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21-1027_SANTA MARGARITA WATER DISTRICT_Master Water Rights Transfer AgreementMASTER WATER RIGHTS TRANSFER AGREEMENT This Master Water Rights Transfer Agreement dated October 27, 2021 ("Master Agreement" or "Agreement") is entered into by the City of San Juan Capistrano ("City") and Santa Margarita Water District ("SMWD"). The City and SMWD may be referred to herein in the singular as "Party" and collectively as "Parties." RECITALS A. The City is a general law city created and existing under the California Constitution and the laws of the State of California. B. SMWD is a water district created and existing under the California Water District Law (California Water Code Section 34000 et seq.). C. The City and SMWD entered into that certain Annexation Agreement dated as of January 21, 2020 ("Annexation Agreement"). Pursuant to the Annexation Agreement, the City and SMWD agreed to, among other things, negotiate in good faith and enter into a "Water Rights Transfer Agreement" with respect to the City's water rights and the SMWD's provision of water service to the City and its existing and future customers. D. Concurrent with the Parties' execution of this Master Agreement, the Parties and the San Juan Basin Authority are executing the Assignment, Assumption and Amendment Agreement Regarding Desalter Project Implementation Agreements (Water Rights Transfer Agreement No. 1) ("Assignment of Desalter Project Agreements") by which the City assigns its rights, title, interest, duties and obligations in and to the San Juan Basin Authority Groundwater Recover Project (the "Desalter Project") and the San Juan Basin Authority's water right Permit 21074, and SMWD Assignee accepts all of the City's rights, title, interest, duties and obligations in and to the Desalter Project and Permit 21074. E. Also concurrent with the execution of this Master Agreement, the Parties are executing the following agreements: Agreement For The Exercise Of City Appurtenant Water Rights (Water Rights Transfer Agreement No. 2); Agreement Regarding Water Rights Dedicated To Public Use (Water Rights Transfer Agreement No. 3); Agreement Regarding Assignment And Assumption Of San Juan Hills Settlement Agreement (Water Rights Transfer Agreement No. 4); Agreement Regarding Assignment And Assumption Of Cotton Settlement, Mutual Release And Well Sharing Agreement (Water Rights Transfer Agreement No. 5); Agreement Regarding Assignment And Assumption Of Recycled Water Agreement (Water Rights Transfer Agreement No. 6). The Assignment of Desalter Project Agreements, together with the agreements listed in this paragraph E are collectively referred to as the "Additional Water Agreements." F. This Agreement and the Additional Water Agreements, are intended to fulfill the Parties' respective obligations under the Annexation Agreement to enter into a "Water Rights Transfer Agreement." Page 1 of 5 Master Water Rights Transfer Agreement 22522669.3 10/27/21 G. The Parties seek to incorporate the term and conditions set forth in this Master Agreement into each of the Additional Water Agreements. TERMS OF THE AGREEMENT NOW, THEREFORE, in consideration of the foregoing recitals, and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows: 1. Recitals. The Parties acknowledge that the above recitals preceding this paragraph 1 are true and correct, and are incorporated herein as material parts of this Agreement 2. Provisions Incorporated Into Each of the Additional Water Agreements. Sections 1, 2, 3, 4, 5 and 6 of this Agreement shall be incorporated into the each of the Additional Water Agreements. 3. CVWD and OCWD No. 4. If neither the LAFCO Approval nor the LAFCO Certificate of Completion (as those terms are defined in the Annexation Agreement) contains a finding that the City is the legal successor to the Capistrano Valley Water District ("CVWD") and the Orange County Waterworks District No. 4 ("OCWD No. 4"), then the City shall be deemed to have made a representation and warranty to SMWD that the City is the legal successor to CVWD and OCWD No. 4. 4. Effective Date. This Agreement shall become effective on the "Annexation Effective Date," as that term is defined in the Annexation Agreement. 5. Defense of Agreement; Indemnification. From and after the Annexation Effective Date, SMWD shall defend, with counsel approved by the City, which approval shall not be unreasonably withheld, indemnify and hold harmless the City from and against: (i) all liabilities, claims, costs, expenses and judgments arising from or related to this Agreement and the matters contained herein; and (ii) any action or proceeding to attack, review, set aside, enjoin, void or annul this Agreement. SMWD shall also defend, with counsel approved by the City, which approval shall not be unreasonably withheld, indemnify and hold harmless City officials, employees and agents for any matter within the scope of the indemnification under this Section 5, to the same extent, and subject to the same limitations, that apply to the City's obligations to defend, indemnify and hold harmless such City officials, employees and agents under California law or applicable City contract with those officials, employees or agents. SMWD shall not seek reimbursement or contribution from the City for any costs, expenses or damages for, or related to, matters within the scope of the indemnification under this Section 5. 6. Miscellaneous Provisions 6.1 Amendment. This Agreement may be amended only by a written agreement signed by all Parties. Page 2 of 5 Master Water Rights Transfer Agreement 22522669.3 10/27/21 6.2 Comprehension of Terms. Each of the Parties warrants and represents that he, she and it has read this Agreement in full, fully understands each and every provision hereof, and agrees to be bound by all of the terms and provisions set forth herein. 6.3 Construction. (a) Unless the context otherwise indicates, words expressed in the singular shall include the plural and vice versa and the use of the neuter, masculine, or feminine gender is for convenience only and shall be deemed to include the neuter, masculine or feminine gender, as appropriate. (b) Headings of sections in this Agreement are solely for convenience of reference, do not constitute a part of this Agreement and shall not affect the meaning, construction or effect of the provisions of this Agreement. (c) This Agreement has been negotiated and prepared by the Parties and their respective counsel. The Parties agree that the rule of construction that a contract be construed against the drafter shall not apply. In the event of any ambiguity with respect to a term of condition of this Agreement, such ambiguity shall not be construed for or against a Party on the basis that such Party did or did not author the same. (d) If any inconsistency arises in the application of this Agreement and the Annexation Agreement, the terms of the Annexation Agreement shall control. 6.4 Entire Agreement. This Agreement, together with all exhibits hereto, constitutes the entire understanding and agreement of the Parties with respect to the subject matters hereof, and integrates all of the terms and conditions mentioned herein or incidental thereto, and supersedes all prior or contemporaneous negotiations, discussions and previous agreements between the Parties concerning all or any part of the subject matters of this Agreement. 6.5 Execution in Counterparts. This Agreement may be executed in counterparts, each of which, when the Parties have signed this Agreement, shall be deemed to be an original, and such counterparts shall constitute one and the same instrument. 6.6 Governing Law and Venue. This Agreement has been negotiated and executed in the State and shall be governed by and construed under the laws of the State, except that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in interpreting this Agreement. Any action at law or in equity brought by any Party hereto arising out of this Agreement shall be brought in the Superior Court of the State in and for the County of Orange. 6.7 No Assignment. No part of this Agreement may be assigned by a Party to another person or entity without the prior written consent of the other Party. 6.8 No Reliance on Others. No representations, oral or otherwise, expressed or implied, other than those contained herein have been made by any Party, or any agent, attorney or Page 3 of 5 Master Water Rights Transfer Agreement 22522669.3 10/27/21 employee thereof. By executing this Agreement, each of the Parties warrants and represents that this Agreement is made and entered into without reliance upon any statements or representations of any other Party, or in reliance upon any statements or representations made by any agents, attorneys or employees, of any other Party. 6.9 No Third Party Beneficiary. This Agreement is not intended nor shall it be construed to create any third -party beneficiary rights in any person or entity other than the Parties. Nothing in this Agreement, expressed or implied, is intended to give to any person other than the City and SMWD any right, remedy or claim under or by reason of this Agreement. 6.10 Nonfiability of City and SMWD Officials, Employees and Agents. No official, employee or agent of the City or SMWD, acting in his or her official capacity, shall be personally liable to the City or SMWD, or any successor or assign, for any loss, costs, damage, claim, liability, or judgment, arising out of or in connection with this Agreement, or for any act or omission on the part of the City or SMWD, unless such liability is permitted and provided by either California law or the applicable City or SMWD contract with that official, employee or agent. 6.11 Notice. Any notice, request, demand or other communication under this Agreement shall be given by first class mail or personal delivery to the Party entitled thereto at its address set forth below, by overnight mail, as a ".pdf' attachment to electronic mail, or by telecopy or other form of telecommunication, confirmed by telephone at its number set forth below. Notice shall be effective either (i) upon transmission by telecopy, electronic mail or other form of telecommunication, (ii) 48 hours after deposit in the United States mail, postage prepaid, (iii) in the case of overnight mail, upon delivery to the addressed destination, or (iv) in the case of personal delivery to any person, upon actual receipt. Each Party may, by written notice to the other Party, from time to time modify the address or number to which communications are to be given under this Agreement: If to the City: City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Attention: City Manager Telephone: (949) 443-6315 E-mail: bsiegel i�sanjuancapistrano.arg If to SMWD: Santa Margarita Water District 26111 Antonio Parkway Rancho Santa Margarita, CA 92688 Attention: General Manager Telephone: (949) 459-6590 E-mail: danf@smwd.com 6.12 Severability. If any term of this Agreement is held by a court of competent jurisdiction to be invalid or void, each of the remainder of the provisions shall continue in full force and effect, unless the rights and interests of a Party under a provision have been materially altered or abridged by such invalidation or voiding. Page 4 of 5 Master Water Rights Transfer Agreement 22522669.3 10/27/21 6.13 Successors. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. IN WITNESS WHEREOF, the Parties to this Agreement have caused the same to be executed by each of their duly authorized officers as follows: CITY OF SAN JUAN CAPISTRANO r By: enj n 'egel City Manager SANTA MARGARITA WATER DISTRICT 0 Charles T. Gibson President of Board of Directors City Clerk AS TO ie Osler Hastings ` Counsel ATTEST: Kelly Radvansky Board Secretary APPROVED AS TO FORM: Edward Casey Special Counsel Page 5 of 5 Master Water Rights Transfer Agreement 22522669.3 10/27/21 6.13 Successors. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. IN WITNESS WHEREOF, the Parties to this Agreement have caused the same to be executed by each of their duly authorized officers as follows: CITY OF SAN JUAN CAPISTRANO LN Benjamin Siegel City Manager ATTEST: Maria Morris City Clerk 1i � � l 1 � � i ���eJ ►�►7 !� Stephanie Osler Hastings Special Counsel SANTA MARGARITA WATER ATTEST: DISTRICT 0011 By:I-'j4b-' Charles T. Gibson Kelly Radvansky President of Board of Directors Board Secretary APPROVED AS TO FORM: Edward Casey Special Counsel Page 5 of 5 Master Water Rights Transfer Agreement 22522669.3 10/27/21