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21-1101_SANTA MARGARITA WATER DISTRICT_Assignment, Assumption Agreement (Water Bonds Series 2017)EXECUTION VERSION 4818-3217-3973v11/022030-0166 ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT by and among SANTA MARGARITA WATER DISTRICT as Assignee and CITY OF SAN JUAN CAPISTRANO as Assignor and PUBLIC PROPERTY FINANCING CORPORATION OF CALIFORNIA as Corporation Dated as of November 1, 2021 relating to $8,410,000 CITY OF SAN JUAN CAPISTRANO REFUNDING REVENUE INSTALLMENT AGREEMENT, SERIES 2017 4818-3217-3973v11/022030-0166 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 PUBLIC PROPERTY FINANCING CORPORATION OF CALIFORNIA, a nonprofit public benefit corporation duly organized and existing under the laws of the State of California (the “Corporation”). 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 Installment Purchase Agreement, dated as of December 1, 2017 (the “IPA”), by and between the Assignor and the Corporation, under which the Assignor agreed to make Series 2017 Installment Payments (as such term is defined in the IPA) to the Corporation. C. The Series 2017 Installment Payments are payable from Net Revenues (as such term is defined in the IPA). D. Pursuant to the LAFCO Resolution, the Assignee will assume all obligations under the IPA on the Annexation Effective Date, including the obligation to make the Series 2017 Installment Payments from Net Revenues of the Water System. E. Capitalized terms that are used herein and not otherwise defined have the meanings that are assigned to such terms under the IPA. 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 Corporation, all of its rights, title, interest, duties and obligations in and to the IPA, including the obligation to pay all Series 2017 Installment Payments to the Corporation. This assignment is absolute and is presently effective. 2 4818-3217-3973v11/022030-0166 (b) In connection with the matters described in subsection (a), the Assignee agrees to establish a “Revenue Fund” and a “Payment Fund,” in each case meeting the description thereof set forth in Section 5.2 of the IPA, on or before the Annexation Effective Date. (c) In connection with the matters described in subsection (a), the Assignor agrees to transfer the amounts held in the 2017 Rate Stabilization Fund, 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 Corporation. SECTION 2. Acceptance. (a) The Assignee hereby accepts the foregoing assignment as of the Annexation Effective Date for the benefit of the Corporation, and agrees thereafter to pay the Series 2017 Installment Payments to the Corporation and assume the other obligations of the Assignor as provided in the IPA. (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 Series 2017 Installment Payments, in accordance with the Tax Compliance Certificate and Agreement dated December 15, 2017 and executed by the Assignor in connection with the IPA. SECTION 3. Amendment. (a) The definition of “City” in Section 1.1 of the IPA is hereby amended as follows: “City. The term “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.” (b) The definition of “Manager” in Section 1.1 of the IPA is hereby amended as follows: “Manager. The term “Manager” means the General Manager of Santa Margarita Water District, or any person designated by the General Manager of Santa Margarita Water District to act on behalf of the General Manager of Santa Margarita Water District.” (c) The definition of “Water System” in Section 1.1 of the IPA is hereby amended as follows: “Water System. The term “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 3 4818-3217-3973v11/022030-0166 such water system or any part thereof hereafter acquired or constructed.” (d) The notice address for the City set forth in Section 10.10 of the IPA 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. The Corporation 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 IPA. This Agreement shall confer no rights and impose no obligations upon the Corporation beyond those expressly provided in the IPA. SECTION 6. Representations and Warranties. Each of the Assignee, the Assignor and the Corporation represents and warrants 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 and the Corporation represent and warrant that no Event of Default has occurred and is continuing under the IPA as of the date of execution and delivery of this Agreement. 4 4818-3217-3973v11/022030-0166 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 Corporation 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 Corporation 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] 5 4818-3217-3973v11/022030-0166 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 PUBLIC PROPERTY FINANCING CORPORATION OF CALIFORNIA By:________________________________________ Its: Authorized Officer ACKNOWLEDGED AND AGREED: CITY NATIONAL BANK By:__________________________________ Its: Authorized Officer ______________________________________________________________________________________________________________________________________________________________________________________________________________ General Manager