Agenda - Economic Development Authority - 05/10/2012

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(ii) the redemption and prepayment of the Callable Prior Bonds on December 15, 2014; and (iii) the defeasance of the Refunded Bonds pursuant to this Escrow Agreement; and D. WHEREAS, pursuant to Section 10.01 of the Indenture, the Refunded Bonds may be defeased subject to the conditions set forth therein; and E. WHEREAS, the Trustee for the Refunded Bonds has on deposit $1,450,000 in the Reserve Account for the Refunded Bonds and shall transfer such funds to the Escrow Account hereinafter established; and F. WHEREAS, under the terms of the Refunding Resolution and this Agreement $17,236,636.86 of Refunding Bonds proceeds and $1,786,632.50 held by the Trustee in the Reserve Account for the Refunded Bonds (the "Escrow Account ") shall be held and invested in accordance with the terms and conditions of this Escrow Agreement as follows: $18,765,933,81 shall simultaneously be invested in securities (the "Initial Escrowed Obligations ") as described in the report of Grant Thornton LLP, dated June 7, 2012, attached hereto as Exhibit D (the "Accountant's Report "), which Initial Escrowed Obligations, together with the balance of cash in the amount of $209,526.20, shall be used to advance refund the Refunded Bonds. The. Initial Escrowed Obligations (or evidence of the investment therein and constructive receipt thereof) and cash are herein called the "Escrow Deposit ", provided that the term "Escrow Deposit" may include due bills reflecting Escrowed Obligations not received by the delivery of and payment for the Refunding Bonds (the ''Bond Closing ") so long as such due bills are secured by the deposit of comparable securities identified as "Substitute Securities" in the Accountant's Report, or by a cashier's check in an amount equal to either the principal and interest due on the Escrowed Obligations so due or any deficiency in principal or interest due on the Substitute Securities (the Initial Escrowed Obligations, said Substitute Securities and any other investments made hereunder, are referred to collectively as the "Escrowed Obligations"); and G. WHEREAS, it is desirable and appropriate that $35,227.00 of Refunding Bond proceeds and $0.00 of available City funds to be used to pay issuance expenses be paid by the Escrow Agent for disbursement in accordance with the schedule of disbursements (the "Issuance Expenses") set forth in Exhibit B attached hereto and incorporated herein by reference; and H. WHEREAS, the Escrow Agent is, and hereby represents that it is a suitable financial institution within or without the State of Minnesota. NOW, THEREFORE, in consideration of the premises and of the respective agreements on the part of the Escrow Agent, the EDA and the City herein contained, the parties hereto hereby agree as follows: 1. Deposits. The City agrees upon delivery of and payment for the Refunding Bonds at the Bond Closing to forthwith irrevocably deposit with the Escrow Agent the Escrow Deposit, as an appropriation of the Escrowed Obligations and all payments of principal and interest thereon, in trust with the Escrow Agent for the security of the holders and owners of the Refunded Bonds. The City further agrees upon the Bond Closing to deposit with the Escrow Agent the moneys designated above, and the City authorizes the Escrow Agent (and the Escrow Agent agrees) to disburse the moneys to pay Issuance Expenses. The City further authorizes the