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17-1017_COTTON, JEFFREY AND SHANNON_Amendment to Settlement AgreementAMENDMENT TO SETTLEMENT, MUTUAL RELEASE AND WELL SHARING AGREEMENT This Amendment to Settlement, Mutual Release and Well Sharing Agreement ("Amendment") is made, and is effective as of the date executed by all Parties, by and between Jeffrey Cotton and Shannon Cotton, as trustees of the Cotton Family Trust dated September 9, 2002 (collectively, "Cottons") and the City of San Juan Capistrano, a public municipality ("City") (collectively, the "Parties") with reference to the following facts: RECITALS A. On or about September 27, 2016, the City and the Cottons entered into the Settlement, Mutual Release and Well Sharing Agreement fully and finally resolving litigation pending in the Orange County Superior Court (Case No. 30 -2015 -00778655 -CU -BC -JC) ("Litigation") between the Cottons and the City ("Agreement"). B. Unless otherwise expressly defined herein, all defined terms shall have the same meaning as provided in the Agreement. The Agreement is attached hereto as Exhibit A and incorporated herein by this reference. C. Among other things, the Agreement provides for the City's shared use of the Blenheim Well and Blenheim Water Delivery System, which well and water delivery system are owned and operated by the Cottons and located on the Cotton Property, in exchange for the City's Monthly Payment to the Cottons. Water produced from the Blenheim Well is used for the benefit of the Cottons and the City's Riding Property and any tenants or operators of the Riding Property. This arrangement is mutually beneficial to both the Cottons and the City. D. The Parties now desire to provide for the City's long-term shared use of the Blenheim Well and Blenheim Water Delivery System as provided in this Amendment. AGREEMENT NOW, THEREFORE, in consideration of the foregoing recitals which are incorporated into the operative provisions of this Amendment by this reference, and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows: 1. A new Section 4.3 is added as follows: Section 4.3 If at any time the Blenheim Well or the Blenheim Water Delivery System fails to permit the City's shared use of the Blenheim Well and Blenheim Water Delivery System for the benefit of the Riding Property as intended by this Agreement ("Well Failure"), the City shall give written notice of the Well Failure to the Cottons ("Notice of Failure"). Within seven (7) days of the Cottons' receipt of the City's Notice of Failure, the Parties shall meet and Page 1 of 3 15826689 confer to determine the cause of the Well Failure, whether and to what extent repairs may be undertaken to remedy the Well Failure, and the associated costs of such repairs. The Parties may, but shall have no obligation to, make and fund the repairs necessary to permit continued operation of the Blenheim Well and Blenheim Water Delivery System for the benefit of the Parties. In the event the Parties do not agree to repair the Well Failure, as necessary to permit the City's continued shared use of the Blenheim Well and Blenheim Delivery System, Sections 4 and 5 of the Agreement shall terminate, as provided in Section 6.2 of this Agreement. 2. A new Section 4.4 is added as follows: Section 4.4 No later than thirty (30) days prior to the second anniversary of this Agreement, which date is two (2) years following the Effective Date, the Parties shall meet and confer to determine whether the Monthly Payment for the subsequent two (2) years should increase or decrease. Thereafter, every two (2) years, the Parties shall meet and confer for this same purpose. In the event the Parties do not agree to modify the Monthly Payment, the Monthly Payment shall remain the same. 3. A new Section 5.3 is added as follows: Section 5.3 If at any time the tenants or operators of the Riding Property cease to reimburse the Cottons for the actual electrical utility costs (at a minimum of $3,300 per month) attributable to operation of the Blenheim Well for the benefit of the Riding Property ("Energy Costs"), and neither Party has given notice of its right to Partial Termination from this Agreement pursuant to Section 6.2, the City shall be responsible for both the City's Monthly Payment, as provided in Section 5.2, and the Energy Costs, on a monthly basis. Annually, the minimum Energy Costs shall increase by an amount corresponding to increases in applicable tariff electrical utility rates in the south Orange County area. At the City's election, the City, or the tenants or operators of the Riding Property, acting on behalf of the City, may pay both the Monthly Payment and the Energy Costs in a single monthly payment to the Cottons. Except as the Parties may otherwise agree pursuant to Section 4.3, the City shall not be responsible for any costs in excess of the Monthly Payment and the Energy Costs, on a monthly basis, including but not limited to any costs associated with the use, operation, maintenance, repair or replacement of the Blenheim Well or Blenheim Water Delivery System. 4. Section 6.2 of the Agreement is amended in its entirety to state as follows: 6.2 Partial Termination. In its sole and absolute discretion, either Party may terminate Sections 4 and 5 of this Agreement ("Partial Termination") upon one hundred and eighty (180) days written notice to the other Party, which Partial Termination takes effect at the expiration of such notice period. Partial Termination shall also occur if there is a Well Failure and the Parties do not agree to repair it pursuant to Section 4.3, in which case Partial Termination shall take effect thirty (30) days following the Cottons' receipt of the City's Notice of Failure. 5. Section 6.4 of the Agreement is deleted in its entirety. 6. Except as amended above, each and every provision of the Agreement, inclusive of all Exhibits, shall remain in full force and effect without change or modification. Page 2 of 3 15826689 IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date first above written. City of San Juan Capistrano Cottons City of San Juan Capistrano, a public municipality 1582UBD 3l �2at-� effrey Cotton, as trustee of the Cotton Family Trust dated September 9, 2002 Shannon Cotton, as trustee of the Cotton Family Trust dated September 9, 2002 Page 3 of 3