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from Installment Payments Secured by Water System Net Revenues) (the <br />"Prior Bonds"), secured by the Prior Installment Purchase Agreement; <br /> <br />In order to achieve certain savings, the City desires to refinance the <br />Project by exercising its option to prepay the component installment <br />payments (the "Prior Installment Payments") payable by the City under the <br />Prior Installment Purchase Agreement and cause the redemption of the <br />Prior Bonds; <br /> <br />In order to accomplish such refinancing, the Authority and the City desire <br />to enter into a Master Installment Purchase Agreement (the "Master <br />Installment Purchase Agreement"), by and between the City and the <br />Authority, and a First Supplement to Master Installment Purchase <br />Agreement (the "First Supplement" and together with the Master <br />Installment Purchase Agreement, the "Installment Purchase Agreement"), <br />between the City and the Authority; <br /> <br />The City and the Authority have determined that it would be in the best <br />interests of the City and the Authority to provide the funds necessary to <br />refinance the Project through the offering and sale of bonds of the <br />Authority, designated "Santa Ana Financing Authority Water Refunding <br />Revenue Bonds, Series 2004 (Payable Solely from Installment Payments <br />Secured by Water System Net Revenues)" (the "Bonds"), secured by the <br />Installment Purchase Agreement; <br /> <br />The Authority and the City desire that BNY Western Trust Company, as <br />trustee (the "Trustee") and the Authority enter into an Indenture (the <br />"Indenture") in order to provide for the issuance of the Bonds; <br /> <br />The Bonds will be issued pursuant to the Marks-Roes Local Bond Pooling <br />Act of 1985, commencing with Section 6584 of the California Government <br />Code; <br /> <br />The Governing Board of the Authority (the "Governing Board") has <br />determined that it would be in the best interest of the Authority to secure <br />the timely payment of the principal of and interest on the Bonds by <br />obtaining an insurance policy [and a reserve surety bond] with respect <br />thereto; <br /> <br />The funds representing the prepayment of the Prior Installment Payments <br />payable by the City under the Prior Installment Purchase Agreement will <br />be applied to the payment and redemption of the Prior Bonds pursuant to <br />an Escrow Agreement (the "Escrow Agreement") by and among the City, <br />the Authority and BNY Western Trust Company, as escrow agent; <br /> <br />FA Resolution No. 2004-002 <br />Page 2 of 7 <br /> <br /> <br />