AgdaPkt 2013-05-20 Closed Cancelled and Special

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7.A. - Page 25 Attachment 6 Customers entered into a Water Supply Agreement (the "WSA") that replaced a prior agreement entered into in 1984. The WSA has a 25-year term (with provisions for two conditional five-year extensions). The City currently receives all of its potable water from the Regional Water System. See "THE ENTERI'RISE" and APPENDIX A—GENERAL INFORMATION ABOUT THE CITY OF REDWOOD CITY AND SAN MATEO COUNTY. Authority for Issuance of the Bonds The Bonds are being issued pursuant to (i) the laws of the State of California (the "State"), including the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4, Chapter 5, Division 7, Title 1 (commencing with Section 6584) of the California Government Code, as amended (the "Bond Law"), (ii) an Indenture of Trust, dated as of June 1, 2013 (the "Indenture"), by and between the City of Redwood City (the "City") and U.S. Bank National Association, San Francisco, California, as trustee (the "Trustee"), (iii) a resolution adopted by the Governing Board of the Authority on May 20, 2013, and (iv) a resolution adopted by the City Council of the City on May 20,2013. Purpose of the Bonds The Bonds are being issued to (a) refund the Authority's outstanding City of Redwood City Public Financing Authority Water Revenue Bonds, Series 2005A (the "2005 Bonds"), (b) fund a reserve fund for the Bonds, and (c) pay the costs of issuance of the Bonds. See "THE FINANCING PLAN." Security and Source of Repayment The City will secure its obligation to pay Installment Payments with its pledge of all of the "Net Revenues" of the Enterprise, defined generally as all gross income and receipts derived by the City from the ownership and operation of the Enterprise, less operation and maintenance costs. The Bonds are also secured by amounts held in any fund or account established under the Indenture (other than the Project Fund and the Rebate Fund). See "SECURITY FOR THE BONDS." A reserve fund will be established for the Bonds however, "SECURITY FOR THE BONDS—Reserve Fund" below, including a description of certain circumstances under which the Reserve Fund for the Bonds may be terminated. The City's obligation to make Installment Payments is on a parity with certain other obligations of the City. See "Outstanding Enterprise Debt"below. Outstanding Enterprise Debt The City's obligation to make Installment Payments under the Installment Purchase Contract is on a parity with (i) its obligation to make installment payments (the "2007 Installment Payments") under an installment purchase contract (the "2007 Installment Purchase Contract") entered into in connection with the issuance of the Authority's $15,150,000 Water Revenue Bonds, Series 2007A (the "2007 Bonds"), and (ii) its obligation to make installment payments (the "2006 Installment Payments") under an installment purchase contract (the "2006 Installment Purchase Contract") entered into in connection with the issuance of the 2006 Bonds. Future Parity Debt The Installment Purchase Contract, the 2007 Installment Purchase Contract and the 2006 Installment Purchase Contract permit the City to issue bonds or incur other obligations payable from and secured by a pledge of and lien upon any of the Net Revenues on a parity with the Installment Payments, the 2007 Installment Payments and the 2006 Installment Payments, if the -2-