14-0916_ORRICK, HERRINGTON & SUTCLIFFE_Second Amended and Restate AgreementSECOND AMENDED AND RESTATED AGREEMENT FOR BOND COUNSEL SERVICES
THIS SECOND AMENDED AND RESTATED AGREEMENT (this
"Agreement") is entered into as of September, 2014, between the CITY OF SAN JUAN
CAPISTRANO (the "Issuer") and ORRICK, HERRINGTON & SUTCLIFFE LLP ("Bond
Counsel"), and amends and restates the Amended and Restated Agreement for Bond Counsel
Services, entered into as of April 1, 2014, between the Issuer and Bond Counsel (the "Amended
Agreement").
Recitals
A. Issuer desires to engage the services of bond counsel in connection with a
proposed (i) issuance of revenue bonds by the San Juan Capistrano Financing Authority or the
San Juan Basin Authority backed by installment payments or lease payments to be made by the
Issuer or (ii) execution and delivery of certificates of participation evidencing interests in
installment payments to be made by the Issuer (in either case, the "Bonds"), to be sold for the
purpose of refunding all or a portion of the San Juan Capistrano Public Financing Authority
Revenue Certificates of Participation, Series 2002, and/or refunding all or a portion of the San
Juan Basin Authority Lease Revenue Bonds (Groundwater Recovery Project), Issue of 2002,
each issued to fund certain water system capital improvement projects (the "Projects").
B. Bond Counsel possesses the necessary professional capabilities and
resources to provide the legal services required by Issuer as described in this Agreement.
C. Issuer and Bond Counsel entered into an Agreement for Bond Counsel
Services, dated June 4, 2013 (the "Original Agreement").
D. Due to unforeseen developments, the Issuer and Bond Counsel amended
and restated the Original Agreement by entering into the Amended Agreement.
E. Work has resumed on the Bond financing.
F. The Amended Agreement provides as follows:
"For legal services rendered from and after the [resumption of work on the
Bond financing], Bond Counsel will be paid such fee as Bond Counsel and
the Issuer shall determine, in good faith, to be fair and appropriate. The
determination of [such amount] shall take into account the amount of
additional time expected to be required to be expended to complete the
issuance of the Bonds and the $101,729 of time expended and
disbursements incurred by Bond Counsel in providing services under the
Original Agreement prior to September 1, 2013."
G. Issuer and Bond Counsel have determined that the fee to be paid to Bond
Counsel set forth in this Agreement is fair and appropriate.
H. The Issuer and Bond Counsel desire to amend the Amended Agreement as
provided in this Agreement.
Agreements
Scope of Services.
Bond Counsel shall perform the following legal services:
(1) Analysis of the validity of the Bonds under State of California law and the
exclusion of interest on the Bonds from gross income under federal tax law.
(2) Consultation with representatives of the Issuer, including Rutan & Tucker,
LLP ("Issuer Counsel"), Fieldman, Rolapp & Associates, and others, with respect to the
timing, terms, and legal structure of the proposed Bonds.
(3) Preparation of documents to be adopted or entered into by the Issuer, the
San Juan Capistrano Public Financing Authority or the San Juan Basin Authority required
for the authorization, sale and issuance of the Bonds, including preparation of the
resolutions approving the issuance of the Bonds, any indenture or trust agreement
providing for the issuance of the Bonds, any purchase contract providing for the sale of
the Bonds and any installment sale agreement or lease entered into by the Issuer backing
the Bonds (the "Major Legal Documents").
(4) Attendance at such meetings or hearings of the Issuer and working group
meetings or conference calls as Issuer may request.
(5) Preparation of final closing papers to be executed by the Issuer, the San
Juan Capistrano Public Financing Authority or the San Juan Basin Authority required to
effect delivery of the Bonds (including the Tax Agreement) and coordination of the Bond
closing.
(6) Rendering of Bond Counsel's customary form of final legal opinion to the
issuer of the Bonds on the validity of the Bonds and the tax-exempt status of interest
thereon.
(7) Preparation and dissemination of closing transcripts.
(8) Such legal services with respect to outstanding debt obligations payable
from the revenues of the Issuer's water enterprise (other than representation in any
litigation or other legal or administrative proceeding, audit or investigation) as the Issuer
shall request.
Issuer shall have and will rely on Issuer Counsel to render day-to-day and
ongoing general counsel legal services. Bond Counsel shall circulate documents to and
coordinate its services with Issuer Counsel to the extent requested by Issuer or Issuer Counsel.
Bond Counsel shall be entitled to assume that Issuer Counsel has reviewed all documents and
matters submitted to Issuer for adoption or approval or to officers of Issuer for execution prior to
such adoption, approval or execution.
In rendering opinions and performing legal services under this Agreement, Bond
Counsel shall be entitled to rely on the accuracy and completeness of information provided and
certifications made by, and opinions provided by counsel to, Issuer and other parties and
consultants, without independent investigation or verification. Knowledge of attorneys and non -
attorneys at Bond Counsel's firm not working directly on the Bond issue will not be imputed to
Bond Counsel nor shall there be any duty on the part of Bond Counsel to make any inquiry of
such other attorneys or non -attorneys.
Bond Counsel services are limited to those specifically set forth above. For
example, Bond Counsel services do not include representation of Issuer or any other party to the
transaction in Capistrano Taxpayers Association, Inc. v. City of San Juan Capistrano or any other
litigation or other legal or administrative proceeding, audit or investigation involving any of the
Bonds, the Projects or any related matter. Additionally, Bond Counsel services do not include
the preparation, negotiation, content or validity of any agreements relating to the Projects other
than the Major Legal Documents or any legal advice relating to the Projects or to water rights.
Bond Counsel services also do not include any responsibility for compliance with federal or state
securities laws, environmental, land use, real estate, insurance or similar laws or matters or
(except as required for tax exemption of the Bonds) any tax laws, or for title to, recording, filing
or perfection of security interests in real or personal property. Bond Counsel services do not
include any financial advice or analysis or data or mathematical verification. Bond Counsel will
not be responsible for the services performed or acts or omissions of any other transaction
participant. Also, Bond Counsel services will not extend past the date of issuance of the Bonds
and will not, for example, include services related to rebate or other post issuance tax compliance
or continuing disclosure (although Bond Counsel may be available for separate engagement to
provide either or both such services pursuant to separate contract) or otherwise related to the
Bonds, Bond proceeds or the Project after issuance of the Bonds.
2. Fees and Expenses.
A. Fees.
Bond Counsel will be paid a fixed fee for the foregoing services of $120,000 if
the Issuer proceeds with either the Water System Refunding or the SJBA Refunding only and
$180,000 if the Issuer proceeds with both the Water System Refunding and the SJBA Refunding.
The fixed fee is based, in part, upon the assumption that the terms, structure, size
and schedule of the financing will conform to the description in Recital A of this Agreement, the
scope of services will conform to the description thereof contained in Section 1 of this
Agreement, the Water System Refunding and the SJBA Refunding will proceed on
approximately the same schedule, the transaction will not have an extraordinary amount of
problems/issues, Bond Counsel will not be required to make more than two out of town trips and
will be required to attend no more than the usual number of meetings and conference calls, Bond
Counsel will not be required to generate an inordinate amount of drafts of the Major Legal
Documents, the Bonds will be privately placed, the structure of the transaction will not
materially change (particularly after preparation of the Major Legal Documents has
commenced), and the Bonds will be issued not later than December 31, 2014. If any part of this
assumption is incorrect, or if any unusual or unforeseen circumstances arise, and occasions
substantial additional work or responsibility on the part of Bond Counsel, Bond Counsel will be
entitled to seek additional compensation in such amount as the Issuer and Bond Counsel shall
mutually agree to be appropriate.
B. Expenses. Bond Counsel will not charge for expenses customarily
incurred by Bond Counsel in performing the bond counsel services described in Section 1 of this
Agreement. Any filing, publication or printing costs required in connection with the Bonds shall
be paid directly by Issuer, but if paid by the Bond Counsel on behalf of Issuer, shall be
reimbursed to Bond Counsel on demand.
C. Payment. Fees shall be payable by Issuer upon the issuance of the Bonds.
Payment of all fees hereunder shall be entirely contingent upon issuance of the Bonds.
3. Termination of Agreement Legal Services and Other Obligations. This
Agreement and all legal services to be rendered under it may be terminated at any time by
written notice from either party, with or without cause. In that event, all finished and unfinished
documents prepared for adoption or execution by Issuer, shall, at the option of Issuer, become its
property and shall be delivered to it or to any party it may designate; provided that Bond Counsel
shall have no liability whatsoever for any subsequent use of such documents. In the event of
termination by Issuer, Bond Counsel shall be paid for all unpaid portions of the Hourly
Component upon such termination and shall be paid the Contingent Component upon the
issuance of any Bonds, unless the termination is made for cause, in which event compensation, if
any, shall be adjusted in the light of the particular facts and circumstances involved in the
termination. If not sooner terminated as aforesaid, this Agreement and all legal services to be
rendered under it shall terminate upon issuance of the Bonds; provided that Issuer shall remain
liable for any unpaid compensation or reimbursement due under Section 2 of this Agreement.
Upon termination, Bond Counsel shall have no future duty of any kind to or with respect to the
Bonds or the Issuer. This Agreement shall not be the basis of any breach of contract claim that
would have the effect of extending the statute of limitations pertaining to legal malpractice to the
statute of limitations pertaining to breach of contract. Except as state above, Bond Counsel
retains the right to discard any files and materials. It is Bond Counsel's current policy (subject to
change) to discard all files and materials after issuance of the Bonds (except the closing
transcript until after the Bonds are paid or defeased) or following cessation of work on the
financing without issuance of Bonds.
4. Nature of Engagement, Client Relationships With Other Parties. The role
of bond counsel, generally, is to prepare or review the proceedings for issuance of the bonds,
notes or other evidence of indebtedness and to provide an expert legal opinion with respect to the
validity thereof and other subjects (usually including the tax status of interest thereon) addressed
by the opinion. Consistent with the historical origin and unique role of bond counsel, and
reliance thereon by the public finance market, Bond Counsel's role as bond counsel under this
Agreement is to provide opinions and related legal services that represent an objective judgment
on the matters addressed rather than the partisan position of an advocate.
In performing its services as bond counsel in connection with the Bonds, Bond
Counsel will act as special counsel to Issuer (as such and not any particular body, board, office
or official) with respect to issuance of the Bonds; i.e., Bond Counsel will assist Issuer Counsel in
representing Issuer but only with respect to validity of the Bonds and the Major Legal
Documents as to the Issuer and tax status of interest on the Bonds, and in a manner not
inconsistent with the role of Bond Counsel described in the first sentence of this section.
Issuer acknowledges that Bond Counsel regularly performs legal services for
many private and public entities in connection with a wide variety of matters. For example,
Bond Counsel has represented, is representing or may in the future represent other public
entities, underwriters, trustees, rating agencies, insurers, credit enhancement providers, lenders,
contractors, suppliers, financial and other consultants/advisors, accountants, investment and
swap providers/brokers, providers/brokers of derivative products and others who may have a role
or interest in the Bond financing or the Projects or that may be involved with or adverse to Issuer
in this or some other matter. Bond Counsel agrees not to represent any such entity in connection
with the Bond financing, during the term of this Agreement, without the consent of Issuer.
Given the special, limited role of bond counsel described above, Issuer acknowledges and agrees
that no conflict of interest exists or would exist, and waives any actual or potential conflict of
interest that might be deemed to arise, now or in the future, from this Agreement or any such
other relationship that Bond Counsel may have had, have or enter into, and Issuer specifically
consents to any and all such relationships.
5. Limitation of Rights to Parties. Nothing in this Agreement or in any of the
documents contemplated hereby, expressed or implied, is intended or shall be construed to give
any person other than Issuer and Bond Counsel any legal or equitable right or claim under or in
respect of this Agreement, and this Agreement shall inure to the sole and exclusive benefit of
Issuer and Bond Counsel.
6. Counterparts. This Agreement may be executed in any number of
counterparts and each counterpart shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same Agreement.
7. Insurance. Bond Counsel advises that it does maintain errors and
omissions insurance coverage applicable to the services to be rendered under this Agreement.
Issuer and Bond Counsel have executed this Agreement by their duly authorized
representatives as of the date provided above.
CITY OF SAN JUAN CAPISTRANO
By ?,
Sam Allevato, Mayor
ORRICK, HERRINGTON & SUTCLIFFE LLP
Bv
r
Steplurn,f. Spitz, Partner
APPROVED AS TO FORM:
Hans Van Ligten, City Attorney