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R-00-1163RESOLUTION NO. 1163 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLERMONT, FLORIDA, AUTHORIZING THE PREPAYMENT AND DEFEASANCE OF THAT CERTAIN LOAN AGREEMENT DATED AS OF JULY 1, 1993, AMONG THE CITY OF CLERMONT, THE CITY OF ARCADIA, FLORIDA, AND THE BANK OF NEW YORK, AS TRUSTEE; AUTHORIZING THE EXECUTION AND DELIVERY OF AN ESCROW DEPOSIT AGREEMENT BETWEEN THE CITY OF CLERMONT AND THE ESCROW HOLDER IN CONNECTION THEREWITH; APPOINTING THE ESCROW HOLDER UNDER SAID ESCROW DEPOSIT AGREEMENT; AND PROVIDING AN EFFECTIVE DATE. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CLERMONT, FLORIDA, as follows: SECTION 1. DEFINITIONS. The terms used in this resolution shall have the respective meanings assigned to them in the Loan Agreement (as hereinafter defined) and in this Section, unless the text hereof clearly otherwise requires: "Bond Counsel" shall mean Foley & Lardner, Jacksonville, Florida, bond counsel to the Governmental Unit. "Escrow Deposit Agreement" shall mean the Escrow Deposit Agreement attached hereto as Exhibit A. "Escrow Holder" shall mean the Escrow Holder appointed pursuant to Section 6 of this resolution. "Escrow Requirement" shall have the meaning assigned to such term in the Escrow Deposit Agreement. "Governmental Unit" shall mean the City of Clermont, Florida, a municipal corporation organized and duly existing under the laws of the State of Florida. "Loan" shall mean the Loan made to the Governmental Unit pursuant to the Loan Agreement. "Loan Agreement" shall mean the Loan Agreement among the Governmental Unit, as borrower, the City of Arcadia, Florida, as Sponsor, and The Bank of New York (successor-in-interest to NationsBank, N.A.), as Trustee, dated as of July 1, 1993. ~'`~~' 004.228233.2 'v~ }~~j ~ ~~ ~C~ SECTION 2. AUTHORITY FOR THIS RESOLUTION. This resolution is adopted pursuant to the provisions of Chapter 166, Part II, Florida Statutes, as amended, other applicable provisions of law, and Sections 3.4 and 3.11 of the Loan Agreement. SECTION 3. FINDINGS. It is hereby found and determined that: (A) The Governmental Unit has heretofore entered into the Loan Agreement. The principal amount of the Loan currently outstanding is $2,790,000. The Governmental Unit deems it necessary, desirable and in the best financial interest of the Governmental Unit that the Loan Agreement be prepaid and defeased in order to effectuate a reduction in the debt service applicable to indebtedness issued to finance the System and to facilitate the financing of additional capital improvements to the System. In connection with the prepayment and defeasance of the Loan Agreement, certain funds will be paid by the Governmental Unit to the Escrow Holder for deposit by the Escrow Holder into the Escrow Account established pursuant to the Escrow Deposit Agreement to effectuate the prepayment and defeasance of the Loan Agreement by providing for the payment of the principal of, premium, if any, and interest on the Loan and other amounts payable by the Governmental Unit under the Loan Agreement, as provided in the Escrow Deposit Agreement. (B) In order to carry out the prepayment and defeasance of the Loan Agreement in accordance with this resolution and the Loan Agreement, it is necessary and appropriate that the Governmental Unit authorize the execution and delivery of the Escrow Deposit Agreement between the Governmental Unit and the Escrow Holder. (C) It is necessary and appropriate that the Governmental Unit appoint an escrow holder to serve as such under the Escrow Deposit Agreement, and the institution hereinafter named is acceptable to the Governmental Unit; and it appears to the City Council that the same is qualified to serve as Escrow Holder under the Escrow Deposit Agreement in accordance with the terms of the Escrow Deposit Agreement. SECTION 4. AUTHORIZATION OF PREPAYMENT AND DEFEASANCE. The prepayment and defeasance of the Loan Agreement in the manner provided in Sections 3.4 and 3.11 of the Loan Agreement and the Escrow Deposit Agreement is hereby authorized. Effective upon and subject to the execution and delivery of the Escrow Deposit Agreement and the deposit of the Escrow Requirement and the Reserve Payments Requirement (as defined in the Escrow Deposit Agreement) with the Escrow Holder thereunder, the Governmental Unit does hereby exercise its option to prepay the Loan in full by paying the Optional Prepayment Price pursuant to Sections 3.4 and 3.11 of the Loan Agreement in the manner provided in the Escrow Deposit Agreement. SECTION 5. AUTHORIZATION OF EXECUTION AND DELIVERY OF ESCROW DEPOSIT AGREEMENT. The Mayor of the Governmental Unit (the "Mayor") is hereby authorized to execute and deliver on behalf of the Governmental Unit, and the City Clerk of the Governmental Unit is hereby authorized to attest and seal, the Escrow Deposit Agreement in favor of the Escrow Holder, with such omissions, insertions and variations as may be necessary and/or desirable and approved by the Mayor prior to the delivery thereof, such 004.228233.2 2 necessity and/or desirability and approval by the Mayor to be presumed by the Mayor's execution and delivery thereof. SECTION 6. ESCROW HOLDER. First Union National Bank, a national banking association, Jacksonville, Florida, is hereby appointed to serve as Escrow Holder under the Escrow Deposit Agreement. SECTION 7. AUTHORIZATION OF EXECUTION OF OTHER CERTIFICATES AND OTHER INSTRUMENTS. The Mayor and other officers of the Governmental Unit are hereby authorized and directed, either alone or severally, under the official seal of the Governmental Unit, to execute and deliver certificates of the Governmental Unit certifying such facts as the Governmental Unit's attorney, or Bond Counsel shall require in connection with the prepayment and defeasance of the Loan Agreement; to execute and deliver such other documents providing for the investment of moneys on deposit pursuant to the Escrow Deposit Agreement; and to execute and deliver such other instruments as shall be necessary or desirable to perform the Governmental Unit's obligations under this resolution and the Loan Agreement and to consummate the transactions contemplated hereby and thereby. SECTION 8. REPEALING CLAUSE. All resolutions or parts thereof in conflict herewith are hereby superseded and repealed to the extent of such conflict. SECTION 9. EFFECTIVE DATE. This .resolution shall take effect immediately upon its adoption. ~~ PASSED, APPROVED AND ADOPTED this twenty-fourth day of October, 2000. CITY COUNCIL OF THE CITY OF CLERMONT, FLORIDA By: Harold S. Turville, Jr., Mayor By: 004.228233.2 (SEAL) ATTEST: Joseph Van Zile, City Clerk 3 ESCROW DEPOSIT AGREEMENT In consideration of the facts hereinafter recited and of the mutual covenants and agreements herein contained, the CITY OF CLERMONT, FLORIDA, a municipal corporation created and duly existing under the laws of the State of Florida (the "Governmental Unit"), and FIRST UNION NATIONAL BANK, a national banking association, Jacksonville, Florida, as Escrow Holder (the "Escrow Holder"), do hereby agree as follows: Section 1. Definitions. Terms used herein shall have the respective meanings assigned in and by the Resolution hereinafter defined, and the following terms which are not defined in the Loan Agreement shall have the following meanings, unless the text clearly otherwise requires: "Aggregate Debt Service" shall mean, as of any particular date, the sum of the amounts of Annual Debt Service for all years with respect to which the Annual Debt Service shall remain unpaid. Aggregate Debt Service as of the date of the delivery of this Agreement is set forth in the Verification Report. "Agreement" shall mean this Escrow Deposit Agreement. "Annual Debt Service" shall mean, with respect to any year, the interest on the Loan becoming due in such year and the principal of and premium, if any, on the Loan maturing or becoming due in such year according to the Verification Report. "Bonds" shall mean the Sponsor's outstanding Dedicated Pool Local Government Revenue Bonds, Series 1993, issued under and secured by the Indenture. "Escrow Account" shall mean the Escrow Account created pursuant to the provisions of Section 3 of this Agreement. "Escrow Requirement" shall mean, as of any particular date, the sum of an amount in cash in the Escrow Account and the principal amount of the Federal Securities held by the Escrow Holder pursuant to Section 4 hereof which, together with the interest which shall thereafter become payable on the Federal Securities, will be sufficient to pay Aggregate Debt Service, as each of the respective installments thereof shall become due. "Escrow Securities" shall mean the Federal Securities and any other securities which may be on deposit from time to time in the Escrow Account. "Federal Securities" shall mean direct obligations of the United States of America, none of which permit redemption prior to maturity at the option of the obligor, which obligations are set forth in the Verification Report for the Escrow Account and the Reserve Payments Account. "Final Payment and Redemption Date" shall mean December 1, 2003 . 004.228260.2 "Indenture" shall mean the Trust Indenture dated as of July 1, 1993, between the Sponsor and the Trustee, securing the Bonds. "Loan" shall mean Loan made to the Governmental Unit pursuant to the Loan Agreement. "Loan Agreement" shall mean the Loan Agreement among the Governmental Unit, as borrower, the Sponsor, and the Trustee, dated as of July 1, 1993. "Reserve Payments Account" shall mean the Reserve Payments Account created pursuant to the provisions of Section 5 hereof. "Reserve Payments Requirement" shall mean the amount of Federal Securities the principal of and the interest on which, when due, will be sufficient to pay an amount equal to the average annual Reserve Payments made by the Governmental Unit in its two most recent full fiscal years (ending September 30, 1999 and 2000) (less any Reserve Payments applicable to the Debt Service Reserve Fund) for each of the fiscal years remaining until the Final Payment and Redemption Date. "Resolution" shall mean the resolution adopted by the Governmental Unit on October 24, 2000, as amended and supplemented from time to time, authorizing the prepayment and defeasance of the Loan Agreement and the execution and delivery of this Agreement. "Sponsor" shall mean the City of Arcadia, Florida. "Trustee" shall mean The Bank of New York (successor-in-interest to NationsBank N.A.), as Trustee under the Indenture. "Verification Report" shall mean the Verification Report dated November 21, 2000, issued by The Arbitrage Group, Inc., independent certified public accountants, in connection with the prepayment and defeasance of the Loan Agreement, a copy of which is attached hereto as Exhibit A and incorporated herein by reference. Section 2. Recitals. (a) The Governmental Unit adopted the Resolution for the purpose of authorizing the prepayment and defeasance of the Loan Agreement. (b) The Resolution authorized the Governmental Unit to enter into this Agreement for the purposes expressed therein and herein, and all acts and things have been done and performed to make this Agreement valid and binding for the security of the payment obligations of the Governmental Unit under the Loan Agreement. (c) The Escrow Holder has the powers and authority of a trust company under the laws of the United States of America and, accordingly, the power to execute the trust hereby created. 004.228260.2 2 Section 3. Escrow Account. There is hereby created and established with the Escrow Holder a special account to be known as the "Escrow Account." Simultaneously with the execution and delivery of this Agreement, the Governmental Unit has deposited with the Escrow Holder, for deposit by the Escrow Holder to the Escrow Account $ of available funds of the Governmental Unit, consisting of $ received directly from the Trustee representing the Governmental Unit's Pro Rata Share of the Debt Service Reserve Funds held by the Trustee under the Indenture and $ of other available funds of the Governmental Unit. After such funds are invested to the extent required to purchase the Federal Securities for such Account, the uninvested portion of such funds and the principal amount of such Federal Securities and the interest to become due thereon will equal or exceed the Escrow Requirement as of the date of the delivery of this Agreement. Such Federal Securities shall mature and such interest shall be payable on or before the funds represented thereby shall be required for timely payment of the principal of, premium, if any, and interest on the Loan as the same shall become due and payable in accordance with their terms as described in the Verification Report. The Escrow Holder shall hold the Escrow Account as a separate trust account wholly segregated from all other funds held by the Escrow Holder in any capacity and shall make disbursements from the Escrow Account only in accordance with the provisions of this Agreement. The Federal Securities described in the Verification Report shall not be sold or otherwise disposed of or reinvested except as provided in Sections 4 and 9 hereof. The Trustee is hereby granted a first and prior lien on the principal of and interest on such Federal Securities until the same shall be used and applied in accordance with the provisions of this Agreement. Section 4. Use and Investment of Funds in Escrow Account. The Escrow Holder acknowledges receipt of the cash described in Section 3 of this Agreement and agrees: (a) to hold the same in irrevocable escrow for application in the manner provided herein; (b) to apply such cash and the proceeds of such Federal Securities in the manner provided in this Agreement, and only in such manner; (c) to invest immediately $ thereof by purchasing the Federal Securities described in the Verification Report to be deposited into Escrow Account; (d) to retain uninvested $ thereof in cash in the Escrow Account for application as shown in the Verification Report; and (e) to deposit in the Escrow Account, as received, the principal of all of such Federal Securities described in the Verification Report and any other Federal Securities acquired hereunder and held in the Escrow Account which shall mature during the term of this Agreement, all interest which shall be derived during the term of this Agreement from such Federal Securities and any other Federal Securities acquired hereunder for such Account, and the proceeds of any sale, transfer, redemption or other disposition of such Federal Securities and any other Federal Securities acquired hereunder for such Account. oo4.zzszso.z 3 Section 5. Reserve Payments Account. There is hereby created and established with the Escrow Holder a special account to be known as the "Reserve Payments Account." Simultaneously with the execution and delivery of this Agreement, the Governmental Unit has deposited with the Escrow Holder, for deposit by the Escrow Holder to the Reserve Payments Account, $ of available funds of the Governmental Unit, which amount equals or exceeds the Reserve Payments Requirement. After such funds are invested to the extent required to purchase the Federal Securities for such Account, the uninvested portion of such funds and the principal amount of such Federal Securities and the interest to become due thereon will equal or exceed the amount sufficient to timely pay the Reserve Payments related to the Loan as the same shall become due and payable until the Final Payment and Redemption Date. Such Federal Securities shall mature and such interest shall be payable on or before the funds represented thereby shall be required for the timely payment of such Reserve Payments in accordance with Loan Agreement as described in the Verification Report. The Escrow Holder is hereby authorized and directed to pay directly to the Trustee any Reserve Payments related to the Loan which shall become due and payable to Trustee pursuant to the Loan Agreement upon receipt of a written request for such payment from the Trustee. The Escrow Holder shall be entitled to rely conclusively upon such written request received from the Trustee. To the extent that the moneys in the Reserve Payments Account are not sufficient to make any Reserve Payment related to the Loan which shall become due and payable, the Governmental Unit covenants to fund such insufficiency from any available unencumbered funds not derived from ad valorem taxes. The Escrow Holder shall hold the Reserve Payments Account as a separate trust account wholly segregated from all other funds held by the Escrow Holder in any capacity and shall make disbursements from the Reserve Payments Account only in accordance with the provisions of this Agreement. The Federal Securities deposited into the Reserve Payments Account described in the Verification Report shall not be sold or otherwise disposed of or reinvested except as provided in Sections 6 and 9 hereof. The Trustee is hereby granted a first and prior lien on the principal of and interest on such Federal Securities until the same shall be used and applied in accordance with the provisions of this Agreement. Section 6. Use and Investment of Funds in Reserve Payments Account. The Escrow Holder acknowledges receipt of the cash described in Section 5 of this Agreement and agrees: (a) to hold the same in irrevocable escrow for application in the manner provided herein; (b) to apply such cash and the proceeds of such Federal Securities in the manner provided in this Agreement, and only in such manner; (c) to invest immediately $ thereof by purchasing the Federal Securities described in the Verification Report to be deposited into the Reserve Payments Account; oo4.2zazso.z 4 (d) to retain uninvested $ thereof in cash in the Reserve Payments Account for application as shown in the Verification Report; and (e) to deposit in the Reserve Payments Account, as received, the principal of all of such Federal Securities described in the Verification Report and any other Federal Securities acquired hereunder and held in the Reserve Payments Account which shall mature during the term of this Agreement, all interest which shall be derived during the term of this Agreement from such Federal Securities and any other Federal Securities acquired hereunder for such Account, and the proceeds of any sale, transfer, redemption or other disposition of such Federal Securities and any other Federal Securities acquired hereunder for such Account. Section 7. Payment of the Loan and Expenses. The Trustee shall have a first and prior lien on the principal of and interest on the Federal Securities and all moneys held by the Escrow Holder in the Escrow Account, until all such moneys shall be used and applied by the Escrow Holder as provided in paragraph (a) below. (a) Loan. O.n each date which shall be a principal or interest payment date for any installment of the Loan, the Escrow Holder shall pay to the Trustee, from the moneys on deposit in the Escrow Account, a sum sufficient to pay that portion of Annual Debt Service due on such date, as shown in the Verification Report. After making such payments from the Escrow Account, the Escrow Holder, upon the written request of the Governmental Unit, signed by the Mayor, shall pay to the Governmental Unit any moneys remaining in said account in excess of the Escrow Requirement, for the Governmental Unit to use for any lawful purpose, provided that, prior to any such payment, the Escrow Holder shall have received a verification report prepared by a firm of independent certified public accountants verifying the Escrow Requirement and that such moneys to be paid to the Governmental Unit are in excess of the Escrow Requirement. (b) Fees and Expenses. (i) In consideration of the services rendered by the Escrow Holder under this Agreement, the Governmental Unit upon the execution hereof has paid to the Escrow Holder a fee of $ for all services and ordinary expenses to be incurred as Escrow Holder in connection with such services. The term "ordinary expenses" means expenses of holding, investing and disbursing the Escrow Account and the Reserve Payments Account as provided herein. (ii) The Governmental Unit shall also reimburse the Escrow Holder for any extraordinary expenses incurred by it in connection herewith. The term "extraordinary expenses" includes (a) expenses arising out of the assertion of any third party to any interest in the Escrow Account or the Reserve Payments Account or any challenge to the validity hereof, including reasonable attorneys' fees, (b) expenses relating to any substitution under Section 9 hereof, and (c) expenses (other than ordinary expenses) not occasioned by the Escrow Holder's willful misconduct or negligence. (iii) The fees and expenses payable by the Governmental Unit under this section shall not be paid from the Escrow Account or the Reserve Payments Account, but 004.228260.2 5 shall be paid by the Governmental Unit from the Net Revenues of the System (as such terms are defined in the Loan Agreement). The Escrow Holder shall have no lien for the payment of its fees or expenses or otherwise for its benefit on the Escrow Account or the Reserve Payments Account and hereby waives any rights of set off against the Escrow Account and the Reserve Payments Account which it may lawfully have or acquire. Section 8. Notice of Prepayment and Defeasance. The Governmental Unit has exercised its option to prepay and defease the Loan in full by paying the Optional Prepayment Price and Reserve Payments Requirement pursuant to Sections 3.4 and 3.11 of the Loan Agreement. The Governmental Unit acknowledges that it has given irrevocable instructions to the Trustee relating to the exercise of such option in the manner provided in Sections 3.4 and 3.11 of the Loan Agreement. Section 9. Reinvestment. 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 for any Federal Securities held hereunder. At the written request of the Governmental Unit and upon compliance with the conditions stated in this Section, the Escrow Holder shall sell, transfer, or otherwise dispose of or request the redemption of any of the Federal Securities acquired hereunder and shall purchase other Federal Securities to be substituted for such Federal Securities disposed of or redeemed. The Governmental Unit will not request the Escrow Holder to exercise any of the powers described in the preceding sentence in any manner which will cause the Loan to be an "arbitrage bond" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, and the applicable regulations proposed or promulgated thereunder. The Escrow Holder may, at the written direction of the Governmental Unit, substitute other noncallable Federal Securities ("Substitute Federal Securities") in lieu of the Federal Securities then on deposit in the Escrow Account provided that, prior to any such substitution, the Escrow Holder and the Governmental Unit shall have received: (a) New debt service and cash flow schedules showing (i) the dates and amounts of all principal and interest payments thereafter to become due on the Loan, (ii) the cash and Federal Securities to be on deposit in the Escrow Account upon making such substitution, (iii) the dates and amounts of maturing principal and interest to be received by the Escrow Holder from such Federal Securities, and (iv) that the cash on hand in the Escrow Account plus cash to be derived from the maturing principal and interest of such Federal Securities shall be sufficient to pay when due all remaining debt service payments on the Loan (the most recent debt service and cash flow schedules shall be considered to be the applicable "Debt Service and Cash Flow Schedules"); (b) Anew verification report prepared by a nationally recognized firm of independent certified public accountants verifying the accuracy of the new Debt Service and Cash Flow Schedules (the most recent verification report shall be considered to be the applicable "New Verification Report" for purposes hereof); 004.228260.2 6 (c) An opinion of nationally recognized bond counsel to the effect that such substitution is permissible hereunder, that (based on said new Debt Service and Cash Flow Schedules and New Verification Report as to sufficiency) such substitution will not adversely affect the defeasance of the Loan Agreement or the exclusion from gross income for federal income tax purposes of the interest payable on the Bonds; The Escrow Holder may, at the written direction of Governmental Unit, substitute Substitute Federal Securities in lieu of the Federal Securities then on deposit in the Reserve Payments Account in the same manner and subject to the same conditions provided above for the substitution of Substitute Federal Securities in lieu of Federal Securities on deposit in the Escrow Account, except that the Debt Service and Cash Flow Schedules and New Verification Report shall relate to the remaining Reserve Payments to be paid by the Governmental Unit. Section 10. Indemnity. Whether or not any action or transaction authorized or contemplated hereby shall be undertaken or consummated, the Governmental Unit hereby agrees to the extent allowed by Florida law to indemnify, protect, save and keep harmless the Escrow Holder and its respective successors, agents and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including reasonable legal fees and attorneys' disbursements and expenses) of whatsoever kind and nature which may be imposed on, incurred by or asserted against the Escrow Holder at any time, whether or not the same may be indemnified against by the Governmental Unit or any other Person under any other agreement or instrument, by reason of or arising out of the execution and delivery of this Agreement, the establishment of the Escrow Account or the Reserve Payments Account, the acceptance by the Escrow Holder of the funds herein described, the purchase, retention or disposition of the Federal Securities or the proceeds thereof, or 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 Governmental Unit shall not be required to indemnify the Escrow Holder for any expense, loss, costs, disbursements, damages or liability resulting from its own negligence or willful misconduct. The indemnities contained in this Section shall survive the termination of this Agreement. Nothing in this Section contained shall give rise to any liability on the part of the Governmental Unit in favor of any Person other than the Escrow Holder. Section 11. Responsibilities of Escrow Holder. The Escrow Holder and its respective successors, agents and servants shall not be held to any personal liability whatsoever, in tort, contract or otherwise, by reason of the execution and delivery of this Agreement, the establishment of the Escrow Account or the Reserve Payments Account, the acceptance and disposition of the various moneys and funds described herein, the purchase, retention or disposition of the Federal Securities or the proceeds thereof, any payment, transfer or other application of funds or securities by the Escrow Holder in accordance with the provisions of this Agreement or any non-negligent act, omission or error of the Escrow Holder made in good faith in the conduct of its duties. The Escrow Holder shall, however, be liable to the Governmental Unit and to the Trustee to the extent of their respective damages for 004.228260.2 7 negligent or willful acts, omissions or errors of the Escrow Holder 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. The Escrow Holder may consult with counsel, who may or may not be counsel to the Governmental Unit, and be entitled to receive from the Governmental Unit reimbursement of the reasonable fees and expenses of such counsel, and in reliance upon the opinion of such counsel have full and complete authorization and protection in respect of any action taken, suffered or omitted by it in good faith in accordance therewith. 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 Governmental Unit. Section 12. 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 Governmental Unit 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 of the Escrow Holder hereunder. Section 13. Removal of Escrow Holder. The Escrow Holder may be removed at any time by an instrument in writing, executed by the Trustee, such instrument to be filed with the Governmental Unit not less than sixty (60) days before such removal is to take effect as stated in said instrument. A photographic copy of any instrument filed with the Governmental Unit under the provisions of this paragraph shall be delivered by the Governmental Unit to the Escrow Holder. Section 14. 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, depaztment 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 Governmental Unit shall appoint a successor Escrow Holder to fill such vacancy. The Governmental Unit shall furnish written notice of any such appointment to the Trustee. (b) At any time within one year after such vacancy shall have occurred, the Trustee, by an instrument in writing, filed with the Governmental Unit, may appoint a successor Escrow Holder, which shall supersede any successor Escrow Holder theretofore appointed by the Governmental Unit. Photographic copies of each such instrument shall be promptly delivered by the Governmental Unit to the predecessor Escrow Holder and to the Escrow Holder so appointed by the Trustee. (c) Every successor Escrow Holder appointed hereunder shall execute, acknowledge and deliver to its predecessor and also to the Governmental Unit an instrument in 004.228260.2 g writing accepting such appointment hereunder, and thereupon such successor Escrow Holder, without any further act, shall become full vested with all of the duties and obligations of its predecessor under this Agreement. Section 15. Predecessor Escrow Holder. Every predecessor Escrow Holder shall deliver to its successor and also to the Governmental Unit and to the Trustee an accounting of all moneys and securities held by it under this Agreement, and shall deliver to its successor all such moneys and securities held by it as Escrow Holder hereunder. Section 16. Amendments. This Agreement is made for the benefit of the Governmental Unit and the Trustee and it shall not be repealed, revoked, altered or amended without the written consent of the Trustee, the Escrow Holder, and the Governmental Unit; provided, however, that the Governmental Unit and the Escrow Holder may, with the consent of the Trustee, enter into such agreements supplemental to this Agreement as shall not adversely affect the rights of the Trustee and as shall not be inconsistent with the terms and provisions of this Agreement, for any one or more of the following purposes: (a) to cure any ambiguity or formal defect or omission in this Agreement; (b) to grant, or confer upon, the Escrow Holder for the benefit of the Trustee, any additional rights, remedies, powers or authority that may lawfully be granted to, or conferred upon, the Trustee or the Escrow Holder; and (c) to subject to this Agreement additional funds, securities or properties. The Escrow Holder shall be entitled to rely exclusively upon an unqualified opinion of nationally recognized bond counsel with respect to compliance with this Section 16, including the extent, if any, to which any change, modification or addition affects the rights of the Trustee, or that any instrument executed hereunder complies with the conditions and provisions of this Section 16. Section 17. Notices. All notices, approvals, consents, requests and other communications hereunder shall be in writing and shall be deemed to have been given when mailed or delivered by registered or certified mail, return receipt requested, postage prepaid, and addressed as follows: If to the Governmental Unit: City of Clermont 1 Westgate Plaza Clermont, Florida 34712 Attention: City Clerk If to the Escrow Holder: First Union National Bank 225 Water Street, 3`d Floor Jacksonville, FL 32225 Attn: Corporate Trust Department 004.228260.2 9 The Governmental Unit and the Escrow Holder may, by notice given hereunder, designate any further or different addresses to which subsequent notices, approvals, consents, requests or other communications shall be sent or persons to whose attention the same may be directed. Section 18. Term. This Agreement shall commence upon its execution and delivery and shall terminate when the Aggregate Debt Service and all Reserve Payments related to the Loan shall have been paid and discharged in accordance with the Loan Agreement and all excess moneys have been paid to the Governmental Unit. Section 19. Severability. If any of the covenants, agreements or provisions of this Agreement on the part of the Governmental Unit or the Escrow Holder to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenant, agreement or provision shall be null and void, shall be deemed separable from the remaining covenants, agreements and provisions of this Agreement and shall in no way affect the validity of the remaining covenants, agreements or provisions of this Agreement. Section 20. Counterparts. This Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as the original and shall constitute and be but one and the same instrument. Section 21. Governing_Law. This Agreement shall be construed under the laws of the State of Florida. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers and their seals to be hereunto affixed and attested, all as of the 21S` day of November, 2000. CITY OF CLERMONT, FLORIDA (SEAL) ATTEST: oseph Van Zile, ity Clerk By:_ C -`-`~ Harold S. Turville, Jr., Mayor 004.228260.2 10 FIRST UNION NATIONAL BANK, as Escrow Holder (SEAL) ATTEST: Title: ACKNOWLEDGED: THE BANK OF NEW YORK, as Trustee By:_ Title: By:_ Title: 004.2282so.s 11