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and construction of 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 of Installment Payments made by the City pursuant to a Master Installment Purchase Agreement dated as of June 1, 2024 (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 June 1, 2024 (the "First Supplement," and together with the Master Installment Purchase Agreement the "Installment Purchase Agreement") and funds and accounts held under the Indenture (excluding the Rebate Fund and the Cost of Issuance Fund). 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 of outstanding Parity Obligations and 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." Parity Obligations The Water Enterprise currently has two installment sale agreements between the City and the California State Water Resources Control Board which are on a parity with the City's obligation under the Installment Purchase Agreement, one in the amount of $10,117,365 for the Automated Metering Infrastructure Project ("AMI"), and one for $13,761,712 for the Well 32 Rehabilitation Project. Both projects have an interest rate of 1.1%; the AMI Project loan has a 20-year repayment period, and the Well 32 Rehabilitation Project loan has a 30- year repayment period. The Water Enterprise, with the issuance of the Prior Obligations, refinanced its 2004 Water Revenue Bonds. The Prior Obligations will refinanced in connection with the issuance of the Bonds, as described herein. (See "INTRODUCTION - Security for the Bonds" and "THE FINANCING PLAN"). 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. 0►