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SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT (hereinafter, this "Agreement") is made and
entered into as of July 31, 2003 between the COUNTY OF LOS ANGELES (the
"County"), the LOS ANGELES COUNTY FLOOD CONTROL DISTRICT ("LACFCD") and the
WATER REPLENISHMENT DISTRICT OF SOUTHERN CALIFORNIA ("WRD") [the County, LACFCD
and WRD are sometime collectively referred to herein as "Plaintiffs"], on the
one hand, and RETIRED PACIFIC PARTNERS, LP, A CALIFORNIA LIMITED PARTNERSHIP
(FORMERLY NAMED, PACIFIC ENERGY RESOURCES, A CALIFORNIA LIMITED PARTNERSHIP),
SCANNER INVESTMENTS, LLC, A DELAWARE LIMITED LIABILITY COMPANY, SHAMROCK
RESOURCES, INC., A CANADIAN CORPORATION, PETROCAL INCORPORATED, A DELAWARE
CORPORATION, AN]) KATMAN PETROLEUM, LLC, A DELAWARE LIMITED LIABILITY COMPANY
(collectively, "Defendants"), on the other hand. [The parties to this Agreement
are sometimes collectively referred to herein as the "Settling Parties".]
RECITALS
WHEREAS, Defendants are currently the owners of the lessee's interests
and the working interests in the following oil and gas leases located in the
Montebello Oil Field in the Whittier Narrows Basin (the "Basin") in Los Angeles
County:
(a) Oil and Gas Lease, dated March 20, 1941 from Xxxxxx X.
Xxxxxxx, as Administrator with the will annexed of the Estate
of Adelaide Bermuda XxXxxxx, deceased, as lessor, to X.X.
Xxxxxxxxxxxxx, as lessee, recorded in Book 18253, Page 323 of
the Official Records of Los Angeles, California, as amended by
instruments dated April 30, 1945, recorded in Book 22694, Page
1, and March 11, 1946 in Book 22948, Page 28, of the Official
Records of Los Angeles County, California, affecting certain
property, as more particularly described therein (the "Xxxxx
Lease");
(b) Indenture of Lease, dated August 29, 1919, between Giovanni
and Xxxxx Xxxxx and Paolo and X. Xxxxxx, as lessors, and St.
Helens Petroleum Company, Limited., as lessee, recorded in
Book 132, Page 99 of the Official Records of Los Angeles,
California, and affecting certain property, as more
particularly described therein (the "Xxxxx-Xxxxxx Lease"); and
(c) Lease Agreement, dated June 8, 1917 between Xxxxxxx Xxxxxxx,
as lessor, and X.X. Xxxxxxx, as lessee, recorded on July 24,
1917, in Book 114, Page 91 of Leases in the Official Records
of Los Angeles County, California, as amended and modified by
instruments recorded in Book 117, Page 124 of Leases and Book
6762, Page 81 of Deeds, and as recognized by the instrument
recorded in Book 19179, Page 157, and by the instrument dated
August 28, 1944 filed for record June 20, 1945, affecting
certain property, as more particularly described therein (the
"Repetto Lease").
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The Xxxxx Lease, the Xxxxx-Xxxxxx Lease and the Repetto Lease are collectively
referred to herein as the "Leases".
WHEREAS, in April 2002, the County and the LACFCD filed a complaint and
then in May 2002 a First Amended Complaint (the "Complaint") in the Superior
Court for the County of Los Angeles, entitled, County of Los Angeles, et al. v.
Kernview Oil Corporatioi~, et a!., [Case No. BC2723 10] (the "Action"), naming
Pacific Energy Resources, among others, as a defendant;
WHEREAS, subsequent to the filing of the Complaint, Pacific Energy
Resources transferred and assigned its rights and interests in, to and under the
Leases to the Defendants (other than Pacific Energy Resources) and reserved a
carried working interest therein;
WHEREAS, Defendants have answered the Complaint, denying the material
allegations thereof and asserting various affirmative defenses;
WHEREAS, Defendants filed Cross-Complaints against the County, the
County's Department of Public Works and the LACFCD in the Action (the
"Cross-Complaints") [as used herein, the term the "County" shall include the
County's Department of Public Works];
WHEREAS, the County and the LACFCD answered the Cross-Complaint of
Pacific Energy Resources, denying the material allegations thereof and asserting
various affirmative defenses;
WHEREAS, the County and the LACFCD have amended the Complaint to name as
defendants certain lessors and royalty owners who own an interest in the Leases,
including but not limited to the Roman Catholic Archbishop of Los Angeles (any
and all persons or entities owning an interest in any of the Leases as a lessor
or royalty owner are collectively referred to herein as the "Royalty Owners");
WHEREAS, in or around December, 2002, the Water Replenishment District of
Southern California also filed a complaint (the "WRD Complaint") in the Superior
Court for the County of Los Angeles, entitled Water Replenishment District of
Southern California v. Kernview Oil Corp., et a!., [Case No. BC286475] (the "WRD
Action"), naming Pacific Energy Resources as a defendant;
WHEREAS, Pacific Energy Resources has answered the WRD Complaint, denying
the material allegations thereof and asserting various affirmative defenses; and
WHEREAS, the Settling Parties have agreed to settle the Action and the
respective claims of the Plaintiffs and Defendants set forth in the Complaint,
the Cross-Complaints and the WRD Complaint, and to provide for a dismissal with
prejudice of the Complaint, the Cross-Complaints and the WRD Complaint, on the
terms and conditions of this Agreement.
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WITNESSETH
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which is hereby acknowledged, Defendants and Plaintiffs hereby agree as follows:
1.Effective Date: Settlement Deposit.
a. As used herein, the term "Effective Date" shall mean the date
that the Parties fully execute this Agreement.
b. Within thirty (30) days following the Effective Date, Plaintiffs
shall cause to be deposited the total sum of One Million Two Hundred Thousand
Dollars ($1,200,000.00) (the "Settlement Deposit") in Escrow Account No.
00000000-x86 with Chicago Title Company, 000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000, Xxx
Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxx Xxxxxx, Escrow Officer (the "Escrow
Company"), which Settlement Deposit shall be held in escrow (the "Escrow") and
disbursed in accordance with the terms and provisions of this Agreement.
Defendants acknowledge and agree that the payment of the Settlement Deposit is
in full and fmal compromise and settlement of any and all cross-claims against
the County, LACFCD andlor WRD.
c. Following the full execution and delivery to the County's counsel
of four (4) counterpart originals of the this Agreement signed by each of the
respective parties hereto, Plaintiffs shall, within three (3) business days
thereafter, deliver one (1) fully executed original of this Agreement to each of
the Escrow Holder, Defendants' counsel, the County's counsel and WRD's counsel.
d. Counsel for the County and the LACFCD shall execute and deliver
to Xxxxxx X. Xxxxxx, Esq., Counsel for the Defendants, by no later than three
(3) business days following the Effective Date, a fully executed original copy
of the dismissal with prejudice of the County's and the LACFCD's Complaint
against Defendants, in the form attached hereto as Exhibit "A". The County and
the LACFCD will also deliver to the Escrow Company a photocopy of the executed
version of Exhibit A. The foregoing dismissal shall be as to all claims and
causes of action against Defendants only, and shall be filed with the Court in
the Action and served on each of the other parties promptly following the
Effective Date.
e. Counsel for the WRD shall execute and deliver to Xxxxxx X.
Xxxxxx, Esq., Counsel for Defendants, by no later than three (3) business days
following the Effective Date, a fully executed original copy of the dismissal
with prejudice of the WRD Complaint against Defendants in the WRD Action, in the
form attached hereto as Exhibit "B". WRD also will deliver to the Escrow Company
a photocopy of the executed version of Exhibit B. The foregoing dismissal shall
be as to all claims and causes of action against Defendants only and shall be
filed with the Court in the WRD Action and served on each of the other parties
in that action promptly following the Effective Date.
f. Counsel for Defendants shall execute and deliver to Xxxxxxx X.X.
Xxxxxxxx of Xxxxxxxxx, Del Xxxxxxx, Xxxxxxxx & Xxxxxxx, LLP, Counsel for the
County and the LACFCD, by no later than three (3) business days following the
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Effective Date, a fully executed original copy of the dismissal with prejudice
of Defendants' Cross-Complaints as to the entire action, in the form attached
hereto as Exhibit "C". Defendants will also deliver to the Escrow Company a
photocopy of the executed version of Exhibit C. The foregoing dismissal shall be
as to all claims and causes of action against the County (including the County's
Department of Public Works) and the LACFCD and shall be filed and served on each
of the other parties promptly following the Effective Date.
g. Defendants shall deliver to the Escrow Company by no later than
three (3) business days following the Effective Date, a fully executed and
acknowledged original Quitclaim Deed for each of the Leases in the form attached
hereto as Exhibit "D".
h. Defendants shall deliver to the Escrow Company by no later than
three (3) business days following the Effective Date, fully executed original
letters, as to each of the Leases, containing Defendants' explanation for the
abandonment of such Lease and stating that producing operations are no longer
justifiable because of circumstances beyond Defendants' control, which letters
shall be in the form attached as Exhibit "E" (the "Abandonment Letters").
2. Ouitclaim of the Leases: Abandonment Letters: Consent to Water
Conservation Pool: Danex Settlement.
a. Defendants shall deliver to the Escrow Company, at the time and
in the manner set forth in Section 1 above, the Quitclaim Deeds in the form
attached hereto as Exhibit "D" (the "Quitclaim Deeds"), by which Defendants
shall quitclaim Defendants' entire right, title and interest in and to each of
the Leases to the record title owners of the mineral rights in the respective
properties described in such Leases. The Quitclaim Deeds shall be in a
recordable form and shall be properly executed and acknowledged by Defendants.
Concurrently with the Lease Abandonment Completion Date, the Escrow Company
shall cause the Quitclaim Deeds to be recorded in the Official Records of Los
Angeles County, and the Escrow Company shall deliver to counsel for the County
and Defendants conformed copies of the recorded Quitclaim Deeds.
b. Immediately following the Escrow Company's receipt of the
Settlement Deposit, the Escrow Company shall mail the originals of the
Abandonment Letters to their respective addressees and deliver copies of the
Abandonment Letters to the County and Defendants' counsel. From and after the
date of this Agreement, Defendants covenant that they will not take any action
or make any statements inconsistent with the content of the Abandonment Letters.
c. Defendants hereby agree and consent to the operation of the water
conservation pool at elevation 201.6 feet as of September 1, 2003.
d. Plaintiffs represent that Plaintiffs' settlement agreements with
Danex Aggregate Materials, Inc. ("Danex") include an agreement by Danex to
dismiss with prejudice Danex's claims in the Action against Defendants,
including claims for indemnity from any of Defendants. Defendants agree that
Defendants shall not seek indemnity from Danex. Defendants agree that Defendants
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will not disclose the terms of this Agreement to Danex or its counsel except as
may be required in response to a discovery request, subpoena or other form of
judicial process calling for the disclosure of any such information.
3. Disbursement of Settlement Deposit.
a. This Section 3 shall constitute Escrow Company's instructions
regarding the handling and disbursement of the Settlement Deposit. The Settling
Parties agree to execute any further reasonable escrow instructions that the
Escrow Company may reasonably request that are not inconsistent with the terms
of this Agreement.
b. Upon receipt of the Settlement Deposit into the Escrow, the
Escrow Company shall deposit the funds into an interest-bearing account with a
fmancial institution reasonably selected by the Escrow Company and reasonably
acceptable to Defendants. Interest in the account shall accrue for the benefit
of Defendants.
c. Following receipt of the Settlement Deposit into the Escrow,
Defendants shall have the right to request the Escrow Company to disburse funds
from time to time from the Settlement Deposit to pay the direct costs (including
advances and deposits to Defendants' vendors who will be performing the
Abandonment Obligations on behalf of Defendants) incurred by Defendants in
connection with the performance of the Abandonment Obligations as defined in
Section 5 hereof (an "Interim Disbursement Request"). An Interim Disbursement
Request shall state: (a) a description of the work performed or to be performed;
(b) the amount that Defendants are instructing the Escrow Company to pay on
account of such work; and (c) the name and address of the vendor to whom such
amount should be paid. The Interim Disbursement Request shall be accompanied by
copies of the bid(s), proposal(s), contract(s), or invoice(s) from the vendor(s)
that will be performing the work, substantiating the information contained in
the Interim Disbursement Request (the "Supporting Documents"). Concurrently with
each submission to the Escrow Company, Defendants shall deliver to the County to
the attention of the Director of Public Works and to Demetriou, Del Xxxxxxx,
Xxxxxxxx & Xxxxxxx, LLP to the attention of Xxxxxxx X.X. Xxxxxxxx (at the
addresses set forth in the notice provision of this Agreement) a copy of such
Interim Disbursement Request and the Supporting Documents. The County and LACFCD
shall have the right, within five (5) days of receipt of any Interim
Disbursement Request and the Supporting Documents by the offices of the
aforementioned two representatives of the County (it being understood that such
five (5)-day period shall commence to run upon the confirmed receipt thereof by
the offices of such two persons), to give written notice to the Escrow Company
and Defendants of objection to disbursement if such Interim Disbursement Request
is not consistent with the Supporting Documents or if the Supporting Documents
have not been provided or are not for the services contemplated by this
Agreement (which objection shall state in reasonable detail the basis for such
objection). If the County and LACFCD do not object to any such disbursement
within said 5-day period, then the Escrow Company shall make such disbursement
within five (5) days following the expiration of said 5-day period. The Escrow
Company shall send copies of the payment advices to Xx. Xxxxx Xxxxxxx of Pacific
Energy Resources and the County. If the County and LACFCD object to such
disbursement, then the Escrow Company shall not make the requested disbursement
and shall retain the funds in Escrow pending further instructions executed by
the County, the LACFCD and Defendants. If the event of an objection, the County,
the LACFCD and Defendants shall promptly meet and confer to attempt to reach a
resolution of such objection. Any delay in the payment of a requested
disbursement which prevents payment for the work contemplated by this Agreement
shall constitute a Force Maj cure Delay under Section 5.a hereof.
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d. On and after the Lease Abandonment Completion Date (as defmed
below), Defendants shall have the right to request the Escrow Company to
disburse any remaining balance of the Settlement Deposit (including accrued
interest), except that there shall be retained therefrom in Escrow an amount
equal to the estimated cost to complete the remediation being conducted at
Defendants' tank farms (the "Lease Abandonment Disbursement Request") under
Section S.f (together with any soil brought there from the Leases). The Lease
Abandonment Disbursement Request shall be accompanied by a Certification Report
by Defendants' Petroleum Engineer stating (a) that the Abandonment Obligations
to be completed by the Lease Abandonment Completion Date have been completed and
(b) the estimated cost of completing the remediation to be conducted at
Defendants' tank farms under Section 5.f (together with any soils brought there
from the Leases). The Certification Report shall be accompanied by copies of the
documents required by Section 5.g that have been issued by the DOGOR as of the
date of the Lease Abandonment Disbursement Request. The County and LACFCD shall
have the right, within ten (10) days of receipt of the Lease Abandonment
Disbursement Request and the Certification Report, to give written notice to the
Escrow Company and Defendants of objection to the requested disbursement if (a)
such Lease Abandonment Disbursement Request or the Certification Report is not
consistent with the provisions of this paragraph or (b) they disagree with the
cost estimate (which objection shall state in reasonable detail the basis for
such objection). If the County and LACFCD do not object to such disbursement
within said 10-day period, then the Escrow Company shall make such disbursement
within five (5) days following the expiration of said 10-day period. If the
County and LACFCD object to such disbursement, then the Escrow Company shall not
make the requested disbursement and shall retain the funds in Escrow pending
further instructions executed by the County, LACFCD and Defendants. In the event
of an objection, the County, LACFCD and Defendants shall promptly meet and
confer to attempt to reach a resolution of such objection, and the time consumed
by that process shall be a Force Maj cure Delay for purposes of Section 5.a. For
purposes of this Agreement, the term "Lease Abandonment Completion Date" shall
mean the date on which (i) Defendants complete all of Defendants' obligations
under Sections S.c, S.d and S.c hereof and (ii) Defendants have removed all the
tanks, pipelines and related equipment from the tank farms currently servicing
the Xxxxx Lease, Repetto Lease and Xxxxx-Xxxxxx Lease, and have begun the
remediation of the surface of those tank farms under Section S.f (together with
any soils brought there from the Leases).
e. On and after the Final Abandonment Completion Date (as defined
below), Defendants shall have the right to request the Escrow Company to
disburse the balance of the Settlement Deposit (including accrued interest), if
any (the "Final Disbursement Request"). The Final Disbursement Request shall be
accompanied by the Certification Report as to the completion of all of the
Abandonment Obligations. The County and LACFCD shall have the right, within ten
(10) days of receipt of the Final Disbursement Request and the Certification
Report, to give written notice to the Escrow Company and Defendants of objection
to disbursement if such Final Disbursement Request or the Certification Report
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is not consistent with the provisions of this Agreement (which objection shall
state in reasonable detail the basis for such objection). If the County and
LACFCD do not object to such disbursement within said 10-day period, then the
Escrow Company shall make such disbursement within five (5) days following the
expiration of said 10-day period. If the County and LACFCD object to such
disbursement, then the Escrow Company shall not make the requested disbursement
and shall retain the funds in Escrow pending further instructions executed by
the County, LACFCD and Defendants. In the event of an objection, the County,
LACFCD and Defendants shall promptly meet and confer to attempt to reach a
resolution of such objection. For purposes of this Agreement, the term "Final
Abandonment Completion Date" shall mean the date on which Defendants complete
all of the Abandonment Obligations and obtain the Certification Report with
respect to such Abandonment Obligations.
f. The Escrow Company's fees and charges for the administration of
the Escrow shall be paid for by Plaintiffs, provided that Plaintiffs shall not
be responsible for any extraordinary fees or charges for services not
contemplated by this Agreement resulting from Defendants' acts or omissions in
connection with Defendants' performance of their Abandonment Obligations, which
fees and charges shall be the responsibility of Defendants.
g. If any disagreement arises between Defendants and the County and
LACFCD that results in conflicting or adverse claims or demands being made in
connection with this Agreement or the Escrow, the Escrow Company shall be
entitled, at its option, to refuse to comply with any such claim or demand, as
long as the disagreement shall continue, and, in so doing, the Escrow Company
shall not become liable for damages or interest to any party for its failure or
refusal to comply with the conflicting or adverse claims or demands. The Escrow
Company shall be entitled to continue to so refrain and refuse to act until the
conflicting or adverse claims or demands have been resolved in accordance with
the procedures set forth in this Agreement or by a court of competent
jurisdiction. The Escrow Company may also file a suit in interpleader to have
the respective rights of any adverse claimants adjudicated, and deposit with the
court all documents and funds held by the Escrow Company under this Agreement.
Any delay in the disbursement from the Escrow of any portion of the Settlement
Deposit which prevents payment for the work contemplated by this Agreement shall
constitute a Force Maj cure Delay under Section S.a hereof.
h. Defendants and the County and LACFCD agree that the Escrow
Company's duties are only those specified herein, that such duties are purely
ministerial in nature, and that the Escrow Company shall not incur any liability
except for willful misconduct or gross negligence as long as it has acted in
good faith.
4. Dismissal of Actions.
a. Defendants and their attorneys of record in the Action and
Plaintiffs and their attorneys of record shall sign and shall file the
dismissals promptly following delivery thereof as provided in Section 1 above.
b. Except as otherwise expressly provided in this Agreement, each of
the parties to this Agreement shall bear their own costs, attorneys' fees, and
related expenses with respect to the Action, the WRD Action and in connection
with the preparation, signing and implementation of this Agreement or the
transactions contemplated hereby.
5. Defendants' Abandonment Obligations. Defendants obligations set forth
below in this Section S are collectively referred to herein as the "Abandonment
Obligations."
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a. Defendants hereby covenant and agree that, following the deposit
of the Settlement Deposit into the Escrow, Defendants shall commence and shall
diligently prosecute to completion the Abandonment Obligations in accordance
with the terms of this Agreement. Defendants covenant that in no event shall the
completion of the Abandonment Obligations described in Sections 5.c, S.d and S.c
below and the issuance of the Certification Report relating to such Abandonment
Obligations extend beyond six (6) months after the date that the Settlement
Deposit is deposited into the Escrow as provided in Section 1 .b above; except
that such six-month period may be extended due to circumstances beyond
Defendants' control, such as shortage of rigs or service company personnel,
weather, delays in permitting, operation of the water conservation pool or Acts
of God (herein, a "Force Maj cure Delay"), for a period of time equal to such
Force Majeure Delay. For purposes of this Agreement, the term "DOGGR" shall mean
the Division of Oil, Gas and Geothermal Resources of the California Department
of Conservation. For purposes of this Agreement, the words "DOGGR regulations"
and words of similar import shall refer to Title 14 (Natural Resources) of the
California Code of Regulations (including, without limitation, Sections 1723,
1775 and 1776 of Chapter 4 of Division 2 thereof). Defendants acknowledge that
their Abandonment Obligations include obtaining any permits required in
connection with the performance of the work, including any required permits from
the Army Corps of Engineers.
b. Defendants agree to permanently cease all of their oil and gas
production operations (other than the performance of the Abandonment
Obligations) with respect to each of the Leases no later than November 1, 2003.
c. Defendants represent and warrant that, to the best of their
knowledge, the following oil and/or gas xxxxx are the only xxxxx that were
located on the Leases when Pacific Energy Resources acquired the Leases that had
not previously been abandoned: Xxxxx-Xxxxxx 2, 3 and 5; Xxxxx 1, 2, 3, 4 and 5;
and Repetto 15, 16, and 18. Defendants shall plug and abandon the oil and/or gas
xxxxx located on the Leases identified as follows: Xxxxx-Xxxxxx 2, 3 and 5;
Xxxxx 1, 2, 3, 4 and 5; and Repetto 15, 16, and 18. Such xxxxx shall be
abandoned in compliance with the applicable regulations and requirements of the
D000R, and compliance with such regulations and requirements shall satisfy
Defendants' obligations with respect to the same. Subject to compliance with the
time requirements and other obligations set forth herein, Defendants may decide
the sequence in which the xxxxx will be abandoned. Plaintiffs have no objection
to Defendants' use of water from the Rio Hondo to make the cement needed for the
well and pipeline abandonment contemplated by this Agreement.
d. Defendants shall abandon all pipelines either owned or operated
by Defendants that (i) are located on the Xxxxx Lease, Xxxxx-Xxxxxx Lease or
Repetto Lease and (ii) run from any of said Leases to any of Defendants' tank
farms serving any of said Leases. Such subsurface pipelines shall be abandoned
in place by purging and filling them with slurry and capping the ends thereof.
Such above ground pipelines shall be removed. The abandonment of all such
pipelines shall be performed according to the applicable DOGGR regulations and
requirements, and compliance with such regulations and requirements shall
satisfy Defendants' obligations with respect to the same. Subject to compliance
with the time requirements and other obligations set forth herein, such
pipelines may be abandoned in the same sequence as the Leases are abandoned.
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e. Defendants shall remediate the lands burdened by the Leases in
the manner and to the extent required by the applicable DOGGR regulations and
requirements, and compliance with such regulations and requirements shall
satisfy Defendants' obligations with respect to the same. Subject to compliance
with the time requirements and other obligations set forth herein, the materials
removed from the surface of the lands burdened by the Leases may be remediated
by Defendants at the Defendants' tank farms. Plaintiffs shall request the U.S.
Army Corps of Engineers to allow the Defendants to use soil from the Whittier
Narrows Flood Control Basin to fill any excavations created by or during the
course of Defendants surface remediation efforts, and the County agrees, upon
request from Defendants, to direct the appropriate agency to issue any and all
appropriate excavation, grading, hauling and other permits that may be
reasonably required to perform such remediation (to the extent that the County
has the authority to do so).
f. Defendants shall abandon the tank farms that serve each of the
Leases and remediate the surface of such tank farms in the manner and to the
extent required by the applicable DOGOR regulations and requirements. Subject to
Defendants' obligation to diligently complete the work and their other
obligations set forth herein, the sequence of the abandonment of such tank farms
may be as determined by Defendants.
g. Defendants shall engage a petroleum engineer (the "Petroleum
Engineer") to monitor Defendants' performance of the Abandonment Obligations.
Upon completion of the Abandonment Obligations (or relevant portion thereof),
the Petroleum Engineer shall issue a closure report or reports (the
"Certification Report") to and for the benefit of Plaintiffs certifying that the
Abandonment Obligations have been performed and completed and that the DOGGR has
approved the work performed and has issued the applicable certifications,
approvals or similar documents. Copies of all applicable certifications,
approvals or similar documents required or given by DOGGR shall be appended to
the Certification Report.
h. Defendants acknowledge and agree that as between Plaintiffs and
Defendants (i) Defendants are solely responsible and liable for the performance
of the Abandonment Obligations and for the sufficiency of the Settlement Deposit
to cover the costs of performing the Abandonment Obligations and any excess
costs are at Defendants' risk and obligation, and (ii) Plaintiffs are not
assuming nor shall Plaintiffs be responsible for the performance of the
Abandonment Obligations or for the payment of costs or expenses relating to the
Abandonment Obligations (other than the payment of the Settlement Deposit into
escrow). By entering into this Agreement, Plaintiffs are not accepting or
assuming any responsibilities or obligations with respect to the operation or
abandonment of the Leases.
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6. Release.
a. With the exception of the rights and obligations created by this
Agreement or as otherwise expressly provided herein, Plaintiffs hereby fully and
forever release and discharge Defendants and each of their officers, directors,
shareholders, partners, employees, servants, agents, attorneys, expert
witnesses, representatives, heirs, successors, and assigns (collectively, the
"Defendant Parties"), from any and all rights, claims, demands, obligations,
causes of action, liens, debts, costs, expenses, compensation, losses,
liabilities and any and all past or present claims, damages, expenses,
attorneys' fees, obligations, costs or demands of whatever nature, including any
claims for contribution or indemnity (collectively, "Claims"), which they have
or may have against Defendants or the Defendant Parties in any way arising out
of or related to the acts, omissions to act, violations and other matters
alleged in the Action, the Complaint or the WRD Action. Neither the term
"Defendant Parties" nor the foregoing release includes the Royalty Owners.
b. With the exception of the rights and obligations created by this
Agreement or as otherwise expressly provided herein, Defendants, on behalf of
themselves and the Defendant Parties, hereby forever release and discharge the
County, the LACFCD and the WRD and each of their past or present elected or
appointed officials, board members, employees, servants, agents, attorneys,
expert witnesses, representatives, successors, and assigns (the "Plaintiff
Parties"), from any and all rights, claims, demands, obligations, causes of
action, liens, debts, costs, expenses, compensation, losses, liabilities and any
and all past or present claims, damages, expenses, attorneys' fees, obligations,
costs or demands of whatever nature, including any claims for contribution or
indemnity, which they have or may have against Plaintiffs or the Plaintiff
Parties in any way arising out of or related to the acts, omissions, facts and
matters alleged in the Action, the Cross-Complaints or the WRD Action
(including, but not limited to, claims, damages or other claims for entitlement
to compensation for inverse condemnation, the taking or damaging of property or
the displacement from property under any condemnation, relocation or similar law
or ruling now or hereafter in effect arising out of or in any way related to the
Leases).
c. Each of the Settling Parties represent that they have not
heretofore assigned or transferred or purported to assign or transfer to any
other person or entity any released matter or Claims or any part or portion
thereof, except that Pacific Energy Resources did assign its cross-claims
against the County and the LACFCD to Scanner Investments, LLC as part of the
transaction described in the third recital paragraph above.
7. No Admission of Liability or Waiver. The parties hereto expressly
recognize that the terms and conditions of this Agreement constitute a
compromise and settlement of disputed claims and an accord and satisfaction of
contested matters. This Agreement shall not be construed in any manner as an
admission by any party hereto of any liability of any kind to the other party,
nor shall be it considered or interpreted as an assumption of any liability
under applicable law. This Agreement is executed by the Settling Parties hereto
for the sole purpose of settling the disputes which serve as the bases for this
Action. It is expressly understood and agreed, as a condition hereof, that this
Agreement is not to be construed as, nor does it constitute, an admission,
evidence, or indication, in any degree, of liability by any party for any claim
asserted or unasserted in the Action or the WRD Action.
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8. Time Is Of The Essence. Time is of the essence with respect to this
Agreement.
9. Representations and Warranties.
a. Defendants Representations. Defendants hereby represent and
warrant to Plaintiffs as follows:
(1) Defendants are duly organized, validly existing and in
good standing under the laws of their respective jurisdictions of organization
and under the laws of the State of California and have all requisite power and
authority to own, operate and acquire their properties and to carry on their
business as now conducted.
(2) Defendants have the legal power, right and authority to
enter into and perform this Agreement and the instruments and documents referred
to in this Agreement. Defendants have received all authorizations, approvals and
consents necessary (including all necessary corporate or other actions,
resolutions or approvals) to execute, deliver and perform this Agreement (and
the instruments and documents referred to in this Agreement), and the persons
signing this Agreement on behalf of Defendants are fully authorized to sign this
Agreement and to commit and bind Defendants to each and all the terms and
conditions hereof.
(3) Defendants are the owners of all of the lessee's and
working interest holder's i-i ght, title and interest in to and under the
Leases, free and clear of any encumbrances, claims or other interests, and
Defendants have not transferred any interests in the Leases to any other party.
(4) Defendants are unaware of any reason which would preclude,
prohibit or prevent them from making a full and complete quitclaim of the
Leases, as contemplated herein as of the Effective Date, and the instruments
delivered pursuant to this Agreement are sufficient to terminate the Leases.
(5) In executing this Agreement, Defendants have not relied
upon any statement or representation of any other party hereto nor of any
officer, agent, employee, representative, or attorney for any other party hereto
regarding any facts not expressly set forth within this Agreement.
b. County's and LACFCD's Representations. The County and the LACFCD
represent and warrant as follows:
(1) The County and the LACFCD are public agencies validly
existing and in good standing under the laws of the State of California and have
all requisite power and authority to own, operate and acquire properties and to
carry on their business as now conducted.
(2) The execution, delivery and performance of this Agreement
on behalf of the County and the LACFCD, including the execution of the
instruments and documents referred to in this Agreement, have been duly and
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validly authorized and approved by all necessary action (including County and
the LACFCD Board action, if required), and consunimation of the transactions
contemplated hereby will not violate or be in conflict with any provision of the
charter of the County and the LACFCD.
(3) In executing this Agreement, the County and the LACFCD
have not relied upon any statement or representation of Defendants nor of any
officer, agent, employee, representative, or attorney for Defendants regarding
any facts not expressly set forth within this Agreement.
c. WRD's Representations. WRD represents and warrants as follows:
(1) WRD is a special district validly existing and in good
standing under the laws of the State of California and has all requisite power
and authority to own, operate and acquire properties and to carry on its
business as now conducted.
(2) The execution, delivery and performance of this Agreement
on behalf of the WRD, including the instruments and documents referred to in
this Agreement, have been duly and validly authorized and approved by all
necessary action (including WRD Board action, if required), and consummation of
the transactions contemplated hereby will not violate or be in conflict with any
provision of the charter of the WRD.
(3) In executing this Agreement, the WRD has not relied upon
any statement or representation of Defendants nor of any officer, agent,
employee, representative, or attorney for Defendants regarding any facts not
expressly set forth within this Agreement.
d. Joint Representations of the Parties. The Settling Parties hereto
represent and warrant to each other as follows:
(1) The Settling Parties agree that this Agreement and all
documents and instruments relating thereto are, or, upon execution and delivery
will be, valid and binding obligations, enforceable against them in accordance
with their respective terms.
(2) Each Settling Party acknowledges and agrees that (A) each
party hereto is of equal bargaining strength, (B) each such party has actively
participated in the drafting, preparation and negotiation of this Agreement, (C)
each such party has consulted with such party's own, independent counsel, and
such other professional advisors as such party has deemed appropriate, relating
to any and all matters contemplated under this Agreement, (D) each such party
and such party's counsel and advisors have reviewed this Agreement, (E) each
such party has agreed to enter into this Agreement following such review and the
rendering of such advice, and (F) any rule of construction to the effect that
ambiguities are to be resolved against the drafting parties shall not apply in
the interpretation of this Agreement, or any portions hereof, or any amendments
hereto.
(3) Each Settling Party hereto has made such investigation of
the facts pertaining to this settlement and this Agreement as it deems
necessary.
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(4) It is agreed that this Agreement is being entered into in
good faith by all Settling Parties and without fraud, coercion, duress or undue
influence.
e. Survival of Warranties. The representations and warranties of the
Settling Parties set forth in this Section 9 and elsewhere in this Agreement
shall survive the performance of transactions contemplated by this Agreement.
10. Notices. Except as otherwise specified in Section 3.c above, any
notice, communication, request, instruction or other document required or
permitted to be sent under this Agreement shall be in writing and deemed given
when hand-delivered or sent by confirmed facsimile or certified mail, return
receipt requested, or by overnight, confirmed express delivery service to the
other party at the following addresses:
To the County and the LACFCD:
Los Angeles County Flood Control District
Attention: Xxxxx X. Xxxxx, P.E.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
County of Los Angeles
Attention: Director of Public Works
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxxxxx X.X. Xxxxxxxx, Esq.
Demetriou, Del Xxxxxxx, Xxxxxxxx &
Xxxxxxx, LLP.
000 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Xxxx X. Xxxxx, Esq.
Principal Deputy County Counsel
000 Xxxxxxx Xxxx Xxxx of Administration
000 Xxxx Xxxxxx Xx., #000
Xxx Xxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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To the WRD:
Xxxxx X Xxxxx, General Manager
Water Replenishment District of Southern California
00000 X. 000xx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
J. Xxxxxxx Xxxxxxx, Esq.
Xxxxxxx & Xxxxxx 000 Xxxxx Xxxxxxxx
Xxxxxx, Xxxxx 000 Xxx Xxxxxxx, XX 00000
To Defendants:
Pacific Energy Resources
0000 Xxxx Xxxx X Xxxxxx
Xxxx Xxxxx, XX 00000
Attention: Xx. Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx X Xxxxxx, Esq.
Law Offices of Xxxxxx X. Xxxxxx
00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0 100
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may change the place where or the person to whom notices under
this Agreement will be given by giving notice to the other in the manner set
forth above.
11. Attorney's Fees: Venue.
a. Should any party bring any lawsuit or file a claim in arbitration
arising out of or relating to the terms and provisions of this Agreement, the
losing party in such action shall pay to the prevailing party, in addition to
any other relief ordered by the court or arbitrator, the prevailing party's
costs and expenses in connection with that action or litigation, including
reasonable attorneys' fees. The provisions of this section shall apply with
equal force to any appeal of any decision rendered by a lower court, and any
enforcement efforts undertaken in connection with such decision.
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b. Any action on this Agreement will be brought exclusively in Los
Angeles County Superior Court and the parties agree that such Court has personal
jurisdiction over each of them and that venue is proper in such Court.
12. Choice of Law. All matters pertaining to this Agreement shall be
governed and determined in accordance with the laws of the State of California.
13. Further Cooperation. Each of the Settling Parties agrees to execute
any and all further agreements, documents or other instruments (with
acknowledgment if necessary for recording purposes) as may reasonably be
necessary in order to fully effectuate the agreements and covenants of the
parties contained in this Agreement.
14. Terms Used. Whenever the context requires, words used in the singular
shall be construed to mean or include the plural and vice versa, and pronouns of
any gender shall be deemed to include and designate the masculine, feminine or
neuter gender. If any obligation imposed hereunder applies to more than one
person or entity, then such multiple parties shall be jointly and severally
obligated and liable for the performance of the terms of such obligation.
15. Amendments: No Waiver.
a. This Agreement and the exhibits hereto, and the documents
referred to herein, embody the entire agreement and understanding of the parties
hereto with respect to the subject matter hereof, and supersede all prior and
contemporaneous agreements and understandings, oral or written, relative to said
subject matter.
b. This Agreement may not be changed, amended, terminated,
augmented, rescinded or discharged (other than by performance), in whole or in
part, except by a writing executed by the parties hereto, and no waiver of any
of the provisions or conditions of this Agreement or any of the rights of a
party hereto shall be effective or binding unless such waiver shall be in
writing and signed by the party claimed to have given or consented thereto.
c. Except to the extent that a party hereto may have otherwise
agreed in writing, no waiver by that party of any condition of this Agreement or
breach by the other party of any of its obligations or representations hereunder
or thereunder shall be deemed to be a waiver of any other condition or
subsequent or prior breach of the same or any other obligation or representation
by the other party, nor shall any forbearance by the first party to seek a
remedy for any noncompliance or breach by the other party be deemed to be a
waiver by the first party of its rights and remedies with respect to such
noncompliance or breach.
16. Successors and Assigns. This Agreement and the rights and obligations
arising hereunder shall inure to the benefit of and be binding upon the parties
hereto and their respective heirs, successors and assigns; provided, however,
that Defendants shall not assign or delegate their rights or obligations
hereunder without the prior written consent of Plaintiffs.
17. Counterpart Execution. This Agreement may be executed simultaneously
in multiple counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.
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18. Confidentiality. Defendants agree not to disclose or disseminate any
information or documents relating this Agreement to any third party.
Notwithstanding the foregoing, Defendants may disclose, to the extent reasonably
necessary, the terms of this Agreement: (a) as may be required in order to
comply with applicable securities laws or regulations; (b) to Defendants'
vendors and other persons who need to know such information for purposes of
carrying out Defendants' obligations under this Agreement, provided Defendants
obtain, where reasonably obtainable by Defendants, such persons agreement to
maintain the confidentiality of this Agreement; (c) to Defendants' accountants,
attorneys and management employees, provided such persons agree to maintain the
confidentiality of this Agreement; and (d) to the extent such terms become
generally available to the public from a non-confidential source. In the event
that Defendants receive a request for such information or are served with a
discovery request, subpoena or other form of judicial process calling for the
disclosure of any such information or demanding that Defendants take any other
action prohibited by this paragraph, Defendants shall provide to Plaintiffs
prompt written notice of such fact so that Plaintiffs may seek a protective
order or other appropriate remedy in their discretion and at their sole expense.
Defendants shall not be under any obligation to incur any expense to resist any
such request. In the event that such protective order or other remedy is not
obtained, Defendants shall be entitled to comply with the request in the manner
and at the time set forth therein, except and to the extent the request has been
modified by the requesting party or the court that entertains Plaintiffs'
application for a protective order.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the Effective Date.
DATED: August 28, 0000 XXXXXX XX XXX XXXXXXX
By:s/d
Dirrector
Los Angeles County Department of Public
Works
By: s/d
Principal Deputy County Counsel
Office of the County Counsel
DATED: July__ 2003 LOS ANGELES COUNTY FLOOD CONTROL
DISTRICT
By: s/d
Director
Los Angeles County Department of
Public Works
By: s/d
Principal Deputy County Counsel
Office of the County Counsel
16
DATED: July ___, 0000 XXXXX XXXXXXXXXXXXX XXXXXXXX XX XXXXXXXX
XXXXXXXXXX
By: s/d
-----------------------------------------
Xxxxx X. Xxxxx
General Manager
DATED: August 19, 2003 RETIRED PACIFIC PARNTERS, LP
(formerly named Pacific Energy Resources)
By: Retired Pacific Partners, LLC
-----------------------------------------
Its General Partner
By: s/d
-----------------------------------------
Xxxxxxx Xxxxx, Managing Member
DATED: July ___, 2003 SCANNER INVESTMENTS, LLC
By: s/d
-----------------------------------------
Xxxxxxxx Xxxxx
Manager
DATED: July ___, 2003 SHAMROCK RESOURCES, INC.
By: s/d
-----------------------------------------
Xxxxxxxx Xxxxx
Manager
DATED: August 11, 2003 PETROCAL INCORPORATED
By: s/d
Xxxxxx Xxxxx
President
DATED: August 6, 2003 KATMAN PETROLEUM, LLC
By: s/d
-----------------------------------------
Xxxxxx Xxxxx
Manager
17
APPROVED AS TO FORM:
LAW OFFICE OF XXXXXX X. XXXXXX
Xxxxxx X. Xxxxxx
By: s/d
----------------------------------------
Xxxxxx X. Xxxxxx
Attorney for PER Defendants
XXXXXXX & XXXXXX
Xxxxxxx Xxxxxx, Xx.
By: s/d
----------------------------------------
Xxxxxxx Xxxxxx, Xx.
Attorney for Water Replenishment
District of Southern California
18
ACCEPTANCE BY ESCROW HOLDER
Chicago Title Company acknowledges that it has received a fully executed
original or original executed counterparts of the foregoing Settlement Agreement
(the "Agreement") and agrees to act as Escrow Holder under the Agreement and to
be bound by and strictly perform the terms thereof as such terms apply to Escrow
Holder. Further, Chicago Title Company agrees to be bound by and observe the
terms of the confidentially provisions contained in Section 18 of the Agreement.
Dated: July __, 2003 CHICAGO TITLE COMPANY
By:
-----------------------------------
Name:
------------------------------
Position:
--------------------------
--------------------------------------------------------------------------------
[EXHIBITS NOT INCLUDED. PLEASE CONTACT THE COMPANY FOR EXHIBITS]
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