21-1101_SANTA MARGARITA WATER DISTRICT_Assignment, Assumption Agreement (Water Bonds Series 2014a)EXECUTION VERSION
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ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT
by and among
SANTA MARGARITA WATER DISTRICT
as Assignee
and
CITY OF SAN JUAN CAPISTRANO
as Assignor
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
as Trustee
Dated as of November 1, 2021
relating to
CITY OF SAN JUAN CAPISTRANO
WATER REVENUE REFUNDING BONDS, SERIES 2014A
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ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT
This Assignment, Assumption and Amendment Agreement, dated as of November 1, 2021
(this “Agreement”), is entered into by and among SANTA MARGARITA WATER DISTRICT, a
California Water District duly organized and existing under Division 13 of the Water Code of the
State of California (the “Assignee”), the CITY OF SAN JUAN CAPISTRANO, a municipality duly
organized and existing under and by virtue of the laws of the State of California (the “Assignor”),
and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking
association duly organized and existing under and by virtue of the laws of the United States of
America, as trustee (the “Trustee”).
RECITALS
A. Pursuant to Resolution No. DA 20-01 of the Orange County Local Agency
Formation Commission dated August 19, 2021 (the “LAFCO Resolution”), the Assignee has
annexed the municipal water system of the Assignor as described in the LAFCO Resolution (such
water system, which will constitute the water system within the boundaries of a geographic area
within the boundaries of the Assignee which will be designated after the Annexation Effective Date
(as such term is defined below) as Improvement District No. 9, the “Water System”) and will
assume ownership of the Water System effective November 15, 2021 or such later date as provided
in the Annexation Agreement, dated as of January 21, 2020, by and between the Assignee and the
Assignor, as the same may be amended (the “Annexation Effective Date”).
B. The Assignor has entered into an Indenture, dated as of November 1, 2014 (the
“Indenture”), by and between the Assignor and the Trustee, under which the Assignor issued its
Water Revenue Refunding Bonds, Series 2014A (the “Bonds”).
C. The Bonds are payable from Net Revenues (as such term is defined in the
Indenture).
D. Pursuant to the LAFCO Resolution, the Assignee will assume all obligations under
the Indenture on the Annexation Effective Date, including the obligation to pay the Bonds from Net
Revenues of the Water System.
E. This Agreement constitutes a Supplemental Indenture within the meaning of the
Indenture.
F. Capitalized terms that are used herein and not otherwise defined have the meanings
that are assigned to such terms under the Indenture.
AGREEMENT
SECTION 1. Assignment.
(a) Effective as of the Annexation Effective Date, the Assignor, for good and valuable
consideration in hand received, does hereby unconditionally assign and transfer to the Assignee
without recourse, for the benefit of the Trustee, all of its rights, title, interest, duties and obligations
in and to the Indenture, including the obligation to pay the Bonds. This assignment is absolute and
is presently effective.
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(b) In connection with the matters described in subsection (a), the Assignee agrees to
establish, on or before the Annexation Effective Date: (i) a “Revenue Fund” in which revenues of
the Water System shall be deposited meeting the description thereof set forth in Section 1.01 of the
Indenture, which the Assignee agrees shall be separate from other funds and accounts of the
Assignee and pledged for the benefit of the owners of the Bonds pursuant to the terms of the
Indenture; and (ii) such other funds as may be contemplated pursuant to Article IV of the Indenture.
(c) In connection with the matters described in subsection (a), the Assignor agrees to
transfer, or cause to be transferred, the amounts held in the 2014 Bonds Rate Stabilization Reserve,
if any, to the Assignee upon the Annexation Effective Date, and the Assignee agrees to hold such
moneys separate from other funds of the Assignee for the benefit of the owners of the Bonds.
SECTION 2. Acceptance.
(a) The Assignee hereby accepts the foregoing assignment as of the Annexation
Effective Date for the benefit of the Trustee and the owners of the Bonds, and agrees thereafter to
pay the Bonds from Net Revenues of the Water System and assume and perform all of the other
obligations of the Assignor as provided in the Indenture. The Assignee agrees that the owners of the
Bonds shall be entitled to a lien on moneys in the Revenue Fund and other funds established under
the Indenture.
(b) From and after the Annexation Effective Date, the Assignee will assume the
responsibilities of the Assignor with respect to compliance with applicable federal requirements for
the tax-exempt status of the Bonds, in accordance with the Tax Certificate dated November 14, 2014
and executed by the Assignor in connection with the Bonds.
(c) The Trustee affirms that all moneys from the Revenue Fund and other funds
established under the Indenture which are received by the Trustee shall be held for the benefit of the
owners of the Bonds pursuant to the Indenture. The Trustee further affirms that the Debt Service
Fund and the Redemption Fund are currently established and held by the Trustee and that such
funds will continue to be held by the Trustee for the benefit of the owners of the Bonds.
SECTION 3. Amendment.
(a) The definition of “Certificate of the City” in Section 1.01 of the Indenture is hereby
amended as follows:
““Certificate of the City” means an instrument in writing signed by
the General Manager or Assistant General Manager of Santa
Margarita Water District, or by any other officer of Santa Margarita
Water District duly authorized by the Board of Directors of Santa
Margarita Water District for that purpose.”
(b) The definition of “City” in Section 1.01 of the Indenture is hereby amended as
follows:
““City” means Santa Margarita Water District, a California Water
District duly organized and existing under Division 13 of the Water
Code of the State of California.”
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(c) The definition of “City Council” in Section 1.01 of the Indenture is hereby amended
as follows:
““City Council” means the Board of Directors of Santa Margarita
Water District.”
(d) The definition of “City Manager” in Section 1.01 of the Indenture is hereby
amended as follows:
““City Manager” means the General Manager or Assistant General
Manager of Santa Margarita Water District.”
(e) The definition of “Water System” in Section 1.01 of the Indenture is hereby
amended as follows:
““Water System” means the whole and each and every part of the
water system within the boundaries of a geographic area within the
boundaries of Santa Margarita Water District which will be
designated after the date hereof as Improvement District No. 9
(consisting of the service area annexed to Santa Margarita Water
District pursuant to Resolution No. DA 20-01 dated August 19, 2021
of the Orange County Local Agency Formation Commission),
including all real property and buildings, including the portion thereof
existing on the date hereof, and including all additions, betterments,
extensions and improvements to such water system or any party
thereof hereafter acquired or constructed.”
(f) The notice address for the City set forth in Section 10.09 of the Indenture is hereby
amended as follows:
“Santa Margarita Water District
26111 Antonio Parkway
Rancho Santa Margarita, California 92688
Attention: General Manager”
SECTION 4. Filings.
The Assignee agrees, at its own expense, to make any filings required by The Depository
Trust Company, the Internal Revenue Service, the California Debt Investment Advisory
Commission and any other federal or state administrative and regulatory bodies in order to evidence
the matters set forth herein.
SECTION 5. Attornment.
Each of the Trustee and the undersigned holder of all of the Bonds acknowledges and agrees
to the assignment set forth in Section 1 and agrees to attorn to the Assignee from and after the
Annexation Effective Date with respect to all matters related to the Indenture. This Agreement shall
confer no rights and impose no obligations upon the Trustee beyond those expressly provided in this
Agreement and in the Indenture. Wells Fargo Equipment Finance, Inc., by its signature hereto,
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hereby certifies that it is the holder of 100% of the Bonds and waives any applicable notice periods
for the amendments included herein.
SECTION 6. Representations and Warranties.
Each of the Assignee and the Assignor represent and warrant that: (i) the execution, delivery
and performance of this Agreement have been duly authorized by such party by all necessary action;
(ii) this Agreement, assuming due execution by the other parties thereto, constitutes a valid, binding
and enforceable obligation of such party, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium or other laws relating to
or affecting generally the enforcement of creditors’ rights, by equitable principles, by the exercise of
judicial discretion in appropriate cases and by the limitations on remedies against public agencies in
the State of California; (iii) to the best of such party’s knowledge after due inquiry, this Agreement
does not violate any law, regulation or order binding on such party; (iv) no consent or authorization
of any third party is required in connection with the execution, delivery or performance by such
party of this Agreement or, alternatively, all such consents and authorizations have been given; (v)
such party has the power to carry out the obligations imposed on such party by this Agreement; and
(vi) there is no claim, action or proceeding pending and notice of which has been received by such
party, or to the knowledge of such party, threatened against such party before any court, arbitrator or
governmental agency or regulatory or administrative agency or commission challenging the validity,
enforceability or legality of this Agreement.
In addition, the Assignor represents and warrants that no Event of Default has occurred and
is continuing under the Indenture as of the date of execution and delivery of this Agreement.
SECTION 7. Partial Invalidity.
If any one or more of the agreements or covenants or portions thereof required hereby to be
performed by or on the part of the Assignee, the Assignor or the Trustee shall be contrary to law,
then such agreement or agreements, such covenant or covenants or such portions thereof shall be
null and void and shall be deemed separable from the remaining agreements and covenants or
portions thereof and shall in no way affect the validity hereof. The Assignee, the Assignor and the
Trustee hereby declare that they would have executed this Agreement, and each and every other
article, section, paragraph, subdivision, sentence, clause and phrase hereof irrespective of the fact
that any one or more articles, sections, paragraphs, subdivisions, sentences, clauses or phrases
hereof or the application thereof to any person or circumstance may be held to be unconstitutional,
unenforceable or invalid.
SECTION 8. California Law.
THIS AGREEMENT SHALL BE CONSTRUED AND GOVERNED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA.
SECTION 9. Execution in Counterparts.
This Agreement may be executed in several counterparts, each of which shall be deemed an
original, and all of which shall constitute but one and the same instrument.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their officers
thereunto duly authorized as of the day and year first written above.
SANTA MARGARITA WATER DISTRICT
By:________________________________________
Its: General Manager
CITY OF SAN JUAN CAPISTRANO
By:________________________________________
Its: City Manager
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Trustee
By:________________________________________
Its: Authorized Officer
ACKNOWLEDGED AND AGREED:
WELLS FARGO EQUIPMENT FINANCE,
INC., as holder of 100% of the Bonds
By:__________________________________
Its: Authorized Officer
________________________________________________________________________________________________________________________________
neral Manager
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