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8.A. - Page 14 Attachment 3 <br /> Summary of Principal Legal Documents <br /> City Resolution <br /> The City Resolution approves the sale of bonds by the Redwood City Public <br /> Financing Authority (PFA or Authority) subject to a maximum amount of <br /> refunding bonds in the amount of $21,055,000 and minimum net present value <br /> savings on the refunding bonds of at least 3%. It further approves key basic <br /> legal documents in substantially final form, authorizes the distribution of a <br /> preliminary official statement and official notice of sale, and authorizes authorized <br /> officers of the City to execute such documents and to take any such action as <br /> they, or any of them, may deem necessary or advisable in order for the <br /> transactions as described in the resolution in connection with the issuance and <br /> sale of the Bonds. <br /> PFA Resolution <br /> The PFA Resolution approves the sale of bonds by the PFA subject to a <br /> maximum amount of refunding bonds in the amount of $21,055,000 and <br /> minimum net present value savings on the refunding bonds of at least 3%. It <br /> further approves key basic legal documents in substantially final form, authorizes <br /> the distribution of a preliminary official statement and official notice of sale, and <br /> authorizes authorized officers of the PFA to executes such documents and to <br /> take any such action as they, or any of them, may deem necessary or advisable <br /> in order for the transactions as described in the resolution in connection with the <br /> issuance and sale of the Bonds. <br /> Installment Purchase Contract <br /> This is the agreement whereby the Authority uses the bond proceeds for the <br /> acquisition of the project (i.e., the improvements financed with the 2006 Bonds), <br /> the Authority appoints the City as its agent in connection with the acquisition of <br /> the project, the Authority sells the project to the City, and the City agrees to make <br /> installment purchase payments, together with interest thereon, in satisfaction of <br /> the purchase price of the project. Installment purchase payments are a special <br /> fund obligation of the City's water fund, and, pursuant to the Installment <br /> Purchase Contract, the City pledges water fund Net Revenues in satisfaction of <br /> its annual payment obligations. The Installment Purchase Contract is assigned <br /> to the bond trustee as security for the bonds. The Installment Purchase Contract <br /> places a first priority lien on the Net Revenues of the water system enterprise, <br /> establishes certain performance, financial and other covenants of the City, <br /> including a promise to establish rates annually in an amount sufficient to produce <br /> annual Net Revenues that are at least 120% of debt service on the 2015 Bonds <br /> and any outstanding parity debt (currently, the 2007 Bonds and the 2013 Bonds), <br /> establishes the conditions under which additional bonds secured by the water <br /> system Net Revenues may be sold, establishes certain financial and other duties <br /> Page 1 of 3 <br />