 days' written notice of any change in such address. AMBB/General Obligation Bonds, 2011 Series One Loan Agreement 1:\Docs\37421723\Loan Agreement with Wrangell.wpd Page 4 12. The Borough hereby agrees to keep and retain, until the date six years after the retirement of the Municipal Bond, or any bond issued to refund the Municipal Bond, or such longer period as may be required by the Borough's record retention policies and procedures, records with respect to the investment, expenditure and use of the proceeds derived from the sale of its Municipal Bond, including without limitation, records, schedules, bills, invoices, check registers, cancelled checks and supporting documentation evidencing use of proceeds, and investments and/or reinvestments of proceeds. The Borough agrees that all records required by the preceding sentence shall be made available to the Bond Bank upon request. 13. Prior to payment of the amount of the Loan or any portion thereof, and the delivery of the Municipal Bond to the Bank or its designee, the Bank shall have the right to cancel all or any part of its obligations hereunder if: (a) Any representation, warranty or other statement made by the Borough Borough to the Bank in connection with its application to the Bank for a Loan shall be incorrect or incomplete in any material respect. (b) The Borough has violated commitments made by it in the terms of this Loan Agreement. (c) The financial position of the Borough has, in the opinion of the Bank, suffered a materially adverse change between the date of this Loan Agreement and the scheduled time of delivery of the Municipal Bond to the Bank. 14. The obligation of the Bank under this Loan Agreement is contingent upon delivery of its General Obligation Bonds, 2011 Series One (the "2011 Series One Bonds") and receipt of the proceeds thereof. 15. The Borough agrees that it will provide the Bank with written notice of any default in covenants under the Borough Legislation within 30 days from the date thereof. 16. The Borough shall not take, or omit to take, any action lawful and within its power to take, which action or omission would cause interest on the Municipal Bond to become subject to federal income taxes in addition to federal income taxes to which interest on such Municipal Bond is subject on the date of original issuance thereof. The Borough shall not permit any of the proceeds of the Municipal Bond, or any facilities financed with such proceeds, to be used in any manner that would cause the Municipal Bond to constitute a "private activity bond" within the meaning of Section 141 of the Code. The Borough shall make no use or investment of the proceeds of the Municipal Bond which will cause the Municipal Bond to be an "arbitrage bond" under Section 148 of AMBB/General Obligation Bonds, 2011 Series One Loan Agreement 1:\Docs\37421723\Loan Agreement with Wrangell.wpd Page 5 the Code. So long as the Municipal Bond is outstanding, the Borough, shall comply with all requirements of said Section 148 and 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. The Borough shall indemnify and hold harmless the Bank from any obligation of the Borough to make rebate payments to the United States under said Section 148 arising from the Borough's use or investment of the proceeds of the Municipal Bond. 17. The Borough agrees that if it is one of the Governmental Units that has a ten percent or greater amount of outstanding bonds held by the Bank under its General Bond Resolution, it shall execute a continuing disclosure agreement for purposes of Securities and Exchange Commission Rule 15c2-12, adopted under the Securities and Exchange Act of 1934, and provide the Bank for inclusion in future official statements, upon request, financial information generally of the type included in Appendix D, under the heading "Summaries of Borrowers Representing 10% or More of Outstanding Principal of Bonds Issued Under the 2005 General Bond Resolution," to the Official Statement and attached hereto as Exhibit B. 18. If any provision of this Loan Agreement shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such provision shall not affect any of the remaining provisions of this Loan Agreement and this Loan Agreement shall be construed and enforced as if such invalid or unenforceable provision had not been contained herein. 19. This Loan Agreement may be executed in one or more counterparts, any of which shall be regarded for all purposes as an original and all of which constitute but one and the same instrument. Each party agrees that it will execute any and all documents or other instruments, and take such other actions as are necessary, to give effect to the terms of this Loan Agreement. 20. No waiver by either party of any term or condition of this Loan Agreement shall be deemed or construed as a waiver of any other term or condition hereof, nor shall a waiver of any breach of this Loan Agreement be deemed to constitute a waiver of any subsequent breach, whether of the same or of a different section, subsection, paragraph, clause, phrase or other provision of this Loan Agreement. 21. In this Loan Agreement, unless otherwise defined herein, all capitalized terms which are defined in Article I of the General Bond Resolution shall have the same meanings, respectively, as such terms are given in Article I of the General Bond Resolution. 22. This Loan Agreement merges and supersedes all prior negotiations, representations and agreements between the parties hereto relating to the subject matter hereof and constitutes the entire agreement between the parties hereto in respect thereof. AMBB/General Obligation Bonds, 2011 Series One Loan Agreement 1:\Docs\37421723\Loan Agreement with Wrangell.wpd Page 6 IN WITNESS WHEREOF, the parties hereto have executed this Agreementthe day and year first above written. CITYAND BOROUGH OF WRANGELL, ALASKA AMBB/General Obligation Bonds, 2011 Series One Loan Agreement 1:\Docs\37421723\Loan Agreement with Wrangell.wpd Page 7 EXHIBIT A $220,000 City and Borough of Wrangell, Alaska General Obligation Bond, 2011 Due March 1 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Principal Amount $20,000 20,000 20,000 20,000 20,000 20,000 25,000 25,000 25,000 25,000 Interest Rate 3.00% 3.00 3.00 3.00 3.00 3.00 3.50 4.00 4.00 4.00 Principal installments shall be payable on March 1 in each of the years, and in the amounts set forth above. Interest on the Municipal Bond shall be payable on September 1, 2011, and thereafter on March 1 and September 1 of each year. Prepayment Provisions: The Municipal Bond is not subject to prepayment priorto maturity. AMBB/General Obligation Bonds, 2011 Series One Loan Agreement -Exhibit A 1:\Docs\37421723\Loan Agreement with Wrangell.wpd Page A-1 EXHIBIT B APPENDIXD Summaries ofBorrowers Representing 10% or More of Outstanding Principal of Bonds Issued Under the 2005 General Bond Resolution Page 1 of 4 EXHIBIT B CITY OF KETCHIKAN KETCHIKAN PUBLIC UTILITIES ENTERPRISE FUND FINANCIAL SUMMARY 2003 2004 2005 2006 2007 2008 2009 Audiled Audited Audited Audited Audited Restaled Audited ASSETS Utility Plan In-Service $67,621,026 $66,742,145 $65,655,049 $63,472,399 $65,675,153 $65,397,934 $69,718,266 Construction Work in Progress 30,078,405 1,838,196 2,147,195 3,720,138 3,046,020 8,748,881 8,017,706 Cash 14,766,191 14,973,617 15,601,361 18,036,431 17,271,704 15,351,432 13,958,674 Restricted Assets 8,433,752 3,653,916 3,731,971 3,592,407 3,881,216 5,128,164 4,062,167 Other Assets 7,552,144 6,496,443 6,770,815 7,537,978 9,709,775 11,890,125 8,686,219 Total Assels 128,451,518 93,704,317 93,906,411 96,359,353 99,583,868 106,516,536 104,443,032 LIABILITIES AND NET ASSETS Revenue Bonds Payable 26,060,000 23,960,000 22,475,000 20,580,000 20,214,266 20,574,802 19,902,223 Other Liabilities 7,690,314 2,990,668 3,444,420 4,243,388 5,320,524 6,782,025 4,045,215 Total Liabililies 33,750,314 26,950,668 25,919,420 24,823,388 25,534,790 27,356,827 23,947,438 NET ASSETS 94,701,204 66,753,649 67,986,991 71,535,965 74,049,078 79,159,709 80,495,594 Operating Revenues 27,744,410 27,180,231 27,691,757 31,085,610 30,786,551 33,275,983 33,310,537 Operation and Maintenance 14,604,369 14,874,171 13,974,313 15,188,374 17,777,974 19,912,114 20,861,336 Administrative and General 4,452,846 5,139,468 5,106,907 5,635,363 5,076,384 5,634,660 6,034,476 Depreciation 5,971,682 6,113,112 6,248,245 6,861,088 6,624,656 5,728,819 6,086,514 Payment in Lieu of Taxes 650,000 650,000 Operating Income (Loss) 2,065,513 403,480 2,362,292 3,400,785 1,307,537 2,000,390 328,211 Non-Operating Revenue (Expense) (1,183,143) (1,139,856) (736,471) (108,887) 197,069 75,885 (402,557) Net Income (Loss) Before Contribution 882,370 (736,376) 1,625,821 3,291,898 1,504,606 2,076,275 (74,346) Contributions 16,761,341 1,099,417 257,521 907,076 1,658,507 3,601,635 2,085,231 Speciai Hem 82,721 Transfer of Net Assets -Swan Lake -Lake Tyee Intertie Project (28,310,596) Transfer-Payment In Lieu of Taxes (650,000) (B50,000) (B50,OOO) (650,000) (675,000) Change in Net Assels 17,643,711 (27,947,555) 1,233,342 3,548,974 2,513,113 5,110,631 1,335,885 Population of Service Area ..,.... 13,685 13,093 13,125 13,174 13,166 12,993 12,984 Population of City 6,002 7,691 7,685 7,662 7,732 7,508 7,503 # of Electric Customers 7,178 7,161 7,202 7,251 7,305 7,346 7,365 # ofTelephone Access Lines 10,653 10,131 9,840 9,554 9,039 8,122 7,467 # of Water Customers 2,851 2,905 2,928 3,035 3,230 3,223 3,217 Revenue Bond Coverage 3.02 2.22 3.33 3,92 3.21 2.93 2.30 • Water is only provided wilhin the Cily til Change in accounting standards payment In lieu of tax must be reported as a transfer D-l Page 2 of 4 EXHIBIT B CITY OF KETCHIKAN PORT ANANCIAL SUMMARY 2003 2004 2005 2006 2007 2008 2009 Audited Audited AUdited Audited Audited Audited Audited ASSETS Cash $2,895,450 $5,121,067 $7,066,674 $4,529,687 $8,471,112 $4,939,650 $4,827,125 Port Facilities (net) 10,282,618 10,072,444 9,762,409 10,405,568 41,226,714 46,312,527 44,947,620 Construction Work In Progress 2,276,353 2,686,197 1,632,135 26,082,665 3,493,927 832,620 963,018 Reslricted Assets 19,872,348 4,743,690 4,215,907 4,819,708 Other Assets 129,455 99,752 47,113 515,697 560,772 2,103,049 1,730,443 Total Assets 15,583,876 17,979,460 18,508,331 61,405,965 58,496,215 58,403,753 57,287,914 LIABILITIES AND NET ASSETS General Obli9ation Bonds Payable 2,245,000 2,065,000 1,880,000 1,685,000 1,480,000 1,265,000 1,035,000 Revenue Bonds Payable 38,500,000 37,875,000 37,220,000 36,540,000 Other Liabilities 3,261,400 2,541,005 3,759,032 7,105,081 5,130,176 4,191,404 3,147,957 Total Liabilities 5,506,400 4,606,005 5,639,032 47,290,081 44,485,176 42,676,404 40,722,957 NET ASSETS 10,077,476 13,373,455 12,869,299 14,115,884 14,011,039 15,727,349 16,564,957 Operating Revenues 1,774,457 5,000,010 7,096,948 6,427,207 7,895,063 8,839,267 8,922,228 Operation and Maintenance 828,052 792,954 1,945,688 2,299,099 1,506,749 3,653,251 5,522,050 Depreciation 610,454 632,143 618,708 657,485 985,775 1,390,850 1,460,265 Payment in Lieu of Taxesrraxes 102,100 102,100 102,100 102,100 102,100 282,770 290,000 Operating Income (Loss) 233,851 3,472,813 4,430,452 3,368,523 5,300,439 3,512,396 1,649,913 Non-Operating Revenue (Expense) (22,824) (183,706) (68,390) (310,285) (1,697,827) (1,933,922) (1,738,365) Nettncome (Loss) Before Contribution 211,027 3,289,107 4,362,062 3,058,238 3,602,612 1,578,474 (88,452) Contributions 41,004 6,872 12,251 42,006 1,864,661 740,672 926,060 Extraordinary Item (2,432,884) Special Item 14,789 Transfers (2,445,585) (1,853,659) (5,572,069) (617,625) Change in Net Assels 252,031 3,295,979 (504,156) 1,246,585 (104,796) 1,716,310 837,608 1,0 XAnnual Debt Service/Reserves AccounURepair and Replacement Fund/SPH Lease Payments N/A N/A NlA N/A N/A 1.26 1.12 • Unaudited #ofShips 37 37 37 36 36 37 36 # of Calls/Stops 538 535 562 503 504 508 497 # of Water Passengers 770,663 848,969 921,429 638,880 899,638 941,910 963,220 • Reflects statistical infonmatlon provided by the Ketchikan Visitors Bureau D-2 Page 3 of 4 EXHIBIT B City and Borough of Sitka Electric Enterprise Fund Financial Summary 2004 200S 2006 2007 2008 2009 2010 Audited Audited Audited Audited Audited Audited Unaudited Assets Cash 8,143,639 9,387,420 7,413,414 8,458,918 9,393,512 8,993,721 8,868,159 Restricted Assets 6,388,355 6,412,431 6,893,530 6,964,401 7,020,244 7,376,785 7,149,277 Other Assets 1,984,033 1,821,898 2,188,653 2,189,489 3,185,865 3,602,067 4,256,023 Construction In Progress 1,220,488 1,580,484 1,504,571 1,524,810 1,130,584 2,883,684 5,555,467 Utility Plant In 5ervice 71,247,965 69,529,520 69,974,445 69,898,054 67,869,782 66,094,407 64,914,833 Total Assets 88,984,480 88,731,753 87,974,613 89,035,672 88,599,987 88,950,664 90,743,759 liabilities and Net Assets liabilities Other Liabilities 320,698 492,294 471,531 663,351 654,181 419,304 636,920 Revenue Bonds Payable 39,600,000 38,050,000 36,390,000 34,570,000 32,550,000 30,395,000 28,090,000 Deferred loss on bonds (1,650,996) 11,511,558) (1,372,120) (1,232,682) (1,093,244) (954,781) (815,343) Revenue Note Payable 10,386,520 10,287,213 9,977,213 9,760,076 9,534,167 9,299,130 9,054,598 Total liabilities 48,656,222 47,317,949 45,466,624 43,760,745 41,645,104 39,158,653 36,966,175 Net Assets 40,328,258 41,413,804 42,507,989 45,274,927 46,954,883 49,792,011 53,777,584 Operating Revenues 9,538,911 9,976,533 9,999,043 10,716,798 10,939,726 11,846,117 10,852,914 Operating Expenses Administrative and General 1,309,195 1,204,058 1,334,555 1,392,512 1,799,393 1,955,508 1,699,737 Operation and Maintenance 2,946,610 3,582,937 3,282,047 3,752,626 4,144,733 4,465,023 4,366,115 Depreciation 1,815,328 1,877,245 1,920,919 2,006,972 2,024,708 1,998,438 1,994,177 Operating Income 3,467,778 3,312,293 3,461,522 3,564,688 2,970,892 3,427,148 2,792,885 Nonoperating revenue (expense) Investment Income 248,638 751,273 450,992 791,965 1,020,133 642,422 523,298 Interest Expense (3,045,411) (2,976,520) (2,881,055) (2,741,335) (2,621,198) (2,469,192) (2,369,426) Other 62,726 50,717 315,931 351,823 208,962 Net Income before contributions and transfers 671,005 1,087,046 1,094,185 1,666,035 1,685,758 1,952,201 1,155,719 Capital contributions 1,300,914 603,582 2,853,752 Extraordinary Item: Net Pension Obligation Relief 281,345 Transfer In (Out) net (186,823) (1,500) (5,802) (23,898) Change In Net Assets 484,182 1,085,546 1,094,185 2,966,949 1,679,956 2,837,128 3,985,573 Population of City and Borough 8,805 8,947 8,833 8,644 8,615 8,627 # of electric customers 4,975 5,012 5,061 5,113 5,197 5,257 5,278 KwH 50ld 94,634,990 95,844,639 98,405,781 106,491,085 109,997,183 114,866,192 108,739,970 Revenue Bond Debt 5ervice 3,949,208 3,987,436 4,111,182 4,024,958 4,113,594 4,106,690 4,108,407 Revenue Bond Coverage (> 1.25) 1.40 1.49 1.43 1.59 1.54 1.56 1.34 • Data not available D-3 Page 4 of 4 CERTIFICATE OF CLERK I, NOVA M. JAVIER, Clerk of the Kodiak Island Borough, Alaska (the "Borough"), HEREBY CERTIFY that the document attached hereto is an accurate and complete copy of Resolution No. FY2011-18 of the Borough adopted by the Borough Assembly at a meeting duly called and held on February 3, 2011, and that Resolution No. FY2011-18 has not been modified, amended, repealed or rescinded, but is in full force and effect on the date hereof. IN WITNESS WHEREOF, I have executed this certificate and impressed the seal of the Borough hereon this 1st day of March 2011. ~J!1'~ NOVA M. JAVIER Borough Clerk Kodiak Island Borough [S E A L] {F:\505315\29\OOl72155.DOCx} Introduced by: Requested by: Drafted by: Introduced: Adopted: Borough Manager Finance Director Bond Counsel 02103/2011 02103/2011 1 KODIAK ISLAND BOROUGH 2 RESOLUTION NO. FY2011·18 34 A RESOLUTION OF THE KODIAK ISLAND BOROUGH ASSEMBLY 5 AUTHORIZING THE BOROUGH TO ISSUE GENERAL OBLIGATION 6 SCHOOL BONDS, 2011 SERIES A IN THE PRINCIPAL AMOUNT NOT TO 7 EXCEED $8,000,000 TO PROVIDE FUNDS FOR SCHOOL AND RELATED 8 CAPITAL IMPROVEMENTS IN THE BOROUGH AND TO PAY COSTS OF 9 ISSUING THE BONDS, FIXING CERTAIN DETAILS OF' SUCH BONDS, 10 AUTHORIZING THEIR SALE, AND PROVIDING FOR RELATED MATTERS 11 12 WHEREAS, pursuant to Ordinance No. FY2010-03 of the Kodiak Island Borough, Alaska 13 (the "Borough"), adopted August 6, 2009, a question whether the Borough should issue not 14 to exceed $76,310,000 in general obligation bonds for the purpose of paying the. cost of 15 planning, designing and constructing school and related capital improvements in the 16 Borough, including without limitation the reconstruction and renovation renovation of the Kodiak High 17 School, referred to at the regular Borough election held on October 6, 2009 as Proposition 18 No.1 ("Proposition 1"), was passed and approved: and 19 20 WHEREAS, said election has been duly canvassed and the results thereof certified and 21 confirmed in accordance with law, and $76,310,000 principal amount of general obligation 22 bonds remains unissued under Proposition 1; and 23 24 WHEREAS, the Assembly finds that it is in the best interest of the Borough to plan, design 25 and construct the school capital improvements described in Proposition 1 as. the 26 reconstruction and renovation of the Kodiak High School (the "Project"), and to issue not to 27 exceed $8,000,000 principalarnount Of general obligation bonds referredto in Proposition 1, 28 to pay part of the CQsts of the Project and costs of issuing the bonds; and 29 30 WHEREAS, Section 29.47.410 of the Alaska Statutes provides that the Assembly by 31 resolution may provide for the form and manner of sale of bonds and notes; and 32 33 WHEREAS, the Assembly finds thatit is necessary and appropriate to delegate to each of 34 the Borough Manager and Borough Finance Director authority to determine the maturity 35 amounts, interest rates and other details of the bonds, and to determine other matters that 36 are not provided for in this resolution; and 37 38 WHE~EAS, the Borough intends to sell the bonds to the Alaska Municipal Bond Bank, 39 which will purchase the bonds with the proceeds of an issue of its general obligation bonds; 40 and 41 42 WHEREAS, there has been presented to the Borough the form of a Loan Agreement 43 between the Alaska Municipal Bond Bank and the Borough, which provides for the Alaska 44 Municipal Bond Bank to purchase the bonds on the terms and conditions set forth therein 45 and in this resolution, and it is in the best interest of the Borough that the Borough sell the 46 bonds to the Alaska Municipal Bond Bank under such terms and conditions. 47Kodiak Island Borough Resolution No. FY2011-18 Page 1 of of 12 NOW, THEREFORE, BE IT RESOLVED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THAT: 48 49 Section 1: 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 Definitions. In addition to terms which are defined in the recitals above, the following terms shall have the following meanings in this resolution: (a) "Assembly" means the Assembly of the Kodiak Island Borough, as the general legislative· authority of the Kodiak Island Borough, as the same shall be duly and regularly constituted from time to time. (b) "Bond" or "Bonds" means any of the "General Obligation School Bonds, 2011 Series An of the Kodiak Island Borough, the issuance and sale of which are authorized herein. (c) "Bond Bank" means the Alaska Municipal Bond Bank, a public corporation of the State of Alaska. (d) "Bond Bank Bonds" means the series of general obligation bonds issued by the Bond Bank, all or part of the proceeds of which are used to purchase the Bonds. (e) "Bond Register" means the registration books maintained by the Registrar, which include the names and addresses of the Registered Owners of the Bonds or their nominees. (f) "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. (g) "Code" means the Internal Revenue Code of 1986, as amended from time to time, together with all regulations applicable thereto. (h) "Cost" or "Costs" means the cost of planning, designing, acquiring property for, acquiring, constrwctlng, installing and equipping the Project, including interest on the BondS dUring the period of planning, designing, acquiringpr6pertyfor, acquiring, constructing, installing and equipping the Project, the cost whether incurred by the Borough or by another of field surveys and advance planning undertaken in connection with the Project properly allocable to the Project, the cost of acquisition of any land or interest therein required as the site or sites of the Project or for use in connection therewith, the cost of any indemnity and surety bonds and premiums on insurance incurred in connection with the Project prior to or during construction thereof, all related direct administrative and inspection expenses whether incurred by the Borough 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, costs of issuance of the Bonds by the Borough, including financing charges and fees and expenses of bond counsel, financial advisors and consultants in connection therewith, the cost of any bond insurance premium and bond ratings, the cost of audits, the cost of all machinery, apparatus and equipment, cost of engineering, architectural Kodiak Island Borough Resolution No. FY2011-18 Page 2 of 12 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 Section 2: 120 121 122 123 124 125 126 Section 3: 127 128 129 130 131 132 133 134 135 Section 4: 136 137 138 139 140 141 142 143 144 145 146 services, designs, plans, specifications 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 or incidental to the acquisition and development of the Project, the financing thereof and the putting of the same in use and operation. (i) "Government Obligations" means obligations that are either (i) direct obligations ofthe United States of America or (ii) obligations of an agency or instrumentality of the United States of America the timely payment of the principal of and interest on which are unconditionally guaranteed by the United States of America 0) "Loan Agreement" means the Loan Agreement between the Borough and the Bond Bank concerning theBonds. (k) "Registered Owner" means the person named as the registered owner ofa Bond in the Bond Register. (I) "Registrar" means the Borough Finance Director, or any successor that the Borough may appoint by resolution. (m) "Resolution" means this Resolution No. FY2Q11-_ of the Borough. Authorization of Bonds and Purpose of Issuance. For the purpose of providing part of the funds required to pay the Costs of the ProjE3Ct, to provide for original issue discount, if any, and to pay all costs incidental thereto and to the issuance of the Bonds, the Borough hereby authorizes and determines to issue and sell the Bonds in the aggregate principal amount of not to exceed $8,000,000. Obligation of Bonds. The Bonds shall be direct and general obligations of the Borough and the full faith and credit ofthe Borough are hereby pledged to the payment of the principal of and interest on the Bonds. 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. Designation, Maturities, Interest Rates, and Other Details of Bonds. The Bonds shall be designated "Kodiak Island Borough, Alaska, General Obligation School Bonds, 2011 Series A." The Bonds shall be in the denomination of $5,000 or any integral multiple thereof, shall be numbered separately in the manner and with such additional designation as the Registrar deems necessary for purposes of identification, 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. Kodiak Island Borough Resolution No. FY2011-18 Page 3 of 12 147 148 149 150 151 152 153 154 155 156 157 158 159 Section 5: 160 161 162 163 164 165 Section 6: 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 The Bonds shall mature in one or more years commencing no earlier than 2011 and ending no later than 2032. The Bonds shall bear interest from their date, payable commencing on a date on or after July 1, 2011 and semiannually thereafter. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months. Subject to Section 2 and the remainder of this section, the dated date, the principal and interest payment dates, the record dates for interest payments, the aggregate principal amount, the principal amount of each maturity, and the interest rates on the Bonds shall be determined at the time of execution of the Loan Agreement under Section 17. Optional Redemption. The Bonds, if any, subject to optional redemption by the Borough, the time or times when such Bonds Bonds are subject to optional redemption, the terms upon Which such Bonds may be redeemed, and the redemption price or redemption prices for such Bonds, shall be determined at the time of execution of the Loan Agreement under Section 17. Selection of Bonds for Redemption; Notice of Redemption. (a) Selection of Bonds for Redemption. When the Bond Bank is the Registered Owner of the Bonds, the selection of Bonds to be redeemed shall be made as provided in the Loan Agreement. When the Bond Bank is not the Registered Owner of the Bonds, the selection of Bonds to be redeemed shall be made as provided in this subsection (a). If the Borough redeems at any one time fewer than all of the Bonds having the same· maturity date, the particular Bonds or portions of Bonds of such maturity to be redeemed shall be selected by lot (or in such other manner determined by the Registrar) in increments of $5,000. In the tase of a Bond ora denomination greater than $5,000, the Borough. Shall treat such Bond as representing such number of separate Bonds each of the denomination of $5,000 as is obtained by dividing the actual principal arn.ouot of such Bond by $5.000. In the event that only a portion of the principal amount of a Bond is redeemed, upon surrender of suCh B.ond at the office. of the Registrar there shall be. issued to the Registered Owner, without charge therefor, for the then unredeemed balance of the principal sum thereof, at the option of the R.egistered Owner, a Bond or Bonds of like maturity and interest rate in any of the denominations authorized herein. (b) Notice of Redemption. When the Bond Bank is the Registered Owner of the Bonds, notice of any intended redemption of Bonds shall be given as provided in the Loan Agreement. When the Bond Bank is not the Registered Owner of the Bonds, notice of any intended redemption of Bonds shall be made as provided in this subsection (b). Notice of redemption shall be mailed not less than 30 or more than 45 days prior to the date fixed for redemption by first class mail to Registered Owners of the B.onds to be redeemed at their addresses as they appear on the Bond Register on the day the notice is mailed. Notice of redemption shall be deemed to have been given when the notice is mailed as herein provided, whether or not it is actually received by the Registered Owners. All notices of redemption shall be dated and shall state: (1) the redemption date; (2) the redemption price; Kodiak Island Borough Resolution No. FY2011-18 Page 4 of 12 follows: UNITED STATES OF AMERICA STATE OF ALASKA 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 Resolution: (3) if fewer than all outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed; (4) that on the redemption date the redemption price will become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date; and (5) the place where such Bonds are to be surrendered for payment of the redemption price, which place of payment shall be the office of the Registrar. $---KODIAK ISLAND BOROUGH (A Municipal Corporation of the State of Alaska) PRINCIPAL AMOUNT: GENERAL OBLIGATION SCHOOL BOND, 2011 SERIES A REGISTERED OWNER: NO. Official notice of redemption having been given as aforesaid, Bonds or portions of Bonds to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date, such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. All Bonds which have been rede~med shall be canceled and destroyed by the Registrar and shall not be reissued. Each check or other transfer of fOnds iSSued to pay the redemption price of Bonds shall bear the CUSIP number, if any, identifying, by maturity the Bonds being redeemed with the proceeds of such check or othertransfer. The Kodiak Island Borough (the "Borough"), a municipal corporation of the State of Alaska, hereby acknowledges itself to owe and for value received promises to pay to the Registered Owner identified above, or its registered assigns, the the principal amount shown above in the following installments on of each of the following years, and to pay interest on such installments from the date hereof, payable on ______, 201_ and semiannually thereafter on the __ days of _____ and of each year, at the rates per annum as 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 Section 7: 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248Kodiak Island Borough Resolution No. FY2011-18 Page 5 of 12 Principal Amount Interest Rate 249 250 251 252 253 254 255 256 257 258 259 260 261 262 263 264 265 266 267 268 269 270 271 272 273 274 275 276 277 278 279 280 281 282 283 284 285 286 287 288 289 290 291 292 293 When this Bond is owned by the Alaska Municipal Bond Bank (the "Bond Bank"), payment of principal and interest shall be made as provided in the Loan Agreement between the Bond Bank and the Borough (the "Loan Agreement"). When this Bond is not owned by the Bond Bank, installments of principal and interest on this Bond shan be paid by check or draft mailed by first class mail to the Registered Owner as of the close of business on the 15th day of the month before each installment payment date; provided that the final installment of principal and interest on this Bond shall be payable upon presentation and surrender of this Bond by the Registered Owner at the office of the Registrar. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months. Both principal of and interest on this Bond are payable in lawful money of the United States of Amedea which, on the respective dates of payment thereof, shall be legal tender for the payment of public and private debts. This Bond is one of the General Obligation School Bonds, 2011 Series A of the Kodiak Island Borough, Alaska, of like tenor and effect except as to interest rate, serial number and maturity, aggregating $ in principal amount, and >constituting Bonds authorized for the purpose of paying the cost of· school and related capital improvements in the Borough, and is issued under Resolution No. FY2011-_ of the Borough entitled:A RESOLUTION QF THE KODIAK ISLAND BOROUGH ASSEMBLY AUTHORIZING THE BOROUGH TO ISSUE GENERAL OBLIGATION SCHOOL BONDS, 2011 SERIES A IN THE PRINCIPAL AMOUNT OF NOT TO EXCEED $8,000,000 TO PROVIDE FUNDS FOR SCHOOL AND RELATED CAPITAL IMPROVEMENTS IN THE BOROUGH AND TO PAY COSTS OF ISSUING THE BONDS, FIXING CERTAIN DETAILS OF SUCH BONDS, AUTHORIZING THEIR SALE, AND PROVIDING FOR RELATED MATTERS (the "Resolution"). Installments of principal of this Bond due on and after , 20_, shall be subject to prepayment on and after , 20_, at the option of the Borough (subject to any applicable provisions of the Loan Agreement), in such principal amounts and from such maturities as the Borough may determine, and by lot within a maturity, at a redemption price equal to the principal amount to be prepaid, plus accrued interest to the date of prepayment. Kodiak Island Borough Resolution No. FY2011-18 Page 6 of 12 294 295 296 297 298 299 300 301 302 303 304 305 306 307 308 309 310 311 312 313 314 315 316 317 318 319 320 321 322 323 324 325 326 327 328 329 330 331 332 333 334 335 336 Section 8: 337 338 339 340 341 342 343 344 This Bond is transferable as provided in the Resolution, (i) only upon the bond register of the Borough, and (ii) upon surrender of this Bond together with a written instrument of transfer duly executed by the registered owner or the dUly authorized attorney of the registered owner, 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 Resolution and upon the payment of charges, if any, as therein prescribed. The Borough 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 the Bond as the same shall become due. 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 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 impressed or otherwise reproduced hereon and attested by the manual or facsimile signature of its Clerk, all as of the__ day of 2011. Mayor ATTEST: Clerk [SEAL] Execution. The Bonds shall be executed in the name of the Borough by the manual or facsimile signature of the Mayor, and its corporate seal (or a facsimile thereof) shall be impressed or otherwise reproduced thereon and attested by the manual or facsimile signature of the Borough Clerk. The execution of a Bond on behalf of the Borough by persons who at the time of the execution are duly authorized to hold the proper offices shall be valid and sufficient for all purposes, although any such person shall have ceased to hold office at the time of delivery of the Bond or shall not have held office on the date of the Bond. Kodiak Island Borough Resolution No. FY2011 ..18 Page 7 of 12 345 346 Section 9: Payment of Principal and Interest. The Bonds shall be payable in lawful 347 money of the United states of Americ.a which at the time of payment is legal 348 tender for the payment Of public and private debts. When the Bond Bank is 349 the Registered Owner of the Bonds, payment of principal and interest on the 350 Bonds shan be made as provided in the Loan Agreement. When the Bond 351 Bank is not the Registered Owner of the Bolids, installments of principal and 352 interest on the Bonds shall be paid by check mailed by first class mail to the 353 Registered Owner as of the record date for the installment payment at the 354 address appearing on the Bond Register; provided that the final installment of 355 principal and interest on a Bond shall be payable upon presentation and 356 surrender of the Bond by the Registered Owner at the office of the Registrar. 357 358 Section 10: Registration. The Bonds shall be issued only in registered form as to both 359 principal and interest. The Borough designates the Borough Finance Director 360 as Registrar for the Bonds. The Registrar shall keep, or cause to be kept, the 361 Bond Register at the principal office of the Borough. The Borough covenants 362 that, until all Bonds have been surrendered and canceled, it will maintain a 363 system for recording the ownership of each Bond that complies with the 364 provisions Of Section 149 of the Code. The Borough and the Registrar may 365 treatthe person in whose name any Bohd shall be registered as the absolute 366 owner of such Bond for all purposes, whether or not the Bond shall be 367 overdue, and all payments of principal of and interest on a Bond made to the 368 Registered Owner thereof or upon its order shall be valid and effectual to 369 satisfy and discharge the liability upon such Bond to the extent of the sum or 370 sums so paid, and neither the Borough nor the Registrar shall be affected by 371 any notice to the contrary. 312 373 Section 11: Transfer and Exchange. Bonds shall be transferred only upon upon the books for 374 the registrgtlon and transfer of Bonds ",-ept at the office of the Registrar. 375 Upon surrender for transfer or exchange of any Bond at sUch office, With a 376 written instrument of transfer or authorization for exchange inform and with 377 guaranty of signature satisfactory to the Registrar, duly executed by the 378 Registered Owner or the duly authorized attorney of the Registered Owner, 379 the Borough shall execute anddellveran equal aggregate principal amount of 380 Bonds of the same maturity of any authorized denominations, subject to such 381 reasonable regulations as the Borough may prescribe and upon payment 382 sufficient to reimburse it for any tax, fee or other governmental charge 383 reqUired to be paid in connection with such transfer or exchange. All Bonds 384 surrendered for transfer or exchange shall be canceled by the Registrar. 385 386 Section 12: Bonds Mutilated, Destroyed, Stolen or Lost. Upon surrender to the Registrar 387 of a mutilated Bond, the Borough shall execute and deliver a new Bond of like 388 maturity and principal amount. Upon filing with the Registrar of evidence 389 satisfactory to the Borough that a Bond has been destroyed, stolen or lost 390 and of the ownership thereof, and upon furnishing the Borough with indemnity 391 satisfactory to it, the Borough shall execute and deliver a new Bond of like 392 maturity and principal amount. The person requesting the execution and 393 delivery of a new Bond under this section shall comply with such other 394 reasonable regUlations as the Borough may prescribe and pay such 395 expenses as the Borough may incur in connection therewith. Kodiak Island Borough Resolution No. FY2011-18 Page 8 of 12 396 397 Section 13: Disposition of the Sale Proceeds of the Bonds. The sale proceeds of the 398 Bonds representing accrued interest on the Bonds shall be applied to pay a 399 portion of the interest due on the Bonds on the first interest payment date for 400 the Bonds. The sale proceeds of the Bonds representing original issue 401 premium on the Bonds shall be applied to pay issuance costs of the Bonds, a 402 portion of the interest due on the Bonds on the first interest payment date for 403 the Bonds, or Costs of the Project, and shall be deposited in such manner, as 404 the Borough Manager or the Borough Finance Director may determine. The 405 remaining sale proceeds of the Bonds shall be applied to pay Costs of the 406 Project and issuance costs of the Bonds, and shall be deposited in the 407 appropriate funds or accounts of the Borough for such purposes. 408 409 Section 14: Tax Covenants. The Borough covenants to comply with any and all 410 applicable requirements set forth in the Code in effect from time to time to the 411 extent that such compliance shall be necessary for the exclusion of the 412 interest on the Bonds from gross income for federal income tax purposes. 413 The Borough covenants that it will make no use of the proceeds of the Bonds 414 which will cause the Bonds to be "arbitrage bonds" SUbject to federal income 415 taxation by reason of Section 148 of the Code. The Borough covenants that 416 it will not take or permit any action that would cause the Bonds to be "private 417 activity bonds" as defined in Section 141 of the Code. 418 419 Section 15: Amendatory and Supplemental Resolutions. 420 421 (a) The Assembly from time to time and at any time may adopt a 422 resolution or resolutions supplemental hereto, which resolution orresolutions 423 thereafter shall become a part of this Resolution, for anyone or more of the 424 following purposes: 425 426 (1) To add to the covenants and agreements of the Borough in 427 this Resolution, other covenants and agreements thereafter to be 428 observed, observed, or to Surrender any right or power herein reserved to or 429 conferred upon the Borough, 430 431 (2) To make such provisions for the purpose of curing any 432 ambiguities or of curing, correcting or supplementing any defective 433 provision contained in this Resolution or in regard to matters or 434 questions arising under this Resolution as the Assembly may deem 435 necessary or desirable and not inconsistent with this Resolution and 436 which shall not adversely affect the interests of the Registered 437 Owners of the Bonds. 438 439 Any such supplemental resolution may be adopted without the consent of the 440 Registered Owners of any of the Bonds at any time outstanding, 441 notwithstanding any of the provisions of subsection (b) of this section. 442 443 (b) With the consent of the Registered Owners of not less than 60 444 percent in aggregate principal amount of the Bonds at the time outstanding, 445 the Assembly may adopt a resolution or resolutions supplemental hereto for 446 the purpose of adding any provisions to or changing in any manner or Kodiak Island Borough Resolution No. FY2011-18 Page 9 of 12 447 eliminating any of the provisions of this Resolution or of any supplemental 448 resolution; provided, however, that no such supplemental resolution shall: 449 450 (1) Extend the fixed maturity of aiw of the Bonds, or reduce the 451 rate of interest thereon, or extend the time of payments of interest 452 from their due date, or reduce the amount of the principal thereof, or 453 reduce any premium payable on the redemption thereof, without the 454 consent of the Registered Owners of each Bond so affected; or 455 456 (2) Reduce the aforesaid percentage of Registered Owners of 457 Bonds required to approve any such supplemental resolution without 458 the consent of the Registered Owners of all of the Bonds then 459 outstanding. 460 461 It shall not be necessary for the consent of the Registered Owners of the 462 Bonds under this subsection to approve the particular form of any proposed 463 supplemental resolution, but it shall be sUfficient if such consent approves the 464 substance thereof. 465 466 (c) Upon the adoption of any supplemental resolution under this section, 467 this Resolution shall be deemed to be modified and amended in accordance 468 therewith, and the respective rights, duties and obligations under this 469 Resolution of the Borough and all Registered Owners of outstanding Bonds 470 shall thereafter be subject in all respects. to such modification and 471 amendment, and all the terms and conditions of the supplemental resolution 472 shall be deerned to be part of the terms and conditions of this Resolution for 473 any and all purposes. 474 475 (d) Bonds executed and delivered after the adoption of any supplemental 476 resolution under this section may bear a notation as to any matter provided 477 for in such supplemental resolution, and if such supplemental resolution shall 478 so provide, new Bonds modified so as to conform, in the opinion of the 479 Borough, to any modification of this Resolution contained in any such 480 supplemental resolutioA maybe prepared by the Borough and delivered 481 Without cost to the Registered Owners of the Bonds then outstanding, upon 482 surrender for cancellation of such Bonds in equal aggregate principal 483 amounts. 484 485 Section 16: Defeasance. In the event money and/or non-callable Government 486 Obligations maturing at such times and bearing interest to be earned thereon 487 in amounts sufficient to redeem and retire any or all of the Bonds in 488 accordance with their terms are set aside in a special trust account to effect 489 such redemption or retirement and such moneys and the principal of and 490 interest on such Government Obligations are irrevocably set aside and 491 pledged for such purpose, then no further payments need be made to payor 492 secure the payment of the principal of and interest on such Bonds and such 493 Bonds shall be deemed not to be outstanding. 494 495 Section 17: Sale of Bonds. The Bonds shalf be sold at negotiated sale to the Bond Bank 496 as provided in the Loan Agreement. Subject to the limitations provided in 497 Sections Sections 2 and 4, each of the Borough Manager and the Borough Finance Kodiak Island Borough Resolution No. FY2011-18 Page 10 of 12 498 Director is hereby authorized to determine the aggregate principal amount, 499 maturity amounts, interest rates, yields, dated date, principal and interest 500 payment dates, redemption terms, if any, for the Bonds, and other details of 501 the Bonds; provided that the true interest cost of the Bonds, expressed as an 502 annual rate, does not exceed 6.0 percent. In determining the maturity 503 amounts, interest rates, yields, and redemption terms! if any, for the Bonds, 504 the Borough Manager or Borough Finance Director shall take into account 505 those factors which, in his judgment, will result in the lowest true interest cost 506 on the Bonds to their maturity, including without limitation current financial 507 market conditions and current interest rates for obligations comparable in 508 tenor and quality to the Bonds. Based upon the foregoing determinations, the 509 Borough Manager and the Borough Finance Director each is authorized to 510 execute the Loan Agreement, in substantially the form presented at this 511 meeting. 512 513 Section 18: Authority of Officers. The Mayor, the acting Mayor, the Borough Manager, 514 U1eacting Borough Manager, the Borough Finance Director, the acting 515 Borough Finance Director, the Borough Clerk, and the acting Borough Clerk 516 each is authorized and directed to do and perform all things and determine all 517 matters not determined by this Resolution, to the end that the Borough rnay 518 carry out its obligations under the Bonds and this Resolution. 519 520 Section 19: Prohibited Sale of Bonds. No person, firm or corporation, or any agent or 521 employee thereof, acting as financial consultant to the Borough under an 522 agreement for payment in connection with the sale of the Bonds is eligible to 523 purchase the Bonds as a member of the original underwriting syndicate either 524 at pUblic or private sale. 525 526 Section 20: Ongoing Disclosure. The Borough acknowledges that under Rule 15c2 12 of 527 the Securities and Exchange Commission (the "Rule") the Borough may now 528 or in the future be an "obligated person" with respect to the Bond Bank 529 Bonds.. In accordance with the Rule and as the Bond Bank may require, the 530 Borough shall undertake to provide certain annual financial information and .531 operating data as shall be set forth in the Loan Agreement. 532 533 Section 21: Miscellaneous. 534 535 (a) All payments made by the Borough of, or on account of, the principal 536 of or interest on the Bonds shall be made on the several Bonds ratably and in 537 proportion to the amount due thereon, respectively, for principal or interest as 538 the case may be. 539 540 (b) No recourse shall be had for the payment of the principal of or the 541 interest on the Bonds or for any claim based thereon or on this Resolution 542 against any member of the Assembly or officer of the Borough or any person 543 executing the Bonds. The Bonds are not and shall not be in any way a debt 544 or liability of the State of Alaska or of any political subdivision thereof, except 545 the Borough, and do not and shall not create or constitute an indebtedness or 546 obligation, either legal, moral or otherwise, of said state or of any political 547 subdivision thereof, except the Borough. 548Kodiak Island Borough Resolution No. FY2011-18 Page 11 of 12 549 Section 22: Severability. If anyone or more of the provisions of this Resolution shall be 550 declared by any court of competent jurisdiction to be contrary to law, then 551 such provision shall be null and void and shall be deemed separable from the 552 remaining provisions of this Resolution and shall in no way affect the validity 553 of the other provisions of this Resolution or of the Bonds. 554 555 Section 22: Effective Date. This Resolution shall become effective upon passage and 556 approval. 557 558 ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH 559 THIS THIRD DAY OF FEBRUARY, 2011 KODIAK ISLAND BOROUGH ATTEST: Kodiak Island Borough Resolution No. FY2011-18 Page 12 of 12 CERTIFICATE AS TO ARBITRAGE AND TAX EXEMPTION I, KARLETON G. SHORT, Finance Director of the Kodiak Island Borough, Alaska (the "Issuer"), HEREBY CERTIFY that, as of the date hereof (the "Issue Date"), the Issuer reasonably expects the following regarding the amount and use of the gross proceeds of the Issuer's $8,000,000 General Obligation School Bond, 2011 Series A (the "Bond"): I. PRELIMINARY MATIERS. 1. Officer of Issuer. I am the duly appointed, qualified and acting Finance Director of the Issuer, and an officer of the Issuer responsible for issuing the Bond. 2. Purpose of Certificate. This certificate states the Issuer's expectations as of the Issue Date regarding the Bond for the purposes of the applicable provisions of §103 and §§141 through 150 of the Internal Revenue Code of 1986 and the Income Tax Regulations thereunder (the "Code") concerning the exclusion of interest on the Bond from gross income for federal income tax purposes, and the facts and estimates that form the basis for the Issuer's expectations. It includes the certification required in §1.148-2(b)(2)(i) of the Income Tax Regulations concerning the Issuer's expectations regarding the amount and use of the gross proceeds of the Bond. 3. Reasonable Expectations. To the best of my knowledge, information and belief, the facts, estimates and circumstances stated herein are accurate as of the Issue Date, and the expectations stated herein are the bona fide reasonable expectations of the Issuer. 4. Definitions. All capitalized terms not otherwise defined herein shall have the meanings provided in Resolution No. FY2011-18 of the Issuer adopted February 3, 2011 (the "Resolution"). Any other terms shall have the meanings ascribed to them in the Code. II. AUTHORIZATION AND GOVERNMENTAL PURPOSE OF THE ISSUE. 1. Authorization. The Bond has been authorized under the laws of the State of Alaska, by the approval of Proposition No. 1 at the regular election held by the Issuer on October 6,2009, and by the Resolution. 2. Governmental Purpose. The Bond is being issued for the following purposes: (a) To provide funds to pay part of cost of planning, designing and constructing school and related capital improvements in the Kodiak Island Borough consisting of the reconstruction and renovation of the Kodiak High School (the "Project"); and CERTIFICATE AS TO ARBITRAGE AND TAX EXEMPTION F:\505315\29\00172162.DOGX Page 1 of? (b) To pay issuance costs of the Bond. 3. Capital Project. The Project is a capital project. 4. No Overissuance. As shown in Sections III and V.1, the total amount of the proceeds of the Bond, less issuance costs, will not exceed the amount necessary to pay costs of the Project. III. SALE OF THE BOND; SOURCES AND USES OF SALE PROCEEDS. 1. Sale. The Issuer will sell the Bond to the Alaska Municipal Bond Bank (the "Bond Bank") pursuant to the Resolution and a Loan Agreement dated as of March 1, 2011 (the "Loan Agreement"), between the Issuer and the Bond Bank. The Bond Bank is purchasing the Bond with proceeds of its General Obligation Bonds, 2011 Series One (the "Bond Bank Bonds"). 2. Sale Proceeds. The total amount of sale proceeds of the Bond is $8,049,232.60, consisting of the $8,000,000.00 principal amount of the Bond, plus $49,232.60 of original issue premium. The Issuer will not receive any other direct monetary benefit, such as a rebate of bond insurance premium, surety bond premium or letter of credit fee, in connection with the issuance of the Bond. 3. Allocation of Sale Proceeds. The sale proceeds of the Bond will be allocated as follows: (a) $8,000,000.00 will be allocated to pay part of the cost of the Project; and (b) $49,232.60, including allocation to Bond Bank Bonds issuance costs of $40,688.96, will be allocated to expenditures for issuance costs of the Bond. IV. REPLACEMENT PROCEEDS. 1. Bond Not Outstanding Longer than Necessary. The weighted average maturity of the Bond is 11.7856 years. All of the proceeds of the Bond will be expended for the Project, which is a capital project. The Project will be placed in service on or after September 1, 2014. The average reasonably expected economic life of the Project as of the date the Project is placed in service will be at least 45 years, based on the guideline lives for structures specified by Revenue Procedure 62-21. The weighted average maturity of the Bond does not exceed 120% of the average reasonably expected economic life of the Project. 2. Bona Fide Debt Service Fund. The Issuer annually will appropriate amounts to pay debt service on the Bond from the general fund of the Issuer. The Issuer may deposit the amounts so appropriated in an account used primarily to achieve a proper matching of revenues of the Issuer and debt service on the Bond. At least once each bond year (on or before each March 1), the Issuer will expend all amounts CERTIFICATE AS TO ARBITRAGE AND TAX EXEMPTION F:\505315\29\00172162.DOCX Page 2 of 7 that the Issuer has deposited in such an account, except for an amount not exceeding the greater of (a) the earnings on such amounts for the immediately preceding bond year, or (b) one-twelfth of the principal and interest payments on the Bond for the immediately preceding bond year. 3. No Other Replacement Proceeds. Other than amounts specifically identified as replacement proceeds of the Bond in this certificate, there are no amounts (including without limitation sinking funds, pledged funds and other replacement proceeds) that: (a) Are held by or derived from the Issuer or any person that is a related party to the Issuer or the State of Alaska, and have a sufficiently direct nexus to the Bond or to the governmental purposes of the Bond to conclude that the amounts would have been used for those governmental purposes if the proceeds of the Bond were not used or to be used for those governmental purposes; or (b) Are reasonably expected to be used directly or indirectly to pay debt service on the Bond, or to be available to pay debt service on the Bond if the Issuer were to encounter financial difficulties. V. EXPENDITURES FOR PROJECT COSTS. 1. Project Cost and Sources of Funds. The estimated cost of the Project is $80,000,000, including an allowance for contingencies. Part of the cost of the Project will be paid from $8,000,000 of the sale proceeds of the Bond, with any excess being paid from (i) proceeds of the Issuer's $9,300,000 General Obligation School Bond, 2004 Series A; (ii) proceeds of the Issuer's $11,050,000 General Obligation School Bond, 2004 Series B; and (iii) proceeds of the remaining $68,310,000 of General Obligation School Bonds authorized at the regular election held by the Issuer on October 6, 2009, and not issued as of the Issue Date. 2. Allocating Funds to Expenditures for Project Costs. The Issuer will allocate the funds described above to expenditures for Project costs using a directtracing accounting method. 3. Temporary Period Tests. The amount of net sale proceeds of the Bond (sale proceeds of $8,049,232.60 less the minor portion of $100,000.00 described in Section VI.2(d)) is $7,949,232.60. The Issuer in January 2011 entered into a contract for the design construction of the Project in the amount of $5,134,067.00, an amount not less than five percent of the net sale proceeds of the Bond, which is $397,461.60. Construction of the Project will begin on or before June 1, 2012, and construction of the Project and allocation of sale proceeds of the Bond to expenditures for costs of the Project will proceed with due diligence to completion. Not later than March 1, 2014, the date that is three years after the Issue Date, the Issuer will expend from the net sale proceeds of the Bond on costs of the Project not less than 85% of the net sale proceeds, which is $6,756,847.70. CERTIFICATE AS TO ARBITRAGE AND TAX EXEMPTION F:\505315\29\00172162.DOCX Page 3 of 7 VI. YIELD LIMITATIONS ON INVESTMENTS OF GROSS PROCEEDS OF THE BOND. 1. Investment of Bond Proceeds. It is expected that the Issuer will invest gross proceeds of the Bond only in investments purchased at fair market value in bona fide arm's-length transactions. Where there is an established securities market for an investment, the Issuer will purchase the investment on that market. 2. Investments without Yield Limitation. The following gross proceeds of the Bond may be invested without yield limitation: (a) Amounts allocated to expenditures for the Project (including issuance costs, accrued interest and costs of the Project) may be invested without yield limitation for a period not to exceed three years from the date hereof. (b) Amounts allocated to any fund described in Section IV.2 may be invested without yield limitation for a period not to exceed 13 months from the date of their deposit therein. (c) Except as otherwise provided in this Section V1.2, proceeds received from investing proceeds of the Bond may be invested without yield limitation for a period of one year beginning on the date of receipt. (d) In addition to gross proceeds of the Bond described in Section VI.2(a) through (c), an amount of gross proceeds of the Bond not exceeding $100,000.00 may be invested without yield limitation as a minor portion of the proceeds of the Bond. 3. Investments Subject to Yield Limitation. Gross proceeds of the Bond that cannot be invested without yield limitation under this section will be invested at a yield, computed in the manner described in Section V11.2, which does not exceed the yield on the Bond by more than .125%. VII. COMPUTATION OF YIELD. 1. Computation of Yield on Bond. Pursuant to §1.148-4(a) of the Income Tax Regulations, the yield on the Bond is deemed to be equal to the yield on the Bond Bank Bonds. The yield on the Bond Bank Bonds is the discount rate that, when used in computing the present value as of the Issue Date of all unconditionally payable payments of principal and interest on the Bond Bank Bonds and amounts reasonably expected to be paid as fees for qualified guarantees on the Bond Bank Bonds, produces an amount equal to the present value, using the same discount rate, of the aggregate issue price of the Bond Bank Bonds as of the Issue Date. The issue price of the Bond Bank Bonds is the initial offering price of the Bond Bank Bonds to the public (excluding bond houses, brokers and other intermediaries) at which price at least 10% of each maturity of the Bond Bank Bonds was sold. CERTIFICATE AS TO ARBITRAGE AND TAX EXEMPTION F:\505315\29\00172162.DOCX Page 4 of 7 The yield on the Bond Bank Bonds has been determined to be 4.5108%. Such determination as to yield has been based on the representation made to the Bond Bank by Piper Jaffray & Co. that the issue price of the Bond Bank Bonds is not greater than $8,702,613.80. 2. Computation of Yield on Investments. The yield on an investment allocated to the Bond is the discount rate that, when used in computing the present value as of the date the investment is first allocated to the Bond of all unconditionally payable receipts from the investment, produces an amount equal to the present value of all unconditionally payable payments for the investment. The frequency of compounding interest that is used to calculate yields on investments allocated to the Bond is the same as that used to calculate the yield on the Bond Bank Bonds. VIII. ARBITRAGE REBATE. The Issuer will, in the manner and to the extent required by §148(f) of the Code, calculate and rebate to the United States any investment earnings on gross proceeds of the Bond which are in excess of the amounts that would have been earned if those gross proceeds had been invested at the yield on the Bond, plus any income attributable to such excess earnings. IX. HEDGE BOND REPRESENTATIONS. The Bond will meet the temporary period tests in Section V.3, and in particular the Issuer will expend not less than 85% of the net sale proceeds of the Bond on costs of the Project on or before March 1, 2014, the date that is three years after the Issue Date. None of the proceeds of the Bond will be invested in investments having a substantially guaranteed yield for four years or more. X. REIMBURSEMENT REPRESENTATIONS. None of the proceeds of the Bond will be allocated to reimburse the Issuer for expenditures paid before the Issue Date, other than expenditures described in Resolution No. FY2011-10 of the Issuer, adopted October 21,2010, and which are paid no earlier than August 22, 2010; provided that the reimbursement of such expenditures occurs not later than 18 months after the later of of (i) the date the original expenditure is paid and (ii) the date the Project is placed in service or abandoned, but in no event more than three years after the date on which the expenditure was paid. XI. GENERAL REPRESENTATIONS. 1. Other Obligations. There are no other obligations of the Issuer which are sold at substantially the same time as the Bond, are sold pursuant to the same plan of financing together with the Bond, and are reasonably expected to be paid out of substantially the same source of funds as the Bond. CERTIFICATE AS TO ARBITRAGE AND TAX EXEMPTION F:\505315\29\00172162.DOCX Page 5 of? 2. Abusive Transactions. The Bond is not and will not be part of a transaction or series of transactions that attempt to circumvent the provisions of §148 of the Code and the regulations thereunder by (a) enabling the Issuer to exploit the difference between tax exempt and taxable interest rates to gain a material financial advantage, or (b) overburdening the tax exempt bond market. The Issuer has covenanted in the Resolution that it will make no use or investment of the proceeds of the Bond which will cause the Bond to be an "arbitrage bond" subject to federal income taxation under the Code. XII. NO IMPERMISSIBLE PRIVATE BUSINESS USE OF THE PROJECT. 1. Use in Trade or Business of Nongovernmental Persons. (a) The Project will be owned and used by the Issuer in furtherance of its governmental purposes. The Issuer reasonably expects that no more than 10% of the Project will be used in the trade or business of a nongovernmental person, excluding use as a member of the general public. (b) A nongovernmental person is any person or entity other than a state or local governmental unit, including the federal government and an organization described in Section 501 (c)(3) of the Code. A nongovernmental person uses the Project as a member of the general public only if the Project is intended to be available and in fact is reasonably available for use on the same basis by natural persons not engaged in a trade or business. Use by a nongovernmental person other than as a member of the general public includes ownership, or use under an arrangement that conveys priority rights or other preferential benefits, including actual or beneficial use under a lease, management contract, service or incentive payment contract, output contract or other special arrangement. 2. Private Loan Financing. No proceeds of the Bond will be used (directly or indirectly) to make or finance loans to any nongovernmental person. 3. Unrelated or Disproportionate Private Business Use. There will be no unrelated or disproportionate private business use of the Project. (a) Private business use is unrelated unless (i) the use must be located within, or adjacent to, the Project; (ii) the use is for the same purpose as use of the Project by the Issuer, and the Issuer's use is not insignificant; or (iii) the Project is used in the same manner as a private business use of a nongovernmental person that is related to a governmental use, and the related use is not insignificant. (b) Private business use is disproportionate to a related government use only to the extent that the amount of proceeds used in private business use exceeds the amount of proceeds used for the related governmental use. CERTIFICATE AS TO ARBITRAGE AND TAX EXEMPTION F:\505315\29\00172162.DOCX Page 6 of? 4. Sale of Project. The Issuer will not sell, encumber or otherwise dispose of any part of the Project, except such parts that may be disposed of because of normal wear, obsolescence or depreciation, prior to the final maturity of the Bond. DATED this 1st day of March 2011.KODIAK ISLAND BOROUGH, ALASKA KARLETON G. SHORT Finance Director CERTIFICATE AS TO ARBITRAGE AND TAX EXEMPTION F:\505315\29\00172162.DOCX Page? of? CERTIFICATE OF DELIVERY AND PAYMENT I, RICK GIFFORD, Borough Manager of the Kodiak Island Borough (the "Issuer"), HEREBY CERTIFY that: 1. On the date hereof, I caused to be delivered to the Alaska Municipal Bond Bank (the "Purchaser") the $8,000,000 General Obligation School Bond, 2011 Series A (the "Bond"), duly executed by or on behalf of the Issuer. 2. At or before the time of such delivery there was received by the Issuer $8,008,543.64, as full payment for and the total proceeds of the Bond, consisting of the $8,000,000 principal amount of the Bond, plus $49,232.60 of net original issue premium, less $40,688.96 of underwriter's discount. IN WITNESS WHEREOF, I have executed this certificate this 1st day of March 2011. KODIAK ISLAND BOROUGH, ALASKA RICK GIFFO Borough Manager RECEIPT OF PURCHASER The undersigned hereby acknowledges receipt of the Kodiak Island Borough, Alaska General Obligation School Bond, 2011 Series A, in the principal amount of $8,000,000. DATED this 1st day of March 2011. CERTIFICATE OF DELIVERY AND PAYMENT {F:\505315129\00172158.DOC} BANK Page 1 of 1 CERTIFICATE OF BOROUGH MANAGER I, RICK GIFFORD, Borough Manager of the Kodiak Island Borough, Alaska (the "Issuer"), HEREBY CERTIFY that: 1. Pursuant to Resolution No. FY2011-18 of the Issuer, I have approved the dated date, the principal and interest payment dates, the record dates for interest payments, the aggregate principal amount, the principal amount of each maturity, the interest rates, the optional redemption terms, and other details of the Issuer's General Obligation School Bond, 2011 Series A (the "Bond") as set forth in Schedule X attached hereto, and I have executed on behalf of the Issuer the Loan Agreement dated as of March 1, 2011 (the "Loan Agreement") between the Issuer and the Alaska Municipal Bond Bank with respect to the Bond. 2. No litigation is pending, or to my knowledge threatened, against the Issuer in any court affecting the corporate existence of the Issuer, or the titles of its officers to their respective offices, or seeking to restrain or enjoin the issuance, sale or delivery of the Bond, or in any manner questioning the authority or proceedings for the authorization or issuance of the Bond, or the right of the Issuer to levy and collect taxes pledged or to be pledged to pay the principal of and interest on the Bond, or the pledge thereof, in any way contesting or affecting the validity or enforceability of the Bond or the Loan Agreement. 3. The Issuer is in compliance with its prior continuing disclosure undertakings under Securities and Exchange Commission Rule 15c2-12. DATED this 1st day of March 2011. KODIAK ISLAND BOROUGH, ALASKA ~~~ RICK GIFFORD Borough Manager {F:\505315\26\00052258.DOC} Schedule X KODIAK ISLAND BOROUGH, ALASKA $8,000,000 General Obligation School Bond, 2011 Series A Date: Dated as of March 1, 2011. Interest Payment Dates: Installments of interest on the Bond shall be payable on September 1, 2011 and semiannually thereafter on the 1st days of March and September of each year. Record Dates: The 15th day of the month next preceding the applicable interest payment date. Maturities and Interest Rates: Installments of principal of the Bond mature on March 1 in each of the years in the respective amounts, and bear interest at the rates, as follows: Principal Interest Principal Interest Year Amount Rate Year Amount Rate 2012 $ 275,000 3.000 % 2022 $ 385,000 4.750 % 2013 285,000 3.000 2023 405,000 4.750 2014 295,000 3.000 2024 425,000 4.750 2015 305,000 3.000 2025 445,000 4.750 2016 310,000 3.000 2026 465,000 4.750 2017 320,000 3.000 2027 485,000 5.125 2018 330,000 3.500 2028 510,000 5.125 2019 340,000 4.000 2029 535,000 5.125 2020 355,000 4.000 2030 565,000 5.125 2021 370,000 4.000 2031 595,000 5.125 Optional Redemption: Installments of principal of the Bond shall be subject to prepayment on any date on and after March 1, 2021, at the option of the Issuer (subject to any applicable provisions of the Loan Agreement), in whole or in part at a price equal to the principal amount to be prepaid, plus accrued interest to the date of prepayment. {F:\5053 I 5\26\00052258.DOC} SIGNATURE CERTIFICATE We, the undersigned officers of the Kodiak Island Borough (the "Borough"), a municipal corporation of the State of Alaska, HEREBY CERTIFY that the $8,000,000 Kodiak Island Borough, Alaska, General Obligation School Bond, 2011 Series A (the "Bond"), was duly and completely signed on behalf of the Borough by the execution thereon of the signature of the undersigned Jerome M. Selby, Mayor of the Borough, and duly and completely attested by the execution thereon of the signature of the undersigned Nova M. Javier, Clerk of the Borough. We further certify that the signatures subscribed below are the true and genuine signatures of said officers respectively. We further certify: (a) that on the date of execution of the Bond, and on the date hereof, the undersigned were and are the duly elected or appointed, qualified and acting officers of the Borough authorized to execute the Bond, holding the respective offices indicated by the official titles set beneath said signatures below; and (b) that the seal which is impressed upon this certificate has been impressed on the Bond and is the official seal of the Kodiak Island Borough, Alaska. IN WITNESS WHEREOF, we have executed this certificate and caused the seal of the Borough to be impressed hereon this 1st day of March 2011. NOVA M. JA ~ER Borough Cle Kodiak Island Borough JER ME M. SELBY Mayor Kodiak Island Borough [S E A L] {F:\505315\29\00172159.DOC} Julius J. Brecht Cheryl Rawls Brooking Cynthia L. Cartledge Michael Gatti Clyde W. Hutchins Jr. Robert M. Johnson Leila R. Kimbrell Eric E. Wohlforth Wohlforth I Johnson I Brecht Cartledge I Brooking ATTORNEYS AT LAW 900 WEST 5TH AVENUE, SUITE 600 ANCHORAGE, ALASKA 99501·2048 March 1, 2011 TELEPHONE 907.276.6401 FACSIMILE 907.276.5093 WEBSITE WWW.AKATTY.COM Alaska Municipal Bond Bank State Office Building, 11th Floor 333 Willoughby Juneau, Alaska 99811 Ladies and Gentlemen: I am the Borough Attorney for the Kodiak Island Borough (the "Borough"). This opinion is given in connection with the issuance and sale by the Borough of its $8,000,000 general obligation school bonds (the "Bonds"). The Bonds are sold to the Alaska Municipal Bond Bank (the "Bank") pursuant to a Loan Agreement between the Bank and the Borough dated March 1, 2011 (the "Loan Agreement"). I am of the opinion that: There is no litigation pending or threatened: A. affecting the corporate existence of the Borough, or the titles of officers to their respective offices, or seeking to restrain or enjoin the issuance, sale or delivery of the Bonds, or the rights of the Borough to levy and collect taxes pledged to pay the principal of and interest on the Bonds, or pledge thereof, or in any way contesting or affecting the validity or enforceability of the Bonds or the Loan Agreement between the Borough and the Bank, or contesting the power of the Borough or its authority with respect to the Bonds; or B. against the Borough or involving any of the property or assets of or under the control of the Borough which, whether individually or in the aggregate involves the possibility of any judgment or uninsured liability which may result in any material change in the revenues properties, or assets, or in the condition, financial or otherwise, of the Borough. Alaska Munic1pal Bond Bank March 1, 2011 Page 2 CAB/tim Sincerely, WOHLFaRTH, JOHNSON, BRECHT, CA~L.EE;?pDHE! 8. ROOKIN~ ~~.-Cheryl A. B~ki~[ Cbrooking@akatty.com UNITED STATES OF AMERICA STATE OF ALASKA KODIAK ISLAND BOROUGH (A Municipal Corporation of the State of Alaska) NO. R-1 GENERAL OBLIGATION SCHOOL BOND, 2011 SERIES A $8,000,000 REGISTERED OWNER: PRINCIPAL AMOUNT: ALASKA MUNICIPAL BOND BANK EIGHT MILLION DOLLARS The Kodiak Island Borough (the "Borough"), a municipal corporation of the State of Alaska, hereby acknowledges itself to owe and for value received promises to pay to the Registered Owner identified above, or its registered assigns, the principal amount shown above in the following installments on March 1 of each of the following years, and to pay interest on such installments from the date hereof, payable on September 1, 2011 and semiannually thereafter on the first days of March and September of each year, at the rates per annum as follows: Principal Interest Principal Interest Year Amount Rate Amount Rate 2012 $ 275,000 3.000 % c~~". '"022 $ 385,000 4.750 % 2013 285,000 3.000 . eli' f"'" 2023 405,000 4.750 2014 295,000 3.000 t!.,. ,,,,,/2024 425,000 4.750 2015 305,000 3.0Q«1'</2025 445,000 4.750 2016 310,000 3.~' 2026 465,000 4.750 2017 320,000 3.000' 2027 485,000 5.125 2018 330,000 3.500 2028 510,000 5.125 2019 340,000 4.000 2029 535,000 5.125 2020 355,000 4.000 2030 565,000 5.125 2021 370,000 4.000 2031 595,000 5.125 When this Bond is owned by the Alaska Municipal Bond Bank (the "Bond Bank"), payment of principal and interest shall be made as provided in the Loan Agreement between the Bond Bank and the Borough (the "Loan Agreement"). When this Bond is not owned by the Bond Bank, installments of principal and interest on this Bond shall be paid by check or draft mailed by first class mail to the Registered Owner as of the close of business on the 15th day of the month preceding each installment payment date; provided that the final installment of principal and interest on this Bond shall be payable upon presentation and surrender of this Bond by the Registered Owner at the office of F:\505315\29\00172156.DOC Page 1 of 3 the Registrar. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months. Both principal of and interest on this Bond are payable in lawful money of the United States of America which, on the respective dates of payment thereof, shall be legal tender for the payment of public and private debts. This Bond is one of the General Obligation School Bonds, 2011 Series A of the Kodiak Island Borough, Alaska, of like tenor and effect except as to interest rate, serial number and maturity, aggregating $8,000,000 in principal amount, and constituting Bonds authorized for the purpose of paying the cost of planning, designing and constructing school and related capital improvements in the Borough, and is issued under Resolution No. FY2011-18 of the Borough entitled: A RESOLUTION OF THE KODIAK ISLAND BOROUGH ASSEMBLY AUTHORIZING THE BOROUGH TO ISSUE GENERAL OBLIGATION SCHOOL BONDS, 2011 SERIES A IN THE PRINCIPAL AMOUNT OF NOT TO EXCEED $8,000,000 TO PROVIDE FUNDS FOR SCHOOL AND RELATED CAPITAL IMPROVEMENTS IN THE BOROUGH AND TO PAY COSTS OF ISSUING THE BONDS, FIXING CERTAIN DETAILS OF SUCH BONDS, AUTHORIZING THEIR SALE, AND PROVIDING FOR RELATED MAnERS ...<F..~ " ~,~,~~ (the "Resolution"). •. ~.V~ Installments of princ~~Bond shall be subject to prepayment on any date on and after March 1, 2~~~ the option of the Borough (subject to any applicable provisions of the Loan Agr~ent), in whole or in part at a price equal to the principal amount to be prepaid, plus accrued interest to the date of prepayment. This Bond is transferable as provided in the Resolution, (i) only upon the bond register of the Borough, and (ii) upon surrender of this Bond together with a written instrument of transfer duly executed by the registered owner or the duly authorized attorney of the registered owner, 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 Resolution and upon the payment of charges, if any, as therein prescribed. The Borough 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 the Bond as the same shall become due. 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 F:\505315\29\00172156.DOC Page 2 of3 happened and have been performed, and that the series of Bonds of which this is one, together with all other indebtedness 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 impressed or otherwise reproduced hereon and attested ~by the manual or facsimile signature of its Clerk, all as of the 15t day of March 201}~ ~~ r~'~ ~.;\j ~ <':'\'k <t'V/:-:M-a-;:=::r~---=~!...---=::....l.L~ ~, ATTEST: o1mvon.~ Clerk [SEAL] F:\505315\29\00172156.DOC Page 3 of 3 LAW OFFICES BIRCH HORTON BITTNER & CHERaT A PROFESSIONAL CORPORATION 1127 WEST SEVENTH AVENUE • ANCHORAGE, ALASKA 99501-3301 • TELEPHONE 907.276.1550 • FACSIMILE 907.276.3680 HAL R. HORTON (1944 -1998) RONALD G. BIRCH" WILLIAM H. BinNER KATHRYN A. BLACK SUZANNE CHEROT ADAMW.COOK JON M. DEVORE" CHARLES R. EBERLEt· JOSEPH H. FLACK DOUGLAS S. FULLER' MAX D. GARNER DAVID KARL GROSS TINA M. GROVIER WILLIAM P. HORN" STEPHEN H. HUTCHINGS DANIEL C. KENT THOMAS F. KLINKNER DAVID E. LAMPP'O STANLEYT. LEWIS AMY W. L1MERES JAMES H. L1STEWtO JENNIFER L. OWENS, Ph.D. TIMOTHY J. PETUMENOS ELISABETH H. ROSSAARON D. SPERBECK KENNETH E. VASSAR HOLLY C. WELLS OF COUNSEL: JENNIFER C. ALEXANDER 1155 CONNECTICUT AVE. N.W. SUITE 1200 WASHINGTON, D.C. 20036 TELEPHONE 202.659.5800 FACSIMILE 202.659.1027 -D.C. AND ALASKA BAR t MARYLAND BAR o VIRGINIA BAR • D.C. BAR ALL OTHERS ALASKA BAR WRITER'S DIRECT DIAL 907.263.7268 • WRITER'S DIRECT FAX 907.276.3680 • tklinkner@bhb.com March 1, 2011 Mayor and Members of the Assembly Kodiak Island Borough 710 Mill Bay Road Kodiak, Alaska 99615 Piper Jaffray & Co. 601 Union Street, Suite 5010 Seattle, Washington 98199 Ladies and Gentlemen: Board of Directors Alaska Municipal Bond Bank Department of Revenue 333 Willoughby Avenue Juneau, Alaska 99811 We have acted as Bond Counsel in connection with the issuance by the Kodiak Island Borough, Alaska (the "Issuer") of its $8,000,000 General Obligation School Bond, 2011 Series A (the "Bond"). We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion. The Bond is authorized by Resolution No. FY2011-18 of the Issuer, adopted February 3, 2011 (the "Resolution"), and issued under a Loan Agreement dated as of March 1, 2011 (the "Loan Agreement"), between the Issuer and the Alaska Municipal Bond Bank. The Bond is registered in form, is dated March 1, 2011, matures on March 1 in each of the years in the respective principal amounts, and bears interest at the rates, as follows: F:\505315\29\00174887 .DOCX BIRCH HORTON BITTNER & CHERaT A PROFESSIONAL CORPORATION March 1, 2011 Page 2 Principal Interest Principal Interest Year Amount Rate Year Amount Rate 2012 $ 275,000 3.000 % 2022 $ 385,000 4.750 % 2013 285,000 3.000 2023 405,000 4.750 2014 295,000 3.000 2024 425,000 4.750 2015 305,000 3.000 2025 445,000 4.750 2016 310,000 3.000 2026 465,000 4.750 2017 320,000 3.000 2027 485,000 5.125 2018 330,000 3.500 2028 510,000 5.125 2019 340,000 4.000 2029 535,000 5.125 2020 355,000 4.000 2030 565,000 5.125 2021 370,000 4.000 2031 595,000 5.125 The Bond bears interest from March 1, 2011, payable on September 1, 2011, and semi-annually thereafter on March 1 and September 1 in each year. The Bond is subject to optional redemption prior to maturity as provided in the Resolution. As to questions of fact material to our opinion, we have relied upon the certified proceedings and other certifications of public officials furnished to us without undertaking to verify the same by independent investigation. Based upon the foregoing, we are of the opinion that, under existing law: 1. The Issuer is a municipal corporation duly organized and legally existing under the laws of the State of Alaska. 2. The Bond has been duly authorized and executed by the Issuer and is issued in full compliance with the provisions of the Constitution and laws of the State of Alaska and the Resolution. The Bond is the valid and legally binding general obligation of the Issuer for the payment of the principal and interest of which the Issuer has the power and is obligated to levy taxes upon all taxable property in the Kodiak Island Borough without limitation as to rate or amount and for the payment of which the full faith and credit of the Issuer are pledged. 3. The Loan Agreement has been duly authorized, executed and delivered by, and constitutes a valid and binding agreement in accordance with its terms of, the Issuer, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting the enforcement of creditors' rights generally, or general principles of equity. F:\505315\29\00174887.DOCX BIRCH HORTON BITTNER & CHEROT A PROFESSIONAL CORPORATION March 1, 2011 Page 34. The interest on the Bond is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, interest on the Bond is taken into account in determining adjusted current earnings for the purpose of computing the corporate alternative minimum tax under Section 55 of the Internal Revenue Code of 1986 (the "Code"). The opinion set forth in the preceding sentence is subject to the condition that the Issuer comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Bond in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The Issuer has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bond in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bond. The Bond and the interest thereon are exempt from taxation by the State of Alaska except for estate taxes, and except to the extent that inclusion of said interest in computing the corporate alternative minimum tax under Section 55 of the Code may affect the corresponding provisions of the State of Alaska corporate income tax. We express no opinion regarding tax consequences arising with respect to the Bond other than as expressly set forth herein. Sincerely yours, BIRCH HORTON BinNER & CHERaT ~r2 ~/uir~J'/J Thomas F. Klinkner TFK:cmm F:\505315\29\00174887.DOCX If Amended Return, check here ~ 0 2 Issuer's er11J/oyet" identification ruri:ler (BN) 92 0030845 Form8038·G (Rev. May 2010) 1 Issuer's name Kodiak Island Borough Information Return for Tax-Exempt Governmental Obligations ~ Under Internal Revenue Code section 149(e) ~ See separate instructions. Caution: If the issue price is under $100,000, use Form B03B-GC. OMS No. 1545-0720 3 Number and street (or P.O. box if mall is not delivered to street address) Room/suite 4 Report number (For IRS Use Only) 710 Mill Bay Road 5 City, town, Or post office, state, and ZIP code Kodiak, Alaska 99615 6 Date of issue March 1, 2011 7 Name of issue 8 CUSIP number General Obligation School Bond, 2011 Series A None 9 Name and title of officer of the issuer or other person whom the IRS may call for more information 10 Telephone number of officer or other person 49,233 years oyears 4.5108 % (e) Yield 8,049,233 8,000,000 8,049,233 486-9320 11 15 13 17 16 12 18 14 oooo bonds. ( 907 ) 49,233 (d) Weighted average maturity 24 25 26 27 28 8,000,000 11.7856 years underwriters' discount (e) Stated redemption (b) Issue price price at maturity Description of Obligations. Com lete for the entire issue for which this form is bein Proceeds used for accrued interest. Issue price of entire issue (enter amount from line 21, column (b» Proceeds used for bond issuance costs (including underwriters' discount) Proceeds used for credit enhancement Proceeds allocated to reasonably required reserve or replacement fund. Proceeds used to currently refund prior issues . Proceeds used to advance refund prior issues . Total (add lines 24 through 28) . . Nonrefundin roceeds of the issue subtract line 29 from line 23 and enter amount here Descri tion o'f Refunded Bonds Com lete this art onl for refundin Karleton G. Short, Finance Director Type of Issue (enter the issue price) See instructions and attach schedule 11 Education . 12 Health and hospital 13 Transportation. . 14 Public safety . . 15 Environment (including sewage bonds). 16 Housing. 17 Utilities . 18 Other. Describe ~ 19 If obligations are TANs or RANs, check only box 19a If obligations are BANs, check only box 19b 20 If obligations are in the form of a lease or installment sale, check box 22 23 24 25 26 27 28 29 30 31 Enter the remaining weighted average maturity of the bonds to be currently refunded. .32 Enter the remaining weighted average maturity of the bonds to be advance refunded. 33 Enter the last date on which the refunded bonds will be called (MM/DDIYYYY) . 34 Enter the date(s} the refunded bonds were issued ~ (MMIDDIYYYY) For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 637735 Form 8038-G (Rev. 5-2010) Page 2 ~o ~O ~O oo Enter the amount of the state volume cap allocated to the issue under section 141 (b)(5) . Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (GIC) (see instructions) . Enter the final maturity date of the GIC ~ Pooled financings: a Proceeds of this issue that are to be used to make loans to other governmental units . 37a 0 b If this issue is a loan made from the proceeds of another tax-exempt issue, check box ~ IZJ and enter the name of the issuer ~ Alaska Municipal Bond Bank and the date of the issue ~ March 1, 2011 If the issuer has designated the issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check box If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . If the issuer has identified a hedge, check box . 35 36a 38 39 40 Form 8038-G (Rev. 5-2010) Miscellaneous b 37 Preparer's SSN or PTIN Under penalties of perjury, I declare that I have examined this retum and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. I further declare that I consent to the IRS's disclosure of the issuer's retum information, as necessary to process this retur , to the person that I have authorized above. 1 . ~ Signature of issuer's authorized representative Signature and Consent Paid Preparer's ~ signature r Preparer'st------'-----,------------------'------'-=:.:.r-'''-'==':O'=-..:=:::....J.----------Firm's name (or ~ Use Only yours if self-employed), address, and ZIP code Form 8038-G (Rev.5-2010) CERTIFICATE I, CHRISTIE L. JAMIESON, the duly appointed, qualified and acting Borough Clerk of the City and Borough of Wrangell, Alaska, DO HEREBY CERTIFY that the attached is a full, true and conect copy of Resolution 01-11-1216 (the "Bond Resolution") adopted by the Assembly at its meeting on JanualY 25, 2011. DATED as of this 1st day of March, 2011. CITY AND BOROUGH OF WRANGELL, ALASKA Christie L. Jamieson Borough Clerk CITY AND BOROUGH OF WRANGELL, ALASKA GENERAL OBLIGATION BONDS, 2011 $225,000 RESOLUTION NO. 01-11-1216 A RESOLUTION of the Borough Assembly of the City and Borough of Wrangell, Alaska, authorizing the issuance of general obligation bonds of the Borough in the principal amount of not to exceed $225,000 to finance a portion of the cost of playground upgrades at Evergreen Elementary School as authorized by Ordinance No. 846 and ratified by the Borough's voters at an election held therein 011 October 5, 201 O~ authorizing tax levies to pay the principal thereof and interest thereon; and authorizing the sale ofthe bonds to the Alaska Municipal Bond Bank 011 the terms and conditions provided in this resolution. ADOPTED: JANUARY 25, 2011 Prepared by: K&L GATES LLP Seattle, Washingtol1 CITY AND BOROUGH OF WRANGELL, ALASKA RESOLUTION NO. 01-11-1216 TABLE OF CONTENTS* Section 1. Section 2. Section 3. Section 4. Section 5. Section 6. Section 7. Section 8. Section 9. Section 10. Section 11. Section 12. Section 13. Section 14. Section 15. Section 16. EXHIBIT A Definitions 1 Authorization ofBond 3 Registration, PayTIlent and Transfer 3 Prepaynlent. 4 Bond Flmd; Pledge ofTaxes 4 Defeasance 4 Tax Covenants 5 Lost or Destroyed Bond 5 Fornl ofthe Bond 5 Execution ofthe Bond 9 Application of Proceeds ofBond 9 Sale of the Bond 9 Ongoing Disclosure 10 General Authorization; Prior Acts 10 Severability : 10 Effective Date 10 Form ofLoan Agreement '" Neither tillS table ofcontents nor the preceding cover page is a part of this Resolution. -1- RESOLUTION NO. 01-11-1216 A RESOLUTION of the Borough Assembly of the City and Borough of Wrangell, Alaska, authorizing the issuance of general obligation bonds of the Borough in the principal amoullt of not to exceed $225,000 to finance a portion of the cost of playground upgrades at Evergreen Elementary School as authorized by Ordinance No. 846 and ratified by the Borough's voters at an election held therein on October 5, 2010; autholizing tax levies to pay the plincipal thereof and interest thereon; and authorizing the sale ofthe bonds to the Alaska Municipal Bond Banle 011 the terms and conditions provided in this resolution. WHEREAS, at an election held in the City and Borough of Wrangell, Alaska (the ''BoroughH ), on October 5, 2010, a majority of the qualified electors of the Borough voted in favor of a proposition authorizing the issuance of general obligation bonds of the Borough in the principal amount of 110t to exceed $225,000 to finance a portion of the cost of playground upgrades at Evergreen Elementary School (the "Project") as authorized by Ordinance No. 846 of the Borough passed on June 22, 2010 (the "Election Ordinance"); and WHEREAS, it is in the best interest of the Borough to sell the bonds to the Alaska Municipal Bond Bank (the "Bond Bank") on the tenns and conditions set forth herein and in a loan agreement authorized by this resolution to be entered into by the Finance Director. NOW, THEREFORE, BE IT RESOLVED by the Borough Assembly of the City and Borough ofWrangell, Alaska, as follows: Section 1. Definitions. As used in this resolution, the following words have the following meanings, unless a different meaning clearly appears from the context: "Assembly" means the Borough Assembly of the Borough, the general legislative authority ofthe Borough, as duly constituted from time to time, or any successor body. "Bond" means the City and Borough of Wrangell General Obligation Bond, 2011, in the tot~l principal amount ofnot to exceed $225,000, issued pursuant to this resolution. "Bond Bank" means the Alaska Municipal Bond Bank, a public corporation and instrumentality of the State of Alaska, created pursuant to the provisions of Chapter 85, Title 44, Alaska Statutes, as amended. "Bond Bank Bonds" means bonds to be issued by the Bond Bank to provide funds to be loaned to the Borough pursuant to the Loan Agreement. "Bond Fund" means the "City and Borough of Wrangell Debt Service Fund," as further described in Section 5 of this resolution. "Bond Register" means the registration books for the Bond maintained by the Reg~strm', for the purpose of complying with the requirements of Section 149 of the Code and listing, inter alia, the name and address ofthe Registered Owner of the Bond. "Borough" means the City and Borough of Wrangell, Alaska, a home rule municipal corporation duly organized and existing tmder the Constitution and laws of the State of Alaska and its Mtmicipal Charter. "Code" memlS the federal hlternal Revenue Code of 1986, as amended, together with corresponding and applicable final, temporary or proposed regulations and revenue rulings issued or amended with respect thereto by the United States Treasury Department or the Internal Revenue Service, to the extent applicable to the Bond. "Election Ordinance" means Ordinance No. 846 of the Borough, passed by the Assembly on June 22, 2010, and ratified by the Borough's voters in an election held in the Borough on October 5, 2010. ''Finance Director" means the Finance Director of the Borough or the successor to the duties of such office. "Govenunent Obligations" means any bonds or other obligations that, as to principal and interest, constitute direct obligations of, or are unconditionally guaranteed by, the United States of America. "Loan Agreement" means the Loan Agreement by and between the Borough and the Bond Bank authorized to be entered into pursuant to Section 12 of this resolution. "Project Fund" means the "Evergreen Elementary School Playground Project Fund, 2011," created pursuant to Section 11 of this resolution. "Registrar" means the Finance Director, for the purposes of registering and authenticating the Bond, maintaining the Bond Register, and paying principal and interest on the Bond. ''Registered Owner" means the person in whose name the Bond is registered on the Bond Register. "Rule" means the SEC's Rule 15c2-12 under the Securities Exchange Act of 1934. "SEC" means the Securities and Exchange Commission. "Tax Certificate" means the certificate with respect to federal tax tax matters relating to the Bond authorized to be executed by the Finance Director pursumlt to the provisions of Section 7 of this resolution. -2- Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Words imparting the singular number shall include the plural numbers and vice versa lU1less the context shall otherwise indicate. Reference to sections and other subdivisions of this resolution are to the sections and other subdivisions of this resolution as originally adopted lU1less expressly stated to the contrary. The headings or titles of the sections hereof, and the table of contents appended hereto, are for convenience of reference only and shall not define or limit the provisions hereof. Section 2. Authorization of Bond. The Borough shall now issue and sell not to exceed $225,000 aggregate principal amolU1t of the general obligation bonds authorized by the Election Ordinance and approved by the Borough's voters at an election held on October 5, 2010, to finance a portion of the costs of playground upgrades at Evergreen Elementary School and to pay costs of issuance of the bonds, all as authorized by the Election Ordinance. The bonds shall be issued and sold to the Bond Bank as a single bond designated the "City and Borough of Wrangell General Obligation Bond, 2011" (the "Bond"). The Bond shall be in the principal amolmt, shall be dated as of the date to be established in accordance with Section 12 hereof, shall mature on the date or dates, shall be fully registered as to both principal and interest, shall be numbered separately in such mmmer as the Registrm' shall determine, shall bear interest at the rate or rates, and shall be payable on the dates and in the principal amOlU1ts as shall be established in accordance with Section 12 hereof. h1terest on the Bonds shall be computed on the basis of a 360-day year consisting oftwelve 30-day months. Section 3. Registration, Payment and Transfer. The Finance Director shall act as authenticating agent, transfer agent, paying agent and registrar for the Bond (collectively, the "Registrar"). Both principal of mld interest on the Bond shall shall be payable in lawful money of the United States of America. Interest on the Bond shall be paid by check or draft of the Registrar mailed (on the date such interest is due) to the Registered Owner or nominee at the addresses appearing on the Bond Register on the fifteenth day of the month preceding each interest payment date. Principal of the Bond shall be payable upon presentation and surrender of the Bond to the Registrar by the Registered Owner or nominee at the office of the Registrar in Wrangell, Alaska. Notwithstanding the foregoing, if the Bond is sold to the Bond Bank pursuant to the provisions of Section 12 of this resolution, and for so long as the Bond Bank is the owner of the Bond, payments of principal of and interest on the Bond shall be made to the Bond Bm1k in accordance with the Loan Agreement. The Bond may be transferred only on the Bond Register maintained by the RegistTaf for that purpose upon the surrender thereof by the Registered Owner or nominee or his or her duly authorized agent and only if endorsed in the manner provided thereon, and thereupon a new fully registered Bond of like principal amount, maturity and interest rate shall be issued to the transferee in exchange therefore. Upon surrender thereof to the Registrar, the Bond is interchangeable for a bond or bonds (in denominations of$5,000 or any integral multiple thereof) of an equal aggregate principal amount and of the same interest rates and principal payment amolU1ts as the Bond. Such transfer or exchange shall be without cost to the Registered Owner or iransferee. -3- The Borough may deem the person in whose name the Bond is registered to be the absolute owner thereof for the purpose of receiving payment of the principal of and interest on the Bond and for any and all other purposes whatsoever. Section 4. Prepayment. Provisions for the optional prepayment of some or all principal installments of the Bond may be established pursuant to Section 12 and shall be set forth in the Loan Agreement. Portions of the principal amount of the Bond, in increments of $5,000 or any integml multiple of $5,000, may be prepaid. So long as the Bond Bank is the owner of the Bond, notice of prepayment of the Bond shall be given according to the terms of the Loan Agreement. If the Bond Bank is not the owner of the Bond, notice of prepayment thereof shall be given not less than 30 nor more than 60 days prior to the date fixed for prepayment by first class mail, postage prepaid, to the Registered Owner of the Bond at the address appearing on the Bond Register.· The requirements of this section shall be deemed complied with when notice is mailed as herein provided, regardless of whether it is actually received by the owner of the Bond. Each official notice of prepayment shall be dated and shall state: (i) the prepayment date, (ii) the prepayment price or prepayment premium, if any, payable upon such prepayment; (iii) if less than all of an installment of principal is to be prepaid, the principal amount to be prepaid (which must be an integral multiple of $5,000); (iv) that the interest on the Bond, or on the plincipal amount thereof to be prepaid, designated for prepayment in such notice, shall cease to accrue from and after such prepayment date; and (v) that on such date there will become due and payable on the Bond the principal amount thereof to be prepaid and the interest accrued on such plincipal amount to the prepayment date. Section 5. Bond Fund: Pledge of Taxes. A special fund of the Borough known as the "City and Borough of Wrangell Debt Service FlUld" (the "Bond Fund"), has heretofore been been created in the office of the Finance Director. The Bond Fund shall be drawn upon for the pmvose ofpaying the principal of and interest on the Bond. The Bond is a general obligation of the Borough. The Borough hereby irrevocably covenants that, unless the principal of and interest on the Bond are paid from other sources, it will make annual levies of property taxes without limitation as to rate or amount, and in amounts sufficient, together with other legally available funds, to pay such principal and interest as the same shall become due. The full faith, credit and resources of the Borough are hereby irrevocably pledged for the alIDuallevy and collection of such property taxes and for the prompt payment of such principal and interest. Section 6. Defeasance. In the event that money and/or Government Obligations, matmi.ng at such time or times and bearing interest to be earned thereon in amounts sufficient to redeem and retire the Bond or a portion thereof in accordance with its terms, are set aside in a a special account to effect such prepayment and retirement, alld such money and the principal of and interest 011 such obligations are irrevocably set aside and pledged for such purpose,then no fmther payments need be made into the Bond Fund for the payment of the principal of and interest on the Bond or portion thereof so provided for, and the Bond or portion thereof shall -4- cease to be entitled to any lien~ benefit or security ofthis resolution except the right to receive the money so set aside and pledged~ and the Bond or portion thereof shall be deemed 110t to be outstanding hereunder. Section 7. Tax Covenants. (a) General. The Borough covenants not to take any action, or knowingly to omit to take ~U1y action within its control~ that if taken or omitted would cause the interest on the Bond to be includable in gross income, as defined in section 61 of the Code, for federal income tax purposes. (b) Tax Certificate. Upon the issuance of the Bond, the Finance Director is authorized to execute a federal tax certificate (the "Tax Certificate"), which will certify to various facts and representations concerning the Bond, based on the facts and estimates known or reasonably expected on the date of their issuance, and make certain covenants with respect to the Bond as may be necessary or desirable to obtain or maintain the benefits conferred under the Code relating to tax-exempt bonds. The Borough covenants that it will comply with the Tax Certificate unless it receives advice fro111 nationally recognized bond counselor the Internal Revenue Service that certain provisions have been amended or no longer apply to the Bond. Section 8. Lost or Destroyed Bond. If the Bond is lost~ stolen or desiToyed, the Registrar may authenticate and deliver a new Bond of like amount, date, and tenor to the Registered Owner upon such owner's paying the expenses and charges of the Borough in connection with preparation and authentication of the replacement Bond and upon his or her filing with the Registrar evidence satisfactory to the Registrar that the Bond was actually lost, stolen or destroyed and ofhis or her ownership, and upon f1U1lishing the Borough with indemnity satisfactory to the Registrar. Section 9. NO. R-1 Form of the Bond. The Bond shall be in substantially the following form: $225,000 U}ITTED STATES OFAMEIDCA STATE OF ALASKA CITY AND BOROUGH OF WRANGELL GENERAL OBLIGATION BOND, 2011 INTEREST INTEREST RATE: SEE BELOW REGISTERED OWNER: PRINCIPAL AMOUNT: FINAL MATURITY DATE: ALASKA MUNICIPAL BOND BANK $Two hundred twenty-five thousand DOLLARS -5- The City and Borough of Wrangell, Alaska (the "Borough"), a municipal corporation organized and existing under and by virtue of its charter and the laws and Constitution of the State of Alaska, hereby acknowledges itself to owe and for value received promises to pay to the Registered Owner identified above, or registered assigns, the principal amount specified above, in installments payable as set forth below, together with interest on such installments from the date hereof or the most recent date to which interest has been paid or duly provided for, at the interest rates set f01ih below, on , 20_, and on each 1 and 1 thereafter until payment of the principal sum has been made or duly provided for. Principal Installment Payment Year ( 1) Principal Installment Amount Interest Rate Both principal of and interest on this bond are payable in lawful money of the United States of America. Installments of principal of Emd interest on this bond are payable by check or draft of the Finance Director of the Borough (the "Registrar") mailed on the date such interest is due to the Registered Owner at the address appearing 011 the Bond Register as of the fifteenth day of the month preceding the interest payment date. The final installment of principal of and interest 011 this bond shall be paid to the Registered Owner upon presentation and surrender of this bond at the offi.ce of the Registrar. Notwithstanding the foregoing, so long as the Bond Bank is the Registered Owner of this bond, payments of principal of and interest on this bond shall be made to the Bond Ban1e in accordance with the Loan Agreement. This bond is a general obligation bond of the Borough, as approved by the voters of the Borough and issued pursuant to Resolution No. 01-11-1216, adopted by the Borough Assembly on January 25, 2011 (the "Bond Resolution"), to finance a portion of the cost of capital improvements to school facilities for Evergreen Elementary School. Capitalized terms used in this bond and not otherwise defined herein shall have the meanings given such terms in the Bond Resolution. Principal installments of tIus bond are subject to prepayment as provided in the Bond Resolution. The Borough hereby irrevocably covenants that, unless the principal of and interest on this bond are paid from other sources, it will make annual levies of property taxes without limitation as to rate or amount, and in amounts sufficient, together with other legally available funds, to pay such principal and interest as the same shall become due. The full faith, credit and resources of the Borough are hereby irrevocably pledged for the aImual levy and collection of such property taxes and for the prompt payment of such principal and interest. -6- The pledge of tax levies for payment of principal of and interest 011 this bond may be discharged prior to maturity of the bond by making provision for the payment thereof on the terms and conditions set forth in the Bond Resolution. This bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit tmder the Bond Resolution tmtil the Certificate of Authentication hereon shall have been manually signed by the Registrar. It is hereby certified and declared that this bond is issued pursuant to and ill strict compliance with the Constitution and laws of the State ofAlaska and the charter, resolutions, and resolutions of the Borough, that all acts, conditions and things required to be done precedent to and in the issuance of this bond have happened, been done and performed, and that this bond does 110t exceed any Constitutional or statutory limitations. IN WITNESS WHEREOF, the City and Borough of Wrangell, Alaska, has caused tIris bond to be signed on behalf of the Borough with the manual or facsimile signature ofthe Mayor, to be attested by the manual or facsimile signature of the Clerk, and the seal of the Borough to be imprinted or impressed hereon, as of this 26th day ofJanuary, 2011. CITY AND BOROUGH OF WRANGELL, ALASKA By -...!-/~s/-----_ Mayor [SEAL] ATTEST: lsi Clerk -7- CERTIFICATE OF AUTHENTICATION Date of Authentication: --------This is the City and Borough of Wrangell General Obligation Bond, 2011, dated ______, 2011, as described in the Bond Resolution. Finance Director, City and Borough of Wrangell, Alaska, as Registrar ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers lli1to__ PLEASE INSERT SOCIAL SECURITY OR TAXPAYER IDENTIFICATION NUMBER OF TRANSFEREE (Please print or typewrite nan1e and address, including zip code of Transferee) the within bond and all rights thereunder and does hereby irrevocably constitute and appoint__ ________________ of , or its successor, as agent to transfer said bond on the books kept by the Registrar for registration thereof, with full power of substitution in the premises. DATED: ' _ SIGNATURE GUARANTEED: NOTE: The signature of this Assignment must correspond with the name of the Registered Owner as it appears upon the face of the within bond in every particular, without alteration or enlargement or any change whatever. -8- Section 10. Execution of the Bond. .The Bond shall be signed on behalf of the Borough by the manual or facsimile signature of the Mayor, shall be attested by the manual or facsimile signat1.rre of the Borough Clerk, and the seal of the Borough shall be impressed or imprinted thereon. Only such Bond as bears thereon a Certificate of Authentication in the form set forth in Section 9 hereof, manually executed by the Registrar, shall be valid or obligatory for any purpose or entitled to the benefits of this resolution. Such Certificate of Authentication shall be conclusive evidence that the Bond so authenticated has been duly executed, authenticated, registered, and delivered hereunder and is entitled to the benefits ofthis resolution. In case any of the officers of the Borough who have signed, attested, authenticated, registered or sealed the Bond cease to be such officers before the Bond so signed, attested, authenticated, registered or sealed has been actually issued and delivered, such Bond shall be valid nevertheless and may be issued by the Borough with the same effect as though the persons who had signed, attested, authenticated, registered or sealed such Bond had not ceased to be such officers. The Bond may also be signed, attested, authenticated, registered or sealed on behalf of the Borough by such persons as at the actual date of execution of such Bond shall be the proper officers of the Borough although at the original date of such Bond any such person was not such officer. Section 11. Application of Proceeds of Bond. A special fund of the Borough known as the "Evergreen Elementary School Playground Project Fund, 2011" (the ''Project Fund") is hereby authorized to be created in the office of the Finance Director. At the time of delivery of the Bond, the proceeds of the Bond shall be deposited as follows: (a) The accrued interest, if any, to the date of delivery shall be deposited in the Bond Flmd and used to pay a portion of interest on the Bond on the first interest payment date; and (b) The remaining remaining Bond proceeds shall be deposited in the Project Fund and used to pay costs ofthe Project and costs of issuance of the Bonds, as authorized by the Election Ordinance. Money remaining in the Project Fund after all such costs have been paid or reimbursed shall be deposited in the Bond Fund. Money in the Project Fund may be invested as pennitted by law. All interest earned and profits derived from such investments shall be· retained in and become a prot of the Project Fund. Sectionl2. Sale of the Bond. The Finance Director and Borough Manager are authorized to complete the sale of the Bond to the Bond Bank on terms and conditions consistent with this resolution and a loan agreement in substantially the form set forth on Exhibit A attached to this resolution (the "Loan Agreement"). Following the sale of the Bond Bank Bonds, such terms ~U1d conditions, including the :final principal amount, date, principal installment payment -9-P:\20391_D0Tl2039U~EI 01/27/11 schedule, interest rates and prepayment provisions for the Bond, all as provided for in this resolution, shall be set forth in the Loan Agreement, subject to the Borough Manager's approval, which approval shall be conclusively evidenced by his signing and delivering the Loan Agreement to the Bond Banle. Section 13. Ongoing Disclosure. The Borough aclrnowledges that, under Rule 15c2-12 of the Securities and Exchange Commission (the "Rule"), the Borough may now or in the future be an "obligated person" with respect to the Bond Banle Bonds. In accordance with the Rule and as the Bond Bank may require, the Borough shall undertake to provide certain alillual financial information and operating data as shall be set forth in the Loan Agreement. Section 14. General Authorization; Prior Acts. The Mayor, Borough Manager, Finance Director and Borough Clerk and any other appropriate officers of the Borough are each hereby authorized and directed to take such steps, to do such other acts and things, and to execute such letters, certificates, agreements, papers, financing statements, assignments or instruments as in their judgment may be necessary, appropriate or desirable to can'y out the tenns and provisions of, and complete the transactions contemplated by, this resolution. All acts taken pursuant to the authority of this resolution but prior to its effective date are hereby ratified and confirmed. Section 15. Severability. If anyone or more of the covenants or agreements provided in this resolution 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 oi' covenants, agreement or agreements, shall be null and void and shall be deemed separable from the remaining covenants and agreements of tius resolution and shall in 110 way affect the validity ofthe other provisions of thi.s resolution or of the Bond. Section 16. Effective Date. This resolution shall be 111 full force and effect immediately upon its adoption by the Assembly. APPROVED AND ADOPTED by the Borough Assembly of tile City and Borough of Wrangell, Alaska, at a regular meeting thereof, held on January 25, 2011. GELL, Clerk ATTEST:,.~ fUuMiM -10- EXHIBIT A [Attach here the f01111 ofBond Bank Loan Agreement] A-I FORM OF LOAN AGREEMENT THIS AGREEMENT, dated as of the _ day of 20_, between the Alaska Municipal Bond Bank (the "Bank"), a body corporate and politic constituted as an instrumentality of the State of Alaska (the "State") exercising:public and essential governmental functions, created pursuant to the provisions of Cha~tf)t:l?5'c.Jitle44, Alaska Statutes, as amended (the "Act"), having its principal place of busir1~""" au, Alaska, and the [City] [Borough], Alaska, a dUly constituted [C!tyl; .' f the State ("[City] [Borough]"): :; WIT N E SSE T H: .'.' :.,-~j;'. WHEREAS, pursuant to the Act, the Bank is autho~i~,~,8i~~g;ake Icart,:" (the "Loan" or "Loansll ) to governmental units; and .......• ::'.:··;,::,J~_~~:~:.Wt/',,·:"; WHEREAS, the [City] [Borough] is a Govemr.n.$fltaIUnltr$'i;diHl;;:t.·;:'; in the General Bond Resolution of the Bank hereinaftermentiOr.i~q!j~hd~p'ursuanft6f:t.. ." t~ls authorized to accept a Loan from the Bank to be eVideno~d.liyijt$(:i:hQht~ipai bori'(f$:;:j'ahd WHEREAS, the [City] [BoroU9h]'destresto:::,'p,~6r9~;~(~'J:~~YJro~' the Bank in the amount of not to exceed $ . '. and ha~scibrnjned/Wci~~p(jcationto the Bank for a Loan in the amount of not to ~xq_e~~ $ . ·';I.:~J;l~gt;t~e.;·}[City] [Borough] has dUly authorized the issuance of it;:.i:;fu!!Ykf,~gJ.$tered: ,pol1~J!T·th~i:'~€19regateprincipal amount of $ (the "Municip$t~~;§¢hdn), which bondJ's',iQ",:be purchased by the Bank as evidence of the Loan in acdqt~~tl!¢i:i~~ith this Agrseinient; and .<": :::.:.: . reques~ill}~~$rt~iCall~~'bfJhe [City] [Borough] conruins the information "WJ1E;aEAS, tb'prQ,'{lst~,f9r~;the issuance of bonds of the Bank in order to obtain from time~'W ;:tlrn~};money wifhri'whJQh~to make Loans, the Bank has adopted the General Obligat19t0¥t~;q:~,tResoluti.Qi1),6,Q}~~ly 13, 2005, as amended August 19, 2009 (the "General Bond Res.oJUtrt>:tlllr?and<Se r:i~MResolution No. 20 -,approved on , 2011 (together:wlt.&¥l~~:.:;~~.~·Wr~.!~i.~qnd Resolution, thS"Bond Resolution"), authorizing the making of suct:iVL,e~WfpHh'~ncity][Borough] and the purchase of the Municipal Bond. , . .~.:..:": ~':'.:."' ~ .;:' -: ':~"'.':":. :" .." NOW, TH'E:R~~:~'~'~, the parties agree: .... :.;......' 1. The Bank hereby makes the Loan and the [City] [Borough] accepts the Loan in the aggregate principal amount of $ . As evidence of the Loan made to the [City] [Borough] and such money borrowed from the Bank by the [City] [Borough], the [City] [Borough] hereby sells to the Bank the Municipal Bond in the principal amount, with the principal installment payments, and bearing Interest from its date at the rate or rates per annum, stated in Exhibit A appended hereto. For purposes of this Loan Agreement, the interest on the Municipal Bond will be computed without regard to the provision In Section 7 hereof for the [City] [Borough] to make funds available to the Trustee acting under the General Bond Resolution for the payment of principal and interest due at least seven (7) business days prior to each respective principal and interest payment date. 2. The [City] [Borough] represents that it has duly adopted or will adopt all necessary ordinances or resolutions, including [Ordinance] [Re~olution) No. , adopted on , _, 20_. (the "[City] [Borough] [Ordinans~h(R~?~olutionn, and has taken or will take all proceedmgs required by law to enable iH~r'" .. , ,to this Loan Agreement and issue its Municipal Bond to the Bank ·and thatcth ' ' . I Bond will constitute [a general obligation bond, secured by tlle:fU'lhf:~ittl-·,a":·. revenue bond, a special ~nd limited obli~ation] of the [CitynB.6roUgh],dLiiY:~~ ..,:,;:(,,;;; ;. g~ty's] [Borough's] [Ordinance] [Resolution]. """ " ::n,',1"'}0;?\ ~~!;t; ." ;, .~ :~\\ :;~.." . :"/~:~~~~~; ~:~~~ 3. Subject to any applicable legallimitations;;ttie:i~rt1~,Gnts to b'~1( :~ [City) [Borough] pursuant to this Loan Agreement representib~fnjl£~'r.~~t.que on its'" cipal Bond (the "Municipal Bond Interest Payments") shall be·eotilpQl~q~t.~t~e same rate or rates of interest bome by the corresponding maturltl$'s,0f'the'b9dd~\$(X!CP:l;~y the Bank in order to obtain the money with which to makethe.:d;~qa:n.and to'pU(chasE11.\£fhe Municipal Bond (the "Loan Obligations") and shall be paldb~dhe~[¢l.tYl~[Borough]/~t;feast seven (7) business days before the interest payment date 'so :as.tbptc)\rld,e funds sufficient to pay interest as the same becomes due on the'Loan Ob,Hgatiori:', .,.; . 4. The amounts to be;p~id by tne.[QiW]m6rqUg!1] pursuant to this Loan Agreement representing principqJ;pueiop its Municip~k.s:qnd{the "Municipal Bond Principal Paymentsll), shall be paid atfeJ;l~tseveri (7) businessdaY$'.b~fore the payment date stated in the Municipal Bond soas'~ta';prQvid~ funds sufficient to pay the principal of the Loan Obligations as~h~;.~?rne mati.lres.·~bas.ed. upon the maturity schedule stated in Exhibit A appended;be·(~t:~t;:;·r;;;,·:;" ' ." .... , 5•. ,:..·::'i:H;th~~:~J$,b;,th~:arnountg.referred to in Sections 3 and 4 hereof to be paid by the [Gi~¥ldB,tk6ughfpci,r~9~l;I~~J9AhisLoan Agreement are not made available at any time specifle,df;J:l:?i:'Eil,i!'l, the fQ'ity)F[S'9rough] agrees that any money payable to it by any departm~mt:~p"'" ~ncy qf;~h~;,sJate may be withheld from it and paid over directly to the Trustee·~ct'ri. .'. ,Ji~~ th.€l:(3eri¢r~1 Bond Resolution, and this Loan Agreement shall be full warrant, a~tHoJ!Wf~H~':~it~'QtronXto make such payment upon notice to such department or agency by the;i3;ah~;'with:~rc6py provided to the [City] [Borough], as provided in the Act. .•.•••• , ••• "C', • ...:.-.' ,~. . : 6. In the':eveD.t:Coan Obligations have been refunded and the interest rates the Bank is required tOp'~~?on its refunding bonds in any year are less than the interest rates payable by the [City] [Borough] on the Municipal Bond for the corresponding year pursuant to the terms of the Municipal Bond, then both the Municipal Bond Interest Payments and the Municipal Bond Principal Payments will be adjusted in such a manner that (i) the interest rate paid by the [City] [Borough] on any principal installment of the Municipal Bond AMBB/General Obligation Bonds, 20__ Series__ Loan Agreement 1:\Docs\37421723\Form 01 Loan A!lreemenl.wpd Page 2 is equal to the interest rate paid by the Bank on the corresponding principal installment of the Bank's refunding bonds and (ii) on a present value basis the sum of the adjusted Municipal Bond Interest Payments and Municipal Bond Principal Payments is equal to or less than the sum of the Municipal Bond Interest Payments and Municipal Bond Principal Payments due over the remaining term of the Municipal Bond as previously established under this Loan Agreement. In the event ofsuch a refundlng of Loan Obligations, the Bank shall present to the [City] [Borough] forthe [City's] [Borough's] approval, a revised schedule of principal installment amounts and interest rates for the MunicipatSpnd. If approved by the [City] [Borough] the revised schedule shall be attached hel'~tQi; '. hibit A and incorporated herein in repl.acement of the previous Exhibit Adf:i.:ta}1' d principal installment amounts and interest rates. . .:~::::.fi . 7. The [City] [Borough] is obligated to paytoth~!3~nkf:~~S:Jri: Fees and Charges actually collected from the [CitYl IScifqbi:jfflt~hall b'e~·. sufficient, together with the [City's] [Borough's] AllocableProp,qrti~*, (as defirie,':,t '. other money available therefor under the provisions ofthEvB9bd&ae~0Iution,"~an ther money available therefor, including any specific grants·ni~:rde::~Q;:;tii~}l.Jnited States of America or any agency or instrumentality thereot,or. by the·Sfafa~io:r}a[1Y agency or instrumentality thereof and amounts applied thei~foF:ftom amotlnl$~>tr:a:m~~ferred to the Operating Fund pursuant to Section 606 ofthe.~eneraliBOJl;d Resoh:Jtiol1Y (a) to pay, as the samebe60me,~Uei],he,i~i!Y!~lJBorough's] Allocable Proportion of the Administrative Expenses of the Ba,nk; arid/' ,:~:y '. ".:". . -.",' (b) to pay, as4he'.same become.;;dUe;i·,JI1~,,:tCity's] [Borough's] Allocable Proportion of the fees ande*pense.s of the TrUstee ,and paying agent for the Loan Obligations. ".. . ., .. ", . The. [Glty"sl}t~.Clou;9h's].Al/oqable Proportion as used herein shall mean the proportiom~+~;A~.mp.q:'q:'iNRfX~h~ :total.·r§qutrem~nt in respect to which the term is used determin~?J?Y;JIj:~:it~~l9.';t~n,~t!~h~:prin~iparari1ount of the Municip.al Bond outstanding bears to th~ tqt~1i9t:!311 Loans;+tl(3W91lt~t~ndl ngto all Governmental Units under the General Bond ResolutHji)·~J~·s,,;certified bY'ttj,~51?~·9k. The waiver by the Bank of any fees payable pursuant to thisSe'ctib'rF7:':shali notcdrlstltute a sUbsequent waiver thereof. .' .::.~~:~ ·\:~::lJ;r;~!~}~:;~:\:.,_ :," ':"::::<~' .;".'.,.~.:: .... 8.::;>::,tB~;in~it¥1i.t~~r,()ygh] is obligated to make the Municipal Bond Principal Payments sche~q.,e:q~b:Y~tlig.;J:3.ank. The first such Municipal Bond Principal Payment is due at least seven;{7')'!p'Jj$JD~$.:~tdaysprior to the date indicated on Exhibit A appended hereto, and thereafter ordhE:f;§(imiversary thereof each year. The [City] [Borough] is obligated to make the Municipai'.B.bnd Interest Payments scheduled by the Bank on a semi-annual basis commencing seven (7) business days prior to the date indicated on Exhibit A appended hereto, and to pay any Fees and Charges imposed by the Bank within 30 days of receiving the invoice of the Bank therefor. AMBB/General Obligation Bonds, 20_ Series__ loan Agreement 1:\Docs\37421723\Form of Loan Agreemantwpd Page 3 9. The Bank shall not sell and the [City] [Borough] shall not redeem prior to maturity any portion of the Municipal Bond in an amount greater than the Loan Obligations which are then outstanding and which are then redeemable, and in the event of any such sale or redemption, the same shall be in an amount not less than the aggregate of (i) the principal amount of the Municipal Bond (or portion thereof) to be redeemed, (ii) the interest to accrue on the Municipal Bond (or portion thereof) to be redeemed to the next redemption date thereof not previously paid, (iii) the applicable premium, if any, payable on the Municipal Bond (or portion thereof) to be redeemed, and (iv)tti·~CO&~ and expenses of the Bank in effecting the redemption of the Municipal Bond (or-P,o'rti.d.rt,'i!hereof) to be redeemed. The [City] [Borough] shall give the Bank at least 50 dayS;':,~.~9t!p.e.t~~intention to • • • I··:·... ;:!~, ... ·; ..... ,\:-';-~(v:h redeem Its MUnicipal Bond"->:'~::~:Y7::i'l'~'. " ''''~ ......:~:: ~::>'; In the event the Loan Obligations with respect t()whlchJhe;~ale\or.;r~:, .. to maturity of such Municipal Bond is being made have been;'refunpe;d a'rid" ". i'\~:" ,: bonds of the Bank issued for the purpose of refunding such'U::ian;:99Iigationsow~t~~!~~t tI in a principal amount in excess of or less than the princlpal'.8·mo\.lJit~Ofjhe Muniblpaf13"ond remaining unpaid at the. date of issuance of such refunding.b:Ori(;ts.:,i;tha.~c:"l(nountwhich the [City] [Borough] shall be obligated to payor the. Bank shall receive,.;~ndet'item (i) above shall be the principal amount of such refunding boncis,Quts_tandingL: ';~<d; . : ..~ ./' . .' ;~;. In the event the Loan Obligationsh~ve been refui1ded~,a.nd the interest the Bank is required to pay on the refunding bonds is less than-theJnte'r~:~tJheBank was required to pay on the Loan Obligations, the pmount Which~he:[Cityn$prQ~g~]shall be obligated to payor the Bank shall receive under Item (ii) aboveshall betIJeal11'ount of interest to accrue on such refunding bonds outsta.riding,:, . .... . -. In the event the Loan:;Obligatlons have been refund~d, the amount which the [City] [Borough] shallq~cpJ)ligated,·to::P!:ly':ortheBank shall receive under item (iii) above, when the refund~dL.q.~'~}~~!i9a:ti.opsaretobare,deemed, shall be the applicable premium, if any, on the LO<;lrl;qq.IJga#9,rj~~it():be redeemed. NQtbtn'J;i~\~:i~'$'~,~tlbn~hall be' construed as preventing the [City] [Borough] from refundlngAtl<:i;ry1unicipal,i3:(jn"dJn;exchange for a new Municipal Bond in conjunction with a refundlng,ibNI)~:t,oan ObI1'9a~IQris. . . i . . :, ~: : .' . . .. ,-: . 11. Invoices for payments under this Loan Agreement shall be addressed to the [City] [Borough], Attention: , "Alaska99_, The [City] [Borough] shall give the Bank and the corporate trust office of the Trustee under AMBB/General Obligation Bonds, 20__ Series__ Loan Agreement 1:\Docs\37421723\Forrn of Loan Agreemenl.wpd Page 4 the General Bond Resolution at least 30 days' written notice of any change in such address. 12. The [City] [Borough] hereby agrees that it shall fully fund, at the time of loan funding, its debt service reserve fund (in an amount equal to $ )which secures payment of principal and interest on its Municipal Bond and that such fund shall be held in the name of the [City] [Borough] with the Loan Trustee. 13. The [City] [Borough] hereby agrees to keep and retain;YQtIJ~tt;l;~~g,?te six years after the retirement of the Municipal Bond, or any bond issued;t9<r;Eif:ilnr;ti :t'Q,e Municipal Bond, or such longer period as may be required bythe'[CttY'sHBorq4g.6~@r:"":'/. retention policies and procedures, records with respect to the investment, exp:enqW:hP u~e of the proceeds derived from the sale of its Municipal:BOrid(:iricl.Q;cH!lg::j;~r·" 1'", records, schedules, bills, invoices, check registers, canc.eil~.d:4Gne·6ks·:ii:l!( , ' documentation eVidencing use of proceeds, and investm'~ni~!;~&rid/or reinVe,,,, :i'f proceeds. The [City] [Borough] agrees that all records requlrEia;b~¥Jp~:preceding:i$entence shall be made available to the Bond Bank upon request·., ',':':"?::?;;';: ,',' '". <'-..~. . '" (b) The [CityW3:Qfou9h] has violated:cornmitments made by it in the terms of this Loan Agreement. . ~ ... -.. . ..' . , . ", ':.. ;j"": ",'(P):;"',:<;:k,6~~;hh~nciaIPOSitlonOfthe [City] [Borough] has, in the opinion of the Bank, s~ff~r~q~atlJl:?~eti~Uy:a,(J,v~rse chaiigebetween the date of this Loan Agreement and the schedLl!~.d;time ofdellv~ry;~of the Municipal Bond to the Bank. . ...... ; ..... . .....: .' ., . '.. ' ..... 15.·,.Jh~ obligatlorfof,;,the Bank under this Loan Agreement is contingent upon delivery"of,lt~\$,§ii~ralqplJ.g~UQ,1i Bonds, 20_ Series (the "20_ Series __ Bonds") and~r'E:ic~ip:t.of':t~:e~~pt,Q,¢.,eeds thereof. 16. -th~&[6ijy}~i~:d,;6U9h] agrees that it will provide the Bank with written notice of any default in coven~ntEfunder the [City's] [Borough's] [Ordinance] [Resolution] within 30 days from the date date thereof. 17. The [City] [Borough] shall not take, or omit to take, any action lawful and within its power to take, which action or omission would cause interest on the Municipal AMBBfGeneral Obligation Bonds, 20_ Series__ Loan Agreement 1:\Docs\37421723\Form of Loan Agreemenl.wpd Page 5 Bond to become sUbject to federal income taxes in-addition to federal income taxes to which interest on such Municipal Bond is sUbject on the date of original Issuance thereof. The [City] [Borough] shall not permit any of the proceeds of the Municipal Bond, or any facilities financed with such proceeds, to be used in any manner that would cause the Municipal Bond to constitute a "private activity bond" within the meaning of Section 141 of the Code. The [City] [Borough] shall make no use or investment of,;'th~~;~F!fgc,eeds of the Municipal Bond which will cause the Municipal Bond to be an:"aJPtt~~~:~i)~,ondllunder Section 148 of the Code. So long as the MunicipaL Bbnd is'out~tE3b',(:ti'ffl,fkthe [City] [Borough], shall comply with all requirements of said Section>148 ariaiamr~s:~.r~" s qf the United States Department of Treasury issued thereuhder1.:Jo, thej(e-xfeh ..,:, Qh requirements are, at the time, applicable an? in ,effect The[?lwnI39roughf~'t:J:'" .. ,m91t¥ and hold harmless .the Bank from any.obllgat!obllgat!on of the.[CltYl::[~,:qr~ugh].to'n'l;.,.;\:,:~~~~tlte payments to the Umted States under said Section 148 arlslngfrornftM:E:J,.[Clty's] [Bor'btlgh's] use or investment of the proceeds of the Municipal Bond. '.' ..~ .' ........• : "." , 18. The [City] [Borough] agrees thatlf lfi~~one.ofthe GoY.~i~&~ii'tal Units that has a ten percent or greater amount of outstanding'l:>oiid~held by:tKe))Sank under its General Bond Resolution, it shall execute a continuing, dil:?c10s~q~ agreem'ent for purposes of Securities and Exchange Commission Rule 15c2712;<iiiQdpt~:q\lJnderthe Securities and Exchange Act of 1934, and provide. the Bankforln¢lusloi:dn,~futu're official statements, upon request, financial information generally ofthe'lype.inclli.ded'in Appendix D, under the heading "Summaries of BorrowersRepresenting10?AdrMorebf Outstanding Principal of Bonds Issued Under the 2005':iGe:rieral Bond Resohitlon;1I to the Official Statement and attached hereto as Exhibit.g~: 'c' .' . . 19. .If;:$i:1'~;~rqYt$J9fl ot-thi$L,()an Agreement shall for any reason be held to be invalid orl,ln;e.Dfo.eQ:t3a bl~ttheijnvaliditYQrunenforceabilityof such provision shall not affect any of the;re.r¥:i:~t61tHj~l?r9.y.i$r()l1S:of this Loan Agreement and this Loan Agreement shall be constrll~d.':~~Dd·enforcectl. ~~:If~uch invalid or unenforceable provision had not been contalhed;·h.e\t~in. . 20;::T:h.I~\4oan'Agr.eernent may be executed in one or more counterparts, any of which shallber.eg~rded.ifQ(allpllrpos esas an original and all of which constitute but one and the sameJnsth:ime:iitiY'E;aCti party agrees that it will execute any and all documents or other instruments(ari.&tiike:such other actions as are necessary, to give effect to the terms of this Loan AgreerT1~Mti)" 21. No waiver by either party of any term or condition of this Loan Agreement shall be deemed or construed as a waiver of any other term or condition hereof, nor shall a waiver of any breach of this Loan Agreement be deemed to constitute a waiver of any AMBB/General Obligation Bonds, 20_ SerIes__ Loan Agreement 1:\Docs\37421723\Form of LODn Agreement.wpd Page 6 sUbsequent breach, whether of the same or of a different section, subsection, paragraph, clause, phrase or other provision of this Loan Agreement. 22. In this Loan Agreement, unless otherwise defined herein, all capitalized terms which are defined in Article I of the General Bond Resolution shall have the same meanings, respectively, as such terms are given in Article I of the General Bond Resolution. 23. This Loan Agreement merges and supersedes·?H~-,'p'1qtr;:~Qegotiations, representations and agreements between the parties hereto relatilig~~q;: :"'"'bject matter hereof and constitutes the entire agreement between the. parties herEilqH 'i'J,~,~~ct thereof. .' . . .-',:'.:;:...";:.i~·;,·:::F~;;}~:':~~~\~. .....: IN WITNESS WHEREOF, the parties hereto have.exec~~~"q.Jhl~),'Ag:~g~·~;~· ':':''"':''/'.~y and year first abovewritten.'".:< ..,:~:;.,::::;.; ..' "'::;}:~;;<\, )!~;1~;}' ALASKA MUNICIPAglf,QNP BANK ""::';' .,. . ....~; <Y ~~':\:"" [CITY] [HOROUGHli,ALASKA ',By: _ Its:_" _ ", . AMBB/General Obligation Obligation Bonds, 20_ Series__ Loan Agreement 1:\Docs\37421723\Form of loan Agreement.wpd Page 7 EXHIBIT A $-::-=---[City] [Borough], Alaska [General Obligation] [Revenue] Bond, 20_LJ ("20_ Series A Municipal Bond") Due Principal Amount Interest Rate -;'.~" ..... . . " . Principal installments shall be payable on . ,.1tn~ircT)pf the years, and in the amounts set forth above. Interest on the 20_' Serie~,cAMQflICip:~rBondshall be payable on 1, 20_, and thereafteron1~nd .:':/1 of each year. Prepayment Provisions: The202'Series A MunlclpalB.ond is not sUbject to prepayment prior to maturity. '":". : AMBS/General Obligation Bonds, 20_ Series _ Loan Agreement· Exhibit A 1:\Docs\374217231F0rm of Loan AgraemenLwpd Page A-1 EXHIBIT B AMBB/General Obligation Bonds, 20_ Series__ Loan Agreement· Exhibit B 1:\Docs\37421723\Form of Loan Agreemenl.wpd .... '.'. Page B-1 CERTIFICATE I, the undersigned, duly chosen, qualified and acting Borough Clerk of the City and .Borough of Wrangell, Alaska (the "Borough") and keeper of the records of the Borough Assembly of the Borough (the "Assembly"), DO HEREBY CERTIFY: 1. That the attached is a true and correct copy of Resolutioll No. 01-11-1216 of the Assembly (the "Resolution"), as finally adopted at a regular meeting of the Assembly held 011 January 25, 2011, and duly recorded in my office. 2. That said meeting was duly convened and held in all respects in accordance with law, and to the extent required by law, due and proper notice of such meeting was given; that a legal quorum of the Assembly was present throughout the meeting and a legally sufficient number of members of the Assembly voted in the proper manner for the passage of the Resolution; that all other requirements and proceedings incident to the .proper passage of said Resolution have been duly fulfilled, carried out and otherwise observed, and that I amauthorized to execute this certificate. IN WITNESS WHEREOF, I have hereunto set my hand this 26th day of January, 2011. ~Borough Clerk, City and Borough of Wrangell, Alaska P:\20391_DOnz0391_2EI 01/27/11 SIGNATURE IDENTIFICATION CERTIFICATE We, the duly chosen, qualified and acting Mayor and Borough Clerk of the City· and Borough of Wrangell, Alaska (the "Borough"), DO HEREBY CERTIFY that we have executed the following-described General Obligation Bond, 2011, of the Borough in the aggregate principal amount of $220,000 (the "Bond") in the manner and capacity indicated by our manual signatures and titles appended thereto. Said Bond is dated March 1, 2011, is in fully registered form, and is payable, both principal and interest, in lawful money of the United States of America to the registered owner thereof, in the principal installment amounts and at the rates of interest set forth below: Principal Installment Payment Year (March 1) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Principal Installment Amount $ 20,000 20,000 20,000 20,000 20,000 20,000 25,000 25,000 25,000 25,000 Interest Rate 3.0% 3.0 3.0 3.0 3.0 3.0 3.5 4.0 4.0 4.0 2011. IN WITNESS 'WHEREOF, we hereto affix our signatures as of this 1st day of March, Mayor Clerk STATE OF ALASKA )) ss: FIRST JUDICIAL DISTRICT ) On this !tl~ day of February, 2011, before me, the undersigned, a Notary Public in and for the State of Alaska, duly commissioned and swom, personally appeared Jeremy M. Maxand and Christie L. Jamieson, to me known to be the Mayor and Borough Clerk of the City and Borough of Wrangell, Alaska. I hereby identifY their signatl.IreS on this certificate and on the above-described bond as being in all respects true and genuine. WITNESS my hand and official seal hereto affixed the day and year in this certificate above written. Notary Public ip and for,the State of Alaska, residing at. .W {I/v""j{)..fL_ . " My commISSIOn expIres 3l"'1-3'?-O \ '-f CERTIFICATE OF BOROUGH ATTORNEY WITH RESPECT TO NO LITIGATION I, Robert P. Blasco, the duly appointed, qualified and acting Borough Attorney of the City and Borough of Wrangell, Alaska (the "Borough"), in connection with the issuance and delivery of the Borough's General Obligation Bond, 2011, in the amount of $220,000 (the "Bond"), DO HEREBY CERTIFY as follows: That as of the date written below, there is no controversy or litigation pending or to the best of my knowledge threatened against the Borough pending or threatened (a) in any way questioning the corporate existence or boundaries of the Borough, or the titles of the present officers to their respective offices; (b) in any way contesting, affecting or seeking to prohibit, restrain or enjoin the issuance or delivery of the Bond, or the levy or collection of the taxes pledged or to be pledged to pay the principal of and interest on the Bond; (c) in any way contesting or affecting the validity of the Bond, Ordinance No. 846 of the Borough, or Resolution Resolution No. 01-11-1216 of the Assembly (together, the "Bond Legislation"), or the Loan Agreement between the Borough and the Alaska Municipal Bond Bank (the "Loan Agreement"), or the tax-exempt status of the interest on the Bond, or contesting the powers of the Borough, or the adoption of the Bond Legislation, or the execution and delivery by the Borough of the Loan Agreement; or (d) which may result in any material adverse change relating to the operations or financial condition of the Borough. DATED as of this 1st day of March, 2011. Robert P. Blasco, Borough Attorney CERTIFICATE REGARDING COMPLIANCE WITH RULE 15c2-12 I, Timothy D. Rooney, the duly chosen, qualified Borough Manager of the City and Borough of Wrangell, Alaska (the "Borough"), acting in my official capacity, DO HEREBY CERTIFY that to the best of my knowledge and belief, and except as disclosed in the Official Statement dated February 15, 2011, for the Alaska Municipal Bond Bank's General Obligation Bonds, 2011 Series One, the Borough has complied with each continuing disclosure undertaking that the Borough has entered into under Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended from time to time. DATED as of this 1st day of March, 2011. CITY AND BOROUGH OF WRANGELL, ALASKA B~Timothy D. 1:\Dacs\37421723\Cert re Campi Rule 15c2-12 Wrangell.wpd ager CERTIFICATE OF PAYMENT AND DELIVERY I, Jeff Jabusch, Finance Director of the City and Borough of Wrangell, Alaska, DO HEREBY CERTIFY that I have delivered to the Alaska Municipal Bond Bank or its duly appointed agent, the City and Borough of Wrangell, Alaska, General Obligation Bond, 2011, in the aggregate principal amount of $220,000, dated March 1,2011 (the "Bond"). I further certify that at the time of such delivery I received payment for the Bond from the Bond Bank, as follows: Principal of Bond $ 220,000.00 Plus: Premium $ 5,927.05 Less: Underwriter's Discount $ (1,044.48) Total Amount to be received by the Borough $ 224,882.57 Amount received this 1st day of March, 2011 $ 224,882.57 CITY AND BOROUGH OF WRANGELL, ALASKA By(~_ ~. ~~f~ Finance Director RECEIPT FOR THE BOND THE ALASKA MUNICIPAL BOND BANK hereby acknowledges receipt of the City and Borough of Wrangell, Alaska, General Obligation Bond, 2011, in the total principal amount of $220,000, this 1st day of March, 2011. ALASKA MUNICIPA~lt?rNK U(i dl·· I By itU~/1j/Deven Mitchell I Executive Director P:\20391_D01l20391_2EN 01131/11 R-l INTEREST RATE: SEE BELOW REGISTERED OWNER: PRINCIPAL AMOUNT: UNITED STATES OF AMERICA SPECIMEN STATE OF ALASKA CITY AND BOROUGH OF WRANGELL GENERAL OBLIGATION BOND, 2011 ALASKA MUNICIPAL BOND BANK TWO HUNDRED TWENTY THOUSAND AND NO/lOO DOLLARS $220,000 FINAL MATURITY DATE: MARCH 1,2021 The City and Borough of Wrangell, Alaska (the "Borough"), a municipal corporation organized and existing under and by virtue of its charter and the laws and Constitution of the State of Alaska, hereby acknowledges itself to owe and for value received promises to pay to the Registered Owner identified above, or registered assigns, the principal amount specified above, in installments payable as set forth below, together with interest on such installments from the date hereof or the most recent date to which interest has been paid or duly provided for, at the interest rates set forth below, on September 1, 2011, and on each March 1 and September 1 thereafter until payment of the principal sum has been made or duly provided for. Principal Installment Payment Year (March 1) Principal Installment Amount Interest Rate 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 $ 20,000 20,000 20,000 20,000 20,000 20,000 25,000 25,000 25,000 25,000 3.0% 3.0 3.0 3.0 3.0 3.0 3.5 4.0 4.0 4.0 Both principal of and interest on this bond are payable in lawful money of the United States of America. Installments of principal of and interest on this bond are payable by check or draft of the Finance Director of the Borough (the "Registrar") mailed on the date such interest is due to the Registered Owner at the address appearing on the Bond Register as of the fifteenth day of the month preceding the interest payment date. The final installment of principal of and interest on this bond shall be paid to the Registered Owner upon presentation and surrender of this bond at the office of the Registrar. Notwithstanding the foregoing, so long as the Bond Bank is the Registered Owner of this bond, payments of principal of and interest on this bond shall be made to the Bond Bank in accordance with the Loan Agreement. This bond is a general obligation bond of the Borough, as approved by the voters of the Borough and issued pursuant to Resolution No. 01-11-1216, adopted by the Borough Assembly on January 25, 2011 (the "Bond Resolution"), to finance a portion of the cost of capital improvements to school facilities for Evergreen Elementary School. Capitalized terms used in this bond and not otherwise defined herein shall have the meanings given such terms in the Bond Resolution. Principal installments of this bond are not subject to prepayinent. The Borough hereby irrevocably covenants that, unless the principal of and interest on this bond are paid from other sources, it will make annual levies of property taxes without limitation as to rate or amount, and in amounts sufficient, together with other legally available funds, to pay such principal and interest as the same shall become due. The full faith, credit and resources of the Borough are hereby irrevocably pledged for the annual levy and collection of such property taxes and for the prompt payment of such principal and interest. The pledge of tax levies for payment of principal of and interest on this bond may be discharged prior to maturity of the bond by making provision for the payment thereof on the terms and conditions set forth in the Bond Resolution. Page 1on This bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Resolution until the Certificate of Authentication hereon shall have been manually signed by the Registrar. It is hereby certified and declared that this bond is issued pursuant to and in strict compliance with the Constitution and laws of the State of Alaska and the charter, ordinances, and resolutions of the Borough, that all acts, conditions and things required to be done precedent to and in the issuance of ,this bond have happened, been done and performed, and that this bond does not exceed any Constitutional or statutory limitations. CITY.A---))lL)·BOROUGH F WRANGELL, ALAS IN WITNESS WHEREOF, the City and Borough of Wrangell, Alaska, has caused this bond to be signed on behalf of the Borough with the manual or facsimile signature of the Mayor, to be attested by ,the manual or facsimile signature of the Clerk, and the seal of the Borough to be imprinted or impressed hereon, this 1st 1st day of March, 2011. ,.~.IIIIW" ~~ ", ...,.,,, " 'BorOUgft II;; .. ,,;I-0 ,_ .. -:.<.'\ /" /'" ~.. .: cJ' ,.~' .z. ':. ... .~" •. .,...c,. .... :: {.' ":'0. ~ .. : ~" ~/(!f3a" :::s : • '. .1 .:;"'0 DUgh to • : . :,...% D8 (1) : .. lit.. "',.:::: br ':. tlUII~. : -:. "'v': ~ .-<1 .. .." 1/"./0 .... $ .::> .. " ..#''-tT S k 'j .... C ('.,.'{r.." 4''',r ATTEST: CERTIFICATE OF AUTHENTICATION Date of Authentication: March I, 2011 This is the City and Borough of Wrangell General Obligation Bond, 2011, dated March 1,2011, as described in the Bond Resolution. Page 2 of3 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto _ PLEASE INSERT SOCIAL SECURITY OR TAXPAYER IDENTIFICATION NUMBER OF TRANSFEREE (Please print or typewrite name and address, including zip code ofTransferee) the within bond and all rights thereunder and does hereby irrevocably constitute and appoint _ ________of , or its successor, as agent to transfer said bond on the books kept by the Registrar for registration thereof, with full power of substitution in the premises. DATED: ,,__. SIGNATURE GUARANTEED: NOTE: The signature of this Assignment must correspond with the name of the Registered Owner as it appears upon the face of the within bond in every particular, without alteration or enlargement or any change whatever. Page 3 on K&L Gates llP 925 Fourth Avenue SUite 2900 Seattle, WA 98104-1158 K&LIGAT S March 1,2011 City and Borough of Wrangell Wrangell, Alaska Alaska Municipal Bond Bank Juneau, Alaska Re: City and Borough of Wrangell, Alaska, General Obligation Bond, 2011 -$220,000 Ladies and Gentlemen: T 206,623,7580 www,klgates,Gom We have acted as bond counsel to the City and Borough of Wrangell, Alaska (the "Borough") and have examined a certified transcript of the proceedings taken in the matter of the issuance by the Borough of its General Obligation Bond, 2011 (the "Bond"), dated March 1, 2011 in the total principal amount of $220,000, issued pursuant to an approving vote of the Borough's voters for the purpose of providing funds for making capital improvements to the Wrangell schools. Pursuant to Resolution No.01-11-1216 adopted by the Assembly on January 25, 2011 (the "Bond Resolution"), the Borough has entered into a loan agreement (the "Loan Agreement") with the Alaska Municipal Bond Bank (the "Bond Bank") dated March 1, 2011 for the sale of the Bond to the Bond Bank. Capitalized terms not otherwise defined in this opinion shall have the meanings given such terms in the Bond Resolution. The Bond is not subject to prepayment. As to questions of fact material to our opinion, we have relied upon representations of the Borough contained in the Bond Resolution and in the certified proceedings and other celiifications of public officials and others furnished to us without undertaking to verify the same by independent investigation. From such examination it is our opinion, as of this date and under existing law, that: 1. The Bond has been legally issued and constitutes a valid general obligation of the Borough, except to the extent that the enforcement of the rights and remedies of the holder and owner of the Bond may be limited by laws relating to bankmptcy, insolvency, moratorium, reorganization or other similar laws of general application affecting the rights of creditors heretofore or hereinafter enacted to the extent constitutionally applicable and that their enforcement may also be subject to the exercise ofjudicial discretion in appropriate cases. City and Borough of Wrangell Alaska Municipal Bond Bank March 1,2011 Page 2 2. By the Bond Resolution, the Borough has covenanted that, unless the principal of and interest on the Bond are paid from other sources, it will make annual levies of prope11y taxes without limitation as to rate or amount, and in amounts sufficient, together with all other funds of the Borough that may legally be used and which the Borough may apply for such purposes, to pay the principal of and interest on the Bond as the same shall become due. The full faith, credit and resources of the Borough are irrevocably pledged for the annual levy and collection of such property taxes and for the prompt payment of such principal and interest. 3. The Loan Agreement dated as of March 1, 2011 with respect to the Bond, has been duly authorized, executed, delivered by, and (assuming due authorization, execution and delivery by the Bond Bank) constitutes the binding agreement of the Borough, enforceable in accordance with its terms, except to the extent that the enforcement of the rights and remedies of the Bond Bank under the Loan Agreement may be subject to the laws of bankruptcy, insolvency, moratorium, reorganization or other similar laws of general application affecting the rights of creditors heretofore or hereinafter enacted to the extent constitutionally applicable and that their enforcement may also be subject to the exercise ofjudicial discretion in appropriate cases. 4. Interest on the Bond is excluded from gross income for purposes of federal income taxation pursuant to Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"). The Bond is not a private activity bond. Interest on the Bond is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals or corporations, but is taken into account in the computation of adjusted current earnings for purposes of the corporate alternative minimum tax under Section 55 of the Code. The opinions stated in this paragraph are subject to the condition that the Borough comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Bond in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The Borough has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause the interest on the Bond to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bond. The Borough has not designated the Bond as a "tax-exempt obligation" under Section 265(b)(3) of the Code. 5. Interest on the Bonds is not included in taxable income for purposes of the Alaska income tax imposed on corporations. Interest on the Bonds may be indirectly subject to the Alaska alternative minimum tax imposed on corporations to the extent that interest on the Bonds is subject to the federal alternative minimum tax. Except as stated herein, we express no opinion regarding any other federal, state or local tax consequences arising with respect to ownership of the Bond. City and Borough of Wrangell Alaska Municipal Bond Bank March 1,2011 Page 3 This opinion is given as of the date hereof and we assume no obligation to update, revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. Very truly yours, K&L GATES LLP P:120391_D0l\20391_2EN 2 Issuer's employer identification number (EIN) If Amended Return, check here ~ D Form8038·G 1 Issuer's name Information Return for Tax-Exempt Governmental Obligations ~ Under Internal Revenue Code section 149(e) ~ See separate instructions. Caution: If the issue price is under $100,000, use Form 8038-GC. Authority OMS No. 1545-0720 City and Borough of Wrangell, Alaska 92 6000144 3 Number and street (or P.O. box if mail is not delivered to street address) P.O. Box 531 5 City, town, or post office, state, and ZIP code Wrangell, AK 99929 Room/suite 4 Report number (For IRS Use Only) 6 Date of issue March 1, 2011 7 Name of issue 8 CUSIP number General Obligation Bond, 2011 None 9 Name and titie of officer of the issuer or other person whom the IRS may call for more information 10 Telephone number of officer or other person 05 05 00 years years o 4.5108 % 225,927 225,927 (e) Yield 874-2381 N/A N/A years ( 907 ) (d) Weighted average maturity (e) Stated redemption (b) Issue price price at maturity Description of Obligations. Com lete for the entire issue for which this form is bein Uses of Proceeds of Bond Issue (includin underwriters' discount) 03/01/2021 $ 225,927 $ 220,000 5.773 Proceeds used for accrued interest. Issue price of entire issue (enter amount from line 21, column (b)) Proceeds used for bond issuance costs (including underwriters' discount) ~2~4 -=2:.!:,9::..:9::...4.:.+--.::::... Proceeds used for credit enhancement ~2~5 1---_ Proceeds allocated to reasonably required reserve or replacement fund . ~2~6~ +-_ Proceeds used to currently refund prior issues . ~2:.!.7 +-_ Proceeds used to advance refund prior issues . L..::2~8~ l..-_ Total (add lines 24 through 28) . j-=2:=.9+-__-=22.:,9;.;:9...:,4+-...:,48=_ Nonrefundin proceeds of the issue (subtract line 29 from line 23 and enter amount here) 30 222,932 57 Description of Refunded Bonds (Complete this part only for refunding bonds.) Jeff Jabusch, Finance Director Type of Issue (enter the issue price) See instructions and attach schedule 22 23 24 25 26 27 28 29 30 11 Education 12 Health and hospital 13 Transportation. 14 Public safety . 15 Environment (including sewage bonds). 16 Housing. 17 Utilities . 18 Other. Describe ~ 19 If obligations are TANs or RANs, check only box 19a If obligations are BANs, check only box 19b 20 If obligations are in the form of a lease or installment sale, check box 31 Enter the remaining weighted average maturity of the bonds to be currently refunded . ~ 32 Enter the remaining weighted average maturity of the bonds to be advance refunded. ... 33 Enter the last date on which the refunded bonds will be called (MM/DDIYYYY) . ~ _N_I_A'--_ 34 Enter the date(s) the refunded bonds were issued ~ (MM/DDIYYYY) N/A For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 637735 Form 8038-G (Rev. 5-2010) 00 Page 2 ° N/A Form 8038-8 (Rev. 5-2010) Miscellaneous 35 Enter the amount of the state volume cap allocated to the issue under section 141 (b)(5) . 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (GIG) (see instructions) . b Enter the final maturity date of the GIC ~ 37 Pooled financings: a Proceeds of this issue that are to be used to make loans to other governmental units . 37a ° 00 b If this issue is a loan made from the proceeds of another tax-exempt issue, check box ~ IZI and enter the name of the issuer ~ Alaska Municipal Bond Bank and the .date of the issue ~ ..:;3::../1.:.:/.::2.::0...;.1..:.1 _ If the issuer has designated the issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check box If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . If the issuer has identified a hedge, check box . 38 39 40 Form 8038-G (Rev. 5-2010) WA #2900, Seattle, Under penalties of perjury, I declare that I have examined this retum and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. I further declare that I consent to the IRS's disclosure of the issuer's retum information, as necessary to process this return, to the per that I have authorized above. Signature and Consent ALASKA MUNICIPAL BOND BANK $8,635,000 GENERAL OBLIGATION BONDS 2011 SERIES ONE BOND PURCHASE CONTRACT February 15, 2011 Alaska Municipal Bond Bank 333 Willoughby Avenue, 11th Floor Post Office Box 110405 Juneau, Alaska 99811 Ladies and Gentlemen: Piper Jaffray & Co. (the "Underwriter") hereby offers to enter into this Bond Purchase Contract (the "Purchase Contract") with the Alaska Municipal Bond Bank (the "Bond Bank"). The offer made hereby is subject to acceptance by the Bond Bank by execution and delivery of this Purchase Contract to the Underwriter at or prior to 5:00 p.m., Alaska time, on the date set f01ih above. If the offer made hereby is not so accepted, this Purchase Contract will be subject to withdrawal by the Underwriter upon notice delivered by the Underwriter to the Bond Bank at any time prior to the acceptance hereof by the Bond Bank. The Bond Bank acknowledges and agrees that (a) the purchase and sale of the 2011 Series One Bonds (defined herein) pursuant to this Purchase Contract is an ann's-length commercial transaction between the Bond Bank and the Underwriter, (b) in cOllilection with such transaction, the Underwriter is acting solely as a principal and not as an agent or a fiduciary of the Bond Bank, (c) the Underwriter has not assumed (individually or collectively) a fiduciary responsibility in favor of the Bond Bank with respect to (i) the offering of the 2011 Series One Bonds or the process leading thereto (whether or not the Underwriter has advised or is cunently advising the Bond Bank on other matters) or (ii) any other obligation to the Bond Bank except the obligations expressly set f01ih in this Purchase Contract, and (d) the Bond Bank has consulted with its own legal and other professional advisors to the extent it deemed appropriate in c01mection with the offering of the 2011 Series One Bonds. Capitalized temlS used in this Purchase Contract that are not otherwise defined shall have the meanings given to such tenus in the 2005 General Obligation Bond Resolution (the "2005 General General Bond Resolution"), adopted by the Board of Directors of the Bond Bank on July 13, 2005, or Resolution No. 2011-01, adopted by the Board of Directors of the Bond Bank on February 1, 2011 (the "Series Resolution," and together with the 2005 General Bond Resolution, the "Bond Resolution"). 1. Purchase and Sale. Upon the tenns and conditions and upon the basis of the representations, warranties, covenants and agreements set forth herein, the Underwriter hereby agree to purchase from the Bond Bank for offering to the public, and the Bond Bank hereby agrees to sell to the Underwriter for such purpose, all (but not less than all) of its General Obligation Bonds, 2011 Series One (in the aggregate principal amount of $8,635,000 (the "2011 Series One Bonds"). The purchase price for the 2011 Series One Bonds shall be $8,659,193.05 (representing the aggregate principal amount of the 2011 Series One Bonds, plus a net original issue premium of$67,613.80, less Underwriter's discount of$43,420.75). 2. The 2011 Series One Bonds. The 2011 Series One Bonds shall be issued under and secured by the Bond Resolution and pursuant to AS 44.85.005 -44.85.420, as amended (the "Act"). The 2011 Series One Bonds are being issued to lend money to Governmental Units for two projects. 2011 Series One Bond proceeds will be loaned: (a) to the Kodiak Island Borough for capital improvements to school facilities in the Borough; and (b) to the City and Borough of Wrangell for capital improvements to an elementary school playground. In addition, a portion of the 2011 Series One Bond proceeds will be deposited in the Reserve Fund created by the terms of the 2005 General Bond Resolution for purposes of satisfying the Reserve Fund Requirement. The Bank of New York Mellon Trust Company, N.A., serves as Trustee (the "Trustee") under the Bond Resolution. The 2011 Series One Bonds shall be dated as of the date of their initial delivery to the Underwriter and shall mature on the dates and in the principal amounts, bear interest at the interest rates per annum, be subject to redemption on the dates and at the redemption prices, and be initially offered to the public at the prices, or the prices corresponding to the yields, all as set forth in Schedule 1 attached hereto. The 2011 Series One Bonds shall otherwise be as described in the Preliminary Official Statement relating to the 2011 Series One Bonds dated February 3, 2011 (including all appendices thereto, all documents and infonnation incorporated therein by reference and any supplements or amendments thereto made prior to the date of this Purchase Contract, with only such changes as may have been accepted by the Underwriter, the "Preliminary Official Statement"). 3. Purchase. It shall be a condition to the Bond Bank's obligation to sell and deliver the 2011 Series One Bonds to the Underwriter at the Closing (defined herein) that the entire aggregate principal amount of the 2011 Series One Bonds referred to in Section 1 shall be purchased, accepted and paid for by the Underwriter at the Closing, and it shall be a condition to the Underwriter's obligation to purchase, accept delivery of and pay for the 2011 Series One Bonds at the Closing that the entire aggregate principal amount of the 2011 Series One Bonds referred to in Section 1 shall be issued, sold and delivered by the Bond Bank. 4. Official Statement. (a) The Bond Bank has heretofore or hereby deems final the Preliminary Official Statement as of its date for purposes of paragraph (b)(l) of Rule 15c2-12 ("Rule 15c2-l2") promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), except for the omission of the infoffi1ation permitted to be omitted under paragraph (b)(l) of Rule 15c2-12. The Bond Bank has authorized and hereby ratifies and approves the distribution and use of the Preliminary Official Statement by the Underwriter in connection with the public offering and sale of the 2011 Series One Bonds prior to the availability of the Official Statement (defined herein). 2 51050278.2 (b) The Official Statement shall be dated as of the date of this Purchase Contract and shall be identical in form and content to the Preliminary Official Statement, with only such changes as may have been accepted by the Underwriter. Such Official Statement, together with such changes, including all appendices thereto, all documents and information incorporated therein by reference and any supplements or amendments thereto made prior to the date of the Closing in accordance with this Purchase Contract, is referred to as the "Official Statement." The Bond Bank agrees to deliver to the Underwriter as many copies of the Official Statement as the Undelwriter reasonably requests to comply with paragraph (b)(4) of Rule 15c2-12 and all applicable rules of the Municipal Securities Rulemaking Board (the "MSRB"). The Bond Bank agrees to deliver those Official Statements within seven business days after the execution hereof, but in any event at least three business days prior to the Closing. The Bond Bank also agrees that if an amendment or supplement to the Official Statement is accepted by the Underwriter after the date hereof, the Bond Bank shall deliver or cause to be delivered to the Underwriter as many copies of such amendment or supplement as the Underwriter requests to comply with the rules of the MSRB. The Bond Bank hereby approves the use and distribution by the Underwriter of the Official Statement in connection with the public offering and sale of the 2011 Series One Bonds. 5. Representations, Warranties and Agreements of the Bond Bank. The Bond Bank represents and warrants to and agrees with the Underwriter that as of the date hereof and as of the date ofthe Closing: (a) The Bond Bank has full legal right, power and authority to adopt the Bond Resolution, to execute and deliver this Purchase Contract, the Loan Agreements, and the Continuing Disclosure Certificate substantially in the form of Exhibit B attached to the Series Resolution (the "Disclosure Certificate"), to issue the 2011 Series One Bonds for the the purposes described in the Preliminary Official Statement and in the Bond Resolution, to pledge and assign to the payment of the 2011 Series One Bonds the full faith and credit of the Bond Bank, all Municipal Bonds, all Municipal Bonds Payments, the investments thereof, the proceeds of such investments and all funds and accounts established by the 2005 General Bond Resolution, subject to the application thereof to the purposes and on the conditions permitted by the terms of the Bond Resolution, and to observe and perform the covenants and agreements contained in the Bond Resolution, this Purchase Contract, the Loan Agreements, the Disclosure Certificate and the 2011 Series One Bonds. (b) By all necessary official action, the Bond Bank has authorized, ratified and approved the Official Statement and the distribution by the Underwriter of the Official Statement to purchasers and prospective purchasers of the 2011 Series One Bonds. (c) The Bond Bank has duly adopted the Bond Resolution at meetings duly noticed, called and held, and the Bond Resolution is in full force and effect and has not been repealed; the Bond Bank has duly authorized and approved the execution and delivery of, and the observance and performance by the Bond Bank of its covenants and agreements contained in, this Purchase Contract, the Loan Agreements, the Disclosure Certificate and the 2011 Series One Bonds, and the consummation by the Bond Bank of all transactions contemplated thereby to have been consummated at or prior to the date of the Closing; and the Bond Bank is in 3 51050278.2 compliance in all respects with its obligations in connection with the issuance of the 2011 Series One Bonds on its part contained therein. (d) The Preliminary Official Statement, other than information concerning DTC, Underwriting or Appendix D (as to which no representation or warranty is made), did not as of its date and does not as of the date of this Purchase Contract contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (e) The Official Statement, other than information concerning DTC, Underwriting or Appendix D (as to which no representation or warranty is made), does not as of the date of this Purchase Contract and, if supplemented or amended pursuant to Section 5(t), at the time of each supplement or amendment thereto, as so supplemented or amended, will not, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (t) If, between the date of this Purchase Contract and the date that is 25 days following the "end of the underwriting period" (as defined in Rule 15c2-12), any event shall occur or any fact or condition shall become known that might or would cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Bond Bank shall promptly notify the Underwriter thereof and if, in the opinion of the Underwriter, such event, fact or condition requires the preparation and publication of a supplement or amendment to the Official Statement, the Bond Bank at its expense shall supplement or amend the Official Statement in a form and in a manner approved by the Underwriter. (g) The Bond Bank is a public body corporate and politic constituted as a public corporation and an instrumentality of the State of Alaska (the "State") within the Department of Revenue but having a legal existence independent of and separate from the State, exercising public and essential governmental functions and created by the Act. (h) Between the date hereof and the Closing, the Bond Bank will not without the prior written consent of the Underwriter supplement or amend the Official Statement or offer or issue any general obligation bonds or securities or offer or issue to any party other than the Underwriter any bonds or securities in lieu of the 2011 Series One Bonds and will not, without prior written notice to the Underwriter, offer or issue any other bonds, notes or other obligations for borrowed money or incur any other material liabilities, direct or contingent, other than in the ordinary course of its business. (i) With respect to the issuance and sale of the 2011 Series One Bonds, the Bond Bank is not in material breach of or in material default under the Bond Resolution or any constitutional provision, law, ordinance, regulation, order, permit, loan agreement, note, bond, resolution, agreement or other instrument to which the Bond Bank is, or on the date of the Closing will be, a party or to which the Bond Bank: or any of its properties or assets is othelwise subject or in any way relating to the Bond Resolution, this Purchase Contract, the Loan 4 51050278.2 Agreements, the Disclosure Certificate, the 2011 Series One Bonds or the Official Statement; and no event has occurred and is continuing that constitutes or that, with the passage of time or the giving of notice, or both, would constitute a material breach of or a material default under the Bond Resolution, this Purchase Contract, the Loan Agreements, the Disclosure Certificate, or the 2011 Series One Bonds. CD The adoption of the Bond Resolution and the execution and delivery of this Purchase Contract, the Loan Agreements, the Disclosure Certificate and the 2011 Series One Bonds and the observance and performance of the Bond Bank's covenants and obligations hereunder and thereunder will not conflict with or constitute a material breach of or material default by the Bond Bank under the Bond Resolution or any constitutional provision, law, ordinance, regulation, order, permit, loan agreement, note, bond, resolution, agreement or other instrument to which the Bond Bank is, or on the date of the Closing will be, a party or to which the Bond Bank or any of its properties or assets is otherwise subject, nor will any such adoption, execution, delivery, observance or performance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever by the Bond Bank upon any of its properties or assets or under the terms of any such constitutional provision, law, ordinance, regulation, order, pem1it, loan agreement, note, bond, resolution, agreement or other instrument, except as provided by the Bond Resolution and the 2011 Series One Bonds. (k) There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending against the Bond Bank or, to the Bond Bank's actual knowledge, threatened against the Bond Bank, of the nature described as follows: (i) affecting the existence of the Bond Bank or the titles of its officers to their respective offices, or (ii) affecting or seeking to prohibit, restrain or enjoin the issuance, sale or delivery of the 2011 Series One Bonds or the pledge and assignment of the Bond Bank pursuant to the Bond Resolution or the application of the proceeds of the sale of the 2011 Series One Bonds, or (iii) contesting or affecting the powers of the Bond Bank with respect to, or the validity or enforceability of, or any authority for, any of the Bond Resolution, this Purchase Contract, the Loan Agreements, the Disclosure Certificate or the 2011 Series One Bonds, or the observance and perfOlmance by the Bond Bank of its covenants and obligations under any of the foregoing, or (iv) affecting the ownership of any of the Bond Bank's assets, or (v) contesting the tax-exempt status of interest on the 2011 Series One Bonds, or (vi) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or asserting that the Preliminary Official Statement or the Official Statement contained or contains any untrue statement of a material fact fact or omitted or 5 51050278.2 omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (1) The Bond Bank shall furnish such information, execute such instruments and take such other action not inconsistent with law in cooperation with the Underwriter as may be requested to: (i) qualify the 2011 Series One Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as may be designated by the Underwriter and (ii) determine the eligibility of the 2011 Series One Bonds for investment under the laws of such states and other jurisdictions, except that the Bond Bank shall not be required in connection therewith, or as a condition thereof, to bear any cost thereof or to execute a general consent to service of process or to qualify to do business in connection with any such qualification or detennination in any jurisdiction. (m) The 2011 Series One Bonds, when issued issued and delivered in accordance with the Bond Resolution and sold to the Underwriter as provided herein, will be, this Purchase Contract is, and the Loan Agreements, the Disclosure Certificate, when executed and delivered, will be, legal, valid and binding obligations of the Bond Bank, enforceable in accordance with their respective tenns, except to the extent that enforceability may be limited by or rendered ineffective by bankruptcy insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally or the application of equitable principles and the exercise of judicial discretion in appropriate cases; the owners of the 2011 Series One Bonds will be entitled to the benefits of the Bond Resolution; and upon such issuance and delivery, the 2011 Series One Bonds shall constitute legal, valid and binding obligations of the Bond Bank, issued in conformity with and entitled to the benefit and security of the Bond Resolution. (n) All authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, court, board, agency or commission having jurisdiction of the matter that are required to be obtained by the Bond Bank prior to the sale of the 2011 Series One Bonds for the due authorization of, that would constitute a condition precedent to or the absence of which would materially adversely affect the due observance and performance by the Bond Bank of its covenants and obligations in connection with the issuance and sale of the 2011 Series One Bonds under the Bond Resolution and this Purchase Contract, the execution and delivery of this Purchase Contract, the Loan Agreements, the Disclosure Certificate and the 2011 Series One Bonds or the observance or performance by the Bond Bank of its covenants and obligations under any of the Bond Resolution, this Purchase Contract, the Loan Agreements, the Disclosure Certificate and the 2011 Series One Bonds, have been duly obtained, except for such approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the 2011 Series One Bonds, as to which no representation is made. (0) The financial statements and other historical financial information of the Bond Bank contained in the Preliminary Official Statement fairly present the financial position of the Bond Bank as of the dates indicated, for the periods therein specified, and are in confonnity with generally accepted accounting principles applicable to the Bond Bank applied on a consistent basis; and except as otherwise disclosed in the Preliminary Official Statement and 6 51050278.2 the Official Statement, there has been no material adverse change in the financial condition or results of operations of the Bond Bank since the respective dates thereof. (p) Any certificate signed by any official of the Bond Bank and delivered to the Underwriter shall be deemed to be a representation and warranty by the Bond Bank (and not by any official in his or her individual capacity) to the Underwriter as to the statements made therein as if set forth herein. (q) Except as disclosed in the Preliminary Official Statement, the Bond Bank has never defaulted in the payment of principal of or interest on any of its debt obligations, and the Bond Bank has not failed within the previous five years to comply in all material respects with any of its undertakings pursuant to paragraph (b)(5) of Rule 15c2-12. (r) The Bond Bank will undeliake, pursuant to the Disclosure Certificate, to provide certain annual financial information and notices upon the occurrence of certain events, if material, and the form of this this undertaking is accurately set forth in the Preliminary Official Statement and will be accurately set forth in the Official Statement. (s) The Bond Bank will cause each Obligated Person (as defined in the Preliminary Official Statement) to enter into a written agreement or contract for the benefit of the holders of the 2011 Series One Bonds to provide to the MSRB/EMMA certain annual financial information, including audited financial statements and operating data, generally consistent with the infonnation contained or incorporated by reference in the Official Statement, and timely notice of any failure to provide required information on or before the date specified in such agreement or contract. 6. Closing. At 9:00 a.m., Pacific time, on March 1,2011, or at such other date and time as shall have been mutually agreed upon by the Bond Bank and the Underwriter, the Bond Bank shall deliver or cause to be delivered (a) to the Tmstee in accordance with the FAST closing procedures of DTC, the 2011 Series One Bonds in definitive form duly executed by the Bond Bank and (b) to the Underwriter, the other documents specified in Section 7(c); and subject to the terms and conditions contained herein, the Underwriter shall accept such delivery and pay the purchase price of the 2011 Series One Bonds as set forth in Section 1 in immediately available funds, in an aggregate amount equal to the aggregate purchase price set forth in Section 1. All other documents hereinafter mentioned shall be delivered to the offices ofK&L Gates LLP in Seattle, Washington, or at such other place as shall have been mutually agreed upon by the Bond Bank and the Underwriter. Such payment and delivery is referred to as the "Closing." The Underwriter shall order CUSIP identification numbers, and the Bond Bank: shall cause such CUSIP identification numbers to be printed on the 2011 Series One Bonds, but neither the failure to print such number on any 2011 Series One Bond nor any error with respect thereto shall constitute cause for a failure or refusal by the Underwriter to accept delivery of and to pay for the 2011 Series One Bonds in accordance with the terms of this Purchase Contract. The 2011 Series One Bonds shall be prepared and delivered at least one business day prior to the date of the Closing to the Tmstee in the form of one certificate for each maturity, fully registered in the 7 51050278.2 name of Cede & Co. (or such other name as may be requested by an authorized representative of DTC), as nominee ofDTe. 7. Closing Conditions. The obligations of the Underwriter hereunder shall be subject to the performance by the Bond Bank of its obligations hereunder at or prior to the Closing and are also subject to the conditions described below. (a) The representations and warranties of the Bond Bank contained or incorporated in the Bond Resolution, this Purchase Contract, the Loan Agreements, the Disclosure Certificate and the 2011 Series One Bonds shall be true, complete and correct in all material respects as of the date hereof and as of the date of the Closing as if made on the date of the Closing. (b) At the time of the Closing, (i) each of the Bond Resolution, this Purchase Contract, the Loan Agreements, the Disclosure Certificate shall be in full force and effect and shall not have been amended, modified or supplemented after the date thereof except as shall have been agreed to in writing by the Underwriter or as otherwise permitted by the terms of such document; and (ii) the Bond Bank shall have perfonned its respective obligations required under or specified in the Bond Resolution, this Purchase Contract, the Loan Agreements, the Disclosure Certificate or the 2011 Series One Bonds to have been performed at or prior to the Closing. (c) At or prior to the Closing, the Underwriter shall receive the following documents, in each case reasonably satisfactory in form and substance to the Underwriter: (i) The Official Statement executed by an authorized officer of the Bond Bank. (ii) Executed or certified copies (as appropriate) of each of the following, with only such changes or amendments after the date hereof as may have been agreed to in writing by the Underwriter: (A) the Bond Resolution; (B) the Loan Agreements; (C) the Disclosure Certificate; and (D) the Bond Bank's Blanket Issuer Letter of Representations to DTC. (iii) The approving OpInIOn of WohlfOlih, Johnson, Brecht, Cartledge & Brooking, P.e. ("Bond Counsel"), dated the date of the Closing and addressed to the Underwriter, substantially in the form set forth in Appendix A to the Preliminary Official Statement. 8 51050278.2 (iv) The supplemental opinion of Bond Counsel, dated the date of the Closing and addressed to the Underwriter, to the effect that: (A) the Bond Bank is a public body corporate and politic constituted as a public corporation and an instrumentality of the State within the Department of Revenue but having a legal existence independent of and separate from the State, exercising public and essential governmental functions and created by the Act; (B) the Bond Resolution, this Purchase Contract, the Loan Agreements, the Disclosure Certificate have been duly authorized, executed and delivered by the Bond Bank and (assuming in the case of this Purchase Contract, the Loan Agreements, the due authorization, execution and delivery thereof by the other parties thereto) constitute legal, valid and binding agreements of the Bond Bank enforceable against the Bond Bank in accordance with the terms of such agreements except as enforcement may be limited by or rendered ineffective by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally or the application of equitable principles and the exercise ofjudicial discretion in appropriate cases; (C) the Bond Bank has duly authorized the distribution by the Underwriter of the Preliminary Official Statement and the Official Statement to potential purchasers of the 2011 Series One Bonds; (D) the 2011 Series One Bonds are fully negotiable for all purposes of AS 45.01-45.08, AS 45.12, AS 45.14 and AS 45.29, and holders of the 2011 Series One Bonds, by accepting the 2011 Series One Bonds, are conclusively considered to have agreed that such 2011 Series One Bonds are fully negotiable for all purposes of AS 45.01-45.08, AS 45.12, AS 45.14 and AS 45.29; (E) the statements contained in the Preliminary Official Statement and the Official Statement under the headings "DESCRIPTION OF THE 2011 SERIES ONE BONDS," "SECURITY FOR THE 2011 SERIES ONE BONDS," "SUMMARY OF THE 2005 GENERAL BOND RESOLUTION," "TAX MATTERS," "CONTINUING DISCLOSURE UNDERTAKING" and "DEFINITIONS" and in Appendices A and F, insofar as such statements purport to summarize certain provisions of the Bond Resolution, the Loan Agreements, the Disclosure Certificate and the 2011 Series One Bonds (other than any financial or statistical data contained in such sections, about which no opinion need be expressed), certain State and federal laws and tax matters and the approving opinion of Bond Counsel, are true and COlTect in all material respects; and (F) the 2011 Series One Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended (the "Securities Act"), and the Bond Resolution is exempt from qualification as an indenture pursuant to the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). 9 51050278.2 (v) A certificate of a duly authorized Assistant Attomey General of the State, dated the date of the Closing, to the effect that: (A) To the best knowledge of such counsel, all approvals, consents and orders of any State governmental authority, board, agency or commission having jurisdiction that would constitute conditions precedent to the performance by the Bond Bank of its obligations under the Bond Resolution, this Purchase Contract, the Loan Agreements, the Disclosure Certificate and the 2011 Series One Bonds and that can be reasonably obtained at the time of such certificate have been obtained; (B) There is no State litigation or proceeding pending, or to the knowledge of such counsel, after due inquiry, threatened, in any way affecting the existence of the Bond Bank, or the titles of its officers to their respective offices, or seeking to restrain or to enjoin the authorization, sale or delivery of the 2011 Series One Bonds, or the right, power and authority of the Bond Bank to purchase the 2011 Series One Bonds and to collect the Municipal Bonds Payments pledged to pay the principal of and interest on the 2011 Series One Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the Bond Resolution, this Purchase Contract, the Loan Agreements, the Disclosure Certificate or the 2011 Series One Bonds, or contesting the powers of the Bond Bank or its authority with respect to the Bond Resolution, this Purchase Contract, the Loan Agreements, the Disclosure Certificate or the 2011 Series One Bonds; and (C) Based on the examination of such counsel, such counsel has no reason to believe that the material in the Preliminary Official Statement or Official Statement under the caption "LITIGATION" relating to the Bond Bank contains any untme statement of a material fact or omits to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading in any material respects. (vi) The opinions of Birch, Horton, Bittner & Cherot, counsel to the Kodiak Island Borough, and of K&L Gates LLP, counsel to the City and Borough of Wrangell, each to the effect that, with respect to the applicable Govemmental Unit: (A) the Govemmental Unit is duly organized and legally existing under the laws of the State; (B) the applicable Loan Agreement between the Govemmental Unit and the Bond Bank has been duly authorized and executed by the Govemmenta1 Unit and is a valid and binding obligation of the Govemmental Unit; (C) each applicable Municipal Bond has been duly authorized and executed by the Governmental Unit and is issued in full compliance with the provisions of the Constitution and laws of the State and the legislation of the Governmental Unit relating thereto; (D) each applicable Municipal Bond constitutes a valid and binding obligation of the Governmental Unit, except only to the extent that enforcement of payment may be limited by bankmptcy, insolvency or other laws affecting creditors' rights and 10 51050278.2 by the application of equitable principles and the exercise of judicial discretion in appropriate cases; and (E) interest on each applicable Municipal Bond is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the alternative minimum tax applicable to individuals; and interest on each applicable Municipal Bond is free from taxation by the State. (vii) A certificate of the Bond Bank, dated the date of the Closing, to the effect that: (A) the representations and warranties of the Bond Bank contained in this Purchase Contract are true and correct in all material respects on and as of the date of the Closing as if made on the date of the Closing; (B) the Official Statement, other than information concerning DTC, the Underwriter and the reoffering prices and yields on the 2011 Series One Bonds, Underwriting or Appendix D (as to which no representation or warranty need be made), as of its date did not and as of the date of the Closing does not contain contain an untrue statement of a material fact or omit any statement of material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (C) the information relating to entItles other than the Bond Bank contained in the Official Statement has been obtained from sources that the Bond Bank believes to be reliable, and nothing has come to the attention of the Bond Bank that would cause the Bond Bank to believe that such information, as of the date of the Official Statement and as of the date of the Closing, contained an untrue statement of a material fact or omitted any statement of material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (D) since the date of the Official Statement, no material adverse change in the financial condition or operations of the Bond Bank has occurred, and no other infoDnation has come to the attention of the Bond Bank, that should be disclosed in the Official Statement in order that the Official Statement not contain an untrue statement of a material fact or omit to state a material fact or necessary to make the statements therein, in the light of the circumstances under which they are made, not misleading. (viii) Evidence satisfactory to the Underwriter that the 2011 Series One Bonds have been assigned ratings of "Aa2" by Moody's and "AA" by Fitch. (ix) A certificate of the Trustee, dated the date of the Closing, to the effect that: (A) the Trustee is a national banking association duly organized and validly existing under the laws of the United States of America, having the full power and authority to enter into and perform its obligations under the Bond Resolution, to accept and administer the trusts created under the Bond Resolution and to authenticate and deliver the 2011 Series One Bonds; 11 51050278.2 (B) and delivered by the Trustee; the 2011 Series One Bonds have been duly authenticated (C) no consent, approval, authorization or other action by any govemmental or regulatory authority having jurisdiction over the Trustee that has not been obtained is or will be required for the performance by the Trustee of its obligations under the Bond Resolution or for the authentication and delivery of the 2011 Series One Bonds; (D) the perfom1ance by the Trustee of its obligations under the Bond Resolution and the authentication and delivery by the Trustee of the 2011 Series One Bonds will not conflict with, result in a violation or breach of or constitute a default under any material agreement or material instrument to which the Trustee is a party or by which it is bound, or any law or any rule, regulation, order or decree of any court or govemmental body having jurisdiction over the Trustee or any of its activities or properties (except that no representation need be made with respect to any federal or state securities or blue sky laws or regulations) or (except with respect to the lien of the Bond Resolution) result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the Trustee; and (E) to the Trustee's knowledge, there is no litigation, action, suit, proceeding, inquiry or investigation by or before any court, govemmental agency, public board or body, pending or threatened in any way affecting or contesting the existence of the Trustee, the authentication or delivery by the Trustee of the 2011 Series One Bonds, the performance by the Trustee of its obligations under the Bond Resolution or wherein an unfavorable decision, ruling or finding would adversely affect the transactions contemplated in connection with the authentication and delivery of the 2011 Series One Bonds or the performance by the Trustee of its obligations under the Bond Resolution. (x) Such additional legal opinions, celiificates, instruments, permits, consents and other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the date of the Closing, of the Bond Bank's representations and warranties contained herein, of the representations and warranties contained in the Bond Resolution, this Purchase Contract, the Loan Agreements, the Disclosure Certificate and the 2011 Series One Bonds and of the statements and information contained or incorporated in the Official Statement, as the same may be supplemented or amended, and the due observance and performance by the Bond Bank at or prior to the date of the Closing of all covenants and obligations then to be observed or performed and all conditions then to be satisfied by the Bond Bank and to evidence the exclusion from gross income for federal and State income tax purposes of the interest and any original issue discount on the 2011 Series One Bonds. 8. Tennination. The Underwriter may tenninate this Purchase Contract, without liability therefor, by notification from the Underwriter to the Bond Bank if at any time after the date of this Purchase Contract and at or prior to the Closing, anyone or more of the following shall occur: (a) Legislation shall have been enacted by the Congress of the United States or the legislature of the State, or introduced by amendment or otherwise in or passed by either 12 51050278.2 House of the Congress or the legislature of the State, or recommended or endorsed to the Congress for passage by the President of the United States or the Governor of the State, or favorably reported for passage to either House of the Congress of the United States by any committee of such House to which such legislation has been referred for consideration, or recommended or endorsed for passage or presented for consideration by any member of any such committee or by the Treasury Department of the United States, the Internal Revenue Service or the staff of the Joint Committee on Taxation of the Congress, or a decision shall have been rendered by a court of the United States or the State, or the United States Tax Court, or an order, ruling, regulation (final, temporary or proposed) or official statement shall have been made by or on behalf of the Treasury Department of the United States, the Internal Revenue Service or other governmental agency of appropriate jurisdiction, with respect to federal or State taxation of interest received on securities of the general character of the 2011 Series One Bonds or which would have the effect of changing, directly or indirectly, the federal or State tax consequences of receipt of interest on securities of the general character of the 2011 Series One Bonds in the hands of the owners thereof, which in the opinion of the Underwriter would adversely affect the market price or marketability of the 2011 Series One Bonds. (b) Any legislation, constitutional amendment, ordinance, rule or regulation shall be introduced in or enacted by any governmental body, board, department or agency of the State or the United States, or a decision by any court of competent jurisdiction within the State or any comi of the United States shall be rendered, affecting the Bond Bank, which, in the opinion of the Underwriter, will materially adversely affect the market price or marketability of the 2011 Series One Bonds. (c) There shall have occurred a declaration of war by the United States, any new outbreak of hostilities or any escalation in existing hostilities, or any other national or international calamity or crisis or an actual or imminent default or moratorium in respect of payment of any United States Treasury bills, bonds or notes, the effect of which, in the opinion of the Underwriter, would adversely affect the market price or marketability of the 2011 Series One Bonds. (d) A general banking moratorium shall have been declared by federal, New York or State authorities or a major financial crisis or material disruption in commercial banking or securities settlement or clearance services shall have occurred. (e) There shall be in force a general suspension of trading, ml11lmUm or maximum prices for trading or maximum ranges for prices of securities, or restrictions concerning the extension of credit by, or changes to, the net capital requirements of underwriters or other restrictions not in force or not being enforced as of the date hereof on the New York Stock Exchange or other national securities exchange. (f) A stop order, ruling or regulation by the Securities and Exchange Commission shall hereafter be issued or made, the reasonable effect of which is that the issuance, offering or sale of the 2011 Series One Bonds, as contemplated herein or in the Official Statement, or of obligations ofthe general character of the 2011 Series One Bonds, is in violation of any provisions of the Securities Act, the Exchange Act or the Trust Indenture Act or any rule or regulation promulgated under the Securities Act, the Exchange Act or the Trust Indenture Act. 13 51050278.2 (g) There shall occur any change or any development involving a prospective change, in or affecting the business, properties or financial condition of the Bond Bank which, in the opinion of the Underwriter, materially impairs the market price or marketability of the 2011 Series One Bonds. (h) Any rating of bonds, notes or other obligations of the Bond Bank (including the 2011 Series One Bonds) shall have been downgraded, suspended or withdrawn, or the possibility of such a downgrading, suspension or withdrawal shall have been publicly am10unced, by Moody's or Fitch. (i) An event, fact or condition described in Section 5(t) shall have occurred or become known which, in the opinion of the Underwriter, requires the preparation and publication of a supplement or amendment to the Official Statement. (j) Legislation shall be enacted, or a decision of a court of the United States shall be rendered or any action shall be taken by, or on behalf of, the Securities and Exchange Commission or any other govermnenta1 agency having jurisdiction in the subject matter which, in the opinion of counsel to the Underwriter, has the effect of requiring the contemplated distribution of the 2011 Series One Bonds or any underlying arrangement to be registered under the Securities Act or the Exchange Act, or the Bond Resolution to be qualified under the Trust Indenture Act or that would make the offering and sale of the 2011 Series One Bonds illegal. 9. Expenses. The Underwriter shall be under no obligation to pay and the Bond Bank shall payor shall cause to be paid the expenses incident to the performance of its obligations hereunder, including: (a) the fees and disbursements of Bond Counsel, Western Financial Group, LLC and any other expelis, accountants, lawyers or consultants retained by the Bond Bank and the fees and expenses of the Trustee; (b) the cost of preparation and printing and signing of the definitive 2011 Series One Bonds and the registration thereof; (c) the cost of preparing and distributing the Preliminary Official Statement and the Official Statement and any supplements or amendments thereto; and (d) charges of rating agencies for rating the 2011 Series One Bonds. The Underwriter shall pay all advertising expenses incurred by the Underwriter in cOlmection with the public offering of the 2011 Series One Bonds, including the costs of qualifying the 2011 Series One Bonds for sale in various states chosen by the Underwriter, and except as provided above, the fees and expenses of its counsel and all other expenses incurred by the Underwriter in connection with its public offering and distribution of the 2011 Series One Bonds. 10. Notices. Any notice or other communication to be given to the Bond Bank under this Purchase Contract (other than the acceptance hereof as specified in Section 1) may be given by delivering the same in writing to Alaska Municipal Bond Bank, 333 Willoughby Avenue, lIth Floor, Post Office Box 110405, Juneau, Alaska 99811, Attention: Executive Director; any notice or other communication to be given to the Underwriter under this Purchase Contract may be given by delivering the same in writing to Piper Jaffray & Co., 601 Union Street, 12th Floor, Seattle, Washington 98101, Attention: Jane Towery. 14 51050278.2 11. Governing Law. The validity, interpretation and performance of this Purchase Contract shall be governed by the laws ofthe State of Alaska. 12. Parties in Interest. This Purchase Contract, when accepted by the Bond Bank in writing as heretofore specified and when effective as herein provided, shall constitute the entire agreement between the Bond Bank and the Underwriter and is solely for the benefit of the Bond Banle and the Underwriter (including the successors or assigns thereof but not any purchaser of 2011 Series One Bonds by virtue of such purchase). No other person shall acquire or have any rights hereunder or by virtue hereof. All representations, warranties and agreements of the Bond Bank in this Purchase Contract shall remain operative and in full force and effect, regardless of (a) any investigation made by or on behalf of the Underwriter, (b) delivery of and payment for the 2011 Series One Bonds hereunder or (c) any tennination of this Purchase Contract. 13. Headings. The headings of the sections of this Purchase Contract are inselied for convenience of reference only and shall not be deemed to be a part hereof. 14. Effectiveness. This Purchase Contract shall become effective upon the execution hereof by an authorized representative of the Bond Bank and shall be valid and enforceable at the time of such acceptance and receipt. [Signature page follows] 15 51050278.2 15. Counterparts. This Purchase Contract may be executed in several counterparts, which together shall constitute one and the same instrument. Very truly yours, PIPER JAFFRAY & CO. Accepted: Febmary15,2011,at~.m. ALASKA MUNICIPALTNDBANK ~ fl/t/( i l q .1 By: '-#. ! De en J. Mitchell, Executive Director 16 51050278.2 Schedule 1 MATURITY DATES, PRINCIPAL AMOUNTS, INTEREST RATES, YIELDS, PRICES AND REDEMPTION PROVISIONS $8,635,000 ALASKA MUNICIPAL BOND BANK GENERAL OBLIGATION BONDS 2011 SERIES ONE Maturity Date (March 1) Principal Amount Interest Rate Yield 2012 $295,000 3.000% 0.700% 2013 305,000 3.000 1.100 2014 315,000 3.000 1.530 2015 325,000 3.000 2.050 2016 745,000 3.000 2.360 2017 340,000 3.000 2.750 2018 355,000 3.500 3.120 2019 365,000 4.000 3.450 2020 380,000 4.000 3.700 2021 395,000 4.000 3.930 2026* 2,125,000 4.750 4.800 2031* 2,690,000 5.125 5.200 * Term Bonds Maturing March 1 Optional Redemption. The 2011 Series One Bonds are subject to redemption in whole or in part at the option of the Bond Bank on any date on or after March 1, 2021 at a price of 100% of the principal amount thereofto be redeemed plus accrued interest to the date ofredemption. Mandatory Sinking Fund Redemption. The 2011 Series One Bonds are subject to mandatory sinking fund redemption on March 1 of the years and in the principal amounts set forth in the following table. Any such redemption shall be at a price equal to 100 percent of the principal amount to be redeemed plus accrued and unpaid interest thereon to the date fixed for redemption, but without premium. 17 51050278.2 2011 Series One Tenn Bonds Stated to Mature in 2026 * Final Maturity. Date 03/0112022 0310112023 03/0112024 03/0112025 03/0112026* Principal Amount $385,000 405,000 425,000 445,000 465,000 2011 Series One Tenn Bonds Stated to Mature in 2031 51050278.2 * Final Maturity. Date 03/0112027 03/0112028 0310112029 03/0112030 03/0112031 * 18 Principal Amount $485,000 510,000 535,000 565,000 595,000 REQUISITION AND CERTIFICATE OF THE ALASKA MUNICIPAL BOND BANK PURSUANT TO SECTION 502(B) OF THE GENERAL BOND RESOLUTION OF THE BANK ADOPTED JULY 13, 2005 To: The Bank of New York Mellon Trust Company, N.A. as Trustee under the General Bond Resolution of the Alaska Municipal Bond Bank adopted July 13, 2005 The undersigned, as an Authorized Officer of the Alaska Municipal Bond Bank (the "Bank") under the General Bond Resolution adopted July 13, 2005, as amended August 19, 2009 (the "General Bond Resolution"), hereby requisitions from you as Trustee acting under and pursuant to the General Bond Resolution, (i) as payment for the municipal bonds ofthe Kodiak Island Borough, Alaska ("Kodiak")the sum of$8,008,543.64 which is to be paid to Kodiak; and (ii) as payment for the municipal bonds of the City and Borough of Wrangell, Alaska ("Wrangell") the sum of $224,882.57 which is to be paid to Wrangell. Payment is made from proceeds of the Bank's General Obligation Bonds, 2011 Series One, dated March 1,2011. As such such an Authorized Officer, I hereby certify that the terms and provisions of the loan agreements by and between (i) the Bank and Kodiak dated March 1,2011; and (ii) the Bank and Wrangell dated March 1, 2011 (together, the "Loan Agreements") are in compliance with the General Bond Resolution. To my knowledge Kodiak and Wrangell are not in default under any of the terms or provisions of the Loan Agreements. IN WITNESS WHEREOF, I have hereunto set my hand this 1st da AMBB/General Obligation Bonds, 2011 Series One Requisition Certificate 1:\Docs\37421723\Requisition Certificate.wpd March 1,2011 The Bank of New York Mellon Trust Company, N.A. as Trustee/Paying Agent 601 Union Street, Suite 520 Two Union Square Seattle, Washington 98101 Ladies and Gentlemen: There have heretofore been delivered to you, as Trustee/Paying Agent, duly executed, $8,635,000 aggregate principal amount of General Obligation Bonds, 2011 Series One (the "Bonds") of the Alaska Municipal Bond Bank (the "Bank"). The Bonds consist of a single sub-series: General Obligation Bonds, 2011 Series One. The Bonds are authorized by the General Obligation Bond Resolution of the Bank adopted July 13, 2005, as amended August 19, 2009 (the "General Bond Resolution") and Series Resolution No. 2011-01, adopted on February 1, 2011 (the "Series Resolution," and together with the General Bond Resolution, the "Resolutions"). You have received the following documents pursuant to the General Bond Resolution as conditions precedent to the authentication and delivery of the Bonds: 1. A counsel's opinion with respect to and as specified in Section 203(C)(1) and 1003 of the General Bond Resolution. 2. The written order of the Bank as to delivery of the Bonds, signed by an Authorized Officer, describing the Bonds to be authenticated and delivered, designating the purchaser to whom the Bonds are to be delivered and stating the purchase price of the Bonds. Such order is set forth in this letter. 3. A copy of Series Resolution No. 2011-01 authorizing the issuance of the Bonds, and certified by an Authorized Officer. 4. A certificate of an Authorized Officer stating that the Bank is not in default in the performance of any of the covenants, conditions, agreements or provisions contained in the Resolution. You are hereby authorized and directed to authenticate the Bonds and, when so authenticated, to deliver them via your FAST delivery agreement to The Depository Trust The Bank of New York Mellon Trust Company, NA March 1, 2011 Page 2 Company on behalf of Piper Jaffray & Co. (the "Underwriter"), upon receipt of $8,659,193.05, consisting of the aggregate principal amount of the Bonds of $8,635,000.00, plus net original issue premium of $67,613.80, less Underwriter's discount of $43,420.75. All terms which are defined in Section 103 of the General Bond Resolution shall have the same meanings herein as such terms are given in said section of the General Bond Resolution. This letter also certifies that I am an Authorized Officer of the Bank within the meaning of the General Bond Resolution.Very truly yours, Receipt of the foregoing this 1st day of March 2011 is hereby acknowledged. THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. as Trustee ~~cZL/£~ KATHLEEN L. GRAvES Authorized Officer AMBB/General Obligation Bonds, 2011 Series One Written Order 1:\Docs\37421723\Written Order.wpd CERTIFICATE AS TO SIGNATURES, EXECUTION OF BONDS AND SPECIMEN BONDS THE UNDERSIGNED, as Chairman of the Board of Directors and Executive Director, respectively, of the Alaska Municipal Bond Bank (the "Bank") and Authorized Officers as the term is defined in the General Bond Resolution of the Bank adopted July 13, 2005, as amended on August 19, 2009, HEREBY CERTIFY as follows: 1. Subscribed below are our true and genuine signatures. 2. On or before the date hereof each of the Bank's General Obligation Bonds, 2011 Series One (the "Bonds") described in Schedule X attached hereto and hereby made a part hereof, were duly and completely signed in the name and on behalf of the Bank by the execution thereon ofthe signature ofthe undersigned Chairman, and by the impression thereon of the official seal of the Bank, attested by the signature of the undersigned Executive Director. 3. The seal which is impressed upon this certificate has been impressed upon each of the Bonds and is the legally adopted, proper and only official corporate seal of the Bank. 4. On the date hereof we were and are the duly chosen, qualified and acting officers of the Bank holding the offices indicated by the official titles set opposite our names below. 5. Attached hereto is a true and correct specimen of each cover page and the body of the Bonds. IN WITNESS WHEREOF, we have hereunto set our hand and the official seal of the Bank this 1st day of March 2011. Signature Official Title Chairman of the Board of Directors Executive Director SCHEDULE X $8,635,000 ALASKA MUNICIPAL BOND BANK General Obligation Bonds, 2011 Series One AUTHORIZATION: Under and pursuant to Chapter 85 of Title 44, Alaska Statutes, as amended, the General Bond Resolution of the Alaska Municipal Bond Bank adopted July 13, 2005, as amended August 19, 2009, and Series Resolution No. 2011-01, adopted on February 1, 2011 (the "Series Resolution," and together with the General Bond Resolution, the "Resolutions"). Pursuant to the terms of the Resolutions, the Alaska Municipal Bond Bank is issuing its General Obligation Bonds, 2011 Series One (the "Bonds"). BANK QUALIFIED: The Bonds are not designated "qualified tax exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. DATE OF BOND DELIVERY: March 1, 2011. DATE, MATURITIES AND INTEREST RATES: The Bonds are dated the date of delivery, and mature in each of the years and in the principal amounts and bear interest at the rates per annum set forth on the following page. INTEREST PAYMENT DATES: Interest payments for the Bonds commence on September 1, 2011, and occur semi-annually thereafter on March 1 and September 1 and of each year. PLACE OF PAYMENT OF PRINCIPAL: Principal will be payable by The Bank of New York Mellon Trust Company, N.A., Seattle, Washington, as Trustee, to DTC. OTHER DETAILS OF THE BONDS: The definitive Bonds are issued in fully registered form in denominations of $5,000 or any integral multiple thereof. DEFINED TERMS: All terms not herein defined shall have the meaning set forth in the Resolutions. AMBB/General Obligation Bonds, 2011 Series One Signature Certificate 1:\Docs\37421723\Sig Cert.wpd ALASKA MUNICIPAL BOND BANK GENERAL OBLIGATION BONDS 2011 SERIES ONE Due March 1 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2026 2031 Principal Amount $295,000 305,000 315,000 325,000 745,000 340,000 355,000 365,000 380,000 395,000 2,125,000 2,690,000 Interest Rate 3.000% 3.000 3.000 3.000 3.000 3.000 3.500 4.000 4.000 4.000 4.750 5.125 Optional Redemption: The Bonds maturing on and after March 1, 2022 and subject to redemption in whole or in part at the option of the Bank on any date on or after March 1, 2021 at a price of 100 percent of the principal amount thereof to be redeemed plus accrued interest to the date of redemption. Mandatory Sinking Fund Redemption: The Bonds are subject to mandatory sinking fund redemption on March 1 of the years and in the principal amounts set forth in the following table. Any such redemption shall be at a price of 100 percent of the principal amount to be redeemed plus accrued and unpaid interest thereon to the date fixed for redemption, but without premium. 2026 Term Bond Date March 1, 2022 March 1, 2023 March 1, 2024 March 1, 2025 March 1, 2026* * Maturity. AMBB/General Obligation Bonds, 2011 Series One Signature Certificate 1:\Docs\37421723\Sig Cert.wpd Principal Amount $385,000 405,000 425,000 445,000 465,000 2031 Term Bond Date March 1, 2027 March 1, 2028 March 1, 2029 March 1, 2030 March 1, 2031 * * Final Maturity. AMBB/General Obligation Bonds, 2011 Series One Signature Certificate I:\Docs\37421723\Sig Cert.wpd Principal Amount $485,000 510,000 535,000 565,000 595,000 Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and, any payment is made to Cede & Co. or to such other entity as is requested, by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OROTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. GA-1 EN $295,000 ALASKA MUNICIPAL BOND BANK GENERAL OBLIGATION BONDS, 2011 SERIES ONE INTEREST RATE: 3.00% MATURITY DATE: March 1, 2012 CUSIP NO: 01179PT31 Registered Owner: CEDE & Co. Principal Amount: Two Hundred Ninety-Five Thousand and No/100 Dollars Alaska Municipal Bond Bank (herein called the "Bank"), a public body corporate and politic, constituted as an instrumentality of the State of Alaska, organized and existing under and pursuant to the laws of the State of Alaska, acknowledges itself indebted to, and for value/received, hereby promises to pay to CEDE & CO. or registered assigns, the principal sum specified above on the Maturity Date specified <;:lbove, and to pay to the registered owner hereof interest on such principal sum from the date hereof to the date of maturity of this Bond at the rate per annum specified above, payable September 1, 2011, and semi-annually on the 1st day of March and on the 1st day of September thereafter. For so long as this Bond is held in book-entry form, payment of principal and interest shall be made by wire transfer to the registered owner pursuant to written instructions furnished to The Bank of New York Mellon Trust Company, N.A., in Seattle, Washington (or its successor in interest), as Trustee under the General Bond Resolution ofthe Bank, adopted July 13, 2005, as amended August 19, 2009 (herein called the "Resolution"), or its successor as Trustee (herein called the "Trustee"). In the event that this Bond is no longer held in book-entry form, (i) payment of interest will be made by check or draft mailed by first class mail to the registered owner at the address appearing on the bond register of the Bank kept by the Trustee, or, upon the written request of a registered owner of at least $1,000,000 in principal amount of 2011 Series One Bonds (defined herein) received at least 15 days prior to an interest payment date, by wire transfer in immediately available funds to an account in the United States of America designated by such registered owner; and (ii) principal will be payable upon pr~sentation and surrender hereof at the corporate trust office of the Trustee. Interest shall be computed on the basis of a 360-day year composed of twelve thirty-day months. Both principal of and interest on this Bond are payable in any coin or currency of the United States of America which, on the respective dates of payment thereof, shall be legal tenderfor the payment of public and private debts. Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. GA-2 S Eel E $305,000 ALASKA MUNICIPAL BOND BANK GENERAL OBLIGATION BONDS, 2011 SERIES ONE INTEREST RATE: 3.00% MATURITY DATE: March 1, 2013 CUSIP NO: 01179PT49 Registered Owner: CEDE & Co. Principal Amount: Three Hundred Five Thousand and No/100 Dollars Alaska Municipal Bond Bank (herein called the "Bank"), a public body corporate and politic, constituted as an instrumentality of the State of Alaska, organized and existing under and pursuantto the laws of the State of Alaska, acknowledges itself indebted to, and for value received, hereby promises to pay to CEDE & CO. or registered assigns, the principal sum specified above on the Maturity Date specified above, and to pay to the registered owner hereof interest on such principal sum from the date hereof to the date of maturity of this Bond at the rate per annum specified above, payable September 1,2011, and semi-annually on the 1st day of March and on the 1st day of September thereafter. For so long as this Bond is held in book-entry form, payment of principal and interest shall be made by wire transfer to the registered owner pursuant to written instructions furnished to The Bank of New York Mellon Trust Company, N.A., in Seattle, Washington (or its successor in interest), as Trustee under the General Bond Resolution of the Bank, adopted July 13, 2005, as amended August 19, 2009 (herein called the "Resolution"), or its successor as Trustee (herein called the "Trustee"). In the event that this Bond is no longer held in book-entry form, (i) payment of interest will be made by check or draft mailed by first class mail to the registered owner at the address appearing on the bond register of the Bank kept by the Trustee, or, upon the written request of a registered owner of at least $1,000,000 in principal amount of 2011 Series One Bonds (defined herein) received at least 15 days prior to an interest payment date, by wire transfer in immediately available funds to an account in the United States of America designated by such registered owner; and (ii) principal will be payable upon presentation and surrender hereof at the corporate trust office of the Trustee. Interest shall be computed on the basis of a 360-day year composed of twelve thirty-day months. Both principal of and interest on this Bond are payable in any coin or currency of the United States of America which, on the respective dates of payment thereof, shall be legal tender for the payment of public and private debts. Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. GA-3 SPECI E $315,000 ALASKA MUNICIPAL BOND BANK GENERAL OBLIGATION BONDS, 2011 SERIES ONE INTEREST RATE: 3.00% MATURITY DATE: March 1,2014 CUSIP NO: 01179PT56 Registered Owner: CEDE & Co. Principal Amount: Three Hundred Fifteen Thousand and No/100 Dollars Alaska Municipal Bond Bank (herein called the "Bank"), a public body corporate and politic, constituted as an instrumentality of the State of Alaska, organized and existing under and pursuant to the laws of the State of Alaska, acknowledges itself indebted to, and for value received, hereby promises to pay to CEDE & CO. or registered assigns, the principal sum specified above on the Maturity Date specified above, and to pay to the registered owner hereof interest on such principal sum from the date hereof to the date of maturity of this Bond at the rate per annum specified above, payable September 1,2011, and semi-annually on the 1st day of March and on the 1st day of September thereafter. For so long as this Bond is held in book-entry form, payment of principal and interest shall be made by wire transfer to the registered owner pursuant to written instructions furnished to The Bank of New York Mellon Trust Company, N.A., in Seattle, Washington (or its successor in interest), as Trustee underthe General Bond Resolution of the Bank, adopted July 13, 2005, as amended August 19, 2009 (herein called the "Resolution"), or its successor as Trustee (herein called the "Trustee"). In the event that this Bond is no longer held in book-entry form, (i) payment of interest will be made by check or draft mailed by first class mail to the registered owner at the address appearing on the bond register of the Bank kept by the Trustee, or, upon the written request of a registered owner of at least $1,000,000 in principal amount of 2011 Series One Bonds (defined herein) received at least 15 days prior to an interest payment date, by wire transfer in immediately available funds to an account in the United States of America designated by such registered owner; and (ii) principal will be payable upon presentation and surrender hereof at the corporate trust office of the Trustee. Interest shall be computed on the basis of a 360-day year composed of twelve thirty-day months. Both principal of and interest on this Bond are payable in any coin or currency of the United States of America which, on the respective dates of payment thereof, shall be legal tenderforthe payment of public and private debts. Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. GA-4 s CI $325,000 ALASKA MUNICIPAL BOND BANK GENERAL OBLIGATION BONDS, 2011 SERIES ONE INTEREST RATE: 3.00% MATURITY DATE: March 1, 2015 CUSIP NO: 01179PT64 Registered Owner: CEDE & Co. Principal Amount: Three Hundred Twenty-Five Thousand and No/100 Dollars Alaska Municipal Bond Bank (herein called the "Bank"), a public body corporate and politic, constituted as an instrumentality of the State of Alaska, organized and existing under and pursuant to the laws of the State of Alaska, acknowledges itself indebted to, and for value received, hereby promises to pay to CEDE & CO. or registered assigns, the principal sum specified above on the Maturity Date specified above, and to pay to the registered owner hereof interest on such principal sum from the date hereof to the date of maturity of this Bond at the rate per annum specified above, payable September 1,2011, and semi-annually on the 1st day of March and on the 1st day of September thereafter. For so long as this Bond is held in book-entry form, payment of principal and interest shall be made by wire transfer to the registered owner pursuant to written instructions furnished to The Bank of New York Mellon Trust Company, N.A., in Seattle, Washington (or its successor in interest), as Trustee underthe General Bond Resolution of the Bank, adopted July 13, 2005, as amended August 19, 2009 (herein called the "Resolution"), or its successor as Trustee (herein called the "Trustee"). In the event that this Bond is no longer held in book-entry form, (i) payment of interest will be made by check or draft mailed by first class mail to the registered owner at the address appearing on the bond register of the Bank kept by the Trustee, or, upon the written request of a registered owner of at least $1,000,000 in principal amount of 2011 Series One Bonds (defined herein) received at least 15 days prior to an interest payment date, by wire transfer in immediately available funds to an account in the United States of America designated by such registered owner; and (ii) principal will be payable upon presentation and surrender hereof at the corporate trust office of the Trustee. Interest shall be computed on the basis of a 360-day year composed of twelve thirty-day months. Both principal of and interest on this Bond are payable in any coin or currency of the United States of America which, on the respective dates of payment thereof, shall be legal legal tender for the payment of public and private debts. Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. GA-5 s· ALASKA MUNICIPAL BOND BANK GENERAL OBLIGATION BONDS, 2011 SERIES ONE $745,000 INTEREST RATE: 3.00% MATURITY DATE: March 1, 2016 CUSIP NO: 01179PT72 Registered Owner: CEDE & Co. Principal Amount: Seven Hundred Forty-Five Thousand and No/100 Dollars Alaska Municipal Bond Bank (herein called the "Bank"), a public body corporate and politic, constituted as an instrumentality of the State of Alaska, organized and existing under and pursuant to the laws of the State of Alaska, acknowledges itself indebted to, and for value received, hereby promises to pay to CEDE & CO. or registered assigns, the principal sum specified above on the Maturity Date specified above, and to pay to the registered owner hereof interest on such principal sum from the date hereof to the date of maturity of this Bond at the rate per annum specified above, payable September 1, 2011, and semi-annually on the 1st day of March and on the 1st day of September thereafter. For so long as this Bond is held in book-entry form, payment of principal and interest shall be made by wire transfer to the registered owner pursuant to written instructions furnished to The Bank of New York Mellon Trust Company, N.A., in Seattle, Washington (or its successor in interest), as Trustee underthe General Bond Resolution of the Bank, adopted July 13, 2005, as amended August 19, 2009 (herein called the "Resolution"), or its successor as Trustee (herein called the "Trustee"). In the event that this Bond is no longer held in book-entry form, (i) payment of interest will be made by check or draft mailed by first class mail to the registered owner at the address appearing on the bond register of the Bank kept by the Trustee, or, upon the written request of a registered owner of at least $1,000,000 in principal amount of 2011 Series One Bonds (defined herein) received at least 15 days prior to an interest payment date, by wire transfer in immediately available funds to an account in the United States of America designated by such registered owner; and (ii) principal will be payable upon presentation and surrender hereof at the corporate trust office of the Trustee. Interest shall be computed on the basis of a 360-day year composed of twelve thirty-day months. Both principal of and interest on this Bond are payable in any coin or currency of the United States of America which, on the respective dates of payment thereof, shall be legal tender for the payment of public and private debts. Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. GA-6 s CI $340,000 INTEREST RATE: 3.00% ALASKA MUNICIPAL BOND BANK GENERAL OBLIGATION BONDS, 2011 SERIES ONE MATURITY DATE: March 1, 2017 Registered Owner: CEDE & Co. Principal Amount: Three Hundred Forty Thousand and No/100 Dollars CUSIP NO: 01179PT80 Alaska Municipal Bond Bank (herein called the "Bank"), a public body corporate and politic, constituted as an instrumentality of the State of Alaska, organized and existing under and pursuant to the laws of the State of Alaska, acknowledges itself indebted to, and for value received, hereby promises to pay to CEDE & CO. or registered assigns, the principal sum specified above on the Maturity Date specified above, and to pay to the registered owner hereof interest on such principal sum from the date hereof to the date of maturity of this Bond at the rate per annum specified above, payable September 1,2011, and semi-annually on the 1st day of March and on the 1st day of September thereafter. For so long as this Bond is held in book-entry form, payment of principal and interest shall be made by wire transfer to the registered owner pursuant to written instructions furnished to The Bank of New York Mellon Trust Company, N.A., in Seattle, Washington (or its successor in interest), as Trustee underthe General Bond Resolution of the Bank, adopted July 13, 2005, as amended August 19, 2009 (herein called the "Resolution"), or its successor as Trustee (herein called the "Trustee"). In the event that this Bond is no longer held in book-entry form, (i) payment of interest will be made by check or draft mailed by first class mail to the registered owner at the address appearing on the bond register of the Bank kept by the Trustee, or, upon the written request of a registered owner of at least $1,000,000 in principal amount of 2011 Series One Bonds (defined herein) received at least 15 days prior to an interest payment date, by wire transfer in immediately available funds to an account in the United States of America designated by such registered owner; and (ii) principal will be payable upon presentation and surrender hereof at the corporate trust office of the Trustee. Interest shall be computed on the basis of a 360-day year composed of twelve thirty-day months. Both principal of and interest on this Bond are payable in any coin or currency of the United States of America which, on the respective dates of payment thereof, shall be legal tender for the payment of public and private debts. Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. GA-7 $" , . $355,000 ALASKA MUNICIPAL BOND BANK GENERAL OBLIGATION BONDS, 2011 SERIES ONE INTEREST RATE: 3.50% MATURITY DATE: March 1, 2018 CUSIP NO: 01179PT98 Registered Owner: CEDE &Co. Principal Amount: Three Hundred Fifty-Five Thousand and No/100 Dollars Alaska Municipal Bond Bank (herein called the "Bank"), a public body corporate and politic, constituted as an instrumentality of the State of Alaska, organized and existing under and pursuant to the laws of the State of Alaska, acknowledges itself indebted to, and for value received, hereby promises to pay to CEDE & CO. or registered assigns, the principal sum specified above on the Maturity Date specified above, and to pay to the registered owner hereof interest on such principal sum from the date hereof to the date of maturity of this Bond at the rate per annum specified above, payable September 1,2011, and semi-annually on the 1st day of March and on the 1st day of September thereafter. For so long as this Bond is held in book-entry form, payment of principal and interest shall be made by wire transfer to the registered owner pursuant to written instructions furnished to The Bank of New York Mellon Trust Company, N.A., in Seattle, Washington (or its successor in interest), as Trustee under the General Bond Resolution of the Bank, adopted July 13, 2005, as amended August 19, 2009 (herein called the "Resolution"), or its successor as Trustee (herein called the "Trustee"). In the event that this Bond is no longer held in book-entry form, (i) payment of interest will be made by check or draft mailed by first class mail to the registered owner at the address appearing on the bond register of the Bank kept by the Trustee, or, upon the written request of a registered owner of at least $1,000,000 in principal amount of 2011 Series One Bonds (defined herein) received at least 15 days prior to an interest payment date, by wire transfer in immediately available funds to an account in the United States of America designated by such registered owner; and (ii) principal will be payable upon presentation and surrender hereof at the corporate trust office of the Trustee. Interest shall be computed on the basis of a 360-day year composed of twelve thirty-day months. Both principal of and interest on this Bond are payable in any coin or currency of the United States of America which, on the respective dates of payment thereof, shall be legal tender for the payment of public and private debts. Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FORVALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. GA-8 $365,000 ALASKA MUNICIPAL BOND BANK GENERAL OBLIGATION BONDS, 2011 SERIES ONE INTEREST RATE: 4.00% MATURITY DATE: March 1, 2019 CUSIP NO: 01179PU21 Registered Owner: CEDE & Co. Principal Amount: Three Hundred Sixty-Five Thousand and No/100 Dollars Alaska Municipal Bond Bank (herein called the "Bank"), a public body corporate and politic, constituted as an instrumentality of the State of Alaska, organized and existing under and pursuant to the laws of the State of Alaska, acknowledges itself indebted to, and for value received, hereby promises to pay to CEDE & CO. or registered assigns, the principal sum specified above on the Maturity Date specified above, and to pay to the registered owner hereof interest on such principal sum from the date hereof to the date of maturity of this Bond at the rate per annum specified above, payable September 1,2011, and semi-annually on the 1st day of March and on the 1st day of September thereafter. For so long as this Bond is held in book-entry form, payment of principal and interest shall be made by wire transfer to the registered owner pursuant to written instructions furnished to The Bank of New York Mellon Trust Company, N.A., in Seattle, Washington (or its successor in interest), as Trustee underthe General Bond Resolution of the Bank, adopted July 13, 2005, as amended August 19, 2009 (herein called the "Resolution"), or its successor as Trustee (herein called the "Trustee"). In the event that this Bond is no longer held in book-entry form, (i) payment of interest will be made by check or draft mailed by first class mail to the registered owner at the address appearing on the bond register of the Bank kept by the Trustee, or, upon the written request of a registered owner of at least $1,000,000 in principal amount of 2011 Series One Bonds (defined herein) received at least 15 days prior to an interest payment date, by wire transfer in immediately available funds to an account in the United States of America designated by such registered owner; and (ii) principal will be payable upon presentation and surrender hereof at the corporate trust office of the Trustee. Interest shall be computed on the basis of a 360-day year composed of twelve thirty-day months. Both principal of and interest on this Bond are payable in any coin or currency of the United States of America which, on the respective dates of payment thereof, shall be legal tenderforthe payment of public and private debts. Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. GA-9 $380,000 ALASKA MUNICIPAL BOND BANK GENERAL OBLIGATION BONDS, 2011 SERIES ONE INTEREST RATE: 4.00% MATURITY DATE: March 1, 2020 CUSIP NO: 01179PU39 Registered Owner: CEDE & Co. Principal Amount: Three Hundred Eighty Thousand and No/100 Dollars Alaska Municipal Bond Bank (herein called the "Bank"), a public body corporate and politic, constituted as an instrumentality of the State of Alaska, organized and existing under and pursuant to the laws of the State of Alaska, acknowledges itself indebted to, and for value received, hereby promises to pay to CEDE & CO. or registered assigns, the principal sum specified above on the Maturity Date specified above, and to pay to the registered owner hereof interest on such principal sum from the date hereof to the date of maturity of this Bond at the rate per annum specified above, payable September 1,2011, and semi-annually on the 1st day of March and on the 1st day of September thereafter. For so long as this Bond is held in book-entry form, payment of principal and interest shall be made by wire transfer to the registered owner pursuant to written instructions furnished to The Bank of New York Mellon Trust Company, N.A., in Seattle, Washington (or its successor in interest), as Trustee underthe General Bond Resolution of the Bank, adopted July 13, 2005, as amended August 19, 2009 (herein called the "Resolution"), or its successor as Trustee (herein called the "Trustee"). In the event that this Bond is no longer held in book-entry form, (i) payment of interest will be made by check or draft mailed by first class mail to the registered owner at the address appearing on the bond register of the Bank kept by the Trustee, or, upon the written request of a registered owner of at least $1,000,000 in principal amount of 2011 Series One Bonds (defined herein) received at least 15 days prior to an interest payment date, by wire transfer in immediately available funds to an account in the United States of America designated by such registered owner; and (ii) principal will be payable upon presentation and surrender hereof at the corporate trust office of the Trustee. Interest shall be computed on the basis of a 360-day year composed of twelve thirty-day months. Both principal of and interest on this Bond are payable in any coin or currency of the United States of America which, on the respective dates of payment thereof, shall be legal tenderforthe payment of public and private debts. Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. GA-10 s $395,000 ALASKA MUNICIPAL BOND BANK GENERAL OBLIGATION BONDS, 2011 SERIES ONE INTEREST RATE: 4.00% MATURITY DATE: March 1, 2021 CUSIP NO: 01179PU47 Registered Owner: CEDE & Co. Principal Amount: Three Hundred Ninety-Five Thousand and No/100 Dollars Alaska Municipal Bond Bank (herein called the "Bank"), a public body corporate and politic, constituted as an instrumentality of the State of Alaska, organized and existing under and pursuant to the laws of the State of Alaska, acknowledges itself indebted to, and for value received, hereby promises to pay to CEDE & CO. or registered assigns, the principal sum specified above on the Maturity Date specified above, and to pay to the registered owner hereof interest on such principal sum from the date hereof to the date of maturity of this Bond at the rate per annum specified above, payable September 1,2011, and semi-annually on the 1st day of March and on the 1st day of September thereafter. For so long as this Bond is held in book-entry form, payment of principal and interest shall be made by wire transfer to the registered owner pursuant to written instructions furnished to The Bank of New York Mellon Trust Company, N.A., in Seattle, Washington (or its successor in interest), as Trustee underthe General Bond Resolution of the Bank, adopted July 13, 2005, as amended August 19, 2009 (herein called the "Resolution"), or its successor as Trustee (herein called the "Trustee"). In the event that this Bond is no longer held in book-entry form, (i) payment of interest will be made by check or draft mailed by first class mail to the registered owner at the address appearing on the bond register of the Bank kept by the Trustee, or, upon the written request of a registered owner of at least $1,000,000 in principal amount of 2011 Series One Bonds (defined herein) received at least 15 days prior to an interest payment date, by wire transfer in immediately available funds to an account in the United States of America designated by such registered owner; and (ii) principal will be payable upon presentation and surrender hereof at the corporate trust office of the Trustee. Interest shall be computed on the basis of a 360-day year composed of twelve thirty-day months. Both principal of and interest on this Bond are payable in any coin or currency of the United States of America which, on the respective dates of payment thereof, shall be legal tenderforthe payment of public and private debts. GA-11 $2,125,000 Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (nDTcn), the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.S ALASKA MUNICIPAL BOND BANK GENERAL OBLIGATION BONDS, 2011 SERIES ONE INTEREST RATE: 4.75% MATURITY DATE: March 1, 2026 CUSIP NO: 01179PU54 Registered Owner: CEDE & Co. Principal Amount: Two Million One Hundred Twenty-Five Thousand and No/100 Dollars Alaska Municipal Bond Bank (herein called the "Bank"), a public body corporate and politic, constituted as an instrumentality of the State of Alaska, organized and existing under and pursuant to the laws of the State of Alaska, acknowledges itself indebted to, and for value received, hereby promises to pay to CEDE & CO. or registered assigns, the principal sum specified above on the Maturity Date specified above, and to pay to the registered owner hereof interest on such principal sum from the date hereof to the date of maturity of this Bond at the rate per annum specified above, payable September 1,2011, and semi-annually on the 1st day of March and on the 1st day of September thereafter. For so long as this Bond is held in book-entry form, payment of principal and interest shall be made by wire transfer to the registered owner pursuant to written instructions furnished to The Bank of New York Mellon Trust Company, N.A., in Seattle, Washington (or its successor in interest), as Trustee under the General Bond Resolution of the Bank, adopted July 13, 2005, as amended August 19, 2009 (herein called the "Resolution"), or its successor as Trustee (herein called the "Trustee"). In the event that this Bond is no longer held in book-entry form, (i) payment of interest will be made by check or draft mailed by first class mail to the registered owner at the address appearing on the bond register of the Bank kept by the Trustee, or, upon the written request of a registered owner of at least $1,000,000 in principal amount of 2011 Series One Bonds (defined herein) received at least 15 days prior to an interest payment date, by wire transfer in immediately available funds to an account in the United States of America designated by such registered owner; and (ii) principal will be payable upon presentation and surrender hereof at the corporate trust office of the Trustee. Interest shall be computed on the basis of a 360-day year composed of twelve thirty-day months. Both principal of and interest on this Bond are payable in any coin or currency of the United States of America which, on the respective dates of paymentthereof, shall shall be legal tenderforthe payment of public and private debts. Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FORVALUE OR OTHERWISE BYOR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. GA-12 $2,690,000 ALASKA MUNICIPAL BOND BANK GENERAL OBLIGATION BONDS, 2011 SERIES ONE INTEREST RATE: 5.125% MATURITY DATE: March 1,2031 CUSIP NO: 01179PU62 Registered Owner: CEDE & Co. Principal Amount: Two Million Six Hundred Ninety Thousand and No/100 Dollars Alaska Municipal Bond Bank (herein called the "Bank"), a public body corporate and politic, constituted as an instrumentality of the State of Alaska, organized and existing under and pursuant to the laws of the State of Alaska, acknowledges itself indebted to, and for value received, hereby promises to pay to CEDE & CO. or registered assigns, the principal sum specified above on the Maturity Date specified above, and to pay to the registered owner hereof interest on such principal sum from the date hereof to the date of maturity of this Bond at the rate per annum specified above, payable September 1, 2011, and semi-annually on the 1st day of March and on the 1st day of September thereafter. For so long as this Bond is held in book-entry form, payment of principal and interest shall be made by wire transfer to the registered owner pursuant to written instructions furnished to The Bank of New York Mellon Trust Company, N.A., in Seattle, Washington (or its successor in interest), as Trustee underthe General Bond Resolution of the Bank, adopted July 13, 2005, as amended August 19, 2009 (herein called the "Resolution"), or its its successor as Trustee (herein called the "Trustee"). In the event that this Bond is no longer held in book-entry form, (i) payment of interest will be made by check or draft mailed by first class mail to the registered owner at the address appearing on the bond register of the Bank kept by the Trustee, or, upon the written request of a registered owner of at least $1,000,000 in principal amount of 2011 Series One Bonds (defined herein) received at least 15 days prior to an interest payment date, by wire transfer in immediately available funds to an account in the United States of America designated by such registered owner; and (ii) principal will be payable upon presentation and surrender hereof at the corporate trust office of the Trustee. Interest shall be computed on the basis of a 360-day year composed of twelve thirty-day months. Both principal of and interest on this Bond are payable in any coin or currency of the United States of America which, on the respective dates of payment thereof, shall be be legal tenderforthe payment of public and private debts. This Bond is a general obligation of the Bank and is one of a duly authorized issue of Bonds of the Bank designated "Alaska Municipal Bond Bank Bonds" (herein called the "Bonds"), issued and to be issued in various series under and pursuant to the Alaska Municipal Bond Bank Act, constituting Chapter 85, Title 44, of the Alaska Statutes (herein called the "Act"), and under and pursuant to the Resolution and a series resolution authorizing each such series. As provided in the Resolution, the Bonds may be issued from time to time pursuant to series resolutions in one or more series, in various principal amounts, may mature at different times, may bear interest at different rates and, subject to the provisions thereof, may otherwise vary. The aggregate principal amount of bonds which may be issued under the Resolution is not limited except as provided in the Resolution and the Act, and all Bonds issued and to be issued under said Resolution are and will be equally and ratably secured by the pledges and covenants made therein, except as otherwise expressly provided or permitted in the Resolution. This Bond is one of a series of Bonds issued by the Bank and designated "General Obligation Bonds, 2011 Series One" limited in the aggregate principal amount of $8,635,000 (the "2011 Series One Bonds"). The 2011 Series One Bonds are issued under the Resolution of the Bank and a series resolution of the Bank, adopted February 1, 2011, and entitled: "A Series Resolution Authorizing the Issuance of General Obligation Bonds, 2011 Series One, of the Alaska Municipal Bond Bank" (said resolutions being herein collectively called the "Resolutions"). Copies of the Resolutions are on file at the office of the Bank and at the corporate trust office of the Trustee, and reference to the Resolutions and any and all supplements thereto and modifications and amendments thereof and to the Act is made for a description of the pledges and covenants securing the 2011 Series One Bonds; the nature, extent and manner of enforcement of such pledges; the rights and remedies of the registered owners of the 2011 Series One Bonds with respectthereto; and the terms and conditions upon which the Bonds are issued and may be issued thereunder; to all of the provisions of which the registered owner of this Bond, by acceptance of this Bond, consents and agrees. To the extent and in the manner permitted by the terms of the Resolutions, the provisions of the Resolutions or any resolution amendatory thereof or supplemental thereto may be modified or amended by the Bank, with the written consent of the registered owners of at least two-thirds in principal amount of the Bonds then outstanding and, in case less than all of the several series of Bonds would be affected thereby, with such consent of the registered owners of at least two-thirds in principal amount of the Bonds of each series so affected then outstanding. The 2011 Series One Bonds are subject to redemption prior to their respective scheduled maturities as set forth below. The 2011 Series One Bonds maturing on and after March 1, 2022, are subject to redemption on or after March 1,2021, at the option of the Bank at a price of 100% of the principal amount thereof to be redeemed plus aCcrued interest to the date of redemption. Page 2 Unless previously redeemed pursuant to the foregoing optional redemption provisions, the 2011 Series One Bonds maturing on March 1, 2026 are subject to redemption on March 1 of the following years and in the following principal amounts at 100% of the principal amount of the 2011 Series One Bonds to be redeemed plus accrued interest, if any, to the redemption date. Term Bond Due March 1, 2026 *Maturity Year 2022 2023 2024 2025 2026* Principal Amount $385,000 405,000 425,000 445,000 465,000 Unless previously redeemed pursuant to the foregoing optional redemption provisions, the 2011 Series One Bonds maturing on March 1, 2031 are subject to redemption on March 1 of the following years and in the following principal amounts at 100% of the principal amount of the 2011 Series One Bonds to be redeemed plus accrued interest, if any, to the redemption date. Term Bond Due March 1, 2031 *Final Maturity Year 2027 2028 2029 2030 2031* Principal Amount $485,000 510,000 535,000 565,000 595,000 Notice of redemption will be be mailed to owners of 2011 Series One Bonds called for redemption not less than 30 days nor more than 60 days before the redemption date. Interest on any 2011 Series One Bonds called for redemption will cease on the redemption date. This Bond is transferable, as provided in the Resolutions, only upon the books of the Bank kept for that purpose at the corporate trust office of the Trustee, by the registered owner hereof in person or by its attorney duly authorized in writing, upon the surrender of this Bond together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered owner or its attorney duly authorized in writing, and thereupon Page 3 a new registered 2011 Series One Bond or Bonds in the same aggregate principal amount and of the same maturity, in authorized denominations, shall be issued to the transferee in exchange therefor as provided in the Resolutions and upon the payment of the charges, if any, therein prescribed. The 2011 Series One Bonds are issuable in the denomination of $5,000 or any integral multiple thereof, not exceeding the aggregate principal amount of 2011"Series One Bonds maturing in the year of maturity of the Bond for which the denomination of the Bond is to be specified. Subject to such conditions and upon payment of such charges, if any, 2011 Series One Bonds, upon surrender thereof at the corporate trust office of the Trustee with a written instrument of transfer satisfactory to the Trustee, duly executed by the registered owner or its attorney duly authorized in writing, may, at the option of the registered owner thereof, be exchanged for an equal aggregate principal amount of registered 2011 Series One Bonds of any other authorized denominations, of the same maturity. The Bank is obligated to pay the principal of and interest on the 2011 Series One Bonds only from revenues or funds of the Bank, and the State of Alaska is not obligated to pay such principal of or interest on the 2011 Series One Bonds. Neither the faith and credit nor the taxing power of the State of Alaska is pledged to the payment of the principal of or the interest on the 2011 Series One Bonds. This Bond is fully negotiable for all purposes of the Uniform Commercial Code, and each owner of this Bond by accepting this Bond shall be conclusively considered to have agreed that this Bond is fully negotiable for those purposes. Neither a member of the Bank nor any person executing the 2011 Series One Bonds shall be liable personally on the 2011 Series One Bonds by reason of the issuance thereof.This Bond shall not be entitled to any benefit under the Resolutions or be valid or become obligatory for any purpose until this Bond shall have been authenticated by the execution by the Trustee of the Trustee's Certificate of Authentication hereon. 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 Resolutions 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 performed in due time, form and manner as required by law and that the issue of the 2011 Series One Bonds, together with all other indebtedness of the Bank, is within every debt and other limit prescribed by law. Page 4 IN WITNESS WHEREOF, the Alaska Municipal Bond Bank has caused this Bond to be executed in its name by the manual or facsimile signature of its Chairman and its corporate seal (or a facsimile thereof) to be affixed, imprinted, engraved or otherwise reproduced hereon, and attested by the manual or facsimile signature of its Executive Director all as of the 1st day of March 2011. ALASKA MUNICIPAL BOND BANK [S E AL] Chairman Page 5 TRUSTEE'S CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the within-mentioned Resolutions and is one of the 2011 Series One Bonds of the Alaska Municipal Bond Bank. THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee Date of Authentication: March 1, 2011 Page 6 ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto _________________________. (Please print or typewrite the Name and Address, including the Zip Code of the Transferee, and the federal taxpayer identification or social security number) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept for registration and transfer thereof, with full power of substitution in the premises. Dated: _ Signature Guaranteed By: By: [Must be a member of the New York Stock Exchange or a bank] Page 7 THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. I, the undersigned, Barbara J. Parrish, Assistant Secretary of The Bank of New York Mellon Trust Company, N.A., a national banking association organized under the laws of the United States (the "Association") and located in the State of California, with a trust office located at 601 Union Street, Seattle, Washington, DO HEREBY CERTIFY that the following individuals are duly appointed and qualified Officers of the Association: Officer Michael S. Brunstad Kathleen L. Graves Kathleen Gylland Steven A. Horman Michael A. Jones Carol J. Nelson Perry Tobe Janelle Farooque Gene H. Romaine Title Vice President Vice President Vice President Vice President Vice President & Assistant Secretary Vice President & Assistant Secretary Vice President Senior Associate Senior Associate Signing Authority E,H,N A, C5, J, N, P2 A, C5, J, N, P2 E,H,N AA, CI, J, N, PIO A, C5, J, N, P2 A, C5, J, N, P2 A, C5, J, N, P2 I further certify that as of this date they have been authorized to sign on behalf of the Association in discharging or performing their duties in accordance with the senior and limited signing powers provided under Article V, Sections 5.2 and 5.3 of the By-laws of the Association and the paragraphs indicated above of the signing authority resolution of the Board of Directors of the Association. Attached hereto are true and correct copies of excerpts of the By-laws of the Association and the signing authority resolution, which have not been amended or revised since October 15, 2009 and are in full force and effect. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of The Bank of New York Mellon Trust Company, N.A. this 24th day of February 2011. , Assistant Secretary Extracts from By-Laws of The Bank of New York Mellon Trust Company, N.A. As Amended through October 15, 2009 ARTICLE V SIGNING AUTHORITIES Section 5.1 Real Property. Real property owned by the Association in its own right shall not be deeded, conveyed, mortgaged, assigned or transferred except when duly authorized by a resolution of the Board. The Board may from time-to-time authorize officers to deed, convey, mortgage, assign or transfer real property owned by the Association in its own right with such maximum values as the Board may fix in its authorizing resolution. Section 5.2. Senior Signing Powers. Subject to the exception provided in Section 5.1, the President and any Executive Vice President is authorized to accept, endorse, execute or sign any document, instrument or paper in the name of, or on behalf of, the Association in all transactions arising out of, or in connection with, the normal course of the Association's business or in any fiduciary, representative or agency capacity and, when required, to affix the seal of the Association thereto. In such instances as in the judgment of the President, or any Executive Vice President may be proper and desirable, anyone of said officers may authorize in writing from time-to-time any other officer to have the powers set forth in this section applicable only to the performance or discharge of the duties of such officer within his or her particular division or function. Any officer of the Association authorized in or pursuant to Section 5.3 to have any of the powers set forth therein, other than the officer signing pursuant to this Section 5.2, is authorized to attest to the seal of the Association on any documents requiring such seal. Section 5.3. Limited Signing Powers. Subject to the exception provided in Section 5.1, in such instances as in the judgment of the President or any Executive Vice President, may be proper and desirable, anyone of said officers may authorize in writing from time-to-time any other officer, employee or individual to have the limited signing powers or limited power to affix the seal of the Association to specified classes of documents set forth in a resolution of the Board applicable only to the performance or discharge of the duties of such officer, employee or individual within his or her division or function. Section 5.4. Powers of Attorney. All powers of attorney on behalf of the Association shall be executed by any officer of the Association jointly with the President, any Executive Vice President, or any Managing Director, provided that the execution by such Managing Director of said Power of Attorney shall be applicable only to the performance or discharge of the duties of said officer within his or her particular division or function. Any such power of attorney may, however, be executed by any officer or officers or person or persons who may be specifically authorized to execute the same by the Board of Directors. Section 5.5. Auditor. The Auditor or any officer designated by the Auditor is authorized to certify in the name of, or on behalf of the Association, in its own right or in a fiduciary or representative capacity, as to the accuracy and completeness of any account, schedule of assets, or other document, instrument or paper requiring such certification. SIGNING AUTHORITY RESOLUTION Pursuant to Article V, Section 5.3 of the By-Laws Adopted October 15, 2009 RESOLVED that, pursuant to Section 5.3 of the By-Laws of the Association, authority be, and hereby is, granted to the President or any Executive Vice President, in such instances as in the judgment of anyone of said officers may be proper and desirable, to authorize in writing from time-totime any other officer, employee or individual to have the limited signing authority set forth in anyone or more of the following paragraphs applicable only to the performance or discharge of the duties of such officer, employee or individual within his or her division or function: (A) All signing authority set forth in paragraphs (B) through (I) below except Level C which must be specifically designated. (Bl) Individuals authorized to accept, endorse, execute or Sign any bill receivable; certification; contract, document or other instrument evidencing, embodying a commitment with respect to, or reflecting the terms or conditions of, a loan or an extension of credit by the Association; note; and document, instrument or paper of any type, including stock and bond powers, required for purchasing, selling, transferring, exchanging or otherwise disposing of or dealing in foreign currency, derivatives or any form of securities, including options and futures thereon; in each case in transactions arising out of, or in connection with, the normal course of the Association's business. (B2) Individuals authorized to endorse, execute or sign any certification; disclosure notice required by law; document, instrument or paper of any type required for judicial, regulatory or administrative proceedings or filings; and legal opinions. (Cl) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in excess of $500,000,000 with single authorization for all transactions. (C2) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in excess of $500,000,000*. (C3) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount up to $500,000,000. (C4) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount Sin excess of $100,000,000 but not to exceed $500,000,000*. (C5) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount up to $100,000,000. (C6) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount up to $10,000,000. (C7) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount up to $5,000,000. (C8) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount up to $1,000,000. (C9) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount up to $250,000. (CIO) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and internal transfers resulting in a change of beneficial ownership; in each case, in an amount up to $50,000. (Cll) Authority to accept, endorse, execute or sign or effect the issuance of any cashiers, certified or other official check; draft; order for payment of money; check certification; receipt; certificate of deposit; money transfer wire; and int~rnal transfers resulting in a change of beneficial ownership; in each case, in an amount up to $5,000. *Dual authorization is required by any combination of senior officer and/or Sector Head approved designee for non-exempt transactions. Single authorization required for exempt transactions. (Dl) Authority to accept, endorse, execute or sign any contract obligating the Association for the payment of money or the provision of services in an amount up to $1,000,000. (D2) Authority to accept, endorse, execute or sign any contract obligating the Association for the payment of money or the provision of services in an amount up to $250,000. (D3) Authority to accept, endorse, execute or sign any contract obligating the Association for the payment of money or the provision of services in an amount up to $50,000. (D4) Authority to accept, endorse, execute or sign any contract obligating the Association for the payment of money or the provision of services in an amount up to $5,000. (E) Authority to accept, endorse, execute or sign any guarantee of signature to assignments of stocks, bonds or other instruments; certification required for transfers and deliveries of stocks, bonds or other instruments; and document, instrument or paper of any type required in connection with any Individual Retirement Account or Keogh Plan or similar plan. (F) Authority to accept, endorse, execute or sign any certificate of authentication as bond, unit investment trust or debenture trustee and on behalf of the Association as registrar and transfer agent. (G) Authority to accept, endorse, execute or sign any bankers acceptance; letter of credit; and bill of lading. (H) Authority to accept, endorse, execute or sign any document, instrument or paper of any type required in connection with the ownership, management or transfer of real or personal property held by the Association in trust or in connection with any transaction with respect to which the Association is acting in any fiduciary, representative or agency capacity, including the acceptance of such fiduciary, representative or agency account. (11) Authority to effect the external movement of free delivery of securities and internal transfers resulting in changes of beneficial ownership. (12) Authority to effect the movement of securities versus payment at market or contract value. (J) Authority to either sign on behalf of the Association or to affix the seal of the Association to any of the following classes of documents: Trust Indentures, Escrow Agreements, Pooling and Servicing Agreements, Collateral Agency Agreements, Custody Agreements, Trustee's Deeds, Executor's Deeds, Personal Representative's Deeds, Other Real Estate Deeds for property not owned by the Association in its own right, Corporate Resolutions, Mortgage Satisfactions, Mortgage Assignments, Trust Agreements, Loan Agreements, Trust and Estate Accountings, Probate Petitions, responsive pleadings in litigated matters and Petitions in Probate Court with respect to Accountings, Contracts for providing customers with Association products or services. (N) Individuals authorized to accept, endorse, execute or sign internal transactions only, (i.e., general ledger tickets); does not include the authority to authorize external money movements, internal money movements or internal free deliveries that result in changes of beneficial ownership. (PI) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in excess of $10,000,000. (P2) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $10,000,000. (P3) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $5,000,000. (P4) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $1,000,000. (P5) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $250,000. (P6) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $100,000. (P7) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $50,000. (P8) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $25,000. (P9) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $10,000. (PIO) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $5,000. (PU) Authority to approve the payment of valid expenses as incurred to meet the obligations of the Association, excluding salary and other employee directed benefit payments; in each case, in an amount up to $3,000. RESOLVED, that any signing authority granted pursuant to this resolution may be rescinded by the President or any Executive Vice President and such signing authority shall terminate without the necessity of any further action when the person having such authority leaves the employ of the Association. CERTIFICATE OF TRUSTEE $8,635,000 Alaska Municipal Bond Bank General Obligation Bonds, 2011 Series One The undersigned, an authorized officer of The Bank of New York Mellon Trust Company, N.A. (the "Trustee"), hereby certifies on behalf of the Trustee as follows in connection with the issuance of the above-referenced bonds (the "2011 Series One Bonds"): 1. The Trustee is a national banking association duly organized and validly existing under the laws of the United States of America, having the full power and authority to enter into and perform its obligations under the Bond Resolution, to accept and administer the trusts created under the Bond Resolution and to authenticate and deliver the 2011 Series One Bonds. 2. The 2011 Series One Bonds have been duly authenticated and delivered by the Trustee. 3. No consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the Trustee that has not been obtained is or will be required for the performance by the Trustee of its obligations under the Bond Resolution or for the authentication and delivery of the 2011 Series One Bonds. 4. The performance by the Trustee of its obligations under the Bond Resolution and the authentication and delivery by the Trustee of the 2011 Series One Bonds will not conflict with, result in a violation or breach of or constitute a default under any material agreement or material instrument to which the Trustee is a party or by which it is bound, or any law or any rule, regulation, order or decree of any court or governmental body having jurisdiction over the Trustee or any of its activities or properties (except that no representation is made with respect to any federal or state securities or blue sky laws or regulations) or (except with respect to the lien of the Bond Resolution) result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the Trustee. 5. To the Trustee's knowledge, there is no litigation, action, suit, proceeding, inquiry or investigation by or before any court, governmental agency, public board or body, pending or threatened in any way affecting or contesting the existence of the Trustee, the authentication or delivery by the Trustee of the 2011 Series One Bonds, the performance by the Trustee of its obligations under the Bond Resolution or wherein an unfavorable decision, ruling or finding would adversely affect the transactions contemplated in connection with the authentication and delivery of the 2011 Series One Bonds or the performance by the Trustee of its obligations under the Bond Resolution. Capitalized terms used but not defined in this certificate have the meanings assigned such terms in the Bond Purchase Contract relating to the 2011 Series One Bonds dated February 15, 2011, between the Alaska Municipal Bond Bank and Piper Jaffray & Co. DATED: March 1,2011. THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee ~~~~ Kathleen L. Graves, e President Authorized Officer Page 2 1:\Docs\37421723\Tustee's Certificate Re BPC.ooc TRUSTEE'S CERTIFICATE OF AUTHENTICATION AND RECEIPT OF DOCUMENTS AND FUNDS THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee under the General Bond Resolution of the Alaska Municipal Bond Bank (the "Bank") adopted July 13, 2005, as amended August 19, 2009 (the "General Bond Resolution"), HEREBY CERTIFIES as follows: 1. Prior to the delivery on this day as hereinafter stated of the Bank's $8,635,000 General Obligation Bonds, 2011 Series One (the "Bonds"), there were delivered to the undersigned: (a) Pursuant to Section 203(C)(3) ofthe General Bond Resolution, a copy of Series Resolution No. 2011-01 (the "Series Resolution"), certified by an Authorized Officer of the Bank. (b) Pursuant to Section 203(C)(2) of the General Bond Resolution, the written order of the Bank as to delivery of the Bonds, signed by an Authorized Officer, describing the Bonds to be authenticated and delivered, designating the underwriter to whom the Bonds are to be delivered and stating the purchase price of the Bonds. (c) Counsel's Opinions with respect to (i) the General Bond Resolution and the Bonds as specified in Section 203(C)(1) of the General Bond Resolution, and (ii) the Series Resolution, as specified in Section 1003 of the General Bond Resolution. (d) Pursuant to Section 203(C)(4) of the General Bond Resolution, the certificate of an Authorized Officer that the Bank is not in default in the performance of any of the covenants, conditions, agreements or provisions contained in the Resolution. 2. There have been delivered to the undersigned all documents, opinions, certificates and other instruments required under Section 203 and 1003 of the General Bond Resolution as conditions precedent to the authentication and delivery of the Bonds thereunder and the transaction with the Governmental Units listed in Paragraphs 7 and 8 hereof.3. It authenticated the Bonds by manually executing on each of the Bonds a certificate in the following form: TRUSTEE'S CERTIFICATE OF AUTHENTICATION This Bond is one of the sub-series of Bonds described in the within-mentioned Series Resolution and is one of the 2011 Series One Bonds of the Alaska Municipal Bond Bank. Date of Authentication: THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee Authorized Officer 4. Each of the authentication certificates was signed by an officer of the undersigned duly authorized to execute said certificates and perform such other acts as were necessary or incidental thereto. 5. It has examined the form of each of the Bonds as authenticated and delivered by it and found the same to be substantially in the form prescribed by the Series Resolution. 6. On the date hereof, the undersigned caused the Bonds to be delivered by Fast Automated Securities Transfer, duly authenticated, to Piper Jaffray & Co., or its designee, The Depository Trust Company. 7. At or prior to the time of said delivery of the Bonds, there was received by the undersigned the Kodiak Island Borough, Alaska ("("Kodiak"), $8,000,000 General Obligation School Bond, 2011 Series A. 8. At or prior to the time of said delivery of the Bonds, there was received by the undersigned the City and Borough of Wrangell, Alaska ("Wrangell"), $220,000 General Obligation Bond, 2011. 9. The officer executing this certificate on behalf of the undersigned is the duly authorized officer of the undersigned having primary responsibility for the administration of the trust created by the General Bond Resolution. 10. At or prior to the time of delivery of the Bonds there was received by the undersigned as payment for the Bonds the sum of $8,702,613.80 (said amount being the principal amount of the Bonds of $8,635,000.00, plus net original issue premium of $67,613.80, less $43,420.75 representing the Underwriter's discount for the Bonds). AMBB/General Obligation Bonds, 2011 Series One Trustee's Certificate ofAuthentication and Receipt ofDocuments and Funds 1:\Docs\37421723IAuth Cert (Trustee's Cert.).wpd 2 Of said amount, I have deposited (i) $8,008,543.64 with Kodiak, (ii) $224,882.57 with Wrangell, and (iii) $425,766.84 in the Bank's Reserve Fund and the undersigned hereby certifies that such amount was so deposited in the Reserve Fund. 11. The undersigned hereby certifies that upon receipt of the amounts described in Paragraph 10 above, amounts held in the Reserve Fund satisfy the Required Debt Service Reserve as defined in the General Bond Resolution. Capitalized terms not defined herein shall be as defined in the General Bond Resolution and the Series Resolution. IN WITNESS WHEREOF, The Bank of New York Mellon Trust Company, N.A., as Trustee as aforesaid, has caused this certificate to be executed and delivered by a duly authorized officer this 1st day of March 2011. THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. as Trustee ByL~cd~ Authorized Officer AMBB/General Obligation Bonds, 2011 Series One Trustee's Certificate ofAuthentication and Receipt ofDocuments and Funds 1:\Docs\37421723\Auth Cert (Trustee's Cert.).wpd 3 CERTIFICATE OF EXECUTIVE DIRECTOR AS TO DELIVERY AND PAYMENT FOR THE BONDS AND UNDERWRITER'S RECEIPT OF THE BONDS I, DEVEN J. MITCHELL, Executive Director of the Alaska Municipal Bond Bank (the "Bank"), HEREBY CERTIFY as follows: 1. The Bank's $8,635,000 General Obligation Bonds, 2011 Series One, dated the date of delivery (the "Bonds"), were delivered to The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee") on behalf of Piper Jaffray & Co. (the "Underwriter"). The Bank instructed the Trustee to authenticate and deliver, either actually or constructively, on behalf of the Underwriter, one bond certificate for each maturity of the Bonds. The Bonds are registered in the name of Cede & Co., as nominee of The Depository Trust Company in the principal amounts shown on the inside cover of the Official Statement relating to the Bonds. 2. That at or before the time of such delivery there was received by the Trustee, on behalf of the Bank from the Underwriter, the amount of $8,659,193.05 as full payment for the Bonds, computed as follows: Principal Amount of Bonds Less: Underwriter's Discount Plus: Net Original Issue Premium Total Received on Delivery $8,635,000.00 (43,420.75) 67,613.80 $8,659,193.05 IN WITNESS WHEREOF, Ihave hereunt::;y hand thi~#;;arCh 2011. <. (Itt '-/1twll DE EN J. (MITCHELL E1ecutive Director RECEIPT OF UNDERWRITER The undersigned acknowledges constructive receipt this day of the Bonds described in the attached certificate and the documents required to be delivered as of this day and requests that the Bonds be delivered in accordance with said certificate. DATED this 1st day of March 2011. PIPER JAFFRAY & CO., as Underwriter BY:-f-r-+-,-~c..r....l;;."",,-~'--""-'--:: '-"":"'-:::""+=~---'/.Jane Tower, Managin t/Authorized SignatorY AMBB/General Obligation Bonds, 2011 Series One Certificate of Executive Director as to Delivery and Payment For the Bonds and Underwriter's Receipt of the Bonds 1:\Docs\37421723\Cert of Ex Dir (Delivery &Paymenl).wpd Page 2 CERTIFICATE OF EXECUTIVE DIRECTOR CONCERNING LITIGATION, OFFICIAL STATEMENT AND OTHER MATTERS I, DEVEN J. MITCHELL, the duly appointed Executive Director of the Alaska Municipal Bond Bank (the "Bank"), HEREBY CERTIFY, with respect to the $8,635,000 General Obligation Bonds, 2011 Series One (the "Bonds"), as follows. All capitalized terms not otherwise defined herein shall have the meaning provided in the general resolution entitled "A Resolution Creating And Establishing An Issue Of Bonds Of The Alaska Municipal Bond Bank; Providing For The Issuance From Time To Time Of Said Bonds; Providing For The Payment Of Principal Of And Interest On Said Bonds; And Providing For The Rights Of The Holders Thereof," adopted July 13, 2005, as amended on August 19, 2009 (the "General Bond Resolution"), and Series Resolution No. 2011-01, adopted on February 1,2011 (the "Series Resolution," and together with the General Bond Resolution, the "Resolutions"). All terms not herein defined shall have the meaning set forth in the the Resolutions. 1. No action, suit, proceeding, inquiry or investigation, at law or in equity is pending or, to my best knowledge, threatened in any court in any way affecting the existence of the Bank, or the titles of its officers to their respective offices, or seeking to restrain or to enjoin the issuance, sale or delivery of the Bonds, or the right of the Bank to collect payments and other moneys pledged or to be pledged to pay the principal of and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the Bonds, the Resolutions, or any Loan Agreement, or contesting in any way the completeness or accuracy of the Preliminary Official Statement dated February 3,2011, related to the Bonds (the "Preliminary Official Statement"), orthe Official Statement dated February 15, 2011, related to the Bonds (the "Official Statement"), or contesting the power of the Bank or its authority with respect to the Bonds, or the Resolutions; nor, to the best of of my knowledge, is there any basis therefor, wherein an unfavorable decision, ruling, or finding would materially adversely affect the validity or enforceability of the Bonds, or the Resolutions. 2. Except as provided for in paragraph three below, the information contained in the Official Statement (other than information concerning DTC, the Underwriter and the reoffering prices and yields on the Bonds and Appendix D as to which no opinion is expressed except as set forth in paragraph 3 below) does not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading in any material respect. 3. The information relating to entities other than the Bank contained in the Official Statement has been obtained from sources the Bank believes to be reliable, and nothing has come to my attention that would cause me to believe that such information, as of the date of the Official Statement and the date hereof, contains an untrue statement of a material fact or omits a state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading in any material respect. 4. To the best of my knowledge, no event affecting the Bank has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purposes for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect. 5. Since June 30, 2010, there has been no material adverse change in the financial position or results of operations of the Bank whether or not arising from transactions in the ordinary course of business, other than as set forth in the Official Statement; and since such date the Bank has not entered into any transaction or incurred any debt or other liability material as to the Bank, except as set forth in the Official Statement. 6. The Bank has complied with each continuing disclosure undertaking that the Bank has made under Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities and Exchange Act of 1934, as amended from time to time. 7. The Bank has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the date hereof in relation to the issuance and delivery of the Bonds. 8. The representations and warranties of the Bond Bank contained in the Bond Purchase Contract are true and correct in all material respects. 9. The Bank is not in default in the performance of any of the covenants, conditions, agreements or provisions contained in the Resolutions. AMBB/General Obligation Bonds, 2011 Series One Certificate of Executive Director 1:\Docs\37421723\Cert of Ex Dir (Litigation).wpd Page 2 CONTINUING DISCLOSURE CERTIFICATE Alaska Municipal Bond Bank (the "Issuer") executes and delivers this Continuing Disclosure Certificate (the "Disclosure Certificate") in connection with the issuance of $8,635,000 Alaska Municipal Bond Bank General Obligation Bonds, 2011 Series One (the "Bonds"). The Bonds consist of a single sub-series: General Obligation Bonds, 2011 Series One. The Bonds are being issued under the General Bond Resolution of the Bank entitled "A Resolution Creating And Establishing An Issue Of Bonds Of The Alaska Municipal Bond Bank; Providing For The Issuance From Time To Time Of Said Bonds; Providing ForThe Payment Of Principal OfAnd Interest On Said Bonds, And Providing For The Rights Of The Holders Thereof," adopted July 13, 2005, as amended August 19, 2009 (the "General Bond Resolution"), and Series Resolution No. 2011-01, adopted on February 1,2011 (the "Series Resolution," and together with the General Bond Resolution, the "Resolutions"). The Issuer covenants and agrees as follows: Section 1. Purpose of the Disclosure Certificate. The Issuer is executing and delivering this Disclosure Certificate for the benefit of the Beneficial Owners of the Bonds, and to assist the Participating Underwriters in complying with Securities and Exchange Commission Rule 15c2-12(b)(5). Section 2. Definitions. In addition to the definitions set forth in the Resolutions, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" means any Annual Report provided by the Issuer pursuant to, and as described in, Section 3 of this Disclosure Certificate. "Fiscal Year" means the fiscal year of the Issuer (currently the 12-month period ending June 30), as such fiscal year may be changed from time to time as required by State law. "MSRB" means the Municipal Securities Rulemaking Board. "Participating Underwriter" means any of the original underwriters of the Bonds required to comply with the Rule in connection with the offering of the Bonds. "Rule" means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended from time to time. Section 3. Provision ofAnnual Reports and Financial Statements. Commencing with its Fiscal Year ending June 30,2011, the Issuer will provide to the MSRB, in a format as prescribed by the Rule: (a) Not later than 210 days after the end of each Fiscal Year, an Annual Report forthe Fiscal Year. The Annual Report shall contain or incorporate by reference: (I) annual audited financial statements of the Issuer; (ii) a statement of authorized, issued and outstanding bonded debt of the Issuer; (iii) the Reserve Fund balance and the estimated Required Debt Service Reserve under the Resolutions; and (iv) for each of the Government Units that has outstanding with the Issuer an amount of Bonds equal to or greater than ten percent (10%) of all Outstanding Bonds under the General Bond Resolution as of the last day of the Fiscal Year of the Issuer, statistics regarding such Government Units similar to those found in Appendix C to the Official Statement. Any or all of these items may be included by specific reference to documents available to the public on the internet website of the MSRB or filed with the Securities and Exchange Commission. The Issuer shall clearly identify each such other document so incorporated by reference. The Annual Report may be submitted as a single document or as separate documents comprising a package, provided that audited financial statements may be submitted separately from the remainder of the Annual Report. (b) Not later than 120 days after the end of each Fiscal Year, the Issuer will notify each Governmental Unit, who has, or had, an amount of Bonds equal to or greater than ten percent of all Bonds Outstanding under the General Bond Resolution, of its continuing disclosure undertaking responsibility. A list of Governmental Units deemed Obligated Persons for the prior Fiscal Year will be included in the Annual Report. Section 4. Notice of Failure to Provide Information. The Issuer shall provide in a timely manner to the MSRB notice of any failure to satisfy the requirements of Section 3 of this Disclosure Certificate. Section 5. Reporting of Significant Events. (a) The Issuer shall file with the MSRB a notice of any of the following events with respect to the Bonds, within ten (10) business days of the occurrence of such event: (1) Principal and interest payment delinquencies. (2) Unscheduled draws on debt service reserves reflecting financial difficuIties. (3) Unscheduled draws on credit enhancements reflecting financial difficulties. ((4) Substitution of credit or liquidity providers, or their failure to perform. (5) Adverse tax opinions or events affecting the tax-exempt status of the Bonds which include (I) the issuance by the Internal Revenue Service ("IRS") of proposed or final determinations of taxability, (ii) Notices of Proposed Issues (IRS From 5701-TEB), (iii) other material notices or determinations with respect to the Bonds, and (iv) other events affecting the tax status of the Bonds. (6) Defeasances. AMBB/General Obligation Bonds, 2011 Series One Authority Continuing Disclosure Certificate 1:\Docs\37421723\Cont Disc -AMBB.wpd Page 2 (7) Rating changes. (8) Tender offers. (9) Bankruptcy, insolvency, receivership or similar proceeding by the Issuer or "obligated person." (b) The Issuer shall file with the MSRB a notice of any of the following events with respect to the Bonds, within ten (10) business days of the occurrence of such event, if material: (1) Nonpayment-related defaults. (2) Modifications to rights of holders of the Bonds. (3) Bond calls, other than mandatory, scheduled redemptions not otherwise contingent on the occurrence of an event. (4) Bonds. Release, substitution or sale of property securing repayment of the (5) Other than in the normal course of business, the consummation of a merger, consolidation, or acquisition involving an "obligated person," or the sale of all or substantially all of the assets of the Issuer or "obligated person," or the entry into a definitive agreement to undertake such an action, or a termination of a definitive agreement relating to any such actions, other than in accordance with its terms. (6) Appointment of a successor or additional trustee or the change in name of the trustee for the Bonds. Section 6. Termination of Reporting Obligation. The Issuer's obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. Section 7. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, provided that the amendment meets each of the following conditions: (a) The amendment is made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of the Issuer; AMBB/General Obligation Bonds, 2011 Series One Authority Continuing Disclosure Certificate 1:\Docs\37421723\Cont Disc -AMBB.wpd Page 3 (b) This Disclosure Certificate, as amended, would have complied with the requirements of the Rule as of the date hereof, after taking into account any amendments or interpretations of the Rule, as well as any changes in circumstances; (c) The Issuer obtains an opinion of counsel unaffiliated with the Issuer that the amendment does not materially impair the interests of the Beneficial Owners of the Bonds; and (d) The Issuer notifies and provides the MSRB with copies of the opinions and amendments. Any such amendment may be adopted without the consent of any Beneficial Owner of any of the Bonds, notwithstanding any other provision of this Disclosure Certificate or the Resolutions. The first Annual Report containing amended operating data or financial information pursuantto an amendment of this Disclosure Certificate shall explain, in narrative form, the reasons for the amendment and its effect on the type of operating data and financial information being provided. Section 8. FilingAlternative. Any filing required underthetermsofthis Disclosure Certificate may be made solely by transmitting such filing to the Electronic Municipal Market Access as provided at http://www.emma.msrb.org, or in such other manner as may be permitted from time to time by the Securities Exchange Commission. Section 9. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate, any Beneficial Owner may take such actions as may be necessary and appropriate, including an action to compel specific performance, to cause the Issuer to comply with its obligations under this Disclosure Certificate. No failure to comply with any provision of this Disclosure Certificate shall be deemed an Event of Default underthe Resolutions, and the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action to compel specific performance. Section 10. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Trustee, the Participating Underwriters and the Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. Section 11. Prior Compliance. The Issuer is in compliance with all of its prior undertakings pursuant to the Rule. AMBB/General Obligation Bonds, 2011 Series One Authority Continuing Disclosure Certificate 1:\Docs\37421723\Cont Disc -AMBB.wpd Page 4 DATED this 1st day of March 2011. AMBB/General Obligation Bonds, 2011 Series One Authority Continuing Disclosure Certificate 1:\Docs\37421723\Cont Disc -AMBB.wpd ALASKA MUNICIPAL OND BANK 1/1/.() /1//Page 5 ("". ( CONTINUING DISCLOSURE CERTJFICAT~ . The City of Ketchikan, Alaska (the "City") executes and delivers this Continuing Disclosure Certificate (the "Disclosure Certificate") in connection with the issuance of $40,265,000 Alaska Municip.alBond Bank General Obligation Bonds,2006 SeriesTwo(too "Bonds"). The Bonds are being issued under the General Obligation Bond Resolution of the Issuer entitled "A Resolution Creating And Establishing An Issue Of Bonds Of The Alaska Municipal Bond Bank; Providing For The Issuance From Time To Time Of Said Bonds; Providing For The Payment Of P.rincipal Of And "Interest On Said Sonds; And Providing For The Rights OfThe Holders Thereof," adopted July 13, 2005 (the "General Bond Resolution"), and Series Resolution No. 2006-02, adopted on June 14, 2006 (the "Series Resolution," and together with the General Bond Resolution, the "Res·olutions"). The City covenants and agrees as follows: Section 1. Purpose of the Disclosure Certificate. The City is executing and delivering this Disclosure Certificate for the benefit of the Beneficial Owners of the Bonds, and 10 assist lhe Participating Underwriter in complying with Securities and Exchange Commission Rule 15c2-12(b)(5). The City is an "Obligated Person" within the meaning of the Rule. Section 2. Definitions. In addition to the definitions set forth in the Resolutions. which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" means any Annual Report provided by the City pursuant to, and as described in, Section 3 of this Disclosure Certificate. "City" means the City of Ketchikan, Alaska. "Fiscal Year" means the fiscal year of the City (currently the 12-month period ending December 31) as such fiscal year may be changed from time to lime as required by State law and the City'S ordinances. "Issuer" means the Alaska Municipal Bond Bank. "NRMSIR" means any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule. The NRMSIRs, as of the date hereof, are listed In Attachment A. "Participating Underwriter" means any of the original underwriters of the Bonds tequired to comply with Ihe Rule in connection with the offering of the Bonds. "Repository" means each NRMSIR and the SID. "Rule" means Rule 15c2-12(b)(5) adopted by the Securities and Exchange 'Commission under the Securities Exchang~ Act of 1934, as amended from time to lime. ( "SID" means any pubUc or private repository or en1ity designated by the State of Alaska as a state depository for the purposes of the Rule. Currently there is no SID. Section 3. Provision of Annual Reports and Financial Statements. Commencing with its Fiscal Year ending December 31, 2006, and for so long as the City has outstanding with the Issuer an amount of port revenue bonds equal to or greater than 10 percent of all bonds outstanding under the General Bond Resolution as of the last day of the fiscal year of the Issuer (currently June 30f. the City will provide to each Repository the following: {". (a) Not later than 180 days after the end of each Fiscal Year, an Annual Report for the Fiscal Year. The Annual Report shall contain or incorporate by reference the following annual financial information and operating data: (I) annual financial statements for the City, prepared in accordance with generally accepted accounting principles applicable to govemm"ental .entities, as such principles may be changed changed from time to time and (ii) financial information generally of the type included In Appendix 0 under the heading "City of Ketchikan Port . Enterprise Fund Financial Summary" of the Official Statement. Any or all of these items may be incorporated by reference from official statements of debt issues of the City that are available from the Municipal Securities Rulemaking Board, and from other documents which have been submilled to the Repositories or the Securities and Exchange CommissIon. The City shall clearly identify each such other document so incorporated by reference. The Annual Report may be submitted as a single document or as separate documents comprising a package, provided that aUdited financial statements of the City may be submilted separately from the remainder of the Annual Report. ., (b) If not provided as part of the Annual Report, then promptly upon their public release, the audited financial statements of the City for each Aseel Year, prepared in accordance with generally accepted accounting principles applicable to governmental enlities, as such principles may be changed from time to lime. (c) Any filing required under the terms of this Disclosure Certificate may be made solely by transmitting such filing 10 the Texas Municipal Advisory Council (the "MAC") as provided at hUp:/lwww.disclosureusa.org unless the United States Securities and ·Exchange Commission has withdrawn the interpretive advice in its letter to the MAC dated • The Cily not lI1e Issuer, is Il:spon::ible lor delermining whelher ils parlicipallon 1n the (~:;'Jer's program falls below the 10% lhreshold. I;M86/Genetar Obl!gaJion Bonds. ~006 Series TIVO Conlinuing Disclosule CenificBle -Kerchilo.an . 1~~ts\)7C2';O~lt01Uo..:(. ~t'lthll'~'f'.;uI Page 2 (( September 7, 2004. . . Section 4. Notice of Failure to Provide Information. The City shall provide in a timely manner to each Repository notice of any failure to satisfy the requirements of Section 3 of this Disclosure Certificate. . Section 5, Termination of Reporting Obligation. The City's obligations under this . Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of its loan obligation with the Issuer and as otherwise described in Section 3 01 this Disclosure Certificate. Section 6. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, provided that the "amendment meels each of the following conditions: (a) The amendment is made [n connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of the City; (b) This Disclosure Certificate. as amended, would have complied with the requirements of the Rule as of the date hereof, after taking into account ahy amendments or interpretations of the Rule, as well as any changes in circumstances; and (c) The City obtains' an opinion of nationally recognized bond counsel to the effect thai the amendment will not adversely affect the Issuer's compliance with the Rule or its continuing disclosure undertaking; and (d) The City notifies and provides the Issuer and each then existing Repository and any SID with the copies of the opinions and amendments. Any such amendment may be adopted without the consent of any Beneficial Owner .of any of the Bonds, notWithstanding any olher provision of this Disclosure Certificate or the Resolutions. The first Annual Reportcontaining amended operating data or financial information pursuant to an amendment 01 this Disclosure Cerlificete shall explain. in narrative form,the reasons for the amendment and its effect on the type of operating data and financial information being provided. Section 7. Default. In the event of of a failure of the City to comply with any provision of this Disclosure Certificate. any Beneficial Ownermaytake such actions as may be necessary and appropriate, including an aclion to compel specific performance, to cause the City to comply with its obligations under this Disclosure Certificate. No failure 10 comply with any provision of this Disclosure Certificate shall b~ deemed an Event of AMBBlGenetal Obli!l.IiOll Bonds. 10Ci6 Serfes Tl'lo Conr/nu;ng DISclosure Cenificare. Kerch/111m J~~t:!1':2't7DI\Cch'D:t· kd(h~"'?d Page 3 (" ( ' .. Default under1he Resolutions, and the sole legal remedyunder1his Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shaH be an action to compel specific performance. Section 8, Benefidaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Issuer, the Trustee, the Participating Underwriler, and the Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. Section 9. Prior Compliance. Except as disclosed in the Official Statement for the Bonds I the City is in compliance with ail of its prior undertakings pursuant to the Rule. DATED this 26th day of July 2006.:~0O;;;;;;;L ROBERT NEWELL Finance Director' 'A1dBB/Ge/l~l;l1Oblig<llioll Sonr/$. 2005 SEne3 Two . Conrinuing Disclosure! CMilicate ./(Olt:lliifGII ~1!:=Ul.?J)Olll:orJDile, r.,"'....."pe: Pzge<l ('( ATTACHMENT A ··'NRMS1Rs (As of July 1, 2006) Bloomberg Municipal Repository 100 Business Park Drive Skillman, NJ 08558 Phone: (609) 279-3225 Fax: (609) 279·5962 http://www.bloomberg.com/markels/r ates/municontacts.html Email: Munis@8Ioomberg.com DPC Data Inc. One Executive Drive Fort Lee, NJ 07024 Phone: (201) 346-0701 Fax: (201) 947..Q1 07 http://www.dpcdata.com .Email: nrmsir@dpcdata.com FT Interactive Data ATTN: NRMSIR 100 William Street, 15lh Floor New York. NY 10038 Phone: (212) 771-6999: 800-689-8466 Fax: (212) 771-7390 http://www.ftid.com Email: NRMSIR@interaclivedata.com Standard & Poor's Securities Evaluations, Inc. 55 Water Street, 45th Floor New York. NY 10041 Phone: (212) 438-4595 Fax: (212) 438-3975 www.JJkenny.com/jjkennyJpserdescripdatarep.html E-mail: nrmsirrepository@sandp.com Any filing required under the terms of the Disclosure Certificate may be made solely by transmitting such tiling 10 the Texas Municipal Advisory Council (the "MAC") as provided 3t hltp:/lwww.disclosureusa.org unless the United Slates Securities and Exchange Commission has withdrawn the interpretive advice in its letter to the MAC dated September , 7,2004. Altl3l31General ObligBlion Bonds. 2006 Series Two Conrln111ng Olsclosure Cerliticale· KelCh/han 1:'ll0<31:l7.::11101\Co'>\0.". 'Cl.~Il,~ Page 5 CONTINUING DISCLOSURE CERTIFICATE The City and Borough of Sitka, Alaska (the "City and Borough") executes and delivers this Continuing Disclosure Certificate (the "Disclosure Certificate") in connection with the issuance of $78,665,000.00 Alaska Municipal Bond Bank General Obligation Bonds, 2010 Series Four (the "Bonds"). The Bonds are being issued under the General Bond Resolution of the Issuer entitled "A Resolution Creating And Establishing An Issue Of Bonds Of The Alaska Municipal Bond Bank; Providing For The Issuance From Time To Time Of Said Bonds; Providing For The Payment Of Principal Of And Interest On Said Bonds; And Providing For The Rights Of The Holders Thereof," adopted July 13, 2005, as amended August 19, 2009 (the "General Bond Resolution"), and the Series Resolution No. 2010-09, adopted on October 19, 2010 (the "Series Resolution," and together with the General Bond Resolution, the "Resolutions"). The City and Borough covenants and agrees as follows: Section 1. Purpose of the Disclosure Certificate. The City and Borough is executing and delivering this Disclosure Certificate for the benefit of the Beneficial Owners of the Bonds, and to assist the Participating Underwriter in complying with Securities and Exchange Commission ("SEC") Rule 15c2-12(b)(5). The City and Borough is an "Obligated Person" within the meaning of the Rule. Section 2. Definitions. In addition to the definitions set forth in the Resolutions, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" means any Annual Report provided by the City and Borough pursuant to, and as described in, Section 3 of this Disclosure Certificate. "City and Borough" means the City and Borough of Sitka, Alaska. "Fiscal Year" means the fiscal year of the City and Borough (currently the 12-month period ending June 30) as such fiscal year may be changed from time to time as required by State law and the City and Borough's ordinances. "Issuer" means the Alaska Municipal Bond Bank. "MSRB" means the Municipal Securities Rulemaking Board. "Participating Underwriter" means the original underwriter of the Bonds required to comply with the Rule in connection with the offering of the Bonds. "Rule" means Rule 15c2-12(b)(5) adopted by the SEC under the Securities Exchange Act of 1934, as amended from time to time. Section 3. Provision of Annual Reports and Financial Statements. Commencing with its Fiscal Year ending June 30, 2011, and for so long as the City and Borough has outstanding with the Issuer an amount of bonds equal to or greater than 10 percent of all bonds outstanding under the General Bond Resolution as of the last day of the fiscal year of the Issuer (currently June 30), the City and Borough will provide to the MSRB, in a format as prescribed by the Rule, the following: (a) Not later than 210 days after the end of each Fiscal Year, an Annual Report for the Fiscal Year. The Annual Report shall contain or incorporate by reference the following annual financial information and operating data: (i) annual financial statements for the City and Borough, prepared in accordance with generally accepted accounting principles applicable to governmental entities, as such principles may be changed from time to time and (ii) financial information generally of the type included in Appendix D of the Official Statement relating to the Bonds. Any or all of these items may be incorporated by specific reference to documents available to the public on the internet website of MSRB or filed with the Securities and Exchange Commission. The City and Borough shall clearly identify each such other document so incorporated by reference. The Annual Report may be submitted as a single document or as separate documents comprising a package, provided that audited financial statements of the City and Borough may be submitted separately from the remainder of the Annual Report. (b) If not provided as part of the Annual Report, then promptly upon their public release, the audited financial statements of the City and Borough for each Fiscal Year, prepared in accordance with generally accepted accounting principles applicable to governmental entities, as such principles may be changed from time to time. Section 4. Notice of Failure to Provide Information. The City and Borough shall provide in a timely manner to the MSRB notice of any failure to to satisfy the requirements of Section 3 of this Disclosure Certificate. Section 5. Termination of Reporting Obligation. The City and Borough's obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of its loan obligation with the Issuer and as otherwise described in Section 3 of this Disclosure Certificate. AMBBIGeneral Obligation Bonds, 2010 Series Four Continuing Disclosure Certificate· Sitka l:\DocsI37421721\Conl Disc-Sitka,wpd Page 2 Section 6. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City and Borough may amend this Disclosure Certificate, provided that the amendment meets each of the following conditions: (a) The amendment is made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of the City and Borough; (b) This Disclosure Certificate, as amended, would have complied with the requirements of the Rule as of the date hereof, after taking into account any amendments or interpretations of the Rule, as well as any changes in circumstances; and (c) The City and Borough obtains an opinion of nationally recognized bond counsel to the effect that the amendment will not adversely affect the Issuer's compliance with the Rule or its continuing disclosure undertaking; and (d) The City and Borough notifies and provides the Issuer and the MSRB with the copies of the opinions and amendments. Any such such amendment may be adopted without the consent of any Beneficial Owner of any of the Bonds, notwithstanding any other provision of this Disclosure Certificate or the Resolutions. The first Annual Report containing amended operating data or financial information pursuant to an amendment of this Disclosure Certificate shall explain, in narrative form, the reasons for the amendment and its effect on the type of operating data and financial information being provided. Section 7. Default. In the event of a failure of the City and Borough to comply with any provision of this Disclosure Certificate, any Beneficial Owner may take such actions as may be necessary and appropriate, including an action to compel specific performance, to cause the City and Borough to comply with its obligations under this Disclosure Certificate. No failure to comply with any provision of this Disclosure Certificate shall be deemed an Event of Default under the Resolutions, and the sole legal remedy under this Disclosure Certificate in the event of any failure of the City and Borough to comply with this Disclosure Certificate shall be an action to compel specific performance. Section 8. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City and Borough, the Issuer, the Trustee, the Participating Underwriter, and the Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. Section 9. Filing Alternative. Any filing required under the terms ofthis Disclosure Certificate may be made solely by transmitting such filing to the Electronic Municipal AMBB/General Obligation Bonds, 2010 Series Four Continuing Disclosure Certificate -Sitka 1:\DocsI37421721\C0n1 Disc-Sitka.wpd Page 3 Market Access as provided at http://www.emma.msrb.org, or in such other manner as may be permitted from time to time by the Securities Exchange Commission. Section 10. Prior Compliance. The City and Borough is in compliance with all of its prior undertakings pursuant to the Rule. DATED this 9th day of December 2010. CITY AND BOROUGH OF SITKA, ALASKA BY:---i',-f;fL;,4.L-}~'--:7'7h,e: ..-------AMBB/General Obligation Bonds, 2010 Series Four Continuing Disclosure Certificate -Sitka 1:\Docs\374217211Conl Disc, Sitka.wpd Page 4 FEDERAL TAX CERTIFICATE $8,635,000 Alaska Municipal Bond Bank General Obligation Bonds, 2011 Series One I, DEVEN J. MITCHELL, Executive Director of the Alaska Municipal Bond Bank (the "Issuer"), hereby state that, as of the date hereof, the Issuer reasonably expects the following regarding the amount and use of the gross proceeds of the Alaska Municipal Bond Bank General Obligation Bonds, 2011 Series One (the "2011 Bonds"). I. Preliminary Matters 1. Purpose of Certificate. This certificate is provided pursuant to Section 1.148-2(b)(2) of the Income Tax Regulations (the "Regulations") for purposes of demonstrating the tax-exempt status of the 2011 Bonds under the relevant provisions of the Regulations and the Internal Revenue Code of 1986, as amended (together with the Regulations, the "Code") and to establish the facts and circumstances that form the basis for the Issuer's expectations that the 2011 Bonds are not "arbitrage bonds" within the meaning of Code. 2. Officer of Issuer. I am an officer of the Issuer responsible for issuing the 2011 Bonds. To the best of my knowledge, information and belief, the expectations stated herein are reasonable. 3. Definitions. All capitalized terms not otherwise defined herein shall have the meanings provided in the resolution of the Issuer entitled, "A Resolution Creating and Establishing An Issue of Bonds of The Alaska Municipal Bond Bank; Providing For The Issuance From Time To Time Of Said Bonds; Providing For The Payment Of Principal Of And Interest On Said Bonds; And Providing ForThe Rights Of The Holders Thereof," adopted July 13, 2005, as amended August 19, 2009 (the "General Resolution") and Series Resolution No. 2011-01, adopted on February 1, 2011 (the "Series Resolution," and together with the General Resolution, the "Resolutions"). Any other terms shall have the meanings ascribed to them in Section 103 and Sections 141 through 150 of the Code. II. Authorization and Governmental Purpose of the Issue 1. Authorization and Purpose. The 2011 Bonds are authorized by the Resolutions, and pursuant to the laws of the State of Alaska, and are being issued for the following purposes: (a) to make a loan to Kodiak Island Borough, Alaska ("Kodiak") pursuant to a Loan Agreement dated as of March 1, 2011 (the "Kodiak Loan Agreement") between the Issuer and Kodiak. Kodiak has represented that it will use such proceeds to pay for educational capital improvements and to pay costs of issuance of its General Obligation School Bond, 2011 Series A (the "Kodiak Bond"). As evidence of the loan, Kodiak will issue to the Issuer its $8,000,000 Kodiak Bond; (b) to make a loan to the City and Borough of Wrangell, Alaska ("Wrangell") pursuant to a Loan Agreement dated as of March 1, 2011 (the "Wrangell Loan Agreement") between the Issuer and Wrangell. Wrangell has represented that it will use such proceeds to pay for educational capital improvement and to pay costs of issuance of its General Obligation Bond, 2011 (the "Wrangell Bond"). As evidence of the loan, Wrangell will issue to the Issuer its $220,000 Wrangell Bond; (c) to make a deposit to the Issuer's Reserve Fund; and (d) to pay issuance costs of the 2011 Bonds. 2. As of the date hereof, the Issuer reasonably expects that the 2011 Bonds will not meet either the private business tests or the private loan financing test as described in Section 1.141 of the Regulations. 3. The Issuer has covenanted in the General Resolution, at Section 919, that it shall not knowingly take or cause any action to be taken that would cause interest on the 2011 Bonds to become taxable for federal income tax purposes. The Issuer recognizes that, in fulfillment of the foregoing covenant, it may not, and hereby represents that it will not, take any deliberate action subsequent to the date hereof that will cause the conditions of either the private business tests or the loan financing test to be met. 4. No Overissuance. The total amount of the proceeds of the 2011 Bonds will not exceed the total amount necessary for the governmental purposes of the issue. III. Sources and Uses of Sale Proceeds of the 2011 Bonds 1. Sale Proceeds. The total amount of Sale Proceeds of the 2011 Bonds is $8,702,613.80 (the "Sale Proceeds"). The Sale Proceeds reflect the $8,635,000 aggregate principal amount of the 2011 Bonds, plus $67,613.80 of net original issue premium. There is no direct monetary benefit, such as a rebate of bond insurance premium, surety bond premium or letter of credit fee, being received by the Issuer in connection with the issuance of the 2011 Bonds. AMBB/General Obligation Bonds, 2011 Series One Federal Tax Certificate 1:\Docs\37421723\Federal Tax Cert.wpd Page 2 2. Allocation of Sale Proceeds. The Sale Proceeds of the 2011 Bonds will be allocated as follows: (a) $8,008,543.64 will be allocated to Kodiak pursuantto the terms of the Kodiak Loan Agreement in exchange for the Kodiak Bond on the date hereof; (b) $224,882.57 will be allocated to Wrangell pursuantto the terms of the Wrangell Loan Agreement in exchange for the Wrangell Bond on the date hereof; (c) $425,766.84 will be deposited in the Issuer's Reserve Fund; and (d) $43,420.75 will be allocated to payment of a portion of the Issuer's costs of issuance (including underwriter's discount). 3. Pre-Issuance Accrued Interest. The Issuer will not receive accrued interest on the 2011 Bonds; the 2011 Bonds are dated the date of closing. IV. Replacement Proceeds 1. 2011 Bonds not Outstanding Longer than Necessary. Kodiak, a Governmental Unit, will receive on the date hereof, 2011 Bond proceeds in the amount of $8,008,543.64 (consisting of the loan amount of $8,000,000.00, plus $49,232.60 of net original issue premium, premium, less $40,688.96 for costs of issuance) which amount will be used as described herein at 11.1.(a). Kodiak has certified that the term of the Kodiak Bond used to finance this loan will not be outstanding for a period longer than 120% of the average reasonably expected economic life of the capital projects financed by Kodiak. Wrangell, a Governmental Unit, will receive on the date hereof, 2011 Bond proceeds in the amount of $225,927.05 (consisting of the loan amount of $220,000.00, plus $5,927.05 of original issue premium, less $1,044.48 for costs of issuance) which amount will be used as described herein at 11.1.(b). Wrangell has certified that the term of the Wrangell Bond used to finance this loan will not be outstanding for a period longer than 120% of the average reasonably expected economic life of the capital projects financed by Wrangell. 2. Bona Fide Debt Service Fund. The Issuer established, under the Resolutions, a fund that is used primarily to achieve a proper matching of revenues of the Issuer with principal and interest payments on the 2011 Bonds within each bond year. The Issuer will deplete amounts in this fund allocable to the 2011 Bonds AMBB/General Obligation Bonds, 2011 Series One Federal Tax Certificate 1:\Docs\37421723\Federal Tax Cert.wpd Page 3 at least once each bond year, except for a reasonable carryover amount not exceeding the greater of (i) the earnings on the fund for the immediately preceding bond year; or (ii) one-twelfth of the principal and interest payments on the 2011 Bonds for the immediately preceding bond year. 3. Reserve Fund. Under Section 602(B) of the General Resolution, the 2005 General Resolution Reserve Fund is established (the "Reserve Fund"). The Reserve Fund is a parity reserve fund which secures principal and interest payments on all Bonds, including the 2011 Bonds, issued under the General Resolution. The General Resolution requires that the Reserve Fund be funded in an amount equal to the least of (i) Maximum Annual Debt Service with respect to all Bonds Outstanding under the General Resolution; (ii) 125% of Average Annual Debt Service with respect to all Bonds Outstanding under the General Resolution; (iii) 10% of the initial principal amount of each Series of Bonds then Outstanding under the General Resolution; or (iv) such lower amount as may be required by law (the "Reserve Requirement"). Alaska Municipal Bond Bank Reserve Fund. As of the date hereof, the Reserve Requirement (pursuant to the calculations of the Issuer's Financial Advisor and the Trustee) is equal to $31,506,742.41. On the date hereof, 2011 Bond proceeds, in the amount of $425,766.84, will be deposited into the Issuer's Reserve Fund to satisfy the Reserve Requirement. Governmental Unit Reserve Funds. No reserve fund has been established to secure payment of either the Kodiak Bond or the Wrangell Bond. Limitation ofthe Use ofProceeds Deposited in Reserve Funds. The amount of proceeds derived from the sale of the 2011 Bonds and deposited in Issuer's reserve fund does not exceed 10% of the issue price of the 2011 Bonds. 4. No Other Replacement Proceeds. Other than amounts specifically identified as replacement proceeds of the 2011 Bonds in this certificate, there are no amounts (including without limitation sinking funds, pledged funds and other replacement proceeds) that (i) are held by or derived from the Issuer, Kodiak, Wrangell, or any related party to the Issuer, or the State of Alaska; and (ii) have a sufficiently direct nexus to the 2011 Bonds or to the governmental purpose of the 2011 Bonds to conclude that the amounts would have been used for that governmental purpose if the proceeds of the 2011 Bonds were not used or to be used for that governmental purposes. AMBB/General Obligation Bonds, 2011 Series One Federal Tax Certificate 1:\Docs\37421723\Federal Tax Cert.wpd Page 4 V. Yield Limitations on Investments of Gross Proceeds of the 2011 Bonds 1. Investments Without Yield Limitation. The following gross proceeds of the 2011 Bonds may be invested without yield limitation: (a) Amounts to be allocated to pay issuance costs of the 2011 Bonds may be invested without yield limitation for a period not to exceed 30 days from the date hereof. (b) Amounts to be allocated to the Kodiak Loan and the Wrangell Loan may be invested as provided in the federal tax certificate of Kodiak and Wrangell, dated the date hereof. (c) Amounts in the Debt Service Fund described herein at IV.2 may be invested without yield limitation for a period not to exceed 13 months from the date of their deposit therein. (d) Amounts in the Reserve Fund described herein at IV.3 may be invested without yield limitations provided such amount does not exceed the Reserve Requirement. 2. Investments Subject to Yield Limitation. Gross proceeds of the 2011 Bonds that cannot be invested without yield limitation under this section will be invested at a yield, computed in the manner described in Section V11.1, that is not in excess of the yield on the 2011 Bonds plus .125%. VI. Qualified Guarantee The 2011 Bonds are not secured by municipal bond insurance. VII. Computation of Yield 1. Computation of Yield on 2011 Bonds. The 2011 Bonds are a "fixed yield issue" whose arbitrage yield has been determined using the assumptions set forth in Section 1.148-4(b) of the Regulations. Accordingly, the yield for the 2011 Bonds is the discount rate that, when used in computing the present value as of the issue date of all unconditionally payable payments of principal, interest and fees for qualified guarantees on the issue and amounts reasonably expected to be paid as fees for qualified guarantees on the issue, produces an amount equal to the present value, using the same discount rate, of the aggregate Issue Price (as set forth herein) of the 2011 Bonds as of the issue date. AMBB/General Obligation Bonds, 2011 Series One Federal Tax Certificate 1:\Docs\37421723\Federal Tax Cert.wpd Page 5 The Issue Price of the 2011 Bonds is the initial offering price of the 2011 Bonds to the public (excluding bond houses, brokers, and other intermediaries) at which price at least 10% for each maturity of the 2011 Bonds was sold. Such initial offering price for the 2011 Bonds is, in the aggregate, $8,702,613.80, consisting of the $8,635,000.00 face amount of the 2011 Bonds, plus net original issue premium of $67,613.80. The yield on the 2011 Bonds has been determined to be 4.51078 percent. Such determination as to yield has been made by Western Financial Group, LLC (the Issuer's Financial Advisor) and has been based on the representations made to the Issuer by Piper Jaffray & Co., as underwriter of the 2011 Bonds, as to the offering prices at which at least 10% of each maturity of the 2011 Bonds were sold or reasonably expected to be sold. 2. Computation of Yield on Investments. The yield on an investment allocated to an issue is the discount rate that, when used in computing the present value as of the date date the investment is first allocated to the issue of all unconditionally payable receipts from the investment, produces an amount equal to the present value of all unconditionally payable payments for the investment. The frequency of compounding interest that is used to calculate yields on investments allocated to the 2011 Bonds is the same as that used to calculate the yield on the 2011 Bonds. VIII. Arbitrage Rebate The Issuer will calculate or cause to be calculated the Rebate Amount with respect to the 2011 Bonds at least once every five years from the date hereof, and on the date the last of the 2011 Bonds are redeemed, in accordance with Section 1.148 of the Regulations. In determining the Rebate Amount, the Issuer will calculate (i) the aggregate amount earned on all acquired nonpurpose obligations for the computation period; and (ii) the aggregate amount that would have been earned on all acquired nonpurpose obligations if they had been invested for the computation period at the yield on the 2011 Bonds. The Issuer will calculate the Rebate Amount by calculating the excess of (i) over (ii) of the preceding sentence and add to that any income attributable to such excess. Amounts earned on the Debt Service Fund will be excluded from any calculation of the Rebate Amount. Payments of the Rebate Amount will be made by the Issuer to the United States Treasury in accordance with federal tax laws. The Issuer hereby agrees to pay any rebate due on the 2011 Bonds within 60 days after the date the 2011 Bonds are retired. IX. Hedge Bond Representations AMBB/General Obligation Bonds, 2011 Series One Federal Tax Certificate 1:\Docs\37421723\Federal Tax Cert.wpd Page 6 At least 85% of the spendable proceeds of the 2011 Bonds will be used to carry out the governmental purposes of the 2011 Bonds within the three-year period beginning on the date hereof. Not more than 50% of the proceeds of the 2011 Bonds will be invested in nonpurpose investments (as defined in Section 148(f)(6)(A) of the Code) having a substantially guaranteed yield for four years or more. X. Reimbursement Representations No proceeds of the 2011 Bonds will be applied to reimburse the Issuer for expenditures paid before the date hereof. XI. Pooled Financing Representations 1. The Issuer reasonably expects that (a) as of the close of the 1-year period beginning on the date of issuance of the 2011 Bonds at least 30% of the net proceeds of the 2011 Bonds (as of the close of such period) will have been used directly or indirectly to make or finance loans to ultimate borrowers; and (b) as of the close of the 3-year period beginning on the date hereof, at least 95% of the net proceeds of the 2011 Bonds (as of the the close of such period) will have been used directly or indirectly to make or finance the loans to the ultimate borrowers described in Section 11.1 (a), (b) and (c) hereof. For purposes of this paragraph, "net proceeds" means the proceeds ofthe 2011 Bonds reduced by proceeds deposited in a reasonably required reserve or replacement fund. 2. The payment of underwriting costs associated with the issuance ofthe 2011 Bonds is not contingent. At least 95% of the reasonably expected underwriting costs associated with the 2011 Bonds will be paid not later than the 180th day after the date hereof. XII. Qualified Tax Exempt Obligation The Issuer has not designated the 2011 Bonds as "qualified tax exempt obligations." XIII. General Representations 1. Other Obligations. There are no other obligations of the Issuer that are sold at substantially the same time as the 2011 Bonds (within 15 days of February 15, 2011), are sold pursuant to a common plan of financing together with the 2011 Bonds, and are reasonably expected to be paid out of substantially the same source of funds as the 2011 Bonds. AMBB/General Obligation Bonds, 2011 Series One Federal Tax Certificate 1:\Docs\37421723\Federal Tax Cert.wpd Page 7 2. Abusive Transactions. The 2011 Bonds are not and will not be part of a transaction or series of transactions that attempt to circumvent the provisions of Section 148 of the Code and the regulations thereunder by (i) enabling the Issuer to exploit the difference between tax exempt and taxable interest rates to gain a material financial advantage; or (ii) overburdening the tax exempt bond market. The Issuer and the Governmental Unit have covenanted that they will make no use or investment of the proceeds of the 2011 Bonds that will cause the 2011 Bonds to be "arbitrage bonds" subject to federal income taxation under the Code. DATED this 1st day of March 2011. AMBB/General Obligation Bonds, 2011 Series One Federal Tax Certificate 1:\Docs\37421723\Fe deral Tax Cert.wpd Page 8 CERTIFICATE OF THE FINANCIAL ADVISOR I, LAWRENCE W. PIERCE, as financial advisor for the Alaska Municipal Bond Bank (the "Bank") hereby certify with respect to the Bank's General Obligation Bonds, 2011 Series One (the "Bonds"), as follows: 1. I have no reason to believe that the financial information found in Appendix D of the Preliminary Official Statement dated February 3, 2011, and the final Official Statement dated February 15, 2011, relating to the Bonds contains an untrue statement of material fact or omits to state a material fact necessary to make the statements therein, in light of the circumstance under which they were made, not misleading in any material respects. 2. Payment of the Bonds is secured by a reserve fund; based on my calculations (and affirmed by the Trustee) I have determined the reserve fund requirement to be $31,506,742.41 as of the date hereof. The amount of the reserve fund requirement is a reasonable amount to facilitate marketing of the Bonds at the most favorable interest rates available. 3. I have computed the yield on the Bonds to be not less than 4.51078 percent. For purposes of this certificate, the term "yield" means that yield which is computed as described in Section 1.148-4 of the Treasury Regulations. 4. I have computed the weighted average maturity of the Bonds to be 11.2770 years. The weighted average maturity of the Bonds is the sum of the products of the issue price and the par amount of each group of identical Bonds and the number of year to maturity (determined separately for each group of identical Bonds and taking into account mandatory redemption, if any) divided by the aggregate sale proceeds of the Bonds. DATED this 1st day of March 2011. WESTERN FINANCIAL GROUP, LLC ~-LAWRENCE W. PIERCE UNDERWRITER REPRESENTATIONS $8,635,000 Alaska Municipal Bond Bank General Obligation Bonds, 2011 Series One This certificate is being delivered by Piper Jaffray & Co. (the "Underwriter") in connection with the issuance by the Alaska Municipal Bond Bank (the "Bond Bank") of the Bond Bank's General Obligation Bonds, 2011 Series One (the "Bonds"). Each capitalized term used herein, but not defined herein, shall have the meaning specified for such term in the Federal Tax Certificate, dated the date hereof, and relating to the 2011 Bonds. 1. The undersigned is authorized to execute this certificate on behalf of the Underwriter, which certifications are not necessarily based on personal knowledge, but may instead be based on either due inquiry deemed adequate by the undersigned or institutional knowledge (or both) regarding the matters set forth herein. 2. The Underwriter has made a bona fide public offering of the Bonds at the prices (or the prices corresponding to the yields) set forth on the inside cover of the Official Statement. On the sale date of the Bonds (February 15, 2011), at least 10% of each maturity of the Bonds were sold to the public at initial offering prices not greater than the respective prices corresponding to the yields shown on the inside cover of the Official Statement. The term "public," as used herein, does not include bondhouses, brokers, dealers, and similar persons or organizations acting in the capacity of underwriters or wholesalers. 3. The amount of the Reserve Fund Requirement (as defined in the 2005 General Bond Resolution, as amended on August 19, 2009, pursuant to which the Bonds have been issued) is a reasonable amount to facilitate marketing of the Bonds at the most favorable interest rates available. 4. The statements contained in the Official Statement under the heading "Underwriting" are true and correct in all material respects. 5. These representations are provided to (i) Wohlforth, Johnson, Brecht, Cartledge & Brooking and the Alaska Municipal Bond Bank solely to provide them with information concerning the Bonds for purposes of formulating its opinion with regard to the tax-exempt status of the 2011 Bonds; (ii) Birch, Horton, Bittner and Cherot to provide them with information concerning the municipal bond of the Kodiak Island Borough; and (iii) K&L . Gates, LLP to provide them with information concerning the municipal bond of the City and Borough of Wrangell, for purposes of formulating their opinions with respect to the municipal bond; and are not to be used or relied upon by any other person; provided however, the Underwriter expresses no view regarding the legal sufficiency or the correctness of any legal interpretation made by bond counsel, nothing herein represents our interpretation of any laws, and in particular, regulations under the Code, and the Underwriter expresses no view regarding the legal sufficiency of any representations made herein.DATED this 1st day of March 2011. PIPER JAFFRAY & CO. 1:\Docs\37421723\Underwriter Rep.wpd Page 2 Brecht Brooking Wohlforth Johnson Cartledge .4 Pf~OFESSIONAL CORPORATION Julius J. Brecht Cheryl Rawls Brooking Cynthia L. Cartledge Michael Gatti Clyde W. Hutchins Jr. Robert M. Johnson Leila R. Kimbrell Eric E. Wohlfarth ATTORNEYS AT LAW 900 WEST 5TH AVENUE, SUITE 600 ANCHORAGE, ALASKA 99501·2048 Telephone 907.276.6401 Facsimile 907.276.5093 Website www.akatty.com March 1, 2011 Board of Directors Alaska Municipal Bond Bank P.O. Box 110405 Juneau, Alaska 99811 Ladies and Gentlemen: We have acted as Bond Counsel in connection with the issuance by the Alaska Municipal Bond Bank (the "Bank") of $8,635,000 General Obligation Bonds, 2011 Series One (the "Bonds"). We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion, including the opinions of bond counsel to the Governmental Units concerning the validity and enforceability of the Municipal Bonds, and the Loan Agreements securing the Loans financed with the proceeds of the Bonds (as such terms are defined in the Resolutions referred to below). The Bonds are issued under the Alaska Municipal Bond Bank Act, Chapter 85 of Title 44 of the Alaska Statutes, as amended (the "Act"), the General Obligation Bond Resolution of the Bank entitled "A Resolution Creating And Establishing An Issue Of Bonds Of The Alaska Municipal Bond Bank; Providing For The Issuance From Time To Time Of Said Bonds; Providing For The Payment Of Principal Of And Interest On Said Bonds, And Providing For The Rights Of The Holders Thereof," adopted July 13, 2005, as amended August 19, 2009 (the "General Bond Resolution") and Series Resolution No. 2011-01, adopted February 1, 2011 (the "Series Resolution," and together with the General Bond Resolution, the "Resolutions"). Alaska Municipal Bond Bank March 1, 2011 Page 2 The Bonds are in registered form, are dated the date of delivery, mature on 1st day of March in the years in the respective principal amounts, and bear interest at the rates, as follows: Due Principal Interest March 1 Amount Rate 2012 $295,000 3.000% 2013 305,000 3.000 2014 315,000 3.000 2015 325,000 3.000 2016 745,000 3.000 2017 340,000 3.000 2018 355,000 3.500 2019 365,000 4.000 2020 380,000 4.000 2021 395,000 4.000 2026 2,125,000 4.750 2031 2,690,000 5.125 The Bonds bear interest from the date of delivery, payable on September 1,2011, and semi-annually thereafter on March 1 and September 1 in each year. The Bonds are subject to redemption prior to maturity as provided in the form of Bond. In connection with the issuance of the Bonds, we have reviewed the Resolutions and the federal tax certificate of the Bank dated the date hereof (the "Tax Certificate"), a Certificate of No-Litigation of the Attorney General (counsel to the Bank), certificates of the Bank, Bank, the Trustee and others, and such other documents, opinions and matters to the extent we deemed necessary to render the opinions set forth herein. The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. Such opinions may be affected by actions taken or omitted or events occurring after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur. We disclaim any obligation to update this letter. We have assumed the genuineness of all documents and signatures presented to us (whether as originals or as copies) by any parties other than the Bank and the due and legal execution and delivery thereof by any parties other than the Bank. We have not undertaken to verify independently, and have assumed, the accuracy of the factual matters represented, warranted or certified in the documents referred to in the preceding paragraph. Furthermore, we have assumed compliance with the covenants and agreements contained in the Resolutions and the Tax Certificate, including (without limitation) covenants and agreements compliance with which is necessary to assure that I:\Docs\37421723\Final Approving Opinion.wpd Alaska Municipal Bond Bank March 1, 2011 Page 3 future actions, omissions or events will not cause interest on the Bonds to be included in gross income for federal income tax purposes. We call attention to the fact that the rights and obligations under the Bonds, the Loan Agreements, and the Tax Certificate may be subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors' rights generally and to the application of equitable principles. We express no opinion as to the Official Statement or other offering material relating to the Bonds thereto, or relating to the undertaking by the Bankto provide ongoing disclosure pursuantto Securities and Exchange Commission Rule 15c2-12. As to questions of fact material to our opinion, we have relied upon various statements and representations of the Bank contained in the Resolutions and in the certified proceedings and other certifications of public officials furnished to us without undertaking to verify the same by independent investigation. Subject to the foregoing, we are of the opinion that, under existing law: 1. The Bank has the right and power to execute and deliver the Resolutions. 2. The Resolutions have been duly and lawfully executed and delivered by the Bank, are in full force and effect and are valid and binding upon the Bank and enforceable in accordance with their terms (subject, as to enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium, orotherlaws affecting creditors' rights generally from time to time in effect). 3. The Resolutions create the valid pledge and assignment which they purport to create of the Municipal Bonds, subject to the application thereof to the purposes and on the conditions permitted by the Resolutions. 4. The Bonds are valid and binding general obligations of the Bank, enforceable in accordance with their terms and the terms of the Resolutions. 5. The Bonds have been duly and validly authorized and issued in accordance with the constitution and statutes of the State of Alaska, including the Act as amended to the date of this opinion, and in accordance with the Resolutions. 6. The Bonds are not a debt or liability, nor do they constitute a pledge of the faith and credit, of the State of Alaska. 7. Under existing laws, regulations, rulings and judicial decisions, interest on the Bonds is excludable from the gross income of the owners thereof for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. However, interest on the Bonds is 1:\Docs\37421723\Final Approving Opinion.wpd Alaska Municipal Bond Bank March 1, 2011 Page 4 taken into account in determining adjusted current earnings for purposes of computing the federal alternative minimum tax imposed on certain corporations. The opinion set forth in the first sentence of this paragraph is subject to the condition that the Bank comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. The Bank has covenanted to comply with all applicable requirements. Failure to comply with certain of such requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. 8. Under existing laws, interest on the Bonds is free from taxation by the State of Alaska except for transfer, estate and inheritance taxes. Except as expressly stated above, we express express no opinion regarding any other federal or state income tax consequences of acquiring, carrying, owning or disposing of the Bonds. Owners of the Bonds should consult their tax advisor regarding the applicability of any collateral tax consequences of owning the Bonds, which may include original issue discount, original issue premium, purchase at a market discount or at a premium, taxation upon sale, redemption or other disposition, and various withholding requirements. This opinion is given as of the date hereof, and we assume no obligation to update, revise or supplement this opinion or reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. Sincerely, WOHLFORTH, JOHNSON, BRECHT, CARTLEDGE &BROOKING /'1 /'" :i ///./;7 ///!{:/..'---' /L (' /~./. /Cynthia L. Cartledge 1:\Docs\37421723\Final Approving Opinion.wpd Brecht Brooking Wohlforth Johnson Cartledge II PROFESSION/,L COF,POF,ATlor, Julius J. Brecht Cheryl Rawls Brooking Cynthia L. Cartledge Michael Gatti Clyde W. Hutchins Jr. Robert M. Johnson Leila R. Kimbrell Eric E. Wohlforth ATTORNEYS AT LAW 900 WEST 5TH AVENUE, SUITE 600 ANCHORAGE, ALASKA 99501·2048 Telephone 907.276.6401 Facsimile 907.276.5093 Website www.akatty.com March 1, 2011 Board of Directors Alaska Municipal Bond Bank P.O. Box 110405 Juneau, Alaska 99811 Piper Jaffray & Co. Seattle, WA 98101 Ladies and Gentlemen: We have acted as Bond Counsel in connection with the issuance by the Alaska Municipal Bond Bank (the "Bank") of $8,635,000 General Obligation Bonds, 2011 Series One (the "Bonds"). All terms not herein defined shall have the meanings set forth in the Bond Purchase Contract by and between the Bank and Piper Jaffray & Co., as the underwriter named therein, and dated February 15, 2011. The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. As to questions of fact material to our opinion, we have relied upon various statements and representations of the Bank contained in the Resolutions and in the certified proceedings and other certifications of public officials furnished to us without undertaking to verify the same by independent investigation. Subject to the foregoing, we are of the opinion that, under existing law: (A) The Bank is a public body corporate and politic constituted as a public corporation and an instrumentality of the State within the Department of Revenue but having a legal existence independent of and separate from the State, exercising public and governmental functions and created by the Act. (B) The Bond Resolutions, the Loan Agreements, the Purchase Contract and the Disclosure Certificate have been duly authorized, executed and delivered by the Bank and (assuming in the case of the Loan Agreements and the Purchase Contract the due authorization, execution and delivery thereof by the other parties thereto) constitute legal, valid and binding agreements of the Bank enforceable against the Bank in accordance with Alaska Municipal Bond Bank Piper Jaffray & Co. March 1, 2011 Page 2 the terms of such agreements except as enforcement may be limited by or rendered ineffective by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally or the application of equitable principles and the exercise of judicial discretion in appropriate cases. (C) The Bank has duly authorized the distribution by the Underwriter of the Preliminary Official Statement and the Official Statement to potential purchasers of the Bonds.(D) The Bonds are fully negotiable for all purposes ofAS 45.01-45.08, AS 45.12, AS 45.14, and AS 45.29, and holders of the Bonds, by accepting the Bonds, are conclusively considered to have agreed that such Bonds are fully negotiable for all purposes of AS 45.01-45.08, AS 45.12, AS 45.14, and AS 45.29. (E) The statements contained in the Preliminary Official Statement arid Official Statement under the headings "DESCRIPTION OF THE 2011 SERIES ONE BONDS," "SECURITY FOR THE 2011 SERIES ONE BONDS," "SUMMARY OF THE 2005 GENERAL BOND RESOLUTION," "TAX MATTERS," "CONTINUING DISCLOSURE UNDERTAKING" and "DEFINITIONS" and in Appendices A and F, insofar as such statements purport to summarize certain provisions of the Bond Resolutions, the Loan Agreements, the Disclosure Certificate, and the Bonds (other than any financial or statistical data contained in such sections, about which no opinion is expressed), certain State and federal laws and tax matters and the approving opinions of Bond Counsel, are true and correct in all material respects. (F) The Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended, and the Bond Resolutions is exempt from qualification as an indenture pursuant to the Trust Indenture Act of 1939, as amended. (H) The Underwriter is hereby authorized to rely upon the final approving opinion rendered in connection with the issuance of the Bonds and dated the date hereof. Sincerely, WOHLFORTH, JOHNSON, BRECHT, CARTLEDGE & BROOKING /J /1 /'7 /' L.·'}//·'----· /f -_, . j {/' Cyntl4la L. Cartledge 1:\Docs\37421723\Supplemental Opinion.wpd Brecht Brooking Wohlforth Johnson Cartledge ;":;, PROFESSIONAL CORPORATION Julius J. Brecht Cheryl Rawls Brooking Cynthia L. Cartledge Michael Gatti Clyde W. Hutchins Jr. Robert M. Johnson Leila R. Kimbrell Eric E. Wohlforth ATTORNEYS AT LAW 900 WEST 5TH AVENUE, SUITE 600 ANCHORAGE, ALASKA 99501·2048 Telephone 907.276.6401 Facsimile 907.276.5093 Website www.akatty.com March 1, 2011 The Bank of New York Mellon Trust Company N.A., as Trustee 601 Union Street, Suite 520 Seattle, Washington 98101 Ladies and Gentlemen: You are acting as trustee under the General Bond Resolution of the Alaska Municipal Bond Bank (the "Bank"), adopted July 13, 2005, as amended August 19, 2009 (the "General Bond Resolution"). Under the General Bond Resolution, the Bank has authorized the issuance of its $8,635,000 General Obligation Bonds, 2011 Series One (the "Bonds") pursuant to Series Resolution No. 2011-01, adopted February 1, 2011 (the "Series Resolution" and, together with the General Bond Resolution, the "Resolutions"). All terms not herein defined shall have the meaning given such term in the General Bond Resolution. We advise you as such trustee that in our opinion: (I) the Bank had, and has, the right and power under AS 44.85, as amended to the date hereof, to execute and deliver the Resolutions, (ii) the Resolutions have been duly and lawfully executed and delivered by the Bank, are in full force and effect, and are valid and binding upon the Bank and enforceable in accordance with their respective terms (subject, as to enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium, or other laws affecting creditors' rights generally from time to time in effect), (iii) the Resolutions create the valid pledge and assignments which such Resolutions purport to create of the Municipal Bonds subject to the application thereof to the purposes and on the conditions permitted by the General Bond Resolution; (iv) the Bonds are valid and binding general obligations of the Bank, enforceable in accordance with their terms and the terms of the Resolutions, and (v) the Bonds have been duly and validly authorized and issued in accordance with the Constitution and statutes of the State of Alaska, including AS 44.85 as amended to the date hereof, and in accordance with the General Bond Resolution. The Bank of New York Mellon Trust Company NA Re: $8,635,000 General Obligation Bonds, 2011 Series One March 1, 2011 Page 2 We further advise you as such trustee that in our opinion the Series Resolution has been duly and lawfully adopted by the Bank in accordance with the provisions of the General Bond Resolution, is authorized or permitted by the General Bond Resolution and is valid and binding upon the Bank and enforceable in accordance with its terms (subject, as to enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium, or other laws affecting creditor's rights generally from time to time in effect). Sincerely, WOHLFORTH, JOHNSON, BRECHT, CARTLEDGE &BROOKING /1 i ~_ -/./('7 -/Cynthia L. Cartledge 1:\Docs\37421723\WJ BCB Trust Opinion.wpd ATTORNEY GENERAL'S CERTIFICATE AS TO LITIGATION AND OTHER MATTERS I, MARJORIE L. VANDOR, Chief Assistant Attorney General, on behalf of the Attorney General of the State of Alaska, HEREBY CERTIFY, with respect to the Alaska Municipal Bond Bank (the "Bank") General Obligation Bonds, 2011 Series One (the "Bonds"), as follows. All terms not defined herein shall have the meaning as set forth in the Bank's General Resolution, adopted July 13, 2005, as amended August 19, 2009, and Series Resolution No. 2011-01, adopted February 1, 2011 (together, the "Bond Resolutions"). A. I am a properly appointed and qualified Chief Assistant Attorney General of the State of Alaska (the "State"), presently serving in that capacity and authorized to sign this document on behalf of the State Attorney General. B. To the best of my knowledge, all approvals, consents and orders of any State governmental authority, board, agency or commission having jurisdiction that would constitute conditions precedent to the performance by the Bank of its obligations under the Bond Resolutions, the Bonds, the Loan Agreements, and the Continuing Disclosure Certificate, and that can be reasonably obtained at this time have been obtained. Loan Agreements shall mean, the loan agreement by and between the Bank and the Kodiak Island Borough, Alaska and the loan agreement by and between the Bank and the City and Borough of Wrangell, Alaska (together, the "Loan Agreements"). C. There is no State litigation or proceeding pending, or to my knowledge, after due inquiry, threatened, in any way affecting the existence of the Bank, or the titles of its officers to their respective offices, or seeking to restrain or to enjoin the authorization, sale, or delivery of the Bonds, or the right, power and authority of the Bank to purchase the Bonds and to collect the Municipal Bond Payments pledged to pay the principal of and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the Bond Resolutions, the Bonds, the Loan Agreements, the Bond Purchase Contract, or the Continuing Disclosure Certificate, or contesting the powers of the Bank or its authority with respect to the Bond Resolutions, the Bonds, the Loan Agreements, the Bond Purchase Contract, or the Continuing Disclosure Certificate. D. Based on my examination, I have no reason to believe that the material in the Preliminary Official Statement or Official Statement under the caption "LITIGATION" relating to the Bank contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading in any material respects. DATED this 1st day of March 2011. STATE OF ALASKA ATTORNEY GENERAL 1:\Docs\37421723IAG Certificate 2011 Series One.wpd MOODY'S INVESTORS SERVICE February 7, 2011 M1'. Deven Mitchell Executive Director Alaska Municipal Bond Bank Department of Revenue 333 Willoughby Avenue Juneau, AK 99811-0405 Dear M1'. Mitchell, 7 \'I;!orId Trade Center 250 Greenwich Str'cer New York, NY 10007 www.moodys.com We wish to inform you that on February 3,2011, Moody's Investors Service assigned a rating of Aa2 to the Alaska Municipal Bond Bank's General Obligation Bonds, 2011 Series One. In order for us to maintain the currency of our ratings, we request that you provide ongoing disclosure, including annual financial and statistical information. Moody's will monitor this rating and reserves the right, at its sole discretion, to revise or \vithdraw this rating at any time in the future. The rating, as well as any revisions or \vithdrawals thereoC will be publicly disseminated by Moody's through normal print and electronic media and in response to verbal requests to Moody's ratings desk. Should you have any questions regarding the above, please do not hesitate to contact me at 212-553-2741. Sincerely, ~ 7 11.1 . /I//../--.. J ...,.J, '1/--t:f>t."'''J' p' .,---<;;.,-~{ 1\. //Ted Hampton G' Assistant Vice President /Analyst February 11,2011 Mr. Deven Mitchell State Debt Manager State of Alaska Alaska Department of Revenue 333 Willoughby Avenue Juneau, AK 99811 Dear Mr. Mitchell: Cine S~ate Street Pi~Ea ;··le·/'! Ycrk, f'~Y 1000,:j T 212 :~OB 0500/80075 FITCH 'NW\\'. f: tchra'Lings.cGrn Fitch Ratings has assigned one or more ratings and/or otherwise taken rating action(s), as detailed on the attached Notice of Rating Action. In issuing and maintaining its ratings, Fitcl) relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. 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The assignment of a rating by Fitch does not constitute consent by Fitch to the use of its name as an expert in connection with any registration statement or other filings under US, UK or any other relevant securities laws. It is Important that you promptly provide us with all Information that may be material to the ratings so that our ratings continue to be appropriate. Ratings may be raised, lowered, withdrawn, or placed on Rating Watch due to changes in, additions to, accuracy of or the Inadequacy of information or for any other reason Fitch deems sufficient. Nothing in this letter Is Intended to or should be construed as creating a fiduciary relationship between Fitch and you or between us and any user of the ratings. Nothing in this letter shall limit our right to publish, disseminate or license others to publish or otherwise to disseminate the ratings or the rationale for the ratings. In this letter, "Fitch" means Fitch, Inc. and Fitch Ratings Ltd and any subsidiary of either of them together with any successor in interest to any such person. We are pleased to have had the opportunity to be of service to you. If we can be of further assistance, please feel free to contact us at any time. St\erel~, ![ I \0ilL:kO (,Jalynn K. Mora riYanaging Director U.S. Public Finance JKM/rn Enc: Notice of Rating Action (Doc 10: 156890) Bond Description Notice of Rating Action Rating Type Action Outlook/Rating Watch Eft Date Notes Alaska Municipal Bond Bank Authority (AK) GO bonds Long Term ser 2011 ser One New Rating AA RO:Sta 09-Feb-2011 Key: RO: Rating Outlook, RW: Rating Watch; Pos: Positive, Neg: Negative, Sta: Stable, Evo: Evolving (Doc ID: 156890) Page 1 of 1 • Blanket Issuer Letter of Representations (To be Completed by Issuer] ,,1 A~KA MIThlICTPAT. FOND BANK May 2, 1995 !D~tel Attention: Underwriting Department -Eligibility The Depository Trust Company 55 Water Street: 50th Floor ~ewYork. ~Y 10041-0099 Ladies and Gentlemen: This letter sets forth our understanding with respect to all issues £the ,"Securities") that Issuer shall request be made eligible for deposit by The Depository Trust Company ("DTC"). To induce DTC to accept the Securities as eligible for deposit at DTC, and to act in accordance with DTe's Rules with respect to the Securities, Issuer represents to DTC that Issuer will comply with the requirements stated in DTe's Operational Arrangements, as they may be amended from time to time. Note: Schedule A contains statements that DTC believes accuraleh· describe DTC. the method of effecting bookentry transfers of securities distributed through DTC. and certain related matters. Received and Accepted: THE DEPOSITORY TRUST COMPANY Very truly yours, ALASKA MUNICIPAL BOND BANK 23 2 Issuer's employer identification number (EIN) OMS No. 1545-0720 Information Return for Tax-Exempt Governmental Obligations ~ Under Internal Revenue Code section 149(e) ~ See separate instructions. Caution: If the issue price is under $100,000, use Form 8038-GC. Authority If Amended Return, check here ~ 0 1 Issuer's name Form8038·G (Rev. May 2010) Department of the Treasury Internal Revenue Service Alaska Municipal Bond Bank 92 6001185 3 Number and street (or P.O. box if mail is not delivered to street address) 333 Willoughby, State Office Building 5 City, town, or post office, state, and ZIP code Juneau, Alaska 99801 Room/suite 4 Report number (For IRS Use Only) 6 Date of issue March 1, 2011 7 Name of issue 8 CUSIP number General Obligation Bonds, 2011 Series One 01179PU62 9 Name and title of officer of the issuer or other person whom the IRS may call for more information 10 Telephone number of officer or other person years years (e) Yield 4.5108 % -0-469,188 8,702,614 465·3750 8,233,426 N/A N/A 29 years 30 bonds.) -0· -0--0-( 907 ) 43,421 425,767 (d) Weighted average maturity 24 25 26 28 27 (e) Stated redemption price at maturity lete for the entire issue for which this form is bein (b) Issue price Uses of Proceeds of Bond Issue (including underwriters' discount) 3/01/2031 $ 8,702,614 $ 8,635,000 11.2770 Proceeds used for accrued interest. Issue price of entire issue (enter amount from line 21, column (b)) Proceeds used for bond issuance costs (including underwriters' discount) Proceeds used for credit enhancement Proceeds allocated to reasonably required reserve or replacement fund. Proceeds used to currently refund prior issues . Proceeds used to advance refund prior issues . Total (add lines 24 through 28) . Nonrefundin proceeds of the issue (subtract line 29 from line 23 and enter amount here) Description of Refunded Bonds (Complete this art only for refundin Deven J. Mitchell, Executive Director Type of Issue (enter the issue price) See instructions and attach schedule 11 Education 12 Health and hospital 13 Transportation. 14 Public safety . 15 Environment (including sewage bonds). 16 Housing. 17 Utilities . 18 Other. Describe ~ Loans to Governmental Units 19 If obligations are TANs or RANs, check only box 19a If obligations are BANs, check only box 19b 20 If obligations are in the form of a lease or installment sale, check box 22 23 24 25 26 27 28 29 30 31 Enter the remaining weighted average maturity of the bonds to be currently refunded. 32 Enter the remaining weighted average maturity of the bonds to be advance refunded. 33 Enter the last date on which the refunded bonds will be called (MM/DDIYYYY) . 34 Enter the daters) the refunded bonds were issued ~ (MM/DDIYYYY) For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 637738 Form 8038-G (Rev. 5-2010) Page 2 -0-N/A Form 8038-8 (Rev. 5-2010) Miscellaneous 35 Enter the amount of the state volume cap allocated to the issue under section 141 (b)(5) . 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (GIG) (see instructions) . b Enter the final maturity date of the GIC ~ 37 Pooled financings: a Proceeds of this issue that are to be used to make loans to other governmental units . 37a 8,233,426 b If this issue is a loan made from the proceeds of another tax-exempt issue, check box ~ 0 and enter the name of the issuer ~ and the date of the issue ~ If the issuer has designated the issue under section 265(b)(3)(B)(i)(llI) (small issuer exception), check box If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box If the issuer has identified a hedge, check box . 38 39 40 Date March 1,2011 . ed this return and accompanying schedules and statements, and to the best of my knowledge Signature and Consent --1-2·· ,;:1 /Date Preparer's SSN or PTIN Paid t-.~ C 7 3/1/2011 P01467958 Preparer'sf------'---""'--+-------'-=----=:O'-------'-----...........l -=.:,::::.:.:.=::.z..::::::-=:::.J-'--.:::....:"--.:.....:::...:O-='...:::...::::----Use Only 0046684 ( 907 ) 276.6401 Form 8038-G (Rev. 5-2010) Wohlforth I Johnson I Brecht Cartledge I Brooking A PROFESSIONAL CORPORATION Julius J. Brecht Cheryl Rawls Brooking Cynthia L. Cartledge Michael Gatti Clyde W. Hutchins Jr. Robert M. Johnson Leila R. Kimbrell Eric E. Wohlforth ATTORNEYS AT LAW 900 WEST 5TH AVENUE, SUITE 600 ANCHORAGE, ALASKA 99501-2048 March 4, 2011 Telephone 907.276.6401 Facsimile 907.276.5093 Website www.akatty.com CERTIFIED MAIL: #7004 2890 0003 9701 4806 RETURN RECEIPT REQUESTED Internal Revenue Service Center Ogden, Utah 84201 Re: Alaska Municipal Bond Bank, General Obligation Bonds, 2011 Series One; Our File No. 3742.1723 Ladies and Gentlemen: Enclosed please find Form 8038-G, in the above-referenced matter for filing. In addition, you will also find one copy of the Form 8038-G stamped "Acknowledgment Copy" please return this copy with your received date stamp, in the enclosed self-addressed stamped envelope. Sincerely, WOHLFORTH, JOHNSON, BRECHT, CARTLEDGE & BROOKING 6eg!:ant Enclosures as stated 1:\Docs\37421723\L2IRS.wpd , SENDER: COMPLETE THIS SECTION COMPLETE THIS SECTION ON DEI.IVERY r ,," ~ ~ 0' IfII Complete items 1, 2, and 3. Also complete A. Signature item 4 if Restricted Delivery is desired. X D Agent III Print your name and address on the reverse D Addressee so that we can return the card to you. B. Received by ( Printed Name) IC. Date of Delivery l1li Attach this card to the back of the mailpiece, or on the front if space permits. RF~FI\lFn I D. Is c~crafeSSdifler~~~ ~ DYes 1. Article Addressed to: ~ES, MARelioery9adzr5s1s1bei ~ D No Is-.-\e( ('\. G\.\ Reve nu.e ('f) ~(f) in:: Sel"VIc::e c.~V\;-~,... -OGDEN UT O')d'E?1'\ U.{:-Clt.-h 3. Service Type 1 ~.l{ -;tOl ~ Certified Mail D Express Mail D Registered fiiI. Return Receipt for Merchandise D Insured Mail DC.a.D. 4. Restricted Delivery? (Extra Fee) DYes 2. Article Number (Transferfrom service label) 7004 28900003 9701 4806 PS Form 3811, February 2004 Domestic Return Receipt 102595·02-M-1540 : WESTERN FINANCIAL GROUP FINAL Wire Instructions Memorandum Alaska Municipal Bond Bank $8,635,000 General Obligation Bonds, 2011 Series One To: Deven Mitchell, Alaska Municipal Bond Bank Cynthia Cartledge, Wohlforth, Johnson, Brecht, Cartledge and Brooking Karl Short, Kodiak Island Borough Tom Klinkner, Birch, Horton, Bittner and Cherot Jeff Jabusch, City and Borough of Wrangell David Thompson, K&L Gates Jane Towery, Piper Jaffray Daren Bell, Piper Jaffray Kathy Graves, Bank of New York Mellon Trust Company From: Chip Pierce, Western Financial Group, LLC Date: February 25, 2011 The following are final wire instructions for the closing of the above referenced financing. The closing will take place at 8:00 am on March 1, 2011 at the Seattle offices of at the Seattle offices of K&L Gates at 925 Fourth Avenue, Suite 2900. Pre-closing will take place at 11:00 am on February 28, 2011 at the same location. There will be one provider and one initial recipient of funds at closing. The provider will be Piper Jaffray ("("Piper"), the purchaser of the bonds. The initial recipient will be the Bank of New York Mellon Trust Company ("BNY"). BNY will receive all funds relating to the borrowers' project funds. BNY will then make a subsequent wire to the underlying borrowers related to their project amounts. The table below presents the calculation of the funds wired by Piper to BNY on March 1, 2011: Par Amount of Bonds Original Issue Premium Underwriter's Discount Total Wire Amount $8,635,000.00 67,613.80 (43,420.75) $8,659,193.05 On the morning of March 1, 2011, BNY will receive $8,659,193.05 from Piper for the 2011 Series One Bonds. Because the Bonds are dated the date of delivery, there is no accrued interest associated with this issue. Those funds will be allocated according to the table on the following page: Phone: (503) 636-0265 FCL-';: (503) 636-9778 333 S. State Street PMB #172, Suite V Lake Oswego, OR 97034 Alaska Municipal Bond Bank Final Wire Instructions Memorandum General Obligation Bonds -2011 Series One Recipient Kodiak Island Borough City and Borough of Wrangell BNY (AMBB Reserve Obligations) Total The following are wire instructions for funds that will be wired to BNY by Piper: The Bank of New York ABA: 021000018 Account: GLA: 111-565 FBO: TAS # 745965 REF: AMBB 2011 One ATTN: Kathy Graves Phone 206-667-8910 Debt Service Reserve Deposit Amount $8,008,543.64 224,882.57 425,766.84 $8,659,193.05 AMBB 2005 Resolution Reserve Because the reserve requirement will be entirely met with the use of bond proceeds, there is no requirement for funding of the 2005 Resolution Reserve from the Custodian Account. On March I, 2011, BNY will deposit $425,766.84 of 2011 Series One bond proceeds to the 2005 Resolution Reserve Fund. Distribution of Borrower Loan Proceeds Kodiak Island Borough On March I, 2011, BNY will wire $8,008,543.64 to Kodiak Island Borough. The following are wire instructions for funds that will be wired from BNY to Kodiak Island Borough: Wells Fargo ABA #: 121-000-248 Account Number 10502505 Attention: Jody (907) 486-3127 City and Borough of Wrangell On March I, 2011, BNY will wire $224,882.57 to the City and Borough of Wrangell. The following are wire instructions for funds that will be wired from BNY to Wrangell: Wells Fargo Bank ABA #: 121-000-248 City and Borough of Wrangell Account: 12-030082 The table below presents the CUSIP numbers associated with each maturity of the 2011 Series One Bonds: Due March 1 2012 2013 2014 Par Amount $295,000 305,000 315,000 Coupon 3.00% 3.00% 3.00% CUSIP Number 01179P T31 T49 T56 Page 2 Alaska Municipal Bond Bank Final Wire Instructions Memorandum General Obligation Bonds -2011 Series One Due March 1 2015 2016 2017 2018 2019 2020 2021 2026 2031 Par Amount $325,000 745,000 340,000 355,000 365,000 380,000 395,000 2,125,000 2,690,000 Coupon 3.00% 3.00% 3.00% 3.50% 4.00% 4.00% 4.00% 4.75% 5.125% CUSIP Number 01179P T64 Tn T80 T98 U21 U39 U47 U54 U62 If you have any questions related to this memo or the accompanying pages, please contact Chip Pierce at (503) 636-0265. Thank you for your assistance. Page 3 Piperjaffray. TABLE OF CONTENTS Alaska Municipal Bond Bank General Obligation Bonds, Series 2011 One "id< Final Pricing as of February 15, 2011 "id< Report General Obligation Bonds, Series 2011 One Sources and Uses of Funds Bond Pricing Bond Summary Statistics Bond Debt Service Form 8038 Statistics Kodiak Island Borough Loan Bond Pricing Bond Summary Statistics Bond Debt Service Wrangell Loan Bond Pricing Bond Summary Statistics Bond Debt Service Reserve Deposit Bond Pricing Bond Summary Statistics Bond Debt Service Feb 15, 20 II 10: 11 am Prepared by Piper Jaffray & Co. Page I 23456789 10 II 12 13 14 (Finance 6.018 Alaska Municipal Bond Bank 2011 One:2011) SOURCES AND USES OF FUNDS Alaska Municipal Bond Bank General Obligation Bonds, Series 2011 One ,~,~ Final Pricing as of February 15, 2011 ·k.,< Dated Date 03/0112011 Delivery Date 03/01/2011 Kodiak Island Reserve Sources: Borough Loan Wrangell Loan Deposit Total Bond Proceeds: Par Amount 8,000,000.00 220,000.00 415,000.00 8,635,000.00 Net Premium/OlD 49,232.60 5,927.05 12,454.15 67,613.80 8,049,232.60 225,927.05 427,454.15 8,702,613.80 Kodiak Island Reserve Uses: Borough Loan Wrangell Loan Deposit Total Project Fund Deposits: Project Fund 8,005,000.00 222,200.00 8,227,200.00 Other Fund Deposits: Debt Service Reserve Fund 421,742.41 421,742.41 Underwriter's Discount: Average Takedown 38,162.50 975.00 1,556.25 40,693.75 Management Fee 926.46 25.48 48.06 1,000.00 UW Expenses 1,600.00 44.00 83.00 1,727.00 40,688.96 1,044.48 1,687.31 43,420.75 Other Uses of Funds: Additional Proceeds 3,543.64 2,682.57 4,024.43 10,250.64 8,049,232.60 225,927.05 427,454.15 8,702,613.80 Piper]affray. Feb 15,2011 10:11 am Prepared by Piper Jaffray & Co. (Finance 6.018 Alaska Municipal Bond Bank 2011 One:2011) Page 1 Piper]affray. BOND PRICING Alaska Municipal Bond Bank General Obligation Bonds, Series 2011 One ,h~ Final Pricing as of February 15, 2011 i<>~ Maturity Bond Component Date Serial Bond: 03/01/2012 03/0112013 03/0112014 03/01/2015 03/01/2016 03/01/2017 03/01/2018 03/01/2019 03/01/2020 03/01/2021 Term Bond: 03/01/2026 Term Bond: 03/01/2031 Dated Date Delivery Date First Coupon Par Amount Premium Production Underwriter's Discount Purchase Price Accrued Interest Net Proceeds Amount Rate Yield 295,000 3.000% 0.700% 305,000 3.000% 1.100% 315,000 3.000% 1.530% 325,000 3.000% 2.050% 745,000 3.000% 2.360% 340,000 3.000% 2.750% 355,000 3.500% 3.120% 365,000 4.000% 3.450% 380,000 4.000% 3.700% 395,000 4.000% 3.930% 3,820,000 2,125,000 4.750% 4.800% 2,690,000 5.125% 5.200% 8,635,000 03/01/2011 03/01/2011 09/01/2011 8,635,000.00 67,613.80 8,702,613.80 100.783020% -43,420.75 -0.502846% 8,659,193.05 100.280174% 8,659,193.05 Price 102.287 103.748 104.294 103.630 103.001 101.374 102.373 103.816 102.278 100.574 99.469 99.074 Feb 15,2011 10:11 am Prepared by Piper Jaffray & Co. (Finance 6.018 Alaska Municipal Bond Bank 2011 One:2011) Page 2 Piper]affray. BOND SUMMARY STATISTICS Alaska Municipal Bond Bank General Obligation Bonds, Series 2011 One Dated Date Delivery Date Last Maturity ~d< Final Pricing as of February 15, 2011 *~< 03/0112011 03/0112011 03/0112031 Arbitrage Yield True Interest Cost (TIC) Net Interest Cost (NIC) All-In TIC Average Coupon Average Life (years) Duration oflssue (years) Par Amount Bond Proceeds Total Interest Net Interest Bond Years from Dated Date Bond Years from Delivery Date Total Debt Service Maximum Annual Debt Service Average Annual Debt Service 4.510788% 4.570003% 4.642234% 4.570003% 4.666868% 11.373 8.630 8,635,000.00 8,702,613.80 4,583,331.28 4,559,138.23 98,210,000.00 98,210,000.00 13,218,331.28 1,074,375.00 660,916.56 Bond Component Serial Bond Term Bond Term Bond Par Value + Accrued Interest + Premium (Discount) -Underwriter's Discount -Cost of Issuance Expense -Other Amounts Par Average Average PV of I bp Value Price Coupon Life change 3,820,000.00 102.717 3.532% 5.678 1,959.10 2,125,000.00 99.469 4.750% 13.094 2,231.25 2,690,000.00 99.074 5.125% 18.102 3,308.70 8,635,000.00 11.373 7,499.05 All-In Arbitrage TIC TIC Yield 8,635,000.00 8,635,000.00 8,635,000.00 67,613.80 67,613.80 67,613.80 -43.420.75 -43.420.75 Target Value Target Date Yield 8,659,193.05 03/01/2011 4.570003% 8,659,193.05 03/0112011 4.570003% 8,702,613.80 03/011201 I 4.510788% Feb 15,2011 10:11 am Prepared by Piper Jaffray & Co. (Finance 6.018 Alaska Municipal Bond Bank 2011 One:2011) Page 3 BOND DEBT SERVICE Alaska Municipal Bond Bank General Obligation Bonds, Series 2011 One >~-;, Final Pricing as of February 15, 2011 -;,,~ Dated Date 03/011201 I Delivery Date 03/011201 I Period Ending Principal Coupon Interest Debt Service 03/01/2012 295,000 3.000% 366,575.00 661,575.00 03/01/2013 305,000 3.000% 357,725.00 662,725.00 03/01/2014 315,000 3.000% 348,575.00 663,575.00 03/01/2015 325,000 3.000% 339,125.00 664,125.00 03/01/2016 745,000 3.000% 329,375.00 1,074,375.00 03/01/2017 340,000 3.000% 307,025.00 647,025.00 03/01/2018 355,000 3.500% 296,825.00 651,825.00 03/01/2019 365,000 4.000% 284,400.00 649,400.00 03/01/2020 380,000 4.000% 269,800.00 649,800.00 03/0112021 395,000 4.000% 254,600.00 649,600.00 03/01/2022 385,000 4.750% 238,800.00 623,800.00 03/01/2023 405,000 4.750% 220,512.50 625,512.50 03/01/2024 425,000 4.750% 201,275.00 626,275.00 03/0112025 445,000 4.750% 181,087.50 626,087.50 03/01/2026 465,000 4.750% 159,950.00 624,950.00 03/01/2027 485,000 5.125% 137,862.50 622,862.50 03/01/2028 510,000 5.125% 113,006.26 623,006.26 03/0112029 535,000 5.125% 86,868.76 621,868.76 03/01/2030 565,000 5.125% 59,450.00 624,450.00 03/01/203 I 595,000 5.125% 30,493.76 625,493.76 8,635,000 4,583,33 I.28 13,218,33 I .28 Piper]affray. Feb 15,201 I 10:1 I am Prepared by Piper Jaffray & Co. (Finance 6.018 Alaska Municipal Bond Bank 201 1 One:201 I) Page 4 PiperJaffray. FORM 8038 STATISTICS Alaska Municipal Bond Bank General Obligation Bonds, Series 2011 One ~d< Final Pricing as of February 15, 2011 *~< Dated Date Delivery Date 03/0112011 03/0112011 Redemption Bond Component Date Principal Coupon Price Issue Price at Maturity Serial Bond: 03/0112012 295,000.00 3.000% 102.287 301,746.65 295,000.00 03/0112013 305,000.00 3.000% 103.748 316,431.40 305,000.00 03/0112014 315,000.00 3.000% 104.294 328,526.10 315,000.00 03/01/2015 325,000.00 3.000% 103.630 336,797.50 325,000.00 03/0112016 745,000.00 3.000% 103.001 767,357.45 745,000.00 03/0112017 340,000.00 3.000% 101.374 344,671.60 340,000.00 03/0112018 355,000.00 3.500% 102.373 363,424.15 355,000.00 03/0112019 365,000.00 4.000% 103.816 378,928.40 365,000.00 03/01/2020 380,000.00 4.000% 102.278 388,656.40 380,000.00 03/0112021 395,000.00 4.000% 100.574 397,267.30 395,000.00 Term Bond: 03/0112022 385,000.00 4.750% 99.469 382,955.65 385,000.00 03/0112023 405,000.00 4.750% 99.469 402,849.45 405,000.00 03/0112024 425,000.00 4.750% 99.469 422,743.25 425,000.00 03/01/2025 445,000.00 4.750% 99.469 442,637.05 445,000.00 03/0112026 465,000.00 4.750% 99.469 462,530.85 465,000.00 Term Bond: 03/0112027 485,000.00 5.125% 99.074 480,508.90 485,000.00 03/0112028 510,000.00 5.125% 99.074 505,277.40 510,000.00 03/0112029 535,000.00 5.125% 99.074 530,045.90 535,000.00 03/01/2030 565,000.00 5.125% 99.074 559,768.10 565,000.00 03/0112031 595,000.00 5.125% 99.074 589,490.30 595,000.00 8,635,000.00 8,702,613.80 8,635,000.00 Stated Weighted Maturity Interest Issue Redemption Average Date Rate Price at Maturity Maturity Yield Final Maturity 03/01/2031 5.125% 589,490.30 595,000.00 Entire Issue 8,702,613.80 8,635,000.00 11.2770 4.5108% Proceeds used for accrued interest 0.00 Proceeds used for bond issuance costs (including underwriters' discount) 43,420.75 Proceeds used for credit enhancement 0.00 Proceeds allocated to reasonably required reserve or replacement fund 421,742.41 Feb 15,201 I 10:1 I am Prepared by Piper Jaffray & Co. (Finance 6.018 Alaska Municipal Bond Bank 201 I One:201 I) Page 5 BOND PRICING Alaska Municipal Bond Bank Kodiak Island Borough Loan Maturity Bond Component Date Amount Rate Yield Price Serial Bond: 03/01/2012 275,000 3.000% 0.700% 102.287 03/0112013 285,000 3.000% 1.100% 103.748 03/0112014 295,000 3.000% 1.530% 104.294 03/01/2015 305,000 3.000% 2.050% 103.630 03/01/2016 310,000 3.000% 2.360% 103.001 03/0112017 320,000 3.000% 2.750% 101.374 03/0112018 330,000 3.500% 3.120% 102.373 03/01/2019 340,000 4.000% 3.450% 103.816 03/0112020 355,000 4.000% 3.700% 102.278 03/0112021 370,000 4.000% 3.930% 100.574 3,185,000 Term Bond: 03/0112026 2,125,000 4.750% 4.800% 99.469 Term Bond: 03/0112031 2,690,000 5.125% 5.200% 99.074 8,000,000 Dated Date 03/0112011 Delivery Date 0310112011 First Coupon 09101/2011 Par Amount 8,000,000.00 Premium 49,232.60 Production 8,049,232.60 100.615408% Underwriter's Discount -40,688.96 -0.508612% Purchase Price 8,008,543.64 100.106796% Accrued lnterest Net Proceeds 8,008,543.64 Piperjaffray. Feb 15,2011 10: 11 am Prepared by Piper Jaffray & Co. (Finance Finance 6.018 Alaska Municipal Bond Bank 2011 One:2011) Page 6 Piper]affray. BOND SUMMARY STATISTICS Alaska Municipal Bond Bank Kodiak Island Borough Loan Dated Date Delivery Date Last Maturity Arbitrage Yield True Interest Cost (TIC) Net Interest Cost (NIC) All-In TIC Average Coupon Average Life (years) Duration oflssue (years) Par Amount Bond Proceeds Total Interest Net Interest Bond Years from Dated Date Bond Years from Delivery Date Total Debt Service Maximum Annual Debt Service Average Annual Debt Service 03/01/2011 03/0112011 03/0112031 4.510788% 4.648849% 4.708599% 4.648849% 4.717605% 11.858 8.887 8,000,000.00 8,049,232.60 4,475,356.28 4,466,812.64 94,865,000.00 94,865,000.00 12,475,356.28 626,275.00 623,767.81 Bond Component Serial Bond Tenn Bond Tenn Bond Par Value + Accrued Interest + Premium (Discount) -Underwriter's Discount -Cost of Issuance Expense -Other Amounts Par Average Average PV of 1 bp Value Price Coupon Life change 3,185,000.00 102.682 3.587% 5.760 1,649.90 2,125,000.00 99.469 4.750% 13.094 2,231.25 2,690,000.00 99.074 5.125% 18.102 3,308.70 8,000,000.00 11.858 7,189.85 All-In Arbitrage TIC TIC Yield 8,000,000.00 8,000,000.00 8,000,000.00 49,232.60 49,232.60 49,232.60 -40.688.96 -40,688.96 Target Value Target Date Yield 8,008,543.64 03/0112011 4.648849% 8,008,543.64 0310112011 4.648849% 8,049,232.60 03/0112011 4.510788% Feb 15, 20 II 10: 11 am Prepared by Piper Jaffray & Co. (Finance 6.018 Alaska Municipal Bond Bank 2011 One:2011) Page 7 PiperJaffray. BOND DEBT SERVICE Alaska Municipal Bond Bank Kodiak Island Borough Loan Dated Date 03/01/2011 Delivery Date 03/0112011 Period Ending Principal Coupon Interest Debt Service 03/0112012 275,000 3.000% 346,650.00 621,650.00 03/01/2013 285,000 3.000% 338,400.00 623,400.00 03/0112014 295,000 3.000% 329,850.00 624,850.00 03/0112015 305,000 3.000% 321,000.00 626,000.00 03/0112016 310,000 3.000% 311,850.00 621,850.00 03/0112017 320,000 3.000% 302,550.00 622,550.00 03/0112018 330,000 3.500% 292,950.00 622,950.00 03/0112019 340,000 4.000% 281,400.00 621,400.00 03/0112020 355,000 4.000% 267,800.00 622,800.00 03/0112021 370,000 4.000% 253,600.00 623,600.00 03/01/2022 385,000 4.750% 238,800.00 623,800.00 03/01/2023 405,000 4.750% 220,512.50 625,512.50 03/0112024 425,000 4.750% 201,275.00 626,275.00 03/0112025 445,000 4.750% 181,087.50 626,087.50 03/0112026 465,000 4.750% 159,950.00 624,950.00 03/0112027 485,000 5.125% 137,862.50 622,862.50 03/0112028 510,000 5.125% 113,006.26 623,006.26 03/01/2029 535,000 5.125% 86,868.76 621,868.76 03/0112030 565,000 5.125% 59,450.00 624,450.00 03/0112031 595,000 5.125% 30,493.76 625,493.76 8,000,000 4,475,356.28 12,475,356.28 Feb 15, 20 II 10: II am Prepared by Piper Jaffray & Co. (Finance 6.018 Alaska Municipal Bond Bank 2011 One:2011) Page 8 Piperjaffray. BOND PRICING Alaska Municipal Bond Bank Wrangell Loan Bond Component Serial Bond: Maturity Date Amount Rate Yield Price 03/0112012 03/0112013 03/0112014 03/0112015 03/0112016 03/0112017 03/0112018 03/01/2019 03/0112020 03/0112021 Dated Date Delivery Date First Coupon Par Amount Premium Production Underwriter's Discount Purchase Price Accrued Interest Net Proceeds Feb 15, 20 II 10: II am Prepared by Piper Jaffray & Co. 20,000 3.000% 0.700% 102.287 20,000 3.000% 1.100% 103.748 20,000 3.000% 1.530% 104.294 20,000 3.000% 2.050% 103.630 20,000 3.000% 2.360% 103.001 20,000 3.000% 2.750% 101.374 25,000 3.500% 3.120% 102.373 25,000 4.000% 3.450% 103.816 25,000 4.000% 3.700% 102.278 25,000 4.000% 3.930% 100.574 220,000 03/01/2011 0310112011 09/0112011 220,000.00 5,927.05 225,927.05 102.694114% -1,044.48 -0.474764% 224,882.57 102.219350% 224,882.57 (Finance 6.018 Alaska Municipal Bond Bank 2011 One:2011) Page 9 Piperjaffray. BOND SUMMARY STATISTICS Alaska Municipal Bond Bank Wrangell Loan Dated Date Delivery Date Last Maturity Arbitrage Yield True Interest Cost (TIC) Net Interest Cost (NIC) All-In TIC Average Coupon Average Life (years) Duration of Issue (years) Par Amount Bond Proceeds Total Interest Net Interest Bond Years from Dated Date Bond Years from Delivery Date Total Debt Service Maximum Annual Debt Service Average Annual Debt Service 03/0112011 03/0112011 03/0112021 4.510788% 3.153098% 3.215939% 3.153098% 3.600394% 5.773 5.202 220,000.00 225,927.05 45,725.00 40,842.43 1,270,000.00 1,270,000.00 265,725.00 28,875.00 26,572.50 Bond Component Serial Bond Par Value 220,000.00 220,000.00 Price 102.694 TIC Average Coupon 3.600%All-In TIC Average Life 5.773 5.773 PV of! bp change 114.15 114.15 Arbitrage Yield Par Value + Accrued Interest + Premium (Discount) -Undervvriter's Discount -Cost of Issuance Expense -Other Amounts Target Value Target Date Yield 220,000.00 5,927.05 -1,044.48 224,882.57 03/011201 I 3.153098% 220,000.00 5,927.05 -1.044.48 224,882.57 03/01/2011 3.153098% 220,000.00 5,927.05 225,927.05 03/011201 I 4.510788% Feb 15,2011 10:11 am Prepared by Piper Jaffray & Co. (Finance 6.018 Alaska Municipal Bond Bank 20 II One:20 II) Page 10 BOND DEBT SERVICE Alaska Municipal Bond Bank Wrangell Loan Dated Date 03/0112011 Delivery Date 03/0112011 Period Debt Ending Principal Coupon Interest Service 03/0112012 20,000 3.000% 7,475 27,475 03/01/2013 20,000 3.000% 6,875 26,875 03/0112014 20,000 3.000% 6,275 26,275 03/0112015 20,000 3.000% 5,675 25,675 03/0112016 20,000 3.000% 5,075 25,075 03/0112017 20,000 3.000% 4,475 24,475 03/01/2018 25,000 3.500% 3,875 28,875 03/0112019 25,000 4.000% 3,000 28,000 03/0112020 25,000 4.000% 2,000 27,000 03/0112021 25,000 4.000% 1,000 26,000 220,000 45,725 265,725 Piperjaffray. Feb 15, 20 II 10: II am Prepared by Piper Jaffray & Co. (Finance 6.018 Alaska Municipal Bond Bank 20 II One:20 II) Page II PiperJaffray. BOND PRICING Alaska Municipal Bond Bank Reserve Deposit Bond Component Serial Bond: Maturity Date Amount Rate Yield Price 03/01/2016 Dated Date Delivery Date First Coupon Par Amount Premium Production Underwriter's Discount Purchase Price Accrued Interest Net Proceeds Feb 15,2011 10:11 am Prepared by Piper Jaffray & Co. 415,000 3.000% 2.360% 103.001 415,000 03/0112011 03/0112011 09/0112011 415,000.00 12,454.15 427,454.15 103.001000% -1.687.31 -0.406581% 425,766.84 102.594419% 425,766.84 (Finance 6.018 Alaska Municipal Bond Bank 2011 One:2011) Page 12 Piperjaffray. BOND SUMMARY STATISTICS Alaska Municipal Bond Bank Reserve Deposit Dated Date Delivery Date Last Maturity 03/01/201 I 03/011201 I 03/0112016 Arbitrage Yield True Interest Cost (TIC) Net Interest Cost (NIC) All-In TIC Average Coupon 4.510788% 2.445583% 2.481 I 16% 2.445583% 3.000000% Average Life (years) Duration oflssue (years) 5.000 4.685 Par Amount Bond Proceeds Total Interest Net Interest Bond Years from Dated Date Bond Years from Delivery Date Total Debt Service Maximum Annual Debt Service Average Annual Debt Service 415,000.00 427,454.15 62,250.00 51,483.16 2,075,000.00 2,075,000.00 477,250.00 427,450.00 95,450.00 Par Average Average PVof I bp Value Price Coupon Life change 415,000.00 103.001 3.000% 5.000 195.05 415,000.00 5.000 195.05 All-In Arbitrage TIC TIC Yield 415,000.00 415,000.00 415,000.00 12,454.15 12,454.15 12,454.15 -1,687.31 -1.687.3 I Par Value + Accrued Interest + Premium (Discount) -Underwriter's Discount -Cost oflssuance Expense -Other Amounts Bond Component Serial Bond Target Value 425,766.84 425,766.84 427,454.15 Target Date Yield 03/011201 I 2.445583% 03/011201 I 2.445583% 03/011201 I 4.510788% Feb 15, 20 I I 10: I I am Prepared by Piper Jaffray & Co. (Finance 6.018 Alaska Municipal Bond Bank 201 I On~:201 I) Page 13 Piperjaffray. BOND DEBT SERVICE Alaska Municipal Bond Bank Reserve Deposit Period Ending 03/01/2012 03/01/2013 03/01/2014 03/01/2015 03/01/2016 Dated Date Delivery Date Principal 415,000 415,000 03/01/2011 03/0112011 Coupon 3.000% Debt Interest Service 12,450 12,450 12,450 12,450 12,450 12,450 12,450 12,450 12,450 427,450 62,250 477,250 Feb 15, 2011 10: 11 am Prepared by Piper Jaffray & Co. (Finance 6.018 Alaska Municipal Bond Bank 2011 One:2011) Page 14