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90-22 v RESOLUTION NO. 90-22 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF ATLANTIC BEACH, FLORIDA, SUPPLEMENTING ORDINANCE NO. ; AWARDING $ WATER AND SEWER REFUNDING REVENUE BONDS, SERIES 1990 , OF THE CITY; AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE AGREEMENT FOR THE SALE OF THE BONDS PURSUANT TO THE TERMS AND CONDITIONS STATED THEREIN; FIXING THE DATE, MATURITIES, INTEREST RATES, AND REDEMPTION PROVISIONS WITH RESPECT TO SUCH BONDS AND PROVISIONS REGARDING CERTAIN FUNDS AND ACCOUNTS RELATED TO SUCH BONDS; RATIFYING AND CONFIRMING THE USE OF THE PRELIMINARY OFFICIAL STATEMENT AND AUTHORIZING THE USE OF A FINAL OFFICIAL STATEMENT; AUTHORIZING THE ESCROW DEPOSIT AGREEMENT AND DESIGNATING THE ESCROW HOLDER AND THE PAYING AGENT AND REGISTRAR FOR THE BONDS; DESIGNATING THE BONDS AS "QUALIFIED TAX-EXEMPT OBLIGATIONS" UNDER SECTION 265 (b) ( 3 ) OF THE INTERNAL REVENUE CODE OF 1986 , AS AMENDED; AUTHORIZING THE APPROPRIATE OFFICIALS OF THE CITY TO TAKE ALL ACTION NECESSARY IN CONNECTION WITH THE EXECUTION AND DELIVERY OF THE BONDS; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF ATLANTIC BEACH, FLORIDA: SECTION 1 . AUTHORITY FOR RESOLUTION. This resolution is adopted pursuant to the provisions of Ordinance No. duly enacted by the City Commission on December 10 , 1990 (the "Bond Ordinance" ) ; and other applicable provisions of law. All capitalized terms used herein and not defined herein shall have the meanings specified in the Bond Ordinance. SECTION 2. FINDINGS. It is hereby ascertained, determined and declared that: A. The Bond Ordinance authorized the issuance of not exceeding $5,000 ,000 Water and Sewer Refunding Revenue Bonds , Series 1990 , to finance the cost of refunding the Refunded Bonds , as defined in the Bond Ordinance. B. The City deems it in its best interests that the Series 1990 Bonds be sold at this time, and it is necessary to fix the date, interest rates , interest payment dates, and redemption provisions relating to the Series 1990 Bonds . 1 3460 ATL16002 AE3 C. The City' s Financial Advisor has advised the City that a negotiated sale of the Series 1990 Bonds will produce the lowest net interest cost to the City while allowing the Series 1990 Bonds to be sold and delivered at the earliest possible time, and the City hereby finds and determines that a negotiated sale of the Series 1990 Bonds is in its best interests and is necessary on the basis of the foregoing recommendation. D. William R. Hough & Co. (the "Underwriters" ) , have offered to purchase the Series 1990 Bonds upon the terms and conditions described in the Bond Purchase Agreement submitted to the City in the form attached hereto as Exhibit "A" and incorporated by reference herein as though fully set forth here (the "Purchase Contract" ) . The City, upon recommendation of its Financial Advisor, deems it necessary and desirable to accept the proposal of the Underwriter as set forth in the Purchase Contract. E. The City, on the basis of the foregoing recommendation and findings, and in accordance with Section 218 . 385 , Florida Statutes, deems it in its best financial interests that the Series 1990 Bonds be sold at negotiated sale pursuant to the terms contained herein and in the Purchase Contract. F. The City, upon the recommendation of its Financial Advisor, deems it necessary and desirable to obtain a Credit Facility for the Series 1990 Bonds and a Debt Service Reserve Surety Bond from Municipal Bond Investors Assurance Corporation ( "MBIA" ) . G. Based upon the commitment from MBIA, the City expects to receive from Standard & Poor' s Corporation, New York, New York, and/or Moody' s Investors Service, New York, New York, prior to issuance of the Series 1990 Bonds , a bond rating in one of its 3 highest classifications . H. It is necessary and desirable at this time to name the Escrow Holder and Bond Registrar and Paying Agent for the Series 1990 Bonds; to approve the form and dissemination of the Official Statement relating to the marketing of the Series 1990 Bonds; and to authorize all other necessary action by officers of the City in connection with the issuance thereof. SECTION 3 . DISCLOSURE STATEMENT. The disclosure statement required by Section 218 . 385 ( 4 ) , Florida Statutes , is attached as an exhibit to the Purchase Contract which is attached hereto as Exhibit A. SECTION 4 . AWARD OF THE SERIES 1990 BONDS . The Purchase Contract, attached hereto as Exhibit A and made a part hereof, relating to the purchase of the Series 1990 Bonds is hereby accepted, and the Series 1990 Bonds , in the aggregate principal amount set forth in the title to this resolution and in 2 3460 ATL16002 AE3 the Purchase Contract, are hereby awarded to the Underwriter at the purchase price and upon the terms and conditions set forth therein and herein. SECTION 5 . REMAINING FISCAL DETAILS OF SERIES 1990 BONDS . The date, interest rates , interest payment dates and redemption provisions and other details of the Series 1990 Bonds are set forth in Exhibit A to the Purchase Contract and by reference made a part hereof. SECTION 6 . OFFICIAL STATEMENT. The use and distribution of the Preliminary Official Statement relating to the Series 1990 Bonds , dated December , 1990 , by the Underwriter is hereby ratified and confirmed. The Mayor and City Manager of the City are hereby authorized to execute a final Official Statement in substantially the form as the Preliminary Official Statement which is attached to the Purchase Contract as Exhibit B, with such changes as they shall by their execution thereof approve and to deliver the same to the Underwriter within seven ( 7 ) business days from the date hereof in sufficient quantities as may be required to satisfy the reasonable needs of the Underwriter in marketing the Series 1990 Bonds , but in any event not to exceed 2 ,000 copies . The Underwriter is further authorized to use and distribute, the final Official Statement and any supplements thereto in connection with the original issuance of the Series 1990 Bonds . The designation of the Preliminary Official Statement as "deemed final" by the City Manager for the purposes of compliance by the City with the provisions of Rule 15c2-12 (b) ( 1 ) , promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 , as amended , is hereby ratified. The Mayor, City Manager and Finance Director of the City and each of them are authorized to sign and deliver, on behalf of the City, and in their official capacities , such certificates in connection with the accuracy of the final Official Statement and any supplements thereto as may, in their judgment, be necessary or appropriate. SECTION 7 . RETURN OF GOOD FAITH CHECK. The City Manager or his designee is hereby authorized and directed to return the good faith check to the Underwriter simultaneous with receipt of the purchase price for the Series 1990 Bonds as set forth in the Purchase Contract. SECTION 8 . CREDIT FACILITY. There shall be printed on the back of each Series 1990 Bond a statement to the effect that payment of the principal of and interest on the Series 1990 Bonds is insured by MBIA. SECTION 9 . BOND REGISTRAR AND PAYING AGENT AND AGREEMENT THEREFOR. Barnett Banks Trust Company, N.A. ( "Barnett" ) , Jacksonville, Florida, is hereby designated Paying Agent and Bond Registrar for the Series 1990 Bonds in accordance 3 3460 ATL16002 AE3 with the Bond Ordinance and the Paying Agent and Registrar Agreement dated as of the date of closing (the "Paying Agent and Registrar Agreement" ) between the City and such Barnett. Barnett shall fulfill such functions with respect to the Series 1990 Bonds until a qualified- successor shall have been designated by the City and accepted such duties , such designation to be subject to written notice to MBIA, or until the Series 1990 Bonds have been paid in full pursuant to the Bond Ordinance. The Mayor, City Manager and City Clerk of the City, or such other person so designated by the City (the "Authorized Representatives" ) are hereby authorized to execute the Paying Agent and Registrar Agreement upon delivery of the Series 1990 Bonds with such changes as are not inconsistent with the terms hereof, the Bond Ordinance and other action heretofore taken by the City. SECTION 9 . The Series 1990 Bonds are hereby designated as "qualified tax-exempt obligations" for purposes of and as defined in Section 265 (b) ( 3 ) of the Internal Revenue Code of 1986 , as amended. SECTION 10 . AUTHORIZATION AND APPROVAL OF ESCROW DEPOSIT AGREEMENT; DESIGNATION OF ESCROW HOLDER. The City approves and accepts the form of Escrow Deposit Agreement dated as of the date of closing (the "Escrow Deposit Agreement" ) between the City and the Escrow Holder named herein and attached hereto as Exhibit B, and authorizes the proper officers of the City to execute a final Escrow Deposit Agreement between the City and the Escrow Holder, in subtantially the form of Exhibit B hereto. Barnett Banks Trust Company, N.A. ( "Barnett" ) , Jacksonville, Florida, is hereby designated Escrow Holder for the Series 1990 Bonds in accordance with the Bond Ordinance and the Escrow Deposit Agreement. Barnett shall fulfill such functions with respect to the Series 1990 Bonds until a qualified successor shall have been designated by the City and accepted such duties, such designation to be subject to written notice to MBIA, or until the Series 1990 Bonds have been paid in full pursuant to the Bond Ordinance. The Mayor, City Manager and City Clerk of the City, or such other person so designated by the City (the "Authorized Representatives" ) are hereby authorized to execute the Escrow Deposit Agreement upon delivery of the Series 1990 Bonds with such changes as are not inconsistent with the terms hereof, the Bond Ordinance and other action heretofore taken by the City. SECTION 11 . NECESSARY ACTION AUTHORIZED. The Authorized Representatives of the City be and they are hereby authorized and directed to execute and deliver the Purchase Contract and to execute the Series 1990 Bonds when prepared and deliver them to the Underwriter upon payment of the purchase price pursuant to the terms conditions stated in the Purchase 4 3460 ATL16002 AE3 Contract. The Mayor, City Manager and the City Clerk of the City, and the City Attorney are each designated agents of the City in connection with the issuance and delivery of the Series 1990 Bonds and are authorized and empowered, collectively or individually, to take all action and steps to execute and deliver any and all instruments, documents or contracts on behalf of the City which are necessary or desirable in connection with the execution and delivery of the Series 1990 Bonds, in such form and with such changes as are not inconsistent with the terms and provisions of this resolution, the Bond Ordinance and other actions related to the Series 1990 Bonds heretofore taken by the City. SECTION 12 . INCORPORATION BY REFERENCE. All of the terms hereof regarding the Series 1990 Bonds are hereby incorporated herein by reference to be made fully applicable to the Series 1990 Bonds and a part of the City' s contract with the Registered Owners of the Bonds and MBIA during the period such Series 1990 Bonds are outstanding and are enforceable to the same extent as if set forth in the Bond Ordinance. SECTION 13 . REPEALING CLAUSE. All resolutions or parts thereof of the City in conflict with the provisions contained in this resolution are, to the extent of such conflict, hereby superseded and repealed . SECTION 14 . EFFECTIVE DATE. This resolution shall take effect immediately upon its adoption. PASSED AND ADOPTED this day of December, 1990 , at a regular meeting duly called and held . (SEAL) CITY OF ATLANTIC BEACH, FLORIDA Attest: By Mayor/Presiding Officer By City Clerk City Manager Approved as to form, sufficiency and correctness : City Attorney 5 3460 ATL16002 AB3 EXHIBIT A PURCHASE CONTRACT A-1 3460 ATL16002 AE3 EXHIBIT B ESCROW DEPOSIT AGREEMENT B-1 • 3460 ATL16002 AE3 ESCROW DEPOSIT AGREEMENT THIS ESCROW DEPOSIT AGREEMENT, dated December _, 1990, by and between CITY OF ATLANTIC BEACH, FLORIDA (the "City") , and BARNETT BANKS TRUST COMPANY, N.A. , as Escrow Holder (the "Escrow Holder"); WITNESSET H: WHEREAS, the City has previously authorized and issued obligations of the City as hereinafter set forth and defined as the "Refunded Bonds, " as to which the Aggregate Debt Service (as hereinafter defined) is set forth on the Schedules; and WHEREAS, the City has determined to provide for payment of the Aggregate Debt Service of the Refunded Bonds by depositing with the Escrow Holder Federal Securities (as hereinafter defined) the principal of and interest on which will be at least equal to such sum; and WHEREAS, in order to obtain the funds needed for such purpose the City has authorized and is, concurrently with the delivery of this Agreement, issuing its Water and Sewer Refunding Revenue Bonds, Series 1990 (the "Series 1990 Bonds") more fully described herein; and WHEREAS, the City has determined that the amount to be on deposit, from time to time, in the Escrow Account, as defined herein, will be sufficient to pay the Aggregate Debt Service; NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the City and the Escrow Holder agree as follows: SECTION 1. DEFINITIONS. As used herein, the following terms shall have the following meanings: (a) "Aggregate Debt Service" means, as of any date, the sum of all present and future Annual Debt Service payments then remaining unpaid with respect to the Refunded Bonds, as set forth in the Schedules attached hereto. (b) "Agreement" means this Escrow Deposit Agreement. (c) "Annual Debt Service" means, in any year, the principal of, interest on and, redemption premium for the Refunded Bonds coming due or being redeemed in such year as shown on the Schedules attached hereto. (d) "Escrow Account" means the account established and held by the Escrow Holder pursuant to this Agreement in which a portion of the proceeds from the sale of the Series 1990 Bonds will be held for payment of the Refunded Bonds and the Expenses. (e) "Escrow Holder" means Barnett Banks Trust Company, N.A. , a national banking corporation. (f) "Escrow Deposit Requirement" means, as of any date of calculation, the principal amount of Federal Securities in the Escrow Account 1 3460/ATL16002/AD5 which, together with the interest due on the Federal Securities and any uninvested cash in the Escrow Account, will be sufficient to pay, as the installments thereof become due, the Aggregate Debt Service and to pay when due all Expenses then unpaid. (g) "Expenses" means the expenses, if any, set forth on Exhibit A attached hereto and made a part hereof. (h) "Federal Securities" means direct obligations of the United States of America and obligations the principal of and interest on which are fully guaranteed by the United States of America, none of which permit redemption prior to maturity at the option of the obligor, as more specifically set forth on Exhibit B attached hereto and made a part hereof. (i) "Paying Agent" means the respective paying agents for the Refunded Bonds: (a) Florida National Bank for the Oak Harbor Bonds; (b) the City Clerk of the City for the Buccaneer Bonds, and (c) Citibank, N.A. , New York, New York. (j ) "Refunded Bonds" means the City's outstanding (a) loan from the State of Florida for the purpose of financing certain wastewater treatment facilities pursuant to a certain loan agreement among the City and the State of Florida Department of Environmental Regulation and the Division of Bond Finance of the State of Florida Department of General Services, dated as of May 29, 1985 (the "State Loan") ; (b) Buccaneer Water and Sewer District Revenue Bonds, dated as of June 3 , 1985 (the "Buccaneer Bonds"); and (c) Oak Harbor Water and Sewer District Revenue Bonds, dated as of February 28, 1989 (the "Oak Harbor Bonds") more particularly set forth on the Schedules attached hereto. (k) "Schedules" mean the schedules attached hereto incorporating the Annual Debt Service Requirements for the Refunded Bonds and the Escrow Deposit Requirement. (1) "Series 1990 Bonds" means the $ Water and Sewer Refunding Revenue Bonds, Series 1990, of the City authorized by Ordinance No. , duly enacted by the City on December 10, 1990, as supplemented. Section 2. DEPOSIT OF FUNDS. The City hereby deposits $ with the Escrow Holder in immediately available funds, to be held in irrevocable escrow by the Escrow Holder and applied solely as provided in this Agreement. The City represents that $ of such funds are derived by the City from a portion of the proceeds of the Series 1990 Bonds and $ from moneys and the investments held in certain accounts and funds established for the benefit of the Refunded Bonds. Such funds, when applied pursuant to Section 3 below, will at least equal the Escrow Deposit Requirement as of the date hereof. Section 3. USE AND INVESTMENT OF FUNDS. The Escrow Holder acknowledges receipt of the sums described in Section 2 and agrees: (a) to immediately invest $ of such funds by the purchase of the Federal Securities set forth on the Schedules attached hereto. 2 3460/ATL16002/AD5 (b) to hold the funds and securities in irrevocable escrow during the term of this Agreement. (c) to hold the proceeds of all investments in the Escrow Account in such Account from the date of receipt thereof to the dates on which such proceeds are scheduled to be paid out of the Escrow Account and applied only for the purposes thereof as set forth on the Schedules attached hereto, provided, however, that balances in the Escrow Account in excess of amounts immediately required for the scheduled payments of debt service on the Refunded Bonds and Expenses, as shown on Schedule _ attached under the column headed "Required Reinvestments, " shall be reinvested by the Escrow Agent in United States Treasury Certificates of Indebtedness -- State and Local Government Series (the "Required Reinvestments"). The Required Reinvestments shall bear an interest rate of zero percent and shall mature on the next succeeding interest payment date, unless the Escrow Agent obtains an opinion of counsel (as described in Section 5(b) below) to the effect that a higher interest rate for such Required Reinvestment is permissible. Section 4. PAYMENT OF REFUNDED BONDS AND EXPENSES. (a) Refunded Bonds. On or prior to each interest payment date for the Refunded Bonds, the Escrow Holder shall pay to the Paying Agents for the Refunded Bonds (or the State in the case of the State Loan) , from the cash on hand in the Escrow Account, a sum sufficient to pay that portion of the Annual Debt Service coming due on such date, as shown on the Schedules. (b) Expenses. On the date shown on Exhibit A, the Escrow Holder shall pay the Expenses coming due on such date to the appropriate payee or payees designated on Exhibit A. The fee of the Escrow Holder for serving in such capacity under this Agreement shall be included in the amounts shown on Exhibit A. (c) Surplus. On , after making all payments from the Escrow Account described in Subsections 4(a) and (b) , the Escrow Holder shall pay to the City remaining cash, if any, in the Escrow Account. The City shall apply payments made to it hereunder to the payment of the principal of and interest on the Series 1990 Bonds, but the Escrow Holder shall have no duty or responsibility to ensure that the City does so. (d) Priority of Payments. The holders of the Refunded Bonds shall have an express first lien on the funds and Federal Securities in the Escrow Account until such funds and Federal Securities are used and applied as provided in this Agreement. If the cash on hand in the Escrow Account is ever insufficient to make the payments required under Subsection 4(a), all of the payments required under Subsection 4(a) shall be made when due before any payments shall be made under Subsections 4(b) and 4(c). (e) Payments Due on Saturdays, Sundays and Holidays. If any payment date, at the place of payment of the Refunded Bonds, shall be a Saturday, Sunday, legal holiday or a day on which banking institutions are authorized by law to close, then the Escrow Holder may make the payment required by Section 4(a) to the Paying Agent on the first business day following such Saturday, Sunday, legal holiday or day on which banking institutions are authorized by law to close. 3 3480/ATL16002/AD5 Section 5. REINVESTMENT. (a) Except as provided in Subsection 3(b) and in this Section, the Escrow Holder shall have no power or duty to invest any funds held under this Agreement or to sell, transfer or otherwise dispose of or make substitutions of the Federal Securities held hereunder. (b) At the request of the City and upon compliance with the conditions hereinafter stated, the Escrow Holder shall sell, transfer or otherwise dispose of or request the redemption of any of the Federal Securities held hereunder and shall either apply the proceeds thereof to the full discharge and satisfaction of the Refunded Bonds or substitute other Federal Securities for such Federal Securities. The City will not request the Escrow Holder to exercise any of the powers described in the preceding sentence in any manner which would cause any Series 1990 Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, and the Regulations thereunder. Any such transactions may be effected only if (i) an independent certified public accountant shall certify to the City and the Escrow Holder that the cash and principal amount of Federal Securities remaining on hand after the transactions are completed, together with the interest due thereon, will be not less than the Escrow Deposit Requirement, and (ii) the City and the Escrow Holder shall receive an unqualified opinion from nationally recognized bond counsel or tax counsel to the effect that the transactions will not cause such Series 1990 Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, and the regulations thereunder in effect on the date of the transactions and applicable to obligations issued on such date. Section 6. REDEMPTION OF REFUNDED BONDS. The City will exercise its option to redeem the Refunded Bonds (or to make advance payments in the case of the State Loan) prior to the maturity thereof in accordance with the redemption of the Refunded Bonds shown on the Schedules. The Escrow Holder is hereby appointed agent of the City to give notices of such redemption (or advance payment in the case of the State Loan) of the Refunded Bonds at such times and in such manner as is provided in the Resolution of the City Commission of the City adopted on December 13, 1990, the form of which is attached hereto as Exhibit B. Such notices shall be in substantially the forms set forth as exhibits to said Resolution. Section 7. INDEMNITY. The City hereby assumes liability for, and hereby agrees (whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect, save and keep harmless the Escrow Holder and its respective successors, assigns, agents and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements of whatsoever kind and nature which may be imposed, incurred by, or asserted against at any time, the Escrow Holder (whether or not also indemnified against the same by the City or any other person under any other agreement or instrument) and in any way relating to or arising out of the execution and delivery of this Agreement, the establishment of the Escrow Account, the acceptance of the funds and securities deposited therein, the purchase of the Federal Securities, the retention of the Federal Securities or the proceeds thereof and any payment, transfer or other application of funds or securities by the Escrow Holder in accordance with the provisions of this Agreement; provided, however, that the City shall not be required to indemnify the Escrow Holder, its successors, 4 3460/ATL16002/AD5 assigns, agents and servants against the negligence or willful misconduct of the Escrow Holder or its successors, assigns, agents and servants. In no event shall the City or the Escrow Holder be liable to any person by reason of the transactions contemplated hereby other than to each other as set forth in this section. The indemnities contained in this section shall survive the termination of this Agreement. Section 8. RESPONSIBILITIES OF ESCROW HOLDER. The Escrow Holder and its respective successors, assigns, agents and servants shall not be held to any personal liability whatsoever, in tort, contract, or otherwise, in connection with the execution and delivery of this Agreement, the establishment of the Escrow Account, the retention of the Federal Securities or the proceeds thereof or any payment, transfer or other application of money or securities by the Escrow Holder in accordance with the provisions of this Agreement or by reason of any non-negligent act, non-negligent omission or . non-negligent error of the Escrow Holder made in good faith in the conduct of its duties. The Escrow Holder shall, however, be liable to the City for its negligent or willful acts, omissions or errors which violate or fail to comply with the terms of this Agreement. The duties and obligations of the Escrow Holder shall be determined by the express provisions of this Agreement. Whenever the Escrow Holder shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering or omitting any action under this Agreement, such matter may be deemed to be conclusively established by a certificate signed by an authorized officer of the City. Section 9. RESIGNATION OF ESCROW HOLDER. The Escrow Holder may resign and thereby become discharged from the duties and obligations hereby created, by notice in writing given to the City and published once in a newspaper of general circulation in the City of Atlantic Beach, Florida, and in a daily newspaper or financial journal circulated in the Borough of Manhattan, City and State of New York, not less than sixty (60) days before such resignation shall take effect. Such resignation shall take effect immediately upon the appointment of a new Escrow Holder hereunder, if such new Escrow Holder shall be appointed before the time limited by such notice and shall then accept the duties and obligations thereof. Section 10. REMOVAL OF ESCROW HOLDER. (a) The Escrow Holder may be removed at any time by an instrument or concurrent instruments in writing, executed by the holders of not less than fifty-one per centum (51%) in aggregate principal amount of the Refunded Bonds then outstanding, such instruments to be filed with the City, and notice in writing given by such holders to the original purchaser or purchasers of the Refunded Bonds and published once in a newspaper of general circulation in the City of Atlantic Beach, Florida, and in a daily newspaper or financial journal of general circulation in the Borough of Manhattan, City and State of New York, not less than sixty (60) days before such removal is to take effect as stated in such instrument or instruments. A photocopy of any instrument filed with the City under the provisions of this paragraph shall be delivered by the City to the Escrow Holder. (b) The Escrow Holder may also be removed at any time for any breach of trust or for acting or proceeding in violation of, or for failing to act or proceed in accordance with, any provisions of this Agreement with respect to 5 3460/ATL16002/AD5 the duties and obligations of the Escrow Holder by any court of competent jurisdiction upon the application of the City or the holders of not less than five per centum (5%) in aggregate principal amount of the Refunded Bonds then outstanding. Section 11. SUCCESSOR ESCROW HOLDER. (a) If at any time hereafter the Escrow Holder shall resign, be removed, be dissolved or otherwise become incapable of acting, or shall be taken over by any governmental official, agency, department or board, the position of Escrow Holder shall thereupon become vacant. If the position of Escrow Holder shall become vacant for any of the foregoing reasons or for any other reason, the City shall appoint an Escrow Holder to fill such vacancy. The City shall publish notice of any such appointment once in each week for two (2) successive weeks in a newspaper of general circulation in the City of Atlantic Beach, Florida, and in a newspaper of general circulation or a financial journal circulated in the Borough of Manhattan, City and State of New York, and shall mail a copy thereof to the original purchaser or purchasers of the Refunded Bonds. (b) At any time within one year after such vacancy shall have occurred, the holders of a majority in principal amount of the Refunded Bonds then outstanding, by an instrument or concurrent instruments in writing, executed by all such holders and filed with the City Commission of the City, may appoint a successor Escrow Holder, which shall supersede any Escrow Holder theretofore appointed by the City. Photocopies of each such instrument shall be delivered promptly by the City, to the predecessor Escrow Holder and to the Escrow Holder so appointed by the holders. (c) If no appointment of a successor Escrow Holder shall be made pursuant to the foregoing provisions of this section, the holder of any Refunded Bonds then outstanding, or any retiring Escrow Holder may apply to any court of competent jurisdiction to appoint a successor Escrow Holder. Such court may thereupon, after such notice, if any, as such court may deem proper and prescribe, appoint a successor Escrow Holder. Section 12. TERM. This Agreement shall commence upon its execution and delivery and shall terminate when the Refunded Bonds have been paid and discharged in accordance with the proceedings authorizing the Refunded Bonds. Section 13. SEVERABILITY. If any one or more of the covenants or agreements provided in this Agreement on the part of the City or the Escrow Holder to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenant or agreements herein contained shall be null and void and shall be severed from the remaining covenants and agreements and shall in no way affect the validity of the remaining provisions of this Agreement. Section 14. COUNTERPARTS. This Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as duplicate originals and shall constitute and be one and the same instrument. Section 15. GOVERNING LAW. This Agreement shall be construed under the laws of the State of Florida. 6 • 3480/ATL16002/AD5 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers and their corporate seals to be hereunto affixed and attested as of the date first above written. CITY OF ATLANTIC BEACH, FLORIDA By: Mayor ATTEST: City Manager By: City Clerk Approved as to Form, Sufficiency and Correctness: City Attorney 7 3460/ATL16002/AD5 SCHEDULES [Attach Schedules from Verification Report] 8 3460/ATL1600Z/AD5 • EXHIBIT A EXPENSES 9 3460/ArL16002/AD5 • EXHIBIT B REDEMPTION RESOLUTION WITH FORMS OF NOTICES • 10