HomeMy WebLinkAboutContracts & Agreements_31-1993_CCv0001.pdf RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
Law Offices of G. GREG AFI'ERGOOD
A : G. Greg Aftergood, Esq.
15915 Ventura Boulevard, Penthouse I
Encino, California 91436
Space Above This Linc For Recorder's Use
AGREEMENT AND DECLARATION OF COVENANTS, CONDTTMONS AND
RESTRICTIONS RUNNING WITH THE LAND
THIS AGREEMENT (hereinafter "Agreement") is made and entered into effective this
9 th day of July 1993, in the County of San Bernardino, State of California.
ARTICLE I -- PARTIES AND P OS
1.01 Identity of Parties. The parties to this Agreement are:
(A) The MILL CREED. r ANJ A ASSOCIATION,. a California non-profit
corporation, for itself and, to the extent authorized by law, on behalf of all
of its successors and assigns (hereinafter jointly and severally referred to
as the 'ASSOCIATION");
(B) The PROPERTY OWNER/MEMBERS OF THE ASSOCIATION
named at Exhibit "C" hereof, and, to the extent authorized by law, on
behalf of all of their respective heirs, successors and assigns,
(C) The CITE' OF RE LANDS, a municipal corporation, for itself and, to
the extent authorized by law, on behalf of all its affiliated corporations,
companies and divisions, and all of its and their parent, subsidiary,
successor, affiliated or predecessor corporations and companies. and on
behalf of all of its and their successors and assigns, and on behalf of all of
MCZA-REDJSETLMNT8.REJ--370793 1
its and their present and former officers, directors, agents, attorneys,
employees, representatives, administrators, partners and shareholders
(hereinafter jointly and severally referred to as "REDLANDS"); and
(D) CR ON WATER COMPANY, a California corporation, for itself and,
to the extent authorized by law, on behalf of all its affiliated corporations,
companies and divisions, and all of its and their parent, subsidiary,
successor, affiliated or predecessor corporations and companies, and on
behalf of all of its and their successors and assigns, and on behalf of all of
its and their present and former officers, directors, agents, attorneys,
employees, representatives, administrators, partners and shareholders
(hereinafter jointly and severally referred to as "CRAFTON")-, and
1.02 Purpose of Ap-reement. It is the purpose of this Agreement to: (a) settle, adjust
and compromise the claims and contentions of the parties hereto with respect to the subject
matter hereof (hereinafter defined); (b) contractually effect and implement the perpetuation
of a minimum flow of water in the channel known as the Mill Creek Zanja ("Zanja", defined
hereinbelow) for the benefit of the ASSOCIATION's members, their respective successors and
assigns, while at the same time recognizing the vagaries of nature and potentially unforeseen
and/or unforeseeable events which may affect the volume and quality of waters available to the
Zanja; and (c) recognize the public and constitutional duty of REDLANDS and CRAFFON
to effliciently manage their water systems and make every effort to put water to its highest and
best use; (d) recognize the Santa Ana River Mill Creek Cooperative Water Project
Agreement obligations of RED SDS and CR ON; and (e) provide an avenue and
mechanism for the ASSOCIATION's members to perpetuate a minimum flow of waters in the
Zanja even in the event CRAF-fON is no longer continuing to operate as a mutual water
company in the RedlandsNentone area.
MCZA-RED/SETLMNT8.RED--070793 2
1.03 ADvurtenant Rights and Benefits. The rights and benefits inuring to the
ASSOCIATION's members by reason of this Agreement shall run with the land and benefit
(as dominant tenements) and burden (as servient tenements) the respective parcels of real
property more particularly described at Exhibit "C" hereof, which said properties abut the
Zanja between the East Weir (hereinafter defined) and the West Weir (hereinafter defined).
ARTICLE 11-- DEFINMONS
2.01 Defined Terms. When used in this Agreement, or as the context of this
Agreement requires, the following terms shall have the respective meanings specified
hereinbelow:
(A) "Alternate Waters": Waters provided to REDLANDS or CRAFTON
under the Exchange Agreement (hereinafter defined), in exchange for
REDLANDS' and/or CRAF'FON*s claimed share of Mill Creek's
strearnflow (as described by Exhibit "A" to such Exchange Agreement).
(B) "ASSOCIATION": The Mill Creek Zanja Association, a California non-
profit corporation, which is comprised of owners and/or occupants of
those certain parcels of real property which abut the Zanja (hereinafter
defined) between the East Weir (hereinafter defined) and the West Weir
(hereinafter defined).
(C) "Bouillion Bo)e': The water diversion structure located (as generally
depicted by the map appended to this Agreement as Exhibit "A") at the
junction of the Bear Valley High Line and the Zanja.
(D) "C.F. .": Cubic feet per second.
MCZA-RED/SETLMNT8.RED--070793 3
E011 Reservoir": That certain reservoir which is served by the
Z n a and the Crafton Fater Company Aqueduct, as generally depicted
and located b , hibi "A"'
F " lameter Cr. , e: e present location of pipelines closest to the
East Weir (hereinafter defined) which can deliver Alternate Waters to the
Tate WTP (hereinafter defined). This paint is approximately 250 lineal
feet and 10 vertical feet from the. East Weir.
CG "East `weir": That certain weirbox facility generally located as depicted by
Exhibit "N' hereof, from which waters have flawed downstream in the
Zana to the CRAFTON Reservoir.
(H) "Exchange ee ent": That certain Agreement known as the Santa Ana
River-Mill Creek Cooperative "tater Project Agreement, dated May 3,
1976 [recorded in Official Records of the San Bernardino County
Recorder's Office, on September 9, 1976, in Book 9008, Pages 1 through
5 , inclusive], pursuant to which the participating parties agreed to
construct, utilize and implement certain water transmission, diversion,
pumping and related facilities to enable there to exchange and/or transfer
a portion of their available water supplies.
(f) " - kley Gravity Service Area": e geographical water service area
depicted by the diagram appended hereto as Exhibit "W', which can be
sued by gravity flow from the Hinkley W TP (hereinafter defined).
(J) "Hinkley WW': The Hinkley Fater Treatment Plant generally located as
depicted by the map appended to this Agreement as Exhibit "B".
MCZA-RED/SETLMNT8.PED--070793
(K) Indirecty': Any action undertaken by any entity or group of entities in
concert with or under the influence or control of any
party to this Agreement, including, but not limited to: any such action
undertaken by any corporation, partnership, sole proprietorship, or any
other business which any party hereto has or acquires an ownership or
proprietary or controlling interest; or any such action undertaken by any
successors, assigns, agents, representatives, or any other person acting
under the influence or control of such Party. The term "indirectly" shall
always be accorded the broadest possible meaning which is not
inconsistent with the foregoing and specifically with the requirement of
concerted, influenced, or controlled action. For purposes hereof, action
also includes an omission to act.
(L.) "Uwsuit": That certain litigation commenced by the ASSOCIATION's
filing of a complaint against REDLANDS and CRAFTON, among others,
in the Superior Court of the State of California for the County of San
Bernardino, said suit being captioned as follows: Mill Creek Zama
Association, a non-profit corporation. vs. The City,of..Redlands, a
municipal corporation; San Bernardino Valleyr�Muni�cial Water�Distr�ict,
Crafton Fater Company,i�aCal�ifornia corporation•. the County of San
BernardingLDoes I through 200, inclusive. Defendants, Case No. 229 767.
The Lawsuit shall also include appellate case numbers E005518. E005522
and E005105.
(M) "SBVMWD": The San Bernardino Valley Municipal Water District.
(N) "Subject matter hereof': As used in this Agreement, the phrase "subject
matter hereof' or the reference to "subject matter hereof' shall refer to all
events, claims, transactions and occurrences set forth in the Lawsuit, and
all matters, transactions, claims and/or events related or incidental thereto.
MCZA-RED/SETLMNT8.RED--070793 5
(0) 'Tate Service Area": The geographical water service area presently
served by the Tate WTP (hereinafter defined), exclusive of the Hinkley
Gravity Service Area, as depicted by the diagram appended hereto as
Exhibit "B".
(P) "Tate VnT": The Tate Water Treatment Plant, currently owned and
operated by REDLANDS, located as depicted by Exhibit "A" hereof.
(Q) "Unger Pipeline": That certain pipeline constructed by the SBVMWD in
connection with its implementation of the Exchange Agreement, described
(and located) by Exhibit "A" hereof as the "SBVMVvD Pipeline" to the
"Unger Lane Zarija Turnout".
(R) "West Weir": That certain weirbox facility generally located as depicted
by Exhibit "A" hereof, where the Zanja's strearnflow has historically been
diverted to CRAMN via the Crafton Water Company Aqueduct (which
is likewise depicted by Exhibit "A").
(S) "Zanja": That certain watercourse (without regard to whether it was
naturally or artificially created) used since the early 19th Century as an
irrigation channel and other purposes, commonly known as the Mill Creek
Zarja, which is generally located as depicted by
Exhibit "A" hereof.
2.02 References. Except as otherwise specifically indicated, all references herein to
paragraph and article numbers refer to paragraph and article numbers of this Agreement, and
the words "herein", "hereunder", "hereafter", and words of similar import refer to this
Agreement as a whole and not to any particular section of sub-division hereof.
MCZA-RED/SETLMNT8.RED--070793 6
ARTICLE III — RECITALS
3.01 Stipulated Facts. This Agreement is entered into with reference to the following
facts:
(A) On or about November 12, 1985, the ASSOCIATION initiated the
Lawsuit by filing a complaint which sought, inter glia, a determination of the nature and extent
of usufructuary rights of the ASSOCIATION*s members, as well as REDLANDS and
CRAFTON, in and to that portion of the waters of Mill Creek that have historically flowed in
the Zanja past the properties of the ASSOCLkTION's members and their predecessors in
interest since in or about the year 1820. The ASSOCIATION maintained in the Lawsuit that
its members were vested with rights as riparian proprietors of such waters of Mill Creek.
REDLANDS and CRAFTON, as well as the SB D, denied all of the material allegations
of the ASSOCIATION's complaint, and specifically denied that the ASSOCIATION's
members were vested with riparian or any other water rights relating to the historical flow in
the Zanja's channel.
(B) REDLANDS and CRAFTON are participants in, and signatories to the
Exchange Agreement, the provisions of which are incorporated herein by this reference as
though fully set forth at length and verbatim. In addition, the ASSOCIATION recognizes that
CR ON is entitled to receive Bear Valley Water by virtue of other contractual
arrangements that do not involve this Agreement; and this Agreement is not intended to and
does not affect in any way CRAFTON's Bear Valley Water entitlement, and CRAFYON shall
not be obligated under this Agreement to deposit Bear Valley Water in the Zanja, at any time
or at all.
(C) Prior to execution and implementation of the Exchange Agreement, and
thereafter to date, REDLANDS and CR Olt have asserted that they were and still are
vested with appropriative rights to beneficially utilize the entirety of Mill Creek's streamflow
that has historically flowed in the Zanja. By reason of such claimed entitlements,
MCZA-RED/SETLMNT8.RED--070793 7
REDLANDS and CR ON have also asserted the right to exchange up to 32 c.f.s. of Mill
Creek's strearriflow for Alternate Waters to be delivered pursuant to the Exchange Agreement.
(D) In or about the summer of 1985, an ostensible exchange of water
entitlements took place between REDLA-NTDS and CRAFTON whereby REDLANDS received
CRAFTON's claimed water entitlement to Mill Creek's strearnflow, and CRAFFON received
Alternate Waters which were discharged into the Zanja via the Unger Pipeline. The effect of
such exchange eliminated all of the Mill Creek strearnflow in the Zanja between the East
Weir and the Unger Pipeline. Such cessation of flow prompted the ASSOCIATION to file the
Lawsuit.
(E) On or about May 6, 1988, A. Rex Victor, Judge of the Superior Court of
the State of California for the County of San Bernardino, issued an order granting the
ASSOCIATION's motion for summary adjudication of the issue that "[the ASSOCIATION's]
members, being landowners whose properties are contiguous to the Mill Creek Zanja, are
vested with riparian water rights in the Mill Creek strearnflow that has historically flowed in
the Zanja past their respective properties from and after 1820" (such decision shall be
hereinafter referred to as the "Lower Court Decision"). Judge Victor did not, however, define
the precise extent, nature or scope of the riparian interests in favor of the ASSOCIATION's
members. Thereafter, REDLANDS and CRA ON each filed Petitions for Writs of Mandate
before the Fourth District Court of Appeal, seeking, inter glia, to have the Lower Court
Decision overturned.
(F) While the ASSOCIATION's members have agreed to stipulate, as part of
a settlement of the Lawsuit, that the Lower Court Decision can be deemed set aside and
invalidated, they are not willing to permanently disclaim their claims of riparian rights in and
to the Zanja's Mill Creek strearnflow, in perpetuity, and rely solely upon the contractual rights
afforded under this Agreement. The ASSOCIATION's members are willing, however, to
forego asserting such claims of riparian rights so long as: (1) any future disputes or
disagreements concerning implementation and effectuation of the flow of waters in the Zanja
can be resolved by mediation or arbitration, and (2) REDLANTDS and CR ON are
MCZA-RED/SETLMNT8.RED--070793 8
adhering to their respective duties of good faith and fair dealing in connection with the
implementation, interpretation and enforcement of this Agreement.
(G) Notwithstanding the historical disputes and disagreements that have arisen
between the parties with respect to the Zanja's flow and/or any other claims or contentions
comprising the subject matter hereof, the parties hereto consider it to be in their best interests
to settle, adjust and compromise their respective claims and contentions pursuant to the
provisions of this Agreement.
(H) The ASSOCIATION's members who own the properties listed at
Exhibit "C' hereof deem it desirable to hereby establish covenants, conditions and restrictions
relating to their respective properties, and each and every lot and portion thereof, to govern
the use and occupancy of such properties in the future consistent with the provisions hereof,
all for the purpose of enhancing and protecting the value, desirability and attractiveness of
such properties. Such covenants, conditions, restrictions are intended to vest in the
ASSOCIATION and/or its agents or assigns, the powers of maintaining, administering and/or
enforcing such covenants, conditions and restrictions, and collecting and disbursing funds
relating to and in furtherance of the provisions of this Agreement.
ARTICLE IV — DISMISSAL OF CLAIMS IN THE LAWSUIT
4.01 Na Admission QfjjghffibL It is understood by the parties to this Agreement that
it is being entered into in order to resolve outstanding disputes between them, and in
consideration of the promises and other valuable consideration provided for herein. The
par-ties hereto acknowledge that this Agreement implements a settlement of alleged claims
being denied and contested. Nothing contained herein shall be construed as an admission by
any party of the truth of any allegations, claims or contentions of any other party.
MCZA-RED/SETLMNT8.RED--07G793 9
4.02 Survival of Rights Hereunder.
(A) Subject to the further provisions of paragraph 4.04B) hereinbelow, and
notwithstanding the releases contained herein, all rights and obligations created under and
pursuant to this Agreement shall survive the execution of this Agreement and the releases
contained herein. An original copy of this Agreement, bearing the duly notarized signatures of
the parties hereto (or their duly authorized representatives) and their respective counsel, shall
be recorded in the Office of the County Recorder of San Bernardino County- and the
provisions of this Agreement are hereby declared to be for the express benefit of each and all
of the parties hereto, including, but not limited to the members of the ASSOCIATION, as well
as each of the properties designated at Exhibit "C" hereof. The provisions of this Agreement
are hereby made a covenant binding upon the parties and their successors, heirs, transferees,
and assigns, for the benefit of all other parties hereto, their successors, heirs, transferees, and
assigns; and the benefits and burdens of this Agreement shall constitute binding
appurtenances running with the land that will both benefit and burden the properties
designated at Exhibit "C" hereof.
(B) The ASSOCIATION's members hereby agree, for themselves, the
ASSOCIATION, and their respective heirs, successors and assigns, that as a material element
of this Agreement, the Lower Court Decision (i.e. the decision of A. Rex Victor, Judge
Presiding of the San Bernardino County Superior Court, which determined that the
ASSOCIATION's members were vested with riparian rights in and to the Zanja's Mill Creek
strearnflow) shall be deemed null and void, and of no effect. Additionally, it is hereby agreed
that the ASSOCIATION's members, heirs, successors and/or assigns shall not raise, claim or
argue that they have riparian rights in the Zanja's Mill Creek strearnflow, unless and until: (a)
they (and/or their successors and assigns) are being deprived of the essential benefit of their
bargain hereunder, to wit: a flow of waters in the Zanja consistent with the provisions of
paragraph 6.01 and 6.04 hereinbelow, arising by reason of REDLAINDS' and/or CR ON's
failure to comply in good faith with the provisions of this Agreement; and (b) REDLANDS
and/or CRAFTON could, but choose not to, exercise their legal rights and privileges under the
Exchange Agreement in a fashion that would facilitate such flow, and/or thev. or either of
they,
them, fails and refuses to adhere to the duties of good faith imposed pursuant to this
MCZA-RED/SETLMNT8.RED--070793 10
Agreement. Should the ASSOCIATION's members be so deprived of the benefit of their
bargain, they shall be entitled and permitted to reassert and maintain such claims of riparian
rights vis-a-vis the Zanja's Mill Creek streamflow, and the right and entitlement of the
ASSOCIATION's members (or their successors, heirs or assigns) to reassert such riparian
rights claim shall not be deemed prejudiced or compromised in any fashion as a result of the
passage of time between the date this Agreement is executed, and the date any such claims are
resurrected and reasserted. In like fashion, neither Redlands nor Crafton hereby waive.,
abandon or disclaim any rights they may have been accorded in judgments rendered in courts
of competent jurisdiction prior to the filing of the instant lawsuit. Redlands and Crafton are
willing to forego asserting such rights so long as the association's members: (1) resolve all
future disputes or disagreements concerning implementation and effectuation of the flow of
waters in the Zatija through mediation or arbitration; and (2) adhere to their respective duties
of good faith and fair dealing in connection with the implementation, interpretation and
enforcement of this Agreement.
4.03 General Releases. Except as otherwise provided by this Agreement, upon
exchange of the consideration described at Article V hereof, the ASSOCIATION and its
members, on one hand, and REDLANDS and CRAFTON, on the other hand, jointly and
severally agree to release and forever discharge one another, and each of them, and their
respective agents, attorneys, representatives, and/or employees, from any and all claims,
demands, liabilities, actions, cross-actions and/or causes of action of any nature or sort,
liquidated or unliquidated, known or unknown, arising out of or relating to the subject matter
hereof. With respect to the releases set forth in this paragraph, the parties further agree as
follows:
(A) The releases set forth herein are made notwithstanding the provisions of
§1542 of the California Civil Code, which provides as follows:
"A general release does not extend to the claims
which a creditor does not know or suspect to
existing his favor at the time of executing the
release, which if known by him must have
materially affected his settlement with the
debtor."
MCZA-RED/SETLMNT8.RE1J-070793 11
The parties hereto understand and acknowledge the significance and consequences of such
specific waiver of §1542, knowingly waive the provisions and benefits of such
I
section, and hereby assume full responsibility for any injury, damage or loss which has already
or may hereafter arise with respect to such releases.
(B) The releases set forth herein run in favor of the agents, employees,
entities, associations, officers, directors, corporations, subsidiaries, affiliates, partnerships,
joint ventures, representatives, attorneys, heirs, successors and assigns of each released party.
(C) The parties hereto acknowledge that they may hereafter discover facts
different from, or in addition to those which they now know or believe to be true with respect
to the subject matter hereof, and expressly accept and assume the risk of such possible
difference(s) of fact, and agree that this Agreement, and the general releases contained herein,
shall be and remain in effect in all respects notwithstanding such different or additional facts
or the discovery thereof.
ARTICLE V — CONDMONS PRECEDENT TO VALIDITY
AND ENFORCEABILITY OF THIS AGREEMENT
5.01 Binding Effect U All Properties and Owners of Proverties Lmated Between
East Weir and West Weir.
The parties hereto acknowledge and agree that their respective obligations and
duties created under and pursuant to this Agreement shall arise and be enforceable and valid
only upon satisfaction of one of the following conditions:
(A) The record owner(s) of the parcels of real property listed at
Exhibit "C' hereof, shall all execute this Agreement and have their respective signatures
notarized; or
MCZA-REDISETLMNTB.RED--070793 12
(B) The parties hereto procure a duly entered judgment implementing the
provisions hereof, which will be res judicata upon the ASSOCIATION'S members and all
present and future owners of the properties listed at Exhibit "C" hereof. In addition. a title
company shall issue its opinion that recordation of such judgment will have a binding effect
upon the future owners of the properties listed at Exhibit "C" hereof; or
(C) A county service area or similar administrative or quasi-governmental
entity is created and implemented to effectuate the provisions of this Agreement to bind and
obligate the owners of the parcels of real property listed at Exhibit "C" hereof.
ARTICLE VI — QONIDE TION
6.01 Fkyw of Water's i or at Least
500 Shares of CRAFTON Stock Are Still Issued and
(A) REDLANDS and CRAFTON agree that they shall endeavor to maintain
a flow of water in the Zanja from the East Weir, which flow is similar to the historical flows in
the Zanja during the period of January, 1986 through December, 1992. Attached and
incorporated as Exhibit "D" are records which show the Mill Creek Flow Distribution for those
years, including the amount of water available at the East Weir for use by CRAFTON in the
Zanja. The following are pertinent definitions for columns in Exhibit "D".
(1) "L Crafton Entity" means the flow to which CRAFTON is entitled
under the Mill Creek Owners Agreement-,
(2) "M Crafron MC Actual"' means the water actually available at the
East Weir for delivery through the Zanja to the CRAFTON Reservoir. When this number is
negative on Exhibit "U, the flow is zero.
MCZA-RED/SETLMNT8.RED--070793 13
(B) The historical water flows shown in Exhibit "D" will be guidelines for the
future flows in the Zanja. REDLANDS and CRAFTON agree that they shall be bound by the
principles of good faith and fair dealing in operating their water systems in accordance with
this Agreement. They will make their operational decisions based on good business judgment,
keeping in mind their good faith obligation to keep a flow in the Zanja for the benefit of the
ASSOCIATION and its members.
(C) The parties are aware and recognize that REDLANDS and CRAFTON
are obligated under the California Constitution and applicable laws to put water to a beneficial
use and must provide excess water to the San Bernardino Valley Water Conservation District
for groundwater recharge. REDLANDS and CRAFTON will operate their water systems
under this Agreement in accordance with that obligation. As a consequence, there will be
times such as when the Crafton Reservoir is full, or during periods of drought, washouts of the
Crafton Reservoir or tributary streambeds, and/or the necessity of performing reasonable
maintenance and/or repairs of the Zanja's channel and/or related facilities, when the actual
water available to CRAFTON (column M on Exhibit I'D") will not all be placed into the Zanja
but instead some or all will be provided to the Conservation District for groundwater recharge
via the Mill Creek Channel or SBVMWD facilities.
(D) CRAFTON agrees that to comply with its obligations under this
Agreement it will take any Alternate Waters delivered to it through SBv",k4WD facilities at the
highest (farthest east) delivery point feasible (the elevation of the Bouillion Box/the hydraulic
elevation of gradient of Santa Ana No. 3, elev. 2200). rather than through the Unger Line.
(E) Notwithstanding the foregoing provisions of paragraphs 6.01(A)-(D),
REDLANDS and/or CRAFTON shall not be required to act in a fashion that is inconsistent
with or impermissible under the current pro-visions of the Exchange Agreement. In the event
any signatory to the Exchange Agreement exercises its or their rights pursuant to same, with
the result that the entirety of Mill Creek's strearnflow is diverted to locations other than the
Zanja and its East Weir, REDLANDS and the ASSOCIATION shall equally share the
electricity costs (currently 1 c.f.s. = 2 acre feet per 24 hours = $16.001 necessarily incurred in
MCZA-RED/SETLMNT8.RED--070793 14
order to pump not less than 1 c.fs. of Alternate Waters from the hydraulic elevation of the
Bouillion Box to the East Weir, for delivery to CR DN via the Zanja so long as
CR DN Reservoir to accommodate such flow.
(F) REDLAINDS and CR ON, and their successors and/or assigns, agree
to undertake their best efforts to encourage SB MWD to deliver waters to CRA-FTON via the
Zanja from and below the East Weir, when physically and economically possible.
6.02 liaison Committee. The parties agree to form a liaison committee to assist in
the resolution of disputes arising from the operation of REDLANDS' and CRAFTON'S water
systems under this Agreement. This committee shall consist of 3 members of the
ASSOCIATION, to be selected by the ASSOCIATION in a manner such that they may bind
the ASSOCIATION; at least one representative of Redlands familiar with or responsible for
the operation of its water system; ; and at least one representative of CRAFTON familiar with
or responsible for the operation of its system. The committee shall meet upon the call of one
or more of its members whenever any party perceives that the intent and spirit of this
Agreement with regard to water flows in the Zanja has not been met. The liaison committee
must meet and confer on any dispute prior to the submission of any such dispute to arbitration
or mediation as set forth in paragraph 8.01 below.
6.03 Cash Pavment to the ASSOCIATION. In addition to the consideration to be
furnished under paragraph 6.01 hereinabove, RI DLA-N`DS and CR ON shall collectively
remit +the sum of Eighty-Seven Thousand Five Hundred and no/100 Dollars ($87,500.00) to
the ASSOCIATION (care of its legal counsel, G. Greg Aftergood. Esq.) forthwith upon
execution of this Agreement by all parties hereto.
6.04 Qptions for the ASSOCIATION to Ac wire Shares of CRAFTON Stock and,/or
Otherwise Ensure a Flow of Water in the ZqRj4 I 'Mile CRAFTONis Still in
Business and/or Thereafter, The ASSOCIATION shall have the following
options to acquire Shares of CR }N Stock and/or otherwise undertake and implement
MCZA-RED/SETLMNT8.RED--070793 15
activities to ensure a flow of water in the Zanja when CR ON is no longer in business, or
when less than 500 Shares of CRAFTON Stock are still issued and outstanding:
(A) QppL)r�tunit for the ASSOCIATIONtc Acquire Shares of CRAFT ?
Stock. Following execution of this Agreement by the
Parties hereto, on each occasion when Shares of CRAFTON Stock are available for disposition
to RED DS by sale, transfer, assignment or otherwise, the ASSOCIATION (or its
individual members) shall on each such occasion be given an opportunity to acquire all or any
of such shares subject to disposition, as follows:
(1) If the timetable of the disposing party allows, the ASSOCIATION
shall have ten (10) days after having been served with notice that CRAFTON shares have
become or are to become available, to elect to acquire all or any of the shares specified in
such notice, at a price determined in accordance with paragraph 6.04(A)(2) below. Should the
ASSOCIATION elect within such time period to purchase all or any of such shares, then it
shall promptly give written notice of that fact to REDLA.NDS. Should the ASSOCIATION for
any reason fail or refuse to elect to purchase all of the shares so specified in any notice, then,
in such event, the ASSOCIATION's members shall have the right to purchase and allocate
amongst themselves, in any fashion they mutually agree upon, any or all of the CRAFTON
shares which the ASSOCIATION does not wish to acquire, on the terms and conditions and at
the price determined in accordance with this Agreement, so long as such election is made
within the aforementioned ten (10) day period.
(2) The ASSOCIATION (and/or any of its members) shall pay the fair
market value of any shares of CRAFFON water stock subject to disposition under paragraph
6.04(A)(1) above, as determined by negotiated Agreement between the ASSOCIATION/its
members and the disposing party/parties.
(3) If the ASSOCIATION or any of its members elect to purchase the
shares of CRAFFON stock subject to disposition under paragraph 6.04(A)(1) above, the terms
MCZA-RED/SETONTBAED-070793 16
for payment of the purchase price shall be determined by negotiated Agreement of the
disposing party and the ASSOCIATION or its members, as the case may be.
(B) 1rther C titin in pavor cif the ASSClAT1C or ifsto
P`urt hese Shares of C ' Stocl Sulo ect to Ibis dsiti h After cb
Sures have Been Ac aired f In the event
Shares of CRAFTON Stock have become available for disposition to REDLANDS by sale,
transfer, assignment or otherwise, and the ASSOCIATION and/or its individual members have
not been able to consummate- the acquisition of same or any portion thereof) because of the
limited time constraints-imposed under paragraph 6.04(A) above, REDLANDS hereby agrees
to grant the ASSOCIATION (or its individual members) the further option -- exercisable
within one hundred-twenty (120) days of the ASSOCIATION's receipt of notification from
REDLANDS that it has acquired the Shares that were previously available, for disposition -- to
purchase the Shares so acquired by REIN ?NIBS, at the same price paid by DLANDS.
The terms for payment of the purchase price for the shares the ASSOCIATION' (or its
members)-has so elected to acquire shall be full amortization of such purchase price in forty-
eight (48) equal installments of principal and interest, the latter accruing on unpaid principal
at the rate-of ten percent (10%) per annum. The ASSOCIATION, by its duly authorized
officers or the individual members acquiring such shares, as the case may be) shall execute a
promissory note in favor of REIN ISS for the principal sum constituting the purchase price
for such Shares, and such promissory note shall contain provisions for a five percent (5%) late
payment charge, as well as reasonable provisions applicable in the event the ASSOCIATION
(or its members) fail fail to timely remit any of their payments to REDLANDS pursuant to
such note.
605 Any interest(s) subject to disposition pursuant to the provisions of this
Article shall be conveyed via a qualified, licensed Escrow holder to be specified by mutual
agreement of the parties hereto. The provisions hereof shall constitute joint instructions to the
Escrow holder, subject to such additional instructions as are requested by the Escrow holder
which are not inconsistent with the provisions hereof. The close of Escrow shall be not less
MCZA-RED/SETLMNT8.RE0--070 M 17
than thirty (30), nor more than sixty (60) days following the Value Date, absent unanimous
agreement of the parties to a different closing date,
6.06 Protection andUnder 11iis
Agreement. REDLANDS and CRAFTON hereby agree that they will undertake
their best efforts, acknowledging the duties of good faith and fair dealing required of them
pursuant to the express and implied provisions of this Agreement, to sustain and provide a
Continued Flow of Waters in the Zanja. REDLANDS and CRAFTON further agree that they
will at all times exercise their contractual rights as members of the Exchange Agreement in a
fashion consistent with sustaining such flow to the maximum extent reasonably possible, The
parties hereto acknowledge and agree that notwithstanding the foregoing, REDLANDS and
CRAFTON shall not be obligated to take any steps or undertake any course of action that
would be inconsistent with, unlawful under, or violate the terms and conditions of the
Exchange Agreement, as it is presently drafted, or place REDLAINDS and/or CRAFTON in a
position that their conduct is violative of applicable law.
AR'T'ICLE VII — MAMMNANCE OF AND ACCESS TO
THE ZANJAS CHANNEL
7.01 Access to REDLANDS, CRAFTON, and
their representatives and agents, shall have reasonable access to the Zanja's channel to inspect
the condition of same, and to undertake periodic maintenance which will not materiallN, alter
or change the present appearance or character of the Zanja. . The ASSOCIATION and its
members agree to fully cooperate with REDLANDS and CRAFTON in their efforts to gain
access to the Zanja for the purpose of conducting periodic inspection and maintenance of
same, and removing fallen trees or other unsafe or impermissible conditions. Notwithstanding
the foregoing, this Agreement shall not be interpreted or construed, under the ostensible
auspices of conducting "maintenance" of the channel, to permit or entitle REDLANDS andJor
CRAFTON to significantly alter or change the appearance or character of the Zanja, or its
ability to provide percolation and/or irrigation of the trees and vegetation along its reach.
Furthermore, the inspection and/or maintenance rights afforded under this paragraph shall not
MCZA-RED/SETLMNT8.RED--070793 18
be construed or interpreted as abrogating or affecting any ownership rights or interests of the
ASSOCIATION's members in their respective parcels of real property.
7.02 Permissible !MMPEQYmeats to the n"a's "ha.nnel. Notwithstanding the
provisions of paragraph 7.01 hereinabove, the parties hereto agree that the ASSOCIATION's
members shall be allowed to maintain their various "rock-falls" along the Zanja's course, which
merely serve to enhance the appearance and sound of the Zanja. The ASSOCIATION's
members shall not, however, be allowed to construct diversionary dams, or install pumping or
any other mechanical apparatus, that would serve to diminish the flow of waters in the Zanja
below the East Weir. Representatives of the parties hereto shall, prior to or contemporaneous
with their execution of this Agreement, undertake to walk the Zanja's entire reach between
the East Weir and the West Weir, to document the current features of the Zanja's channel,
and identify any potential access obstructions such as gates and fences, or inappropriate
diversionary devices or apparatus.
ARTICLE V111 — ENFORCEMENT OF AGREEMENT
8.01 Remedies For Breach. The parties hereto agree that any arbitrator(s) or trier(s)
of fact chosen or appointed to hear and determine disputes involving the interpretation or
enforcement of any of the terms or conditions of this Agreement shall have the authority to
grant equitable relief, including but not limited to the remedy of specific performance, as well
as all other remedies at law which might otherwise be available, and any act or conduct that
sloes not comply with the terms and conditions of this Agreement may also be specifically
restrained to the extent deemed appropriate by such arbitrator(s) or trierts) of fact.
8.02 ArbitrationlMediation. If any controversy or claim between the parties shall be
commenced with respect to any of the terms or conditions of this Agreement, such controversy
or claim shall be decided by arbitration. The parties will Jointly agree on the selection of one
or more arbitrator(s) to bear disputes in a single arbitration (deter-mining all disputes and
MCZA-RED/SETLMNT8.RED--070793 19
controversies then existing between the parties); and in the absence of agreement as to the
arbitrator(s) to be appointed, a court of competent jurisdiction may be petitioned to appoint
same . Thereafter, the arbitration will proceed pursuant to the Rules of Arbitration as set
forth in the California Code of Civil Procedure §§1280 et seq., and Rules of Court §§1600 et
seq. The findings and decisions of the arbitrator(s) shall be subject to review by a court of
competent Jurisdiction, pursuant to its mandamus authority as defined and described in Code
of Civil Procedure §§1984 et seq. Notwithstanding the foregoing, the parties may also elect to
attempt to resolve any such disputes by way of mediation, before one or more mutually
agreeable mediators. To further the purposes of this Agreement more particularly described
at paragraph 1.02 above, the parties may also utilize mediation for the purpose of determining
whether,, in light of then prevailing facts and/or circumstances, any other avenue besides the
provisions set forth at paragraph 6.04(A) and (B) above can reasonably be utilized to
implement a minimum of 2 U.s. of flow into the Zanja at the highest (furthest east) delivery
point feasible (i.e. the elevation of the bullion box/the hydraulic elevation of gradient of Santa
Ana No. 3, elev. 2200), with not less than I c.f. . being pumped from such hydraulic elevation
to the East Weir.
8.03 Attorney's Fees. If any party hereto shall commence any legal proceedings
against any other party hereto with respect to any of the terms and/or conditions of this
Agreement, or to declare or enforce rights hereunder, the non-prevailing party shall pay to the
prevailing party all expenses of such litigation, including a reasonable attorney's fee as may be
fixed by a court having jurisdiction over the matter.
8.04 Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at law or in
equity.
ARTICLE IX — MLSCEUANEOUS PRC) IONS
9.01 Entire Agreement. This Agreement, including all exhibits attached hereto,
contains the entire understanding of the parties hereto, and supersedes all prior negotiations,
MCZA-RED/SETLMNT8.RED--070793 20
representations, or agreements between them, whether written or oral, concerning the subject
matter hereof. Correspondence, memoranda, and oral or written agreements which
originated before the date of this Agreement are deemed completely superseded and replaced
by this Agreement unless otherwise expressly stated to the contrary herein.
9.02 Amendments. No modification or amendment of the provisions of this
Agreement, or statement or representation in connection herewith, shall be effective or
binding upon any of the parties hereto unless the same is reduced to a writing approved and
executed by all parties hereto, and designated as an amendment to this Agreement. If any
conflict arises between the provisions hereof (or this Agreement as amended from time to
time), and any subsequent amendment, the most recent provisions shall control.
9.03 Exbj*bits. The following exhibits, and any other agreements or documents
referred to in this Agreement as being attached hereto, if any, are incorporated in this
Agreement in their entirety by this reference, as though fully set forth at length:
Exhibit "A" Map of "Upper Zanja Area".
Exhibit "B" Hinkley and Tate Service Areas.
Exhibit "C" Names and addresses of affected property owners/legal
descriptions of affected properties.
Exhibit "D" Mill Creek Flow Distribution January 1986-December 1992.
9.04 Non-Waiver of Performance. The failure of any party to take action Or insist on
strict performance of any covenant or obligation required by this Agreement, or to pursue any
remedy provided for herein, shall not be deemed a waiver of the breach or remedy, nor shall
any custom or practice which may evolve between the parties in the course of implementing
this Agreement be construed as waiving or lessening the right of the party to insist upon the
performance of any term, covenant or condition hereof. A waiver of a particular breach or
default shall not be deemed to be a waiver of the same or any other subsequent breach or
default.
MCZA-RED/SETLMNT8.RED--070793 21
9.05 Further Acts and Instruments. The parties hereto shall, from time to time,
perform any and all acts and execute and deliver such further instruments as reasonably may
be required to fully effectuate the provisions and intent of this Agreement.
9.06 CounjgWarts. This Agreement may be executed in two or more counterparts
which shall, in the aggregate, be signed by all parties; each counterpart shall be deemed an
original instrument as against any party who has signed it.
9.07 Successors. All the terms, covenants, representations, provisions and conditions
hereof shall be binding upon and inure to the benefit of the heirs, executors, administrators,
personal representatives, successors, and assigns of the parties hereto.
9.08 Notices. Any notices to be given hereunder by any party to any other party,
shall be in writing and may be effected by personal delivery or by registered or certified mail,
postage prepaid, with return receipt requested. Mail notices shall be addressed as follows:
TO: ADDRESS:
ASSOCIATION Mill Creek Zanja Owners Association
c/o Richard Gambino, President
2792 Mill Creek Road
Mentone, California 92359
With Courtesy Copy To:
Law Offices of G. Greg Aftergood
15915 Ventura Boulevard
Penthouse 1
Encino, California 91436
REDLANDS City Clerk
City of Redlands
30 Cajon Street
P.O. Box 3005
Redlands, California 92373
MCZ1A-RED/SETLMNT8.RED--070793 22
With Courtesy Copy To:
Meredith Jury, Esq.
Best, Best & Krieger
800 North Haven
P.O. Box 4360
Ontario, California 91761
CRAFTON Crafton Water Company
P.O. Box 842
Redlands, California 92373
With Courtesy Copy To:
Dennis Popka, Esq.
Macl-aughlin, Burford & Arias
150 W. 5th Street, Suite 103
San Bernardino, California 92402
Any party hereto may change his address by giving written notice to every other party in
accordance with the terms of this paragraph. Notices delivered personally shall be deemed
communicated as of the date of actual receipt: notices delivered by mail shall be deemed
communicated as of the date of the first attempted delivery thereof by the United States Post
Office.
9.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
9.10 Partial Invalidity. If any provision of this Agreement, as applied to any party or
to any circumstance, shall be found by a Court of competent jurisdiction to be void, invalid or
unenforceable, the same shall in no way affect, impair or invalidate any
other provision of this Agreement, or the application of any such provision in any other
circumstance, or the validity or enforceability of this Agreement; and any provision found to
I
be void, invalid or unenforceable shall be curtailed and limited only to the extent necessary to
bring such provision within the requirements of applicable law.
MCZA-RED/SETLMNT8.RED--070793 23
9.11 Representations and Warranties.
(A) Each party hereto acknowledges that they have thoroughly read this
Agreement, fully understand the same, and have received or have had an opportunity to
receive independent legal advice from attorneys of their own choice with respect to the
advisability of entering into this Agreement, and the rights and obligations hereby created.
Each party enters into this Agreement knowingly and voluntarily, in consideration of the
promises, obligations and rights set forth herein.
(B) Each party, and his, her or its attorneys, have made such investigations of
the subject matter hereof, and all matters pertaining thereto, as they deem necessary; and in
executing this Agreement, no party is relying upon any statement, representation or promise
made by any other party that is not explicitly set forth herein, and each party further
recognizes and agrees that for the purposes of this Agreement, no attorney representing any
party hereto has undertaken any duty to disclose any facts or knowledge had or possessed by
said attorney.
9.12 Jgjft Drafted. This Agreement has been jointly drafted by the parties hereto,
and shall be interpreted fairly and simply, and not strictly for or against any of the parties.
9.13 Negative Covenants. To the extent any party has agreed herein not to do any
act or omission, he shall be deemed to have agreed not to do the act or omission directly or
indirectly,
9.14 Captions. The paragraph captions of this Agreement are solely for the
convenience of the parties hereto; such captions are not to be deemed a part hereof, and they
shall not be used for the interpretation or construction of any provision of this Agreement.
9.15 Ap1hori
U to Execute. Each person executing this Agreement represents and
warrants that he or she has been fully empowered and authorized to execute this Agreement,
and that all necessary action for the execution of this Agreement has been taken.
MCZA-RED/SETLMNT8,RED--070793 24
9.16 Gender. As used in this Agreement, the masculine, feminine, or neuter gender,
and the singular or plural number, shall each be allowed to include the others whenever the
context so indicates.
9.17 Cross-References. All cross-references in this Agreement, unless otherwise
specifically directed to another agreement or document, refer solely to provisions of this
Agreement (exclusive of Exhibits), and not to any other agreement or document.
.If Survival of Terms and Conditions. The terms and conditions hereof, and all
representations, covenants, and agreements made herein, shall survive the execution of this
Agreement and the closing of the escrows and/or transactions referred to at Article VI hereof.
and same shall not be deemed to have merged or terminated upon any such closing.
IN' WrIWESS WHEREOF, the parties hereto have executed this Agreement effective
as of the date first above written.
AGREED AS TO FORM AND CONTENT
BEST, BEST& KRIEGER CITY OF RE AN
By:
ME EDITH JURY, E HA S M
Attomeys for CITY GFR S
Y cc>
AGREED AS TO FORM AND CONTENT
MACLAUGHLIN, BURFORD & ARIAS CRAFTON WATER Co.
By: By: -
DENNIS POPKA_ ESQ. E.D. PATTER ON, JR., PRESIDENT
Attorneys for CRAFTON WATER CO.
By:
JUANITA HILTGEN. SECRETARY
MCZA-RED/SETLMNT8.RED--070793 25
AGREED AS TO FORM AND CONTENT
LAW OFFICES OF G. GREG ERGOOD MILL CREEK ZANJA ASSOCIATION
IC HARD J. GAMBINO, PRESIDENT
GREG G ITER ID, ESC .
Ott rneys for MILL CREEK ZANJA
ASSOCIATION
MCZA-RED/SETLMNT8.RE0--0MM 26
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4
Exhibit "A" `
STATE OF CALIFORNIA )
� ss.
COUNTY OF k 1 V&-jW I ? }
On u�� _ , 1993, before me, the undersigned notary public,
personally appeared 2. r j t� l personally known to me OR ❑
proved to me on the basis of satisfactory eiViden& to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the
same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s) acted, executed
the instrument.
_
WITNESS my hand and official seal. OFMAUI.AD BICKM
• NOTARYPU&uc-ca.Fa
r-1 NVERn
My Cw n.ExWs Feb.15.1994
fgnature of Notary
STATE OF CALIFORNIA }
} SS.
COUNTY OF }
On 1993, before me, the undersigned notary public,
personally appeared ❑ personally known to me OR ❑
proved to me on the basis of satisfactory evidence to be the person(s)whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the
same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s) acted, executed
the instrument.
WITNESS my hand and official seal.
Signature of Notary
14AJ29364
ALL PURPOSE ACKNOWLEDGMENT
State of California
County of San Bernardino ) SS
City of Redlands
On June 29, 1993, before me, Lorrie Poyzer, City Clerk of the City of Redlands,
California, personally appeared Charles G. DeMidyn {xj personally known to me -- OR -- { }
proved to me on the basis of satisfactory evidence to be the person whose name is subscribed
to the within instrument and acknowledged to me that he executed the same in his authorized
capacity and that by his signature on the instrument the person, or entity upon behalf of which
the person acted, executed the instrument,
(SEAL) WITNESS my hand and official seal.
Lorne y r, Cil
I rk
City a Redlands,91fornia
CAPACITY CLAIMED BY SIGNER(S)
Individual(s) signing for oneself/themselves
Corporate Officer(s)
Title(s)
Company
Partner(s)
Partnership
Attorney-In-Fact
Principal(s)
Trustee(s)
Trust
x Other
Title: Mayor
Entity Represented: City of Redlands
Title or type of document: Agreement and Declaration of Covenant ,
This certificate Conditions and Restrictions Running with the Land
must be attached Number of Pages: 29 (including this page)
to the document Date of Document: July 29, 1993
described at right: Signers other than named above: Meredith Jury, Esquire;
Maclaughlin, Burford & Arias; Crafton Water Company; G. Greg
Aftergood, Esquire; and Mill Creek Zanja Association