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Attachment 3 <br /> <br /> <br /> <br />Legal Documents <br />City Resolution <br />The City Resolution approves the sale of bonds by the Redwood City Public Financing Authority <br />(PFA or Authority) subject to a maximum amount of refunding bonds in the amount of <br />$12,200,000 and 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 the distribution <br />of a preliminary official statement and official notice of sale, and authorizes authorized officers of <br />the City to execute such documents and to take any such action as they, or any of them, may <br />deem necessary or advisable in order for the transactions as described in the resolution in <br />connection with the issuance and sale of the 2017 Bonds. <br /> <br />PFA Resolution <br />The PFA Resolution approves the sale of bonds by the PFA subject to a maximum amount of <br />refunding bonds in the amount of $12,200,000 and minimum net present value savings on the <br />refunding bonds of at least 3%. If bonds are sold on a negotiated basis, it further limits the <br />underwriter’s discount to no more than 1.5% of the par amount of bonds sold. It also approves <br />key basic legal documents in substantially final form, authorizes the distribution of a preliminary <br />official statement and official notice of sale, and authorizes authorized officers of the PFA to <br />executes such documents and to take any such action as they, or any of them, may deem <br />necessary or advisable in order for the transactions as described in the resolution in connection <br />with the issuance and sale of the 2017 Bonds. <br /> <br />Installment Purchase Contract <br />This is the agreement whereby the Authority uses the bond proceeds for the acquisition of the <br />project (i.e., the improvements financed with the 2007 Bonds), the Authority appoints the City as <br />its agent in connection with the acquisition of the project, the Authority sells the project to the <br />City, and the City agrees to make installment purchase payments, together with interest <br />thereon, in satisfaction of the purchase price of the project. Installment purchase payments are <br />a special fund obligation of the City’s water fund, and, pursuant to the Installment Purchase <br />Contract, the City pledges water fund net revenues (gross revenues less operating expenses, <br />net of depreciation, defined as “Net Revenues”) in satisfaction of its annual payment obligations. <br />The Installment Purchase Contract is assigned to the bond trustee as security for the 2017 <br />Bonds. The Installment Purchase Contract places a first priority lien on the Net Revenues of the <br />water system enterprise, establishes certain performance, financial and other covenants of the <br />City, including a promise to establish rates annually in an amount sufficient to produce annual <br />Net Revenues that are at least 120% of debt service on the 2017 Bonds and any outstanding <br />parity debt (currently, the 2013 Bonds and the 2015 Bonds), establishes the conditions under <br />which additional bonds secured by the water system Net Revenues may be sold, establishes <br />certain financial and other duties of the City in connection with the operation and maintenance <br />of the water system enterprise, and establishes events of default and the remedies therefore. <br /> <br />Indenture of Trust <br />This document establishes a trust estate for the benefit of the owners of the 2017 Bonds. It <br />establishes a lien on installment purchase payments received by the Authority for the purpose of <br />paying the interest on and the principal of the 2017 Bonds. The trust indenture serves as a <br />contract with the owners of the 2017 Bonds. It fixes the denominations, payment terms and <br />similar such terms of the 2017 Bonds, establishes a pledge of installment purchase contract <br />8.C. - Page 15