HomeMy WebLinkAboutContracts & Agreements_29-2003_CCv0001.pdf AGREEMENT
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This Agreement is made and entered into this day of January, 2003,1 y and between
the City of Redlands, a municipal corporation (hereinafter "City") and Lockheed Martin
Corporation. a Maryland corporation(hereinafter "Lockheed").
RECITALS
WHEREAS, on February 1, 2000, the City and Lockheed entered into a settlement agreement
whereby the City agreed that prior to incurring future costs, fees or other expenditures arising out
of or relating to the City undertaking efforts to ensure a continuous source of drinking water to its
customers as a result of or in connection with the migration of a trichloroethylene or perchlorate
plume,the City would confer with Lockheed; and
WHEREAS, the City has since informed Lockheed that the City's wells located at Texas Street
("Texan Street Wellfield") have been significantly impacted by perchlorate resulting in water
supply losses and requiring the City to find alternative sources of water supply to meet the
drinking water needs of its citizens; and
WHEREAS,the City has also informed Lockheed of the City's intent to develop a wellfield North
of the Santa Ana River, near Change Street ("the North Orange Wellfield"), to mitigate on a
capacity-for-capacity basis its water supply losses at the Texas Street Wellfield; and
WHEREAS, Lockheed has agreed to pay the City Three Million Eight hundred Fifty Thousand
($3,550,000) Dollars to design, permit and construct wells and develop a new water supply from
the North Orange Wellfield on the terms and conditions hereinafter set forth; and
WHEREAS,rather than requesting Lockheed to replace the Texas Street Wellfield water supply,
on a capacity-for-capacity basis, the City is assuming the risk that the development of its North
Orange Wellfield might not replace the City's water supply losses at its Texas Street Wellfield;
and
NOW, THEREFORE, in consideration of the mutual promises contained herein, and for other
good and valuable consideration the receipt of which is hereby acknowledged, the City of
Redlands and Lockheed Martin Corporation agree as follows:
Section 1. Payment. Lockheed shall, within 30 days of the City's execution of this
Agreement, tender payment in the form of a wire transfer to the City in the amount of Three
Million Eight Hundred Fifty Thousand($3,850;000)Dollars.
Section 2. Use of Funds. The City intends to use the funds obtained from Lockheed
pursuant to this Agreement to acquire land. and design and construct wells and associated
pipelines to replace, capacity for capacity, the City's water supply losses at its Texas Street
Wellfield.
Section 3. Indemnification. The City agrees to indemnify and hold harmless Lockheed
against any claims relating to the use of the monies referred to in paragraph l above.
Section 4. Successors. This Agreement shall be binding upon and inure to the benefit of the
successors,representatives and assigns of the City and Lockheed.
Section 5. Choice of Law. This Agreement was negotiated and entered into in the State of
California, and shall be governed by, construed and enforced in accordance with the laws of the
State of California.
Section 6. No Admission of Liability. Pursuant to California Evidence Code sections 1152
and 1154, nothing in this Agreement is intended as, shall constitute or shall be used or admitted
as evidence of any admission by Lockheed of any fact recited in this Agreement, the validity of
any claim, or liability for any damages, comparative or proportionate liability or fault. Lockheed
denies that it is liable to City for any of the claims that have been asserted or that may be asserted
by the City or anyone else with regard to the source or extent of perchlorate contamination.
Section 7. Release. The City hereby releases Lockheed [its predecessors, successors,
affiliates, parents, subsidiaries, and their respective officers, directors, shareholders, employees,
agents and representatives] from any and all claims, demands, causes of actions, damages, costs,
J udgments and liability of any nature on account of, with respect to, or in any way connected with
or arising from the City's loss of water supply from the Texas Street W ellfield.
Section 8. Authorship. This Agreement is the product of arms-length negotiations carried
on between the parties and their respective counsel_ As a jointly produced agreement, this
Agreement shall be construed as a whole according to its fair meaning and not for or against any
party hereto.
Section 9. Amendments. This Agreement may not be amended except in a written
agreement executed by the parties hereto.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first set forth above.
CITY OF REDLANDS LOCKHEED MARI,CORPORAN
By � .
Mayor of the City of Redlands � � �
Attest:
Cid Clerk
Office of the Daniel J.McHugh,Esq.
City Attorney
City Attorney Leslie E. Murad, 11,Esq.
City of Redlands Assistant City Attorney
ATTORNEY-CLIENT PRIVILEGED
CONFIDENTIAL MEMORANDUM
TO: LORRIE POYZER
FROM: CITY ATTORNEY
DATE: 5 FEBRUARY 2003
RE: SETTLEMENT OF LOCKHEED POTENTIAL LAWSUIT
Lomie,the City Council has had a number of discussions in closed session under"anticipated
litigation"about whether to institute a lawsuit against the Lockheed Martin Corporation. As a result
of those discussions,and direction given to the Municipal Utilities Department and City Attorney's
Office, a settlement agreement was offered to Lockheed. Doug Headrick has just told me that
Lockheed has agreed to the City's settlement proposal and has signed the settlement agreement.
The settlement will result in approximately$3.8 million dollars being delivered immediately
to the City. Because the City Council has approved this matter, in my opinion,there is no problem
with the appropriate City official, be it the Mayor or another City Councilmember, signing the
agreement. Then, in accordance with our standard practice, we will announce the settlement in
accordance with the terms of the Brown Act. That would be done on the consent calendar in the
format that we commonly employ for making these announcements.
My understanding is that there is a question about the timing of your attestation of the
agreement. I think you have two options. You can attest to the agreement now, or wait until after
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the City Council announces the settlement agreement. The timing of your attestation will not affect
the validity of the agreement.
The Municipal Utilities Department asked me whether I saw any legal problem with having
a Councilmernber sign now, and then making the Brown Act announcement on the 18th. Again, I
see no problem with this procedure because the settlement agreement executed by Lockheed is in
101te%,j)d
P.O.Box 3005,Redlands,CA 92373-1505 (909)798-7595 FAX(909)798-7503
the same form that was presented to Lockheed and approved by the City Council in closed session.
Now that Lock-heed has agreed, there is no further "action" to be taken by the City Council.
If you have any questions, please let me know.
DANIEL J. MCHUGH
cc: John Davidson
Gary Phelps
Doug Headrick
101 le.v�vd 2