80A - JOINT - SAFA - WATER SYS BONDS

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certain improvements (the "Project ") to the water system (the "Water System ") of the City, and (iii) to pay certain costs of issuance of the Bonds. The Prior Obligations were issued to refinance outstanding obligations of the Water System and to finance the acquisition and construction of additional improvements to the Water System. See "THE FINANCING PLAN" and "ESTIMATED SOURCES AND USES OF FUNDS" herein. See "THE WATER SYSTEM" herein for a description of the City's water system. Security for the Bonds The Bonds are payable from Revenues, consisting principally of Installment Payments made by the City pursuant to a Master Installment Purchase Agreement dated as of , 2014 (the "Master Installment Purchase Agreement "), between the City and the Authority as supplemented by that First Supplement to Master Installment Purchase Agreement, dated as of 1 , 2014 (the "First Supplement," and together with the Master Installment Purchase Agreement the "Installment Purchase Agreement "). Pursuant to the Indenture the Authority has assigned to the Trustee, among other things, its right to receive Installment Payments. The Installment Payments are a special limited obligation of the City, payable from and secured by a pledge of and first lien on all Net System Revenues in the Payment Fund held by the City under the Installment Purchase Agreement subject to the parity lien, if any, of any additional obligations as provided for in the Installment Purchase Agreement. See "SECURITY FOR THE BONDS." The Installment Payments are calculated to be an amount sufficient to permit the Authority to pay all scheduled debt service on the Bonds when due. See APPENDIX B "SUMMARY OF DEFINED TERMS AND PRINCIPAL LEGAL DOCUMENTS." Limited Obligations THE BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM AND SECURED SOLELY BY THE REVENUES PLEDGED UNDER THE INDENTURE. THE BONDS ARE NOT A DEBT, LIABILITY OR OBLIGATION OF THE CITY, THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS AND NEITHER THE FAITH AND CREDIT OF THE CITY, THE STATE NOR ANY OF ITS POLITICAL SUBDIVISIONS ARE PLEDGED TO THE PAYMENT OF PRINCIPAL OR INTEREST ON THE BONDS AND NEITHER THE CITY, THE STATE NOR ANY OF ITS POLITICAL SUBDIVISIONS IS LIABLE THEREFOR, NOR HAS LEVIED ANY TAXES THEREFOR NOR IS OBLIGATED TO LEVY ANY TAXES THEREFOR, NOR IN ANY EVENT SHALL THE BONDS OR ANY INTEREST OR REDEMPTION PREMIUM THEREON BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN THOSE OF THE AUTHORITY AS SET FORTH IN THE INDENTURE. NEITHER THE BONDS NOR THE OBLIGATION TO MAKE INSTALLMENT PAYMENTS CONSTITUTES AN INDEBTEDNESS OF THE CITY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. Forward- Looking Statements This Official Statement contains forward - looking statements, including (i) statements containing projections of Net System Revenues and other financial items, (ii) statements of future economic performance of the Water System, and (iii) statements of the assumptions underlying or relating to statements described in (i) and (ii) above, (collectively, the "Forward - Looking Statements "). All statements other than statements of historical facts included in this Official Statement, including without limitation statements under "THE WATER SYSTEM" and "SECURITY FOR THE BONDS" regarding the financial position, capital resources and status of the City and the Water System are Forward - Looking Statements. Although the City believes that the expectations reflected in such Forward - Looking Statements are reasonable, no assurance can be given that such expectations will prove to be correct. Important factors which could cause actual results to differ materially from expectations of the City (collectively, the "Cautionary Statements ") are disclosed in this Official Statement. All Forward - Looing Statements attributable to the City or the Authority are expressly qualified in their entirety by the Cautionary Statements. 80A -142