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
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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.
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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
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