SETTLEMENT AGREEMENT AND RELEASE OF ALL CLAIMS
This Settlement Agreement and Release of All Claims
("Agreement") is entered into by Plaintiff Board of Water Supply
of the County of Maui ("Plaintiff"), on the one hand, and The Dow
Chemical Company, Occidental Chemical Corporation, successor-in-
interest to Occidental Chemical Company, Occidental Petroleum
Corporation, Shell Oil Company, individually and dba Shell
Chemical Company, AMVAC Chemical Corporation, American Vanguard
Corporation, Brewer Environmental Industries LLC, Maui Pineapple
Company, Ltd. and Maui Land and Pineapple Company, Inc.
(collectively "Defendants"), on the other hand.
RECITALS
Case Name:
1. There is now pending in the Second Circuit Court of the
State of Hawaii a civil action entitled "Board of Water Supply of
the County of Maui v. Shell Oil Company, et al.," Civil Case No.
96-0370(1) (the "Action").
Intent:
2. Plaintiff and Defendants have entered into this
Agreement to resolve with finality the Action, as well as
all past, pending, potential, continuing and future DBCP claims
between them and to avoid the expense of further litigation.
3. In consideration for this Agreement, Defendants agree to
pay as tort damages $3,000,000 in settlement of the Action,
consisting of the sums of $1,791,231 for the capital cost of GAC
facilities for the Napili A well, $404,769 for certain past DBCP
related costs, and $804,000 for the cost of the Hamakuapoko 1999
Drought Emergency GAC facility. Defendants also agree (subject
to certain limitations) to pay certain sums for the installation
and operation of carbon filtration systems (hereinafter "GAC") or
alternative remedies to assist Plaintiff in complying with the
Maximum Contaminant Level ("MCL") for DBCP on the Island of Maui
until September 1, 2039 (a period of forty (40) years).
DEFINITIONS
4. The following definitions apply throughout this Agreement:
a. "Defendants", as the term is used throughout
this Agreement, refers collectively to defendants The Dow Chemical
Company, Occidental Chemical Corporation, successor- in-interest to
Occidental Chemical Company, Occidental Petroleum Corporation, Shell Oil
Company, individually and dba Shell Chemical Company, AMVAC
Chemical Corporation, American Vanguard Corporation, and Brewer
Environmental Industries, LLC, and third-party defendants Maui
Land and Pineapple Company, Inc., and Maui Pineapple Company,
Ltd. and each of them, and all of their predecessors and
successors, their current and former parent and subsidiary
companies, divisions and affiliates.
b. "DBCP" refers to 1,2-dibromo-3-chloropropane,
and all products containing said compound, including, without limitation,
Dow "Fumazone," Occidental "BBC" and "DBCP," Nematocide Granules 50,
Nematocide 12.1 EM, Nematocide 15.1 EM , Nematocide Solution 17.1
and Shell "Nemagon".
c. The term "Maximum Contaminant Level" or "MCL"
refers to a limit concerning the concentration of DBCP in drinking water
supplies enforced by a public agency which applies to Plaintiff.
At present, the MCL for DBCP enforced by the Hawaii Department of
Health ("DOH") is 40 parts per trillion (ppt), or 0.04 parts per
billion (ppb). The parties anticipate that during the period
covered by this Agreement the name of the governmental entity
enforcing the MCL, the numerical limit, and/or the terminology
used to describe the limit may change. This Agreement is intended
to secure compliance with whatever MCL is applicable and
enforceable at the relevant time during the term of this
Agreement.
d. The terms "Exceeds the MCL" or "Exceeded the
MCL" refer to a potential situation where either: (1) Plaintiff's
well exceeds the MCL for DBCP when tested for the applicable regulatory
period; (2) a regulatory authority directs Plaintiff to stop
using a well or refrain from connecting a well to its water
system unless Plaintiff remediates DBCP in the well; or (3) the
well is tested quarterly and the total of such quarterly test
results exceeds the applicable MCL when divided by four (4).
e. "CPI" refers to the Consumer Price Index, all
urban consumers, water and sewerage maintenance, issued by the
U.S. Bureau of Labor Statistics, or its successor, as adjusted
for projects in Hawaii.
f. (i) "Napili A" refers to Plaintiff's well, Hawaii
State No. 5838-01.
(ii) "Honokahua A" refers to Plaintiff's well,
State No. 5838-03.
(iii) "Hamakuapoko 1" refers to Plaintiff's well,
State No. 5420-02.
(iv) "Hamakuapoko 2" refers to Plaintiff's well,
State No. 5320-01.
(v) "Haiku well" refers to Plaintiff's well, State
No. 5419-01.
g. "Existing Wells" refers to all wells on the
Island of Maui which were drilled, owned, and/or operated by
Plaintiff before the effective date of this Agreement.
h. "Hamakuapoko 1999 Drought Emergency GAC" refers
to the temporary installation of GAC on Hamakuapoko Wells Nos. 1
and 2 during the 1999 Upcountry Drought Emergency.
i. "Future Wells" refers to drinking water wells
on the Island of Maui, which are drilled and/or acquired by
Plaintiff after the effective date of this Agreement.
j. The term "GAC" refers to granular activated
carbon facilities for removal of DBCP from water.
k. The term "O&M" refers to the cost of operation
and maintenance of GAC or other method used to remove DBCP from water,
including, but not limited to, vessel replacement due to age and/or
wear and tear.
l. "Regularly Scheduled Well Test" currently means
a quarterly raw water analysis conducted by or on behalf of
Plaintiff, or for such other period as may be required by any
state or federal law or regulator.
m. The term "Regular Use" means a Plaintiff well
that has a utilization rate of 10% or more, averaged over a year
where water from the well is introduced into the water
distribution system.
n. The term "In Operation" refers to that period of
time (measured in days) when GAC is installed on an active
Plaintiff well and: (1) it is actually removing DBCP from the
water; (2) it is not removing DBCP because the well on which it
is installed is not pumping due to regular water demand
fluctuations; or (3) it is undergoing ordinary maintenance or
carbon change-out.
o. "Defendants' Representative" refers to the law
firm of Filice, Brown, Eassa & McLeod, LLP, 1999 Harrison Street,
18th Floor, Oakland, California 94612-3541, or such other
successor, person or entity designated by Defendants in the
future.
p. "Plaintiff's Representatives" refers to the
Corporation Counsel, County of Maui, 200 South High Street,
Wailuku, Maui, Hawaii, and Miller, Sher & Sawyer, A Professional
Corporation, 7 Park Center, Suite 1, Sacramento, California
95825, or such other successor, person or entity designated by
Plaintiff in the future.
q. The term "Notice to Proceed" refers to a notice
from Plaintiff to a contractor to construct a GAC facility, or
alternative technology facility.
r. "DOH" refers to the Hawaii Department of Health or any
successor entity charged by the State of Hawaii with regulating water quality.
s. "Event of Default" refers to any of the following events:
(i) under the terms of paragraph 46, Defendants fail to pay
Capital
Costs within 30 days of receiving a Notice to
Proceed;
(ii) under the terms of Paragraph 47, Defendants fail to make a
timely payment for O&M Costs;
(iii)under the terms of Paragraph 48, Defendants fail to
provide a replacement Letter of Credit.
GENERAL SUMMARY OF TERMS OF AGREEMENT
5. As more specifically described below, in consideration
for this Agreement:
Past and Present Costs
6. On or before September 1, 1999, Defendants will make a
cash payment as tort damages to Plaintiff and its attorneys of
record, "Miller, Sher & Sawyer, a professional corporation," in
the amount of Three Million Dollars ($3,000,000), provided
Plaintiff has executed this Agreement. This represents a total
of $1,791,231 for the capital cost of GAC facilities for the
Napili A well, $804,000 for the cost of the Hamakuapoko 1999
Drought Emergency GAC, and $404,769 for other past DBCP-related
costs.
7. Third-party defendant, Maui Land and Pineapple
Company hereby releases any claim for past transfers of land to
Plaintiff in West Maui. Plaintiff will participate in separate
negotiations with Maui Land and Pineapple Company to install,
operate and maintain a 2.5 inch high density polyethylene (HDPE)
pipeline, or its equivalent, and appurtenances, across Maui Land
and Pineapple Company land, to connect with the nearest
connection to Plaintiff's water system in the Honokahou Valley.
Capital Costs of GAC Facilities For Certain Wells
8. It is anticipated that during the term of this
Agreement the concentration of DBCP in the Hamakuapoko 1 and 2,
Honokahua A and Haiku wells may Exceed the MCL. Defendants will
reimburse Plaintiff during the term of this Agreement for 100% of
the capital costs of GAC for each such Well that Exceeds the MCL.
Defendants have agreed to make specified payments, as set forth
in subparagraphs (i) through (iv), to defray the expense of
installing GAC on these wells.
i. Defendants shall pay 100% of the sum of One
Million Eight Hundred Thousand Dollars ($1,800,000) for wells
that can be treated with two (2) GAC vessels (that is, a well
with a yield of 750 gallons per minute ("gpm") or less);
ii. Defendants shall pay 100% of the sum of
$2,400,000 for well(s) which can be treated with three GAC
vessels (that is, well(s) with a yield of more than 750 gpm and
less than 1,500 gpm);
iii. Defendants shall pay 100% of the sum of
$600,000 for each additional 750 gpm of yield in a well at or
above 1,500 gpm, in addition to the base amount of $2.4 million;
iv. Defendants' obligations to pay capital costs under
this paragraph shall be reduced by $100,000 for wells with no
pump or a non oil-lubed pump;
v. Capital costs to be paid under this Agreement
after January 1, 2000 shall be adjusted by the CPI annually,
pursuant to Paragraph No. 29 (CPI Adjustment).
Capital Costs of GAC Facilities For Other Wells
9. It is anticipated during the term of this Agreement
that the concentration of DBCP in some other Existing and Future
Wells may Exceed the MCL. Defendants will reimburse Plaintiff
during the term of this Agreement for the capital costs of GAC
for each other Existing and Future Well that Exceeds the MCL.
Defendants have agreed to make specified payments, as set forth
in subparagraphs (i) through (iv), to defray the expense of
installing GAC on these wells.
i. Defendants shall pay 90% of the sum of One Million
Eight Hundred Thousand Dollars ($1,800,000) for wells that can be
treated with two (2) GAC vessels (that is, a well with a yield of
750 gallons per minute ("gpm") or less);
ii. Defendants shall pay 90% of the sum of
$2,400,000 for well(s) which can be treated with three GAC
vessels (that is, well(s) with a yield of more than 750 gpm and
less than 1,500 gpm);
iii. Defendants shall pay 90% of the sum of
$600,000 for each additional 750 gpm of well capacity at or above
1,500 gpm, in addition to the base amount of $2.4 million;
iv. Defendants' obligations to pay capital costs under
this paragraph shall be reduced by $100,000 for all future wells
and existing wells with no pump or a non oil- lubed pump;
v. Capital costs to be paid under this Agreement
after January 1, 2000 shall be adjusted by the CPI annually,
pursuant to Paragraph No. 29 (CPI Adjustment).
Reimbursement For Operations and Maintenance ("O&M") Of GAC
10. Defendants will reimburse Plaintiff during the term
of this Agreement for O&M of GAC for each Plaintiff well that
Exceeds the MCL as follows: Napili A, Honokahua A, Hamakuapoko 1
and 2, and the Haiku Wells shall each qualify for 100% of O&M at
the annual rate of $68,500 for a two-vessel facility, $74,500 for
a three-vessel facility, and an additional $6,000 for O&M for
each additional vessel, adjusted by the CPI as set forth in
Paragraph No. 29. Existing and Future Wells which are treated
with GAC under this Agreement shall qualify for O&M at 90% of the
O&M per vessel rate set forth in this paragraph, adjusted by the
CPI as set forth in Paragraph No. 29. The number of vessels for
which Defendants will pay will be based on well yield and will be
determined pursuant to Paragraph No. 20 (for the Honokahua A,
Hamakuapoko 1 and 2, and Haiku wells) or Paragraph No. 23 (for
other Existing or Future Wells).
i. The O&M payments specified above shall be made on
or before January 10, 2000, and each successive year thereafter.
The payments made shall be adjusted by the CPI annually pursuant
to Paragraph No. 29.
ii. Defendants' obligation to pay annual O&M
under this Agreement ends on September 1, 2039.
Limitation on Number of Wells
11. The number of wells for which Defendants will be
obligated to pay for the capital and O&M costs for GAC is limited
to fifty (50) wells.
Termination Of Obligations
12. Any obligation of Defendants to make any payment
under this Agreement will end on September 1, 2039, provided that
all payments due as of that date have been made.
TERMS OF AGREEMENT
Dismissal of Actions
13. Plaintiff agrees to dismiss with prejudice
Defendants and the Action in its entirety, and Plaintiff further
agrees to release and waive all rights to bring any future DBCP
claims, lawsuits or actions arising in whole or in part from the
past, present, continuing or future presence of DBCP in
Plaintiff's wells on the Island of Maui, subject to the
exceptions set forth in Paragraph 42 [indemnity] and Paragraph 43
[claims related to the Islands of Molokai and/or Lanai].
Denial of Liability
14. This Agreement is not an admission of liability, nor
an admission that any of the facts alleged by Plaintiff are true,
nor an admission that the Action or any portion thereof asserted
by Plaintiff are well-founded, and Defendants deny that they, or
any of them, are liable to Plaintiff for any of the claims
asserted in the Action.
Joint Tortfeasor Release
15. It is understood, agreed, and intended as follows:
a. The release contained in Paragraph 57 of this
Agreement (the "Release") is intended to be and shall be
construed as a joint tortfeasor release, and any damages
otherwise recoverable by the Board against any other persons
(natural, corporate, or otherwise) in connection with events and
transactions which are the subject of the release shall be and
hereby are reduced to the extent of (1) the consideration paid
for this Release, or (2) the pro rata share that Defendants would
be responsible to pay to the Board if it were determined that
Defendants were jointly liable to the Board, whichever is
greater.
b. The Release is given and taken pursuant to the
provisions of the Uniform Contribution Among Tortfeasors Act,
sections 663-11 through 663-17, Hawaii Revised Statutes, as
amended ("UCATA"), and shall operate to release Defendants from
any and all liability to make contribution for the Covered Claims
(as that term is defined in the statute) to any person found to
be a joint tortfeasor with Defendants.
c. The parties hereto intend that the Release and
provisions of UCATA shall be applicable to all Covered Claims,
whether asserted under federal statutes or under Hawaii statutes
or under common law, including claims to which UCATA may not
otherwise (in the absence of this Release) apply.
Payment for Past and Present Costs
16. Plaintiff agrees to release Defendants from all
claims for DBCP-related costs incurred to date by Plaintiff,
including, but not limited to, the capital costs of GAC on the
Napili A well, the costs of the 1999 Hamakuapoko Drought
Emergency GAC, and certain other costs, for which Defendants
agree to pay Plaintiff as tort damages the amount of Three
Million Dollars ($3,000,000), payable to "Board of Water Supply
of the County of Maui and its attorneys of record, Miller, Sher &
Sawyer, a professional corporation," on or before September 1,
1999, if Plaintiff has executed this Agreement.
Payment for O&M Costs
17. On or before January 10 of each year, Defendants
will reimburse Plaintiff for O&M of GAC for the preceding year in
conformity with this Agreement, if GAC was in place and In
Operation during the preceding year. The first payment will be
made on or before January 10, 2000, for the portion of 1999, if
any, that such facilities were in operation. Defendants will
reimburse Plaintiff for O&M on the Hamakuapoko 1999 Drought
Emergency GAC for each month GAC was in place and in operation at
least 10% of the month at a monthly rate of $5,708.
Reimbursement for O&M costs will be requested and paid in
accordance with the terms of paragraph 47.
18. The amounts payable for O&M for GAC will be adjusted
by the CPI annually, pursuant to Paragraph No. 29.
CERTAIN WELLS THAT EXCEED THE MCL
19. If the concentration of DBCP in the Honokahua A,
Hamakuapoko 1, Hamakuapoko 2, and/or the Haiku wells Exceeds the
MCL, then upon issuance of a Notice to Proceed for installation
of GAC facilities on any such well, Defendants will pay 100% of
the capital costs and O&M for GAC on those wells.
Capital Costs
20. Capital costs associated with installation of GAC for
the Honokahua A, Hamakuapoko 1, Hamakuapoko 2, and/or the Haiku
wells are determined as follows:
a. Plaintiff will determine the number of GAC
vessels to be installed for a well(s) that Exceeds the MCL based
on actual peak well yield capacity as follows: Up to 750 gpm
(two vessel), and 751-1,500 gpm (three vessels). One additional
vessel will be installed for each additional 750 gpm increment,
or fractions thereof, in actual peak well capacity. Plaintiff may
locate vessels on a well site, a remote site or at a centralized
site at its option.
b. The capital costs of which Defendants will pay
100% are as follows:
two vessels -- $1, 800,000, three vessels -- $2, 400,000.
Defendants will pay 100% of an additional $600,000 for each
additional vessel above three. Defendants' obligations to pay
capital costs under this paragraph shall be reduced by $100,000
for any of these wells with no pump or a non oil-lubed pump. The
foregoing amounts are deemed to include, but are not limited to,
the costs of land acquisition, design, and construction of GAC.
c. Subject to Defendants' obligation to reinstall GAC
on previously treated wells from which GAC has been removed,
capital costs of which Defendants will pay 100% do not include
the costs of GAC vessel replacement, including due to age or wear
and tear. (See Paragraph No. 4 k.) Such vessel replacement costs
are included in, and/or to be paid by Plaintiff out of, O&M.
d. Reimbursement will be requested and paid in
accordance with Paragraph No. 46.
O&M Costs
21. The O&M costs on the Honokahua A, Hamakuapoko 1,
Hamakuapoko 2, and/or Haiku wells are determined as follows:
a. O&M costs will be based on well yield as follows:
Up to 750 gpm (two vessels), $68,500/year; 751-1,500 gpm (three
vessels), $74,500/year; and an additional $6,000/year for each
additional 750 gpm of well yield.
b. On or before January 10 of each year, for each such
well, Defendants will reimburse Plaintiff for 100 percent of the
O&M of GAC for the preceding year if GAC was In Operation on such
well during the preceding year.
c. For any such well for which GAC has been In
Operation for less than one year, Defendants' obligation to
reimburse Plaintiff for O&M will be limited to 100% of the
monthly per vessel rate set forth in Paragraph No. 21 e. for O&M
of GAC for each month GAC was In Operation.
d. Defendants' obligation to pay annual O&M on any
such well, as set forth above, will be conditioned on Plaintiff's
Regular Use of such well. For any such well with an average
annual utilization rate of less than 10%, Defendants will pay O&M
of $1,000 for such well for each month GAC was In Operation if
GAC was not installed and In Operation for the entire year.
e. For any such well at which GAC was In Operation for
less than one year, the payment will be a calculated amount for
each month the GAC was In Operation for more than fifteen (15)
days. The amount paid for each month under this paragraph will be
calculated by dividing 12 into the annual rate for O&M payments
set forth under subparagraph (a) above.
f. The amounts payable for capital costs for the
Honokahua A, Hamakuapoko 1, Hamakuapoko 2, and/or Haiku wells
under Paragraph 20 will be adjusted by the CPI annually, pursuant
to Paragraph No. 29. The amounts payable for O&M for such wells
under Paragraph No. 21 will be adjusted by the CPI annually,
pursuant to Paragraph No. 29.
g. Reimbursement will be requested and paid in
accordance with the terms of Paragraph No. 47.
OTHER WELLS THAT EXCEED THE MCL IN THE FUTURE
22. Where Existing or Future Wells Exceed the MCL,
Defendants will pay 90% of the capital costs and O&M for GAC on
those Wells, upon Plaintiff's issuance of a Notice to Proceed for
installation of GAC facilities on any Existing or Future Wells.
Capital Costs
23. Capital costs associated with installation of GAC
for Existing or Future Wells are determined as follows:
a. Plaintiff will determine the number of GAC vessels
to be installed for a well(s) that Exceeds the MCL based on actual
peak well yield capacity as follows: Up to 750 gpm (two vessel),
and 751-1,500 gpm (three vessels). One additional vessel will
be installed for each additional 750 gpm increment, or fractions
thereof, in actual peak well capacity. Plaintiff may locate vessels
on a well site, a remote site or at a centralized site at its option.
b. The capital costs of which Defendants will pay 90%
are as follows:
two vessels -- $1, 800,000, three vessels -- $2, 400,000.
Defendants will pay 100% of an additional $600,000 for each
additional vessel above three. Defendants' obligations to pay
capital costs under this paragraph shall be reduced by ninety
percent (90%) of $100,000 for all future wells and for existing
wells with no pump or a non oil-lubed pump. The foregoing
amounts are deemed to include, but are not limited to, the costs
of land acquisition, design, and construction of GAC.
c. Subject to Defendants' obligation to reinstall GAC
on previously treated wells from which GAC has been removed,
capital costs of which Defendants will pay 90% do not include the
costs of GAC vessel replacement, including due to age or wear and
tear. (See Paragraph No. 4 k.) Such vessel replacement costs are
included in, and/or to be paid by Plaintiff out of, O&M.
d. Reimbursement will be requested and paid in
accordance with Paragraph No. 46.
O&M Costs
24. The O&M costs on Existing and Future Wells are
determined as follows:
a. O&M costs will be based on well yield as follows:
Up to 750 gpm (two vessels), $68,500/year; 751-1,500 gpm (three
vessels), $74,500/year; and an additional $6,000/year for each
additional 750 gpm of well yield.
b. On or before January 10 of each year, for each
Existing and/or Future Well, Defendants will reimburse Plaintiff
for 90 percent of the O&M of GAC for the preceding calendar year,
if GAC was In Operation on such Existing or Future Well for the
entire year.
c. For any Existing and/or Future Well for which GAC
has been In Operation for less than one year, Defendants'
obligation to reimburse Plaintiff for O&M will be limited to 90%
of the monthly per vessel rate set forth in Paragraph No. 24 e.
for O&M of GAC for each month GAC was In Operation.
d. Defendants' obligation to pay annual O&M on any
Existing or Future Well, as set forth above, will be conditioned
on Plaintiff's Regular Use of such Well. For any Existing or
Future Well with an average annual utilization rate of less than
10%, Defendants will pay O&M of $1,000 for such Well for each
month GAC was in operation (if GAC was not installed and In
Operation for the entire year).
e. For any Existing and/or Future Well at which GAC
was In Operation for less than one year, the payment will be a
calculated amount for each month the GAC was In Operation for
more than fifteen (15) days. The amount paid for each month under
this paragraph will be calculated by dividing 12 into the annual
rate for O&M payments set forth under subparagraph (a) above.
f. Reimbursement will be requested and paid in
accordance with the terms of Paragraph No. 47.
CPI
25. The amounts payable for capital costs for wells under
Paragraphs 20 and 23 will be adjusted by the CPI annually,
pursuant to Paragraph No. 29. The amounts payable for O&M for
wells under Paragraphs 21 and 24 will also be adjusted by the CPI
annually, pursuant to Paragraph No. 29.
Selection of Alternative Sites for Future Wells
26. Future Wells (other than wells under construction as
of the date this Agreement is fully executed) constructed by
Plaintiff or contractors retained by Plaintiff, must be in
substantial compliance with the following procedures before
Plaintiff may obtain reimbursement from Defendants for the cost
of constructing, operating or maintaining GAC on such well.
a. Plaintiff shall select a proposed well site and
notify Defendants' representative thereof, and provide Defendants
with available relevant information concerning the presence of
DBCP in groundwater underlying the site, including historic land
use information, hydrogeologic characteristics and DBCP test
results (if any).
b. Defendants shall have 21 days after receipt of
said notice to notify Plaintiff that: (1) Defendants do not
object to Plaintiff proceeding with the production well at that
location, or (2) a pilot test well should be drilled and tested
at that location (at defendants' sole expense), or (3) an
alternative well site should be considered.
c. If Defendants request a pilot test well at the
proposed well site, Defendants shall have 15 days after receipt
of test results from that pilot test well to notify Plaintiff
that Defendants do not object to Plaintiff proceeding with the
production well at that location or that an alternative well site
should be considered.
d. If Defendants notify Plaintiff to consider an
alternative well site, Defendants' representative must meet and
confer with Plaintiff's representative to select an alternative
site at least one-half mile from any existing or planned
Plaintiff well, and within one-half mile of the connection to
Plaintiff's water system that would have been serviced by the
original well site. After consideration of potential
environmental issues, Plaintiff shall not unreasonably withhold
consent for the selection of alternative well sites. If
Plaintiff or a controlling regulatory entity determines that a
proposed alternative well site is too environmentally sensitive
to be used for a production well, Plaintiff shall promptly notify
Defendants of that determination so that the parties may consider
additional alternative well sites. Potential environmental issues
may be identified through existing documents (if any) prepared
pursuant to the Hawaii Environmental Policy Act, or otherwise,
that assess the original well site and include the alternative
well site as a project alternative. Nothing in this Agreement
shall impose any additional environmental analysis obligations on
Plaintiff under the Hawaii Environmental Policy Act or otherwise.
e. The parties shall also meet and confer regarding
the estimated cost of constructing, operating, and maintaining
the well at the alternative well site. The parties intend that
should the construction of a well proceed at an alternative well
site, any estimated increased costs (compared to the original
well site) incurred in connection with constructing, connecting,
operating and maintaining a well at the alternative site shall be
borne exclusively by Defendants including, but not limited to:
(i) the cost of acquiring at
least 20,000 square feet of land for the well
site and any treatment facilities which may
be required;
(ii) the cost of drilling,
constructing, and connecting the well to
Plaintiff's distribution system, all in
conformance with Plaintiff's standard
specifications and construction standards;
(iii) the cost of any
electrical costs (see attached formula,
Exhibit A) and/or pressure reducing
facilities associated with the alternative
site;
(iv) the cost of constructing
and maintaining and/or obtaining easements
for any access road to the replacement well;
(v) the cost of obtaining all
necessary permits and authorizations,
including, but not limited to, those required
by the Hawaii Environmental Policy Act and
the Department of Land and Natural Resources
and/or successor legislation;
(vi) the amount of increased
allowance for change orders, based on a 10
percent allowance for such change orders; and
(vii) all other reasonably
anticipated costs associated with the
project.
In calculating any increased costs associated with the
alternative well site, the parties will subtract the amount
Plaintiff would have expended in constructing, connecting,
operating and maintaining the well at the original well site from
the costs of constructing, connecting, operating, and maintaining
the well at the alternative site.
f. Upon completion of the meet and confer process,
Plaintiff shall serve a written notice upon Defendants with
Plaintiff's itemized comparison of the reasonably anticipated
cost of constructing, connecting, operating, and maintaining a
well at the original and alternative well sites. If the
estimated costs at the alternative site are higher than those
estimated at the original well site, Plaintiff may make a demand
on Defendants for those increased costs ("Increased Cost
Demand").
g. Within twenty-one (21) calendar days of receipt
of said itemized comparison, Defendants shall: (1) inform
Plaintiff that Defendants do not object to proceeding with
construction of a well at the original well site; (2) inform
Plaintiff that Defendants agree to pay the Increased Cost Demand;
or (3) serve a written notice of specific objections to the
Increased Cost Demand together with an estimate by a qualified
contractor to perform the work at the alternative well site to
Plaintiff's specifications for construction of a well.
h. If the parties are unable to agree on the selection
and/or increased cost of the alternative well site, either party
may elect to arbitrate the dispute as provided in Paragraph 54.
In any such arbitration, Defendants shall bear the burden of
proof.
i. In the event new or materially different
environmental issues associated with the selection of the
alternative well site ("New Issues") are a substantial factor
leading to environmental litigation by a third party, then
either: (1) Defendants shall assume the cost of defense of that
litigation; or (2) if Defendants do not assume the cost of
defense of that litigation, Plaintiff may proceed with
construction at the original well site with reimbursement by
Defendants if the well exceeds the MCL as specified in this
Agreement.
j. If Defendants fail to serve Plaintiff with a
timely objection to the Increased Cost Demand described above,
Plaintiff may elect to proceed with construction at the original
well site.
k. If the well constructed at an alternative site
fails to yield water that meets all then applicable water quality
standards, Defendants shall pay the full cost of installing
treatment facilities to correct any such deficiency and shall
reimburse Plaintiff for the full cost of operating and
maintaining any such equipment. Defendants' obligation to
reimburse Plaintiff for such treatment facilities shall not apply
to disinfection facilities or any treatment or other water
quality technology which Plaintiff is required to install on all
Plaintiff wells In Operation, other than wells treated with GAC.
l. Any well constructed at an alternative site must
yield at least eighty percent (80%) as much water (gallons per
minute ("gpm")) as the original site selected by Plaintiff.
m. If the well constructed at the alternative well
site fails to operate as provided in the previous sub-paragraph,
Defendants may elect to construct at their sole expense an
additional well to Plaintiff's standards at another site approved
by Plaintiff so that the combined flow from both wells equals or
exceeds that anticipated at the original proposed site.
n. If Defendants pay the Increased Cost Demand or
amount determined in Arbitration under this Agreement, then: (1)
any increased capital costs will be paid within 30 days of
Defendants' receipt of a notice to proceed to a contractor to
construct a well at the alternative well site; and (2) any
increased operations and maintenance costs will be adjusted by
the CPI under Paragraph No. 29 and January 10 for each preceding
year the well is operation during the term of this Agreement.
ADMINISTRATIVE APPEALS
27. If a regulatory authority incorrectly, mistakenly, or
in excess of its authority directs Plaintiff to stop using a well
or refrain from connecting a well to its water system unless
Plaintiff remediates DBCP in the well, Plaintiff may, within 60
days of receipt of the directive, petition the regulatory
authority for reconsideration of the directive. If Plaintiff
chooses not to petition the regulatory authority for
reconsideration of the directive, Plaintiff shall notify
Defendants and Defendants, at their own expense, may choose to
challenge the regulatory authority's decision. Plaintiff shall
provide Defendants with information from its files concerning the
status of the well in question.
CESSATION OF O&M
28. For any Plaintiff well on which GAC or other
remediation equipment to remove DBCP is installed, Defendants'
obligation to pay O&M shall cease upon the occurrence of the
following:
a. If any Regularly Scheduled Well Test for DBCP
results in a concentration below the MCL, a second confirming
sample will be taken within ten (10) days. If the average of
those two samples is below the applicable DBCP MCL, the well is
to be tested for the time period specified by the then applicable
drinking water regulation. If the average of those tests is below
the applicable MCL, Plaintiff may within sixty (60) days of
receipt of the laboratory result for the last sample petition DOH
for a permit amendment allowing removal of GAC or other DBCP
remediation equipment. If the amendment is granted, Defendants'
responsibility to pay O&M on the well is terminated thirty (30)
days after notification to Plaintiff by DOH of the amendment
approval. If Plaintiff chooses not to petition DOH for a permit
amendment, Defendants' obligation to pay O&M on the well is
terminated on the thirtieth day after the events described in
this paragraph.
b. Within 90 days, either DOH will grant Plaintiff's
petition, or Plaintiff must make a good faith effort to obtain
such relief from DOH. If the petition is denied, Plaintiff shall
again petition DOH in a good faith effort to persuade DOH to
grant the petition. If the second petition is denied, Plaintiff
shall notify Defendants and the parties shall cooperate should
Defendants, at their own expense, choose to challenge the DOH
decision in Plaintiff's name. Defendants' responsibility to pay
O&M on the site or well in question will cease 30 days after DOH
grants the petition.
c. Plaintiff is entitled to leave the GAC or other
DBCP remediation equipment in place and/or operate same at its
own expense for at least twelve (12) months after Defendants'
obligation to pay O&M on the well has ceased.
d. If GAC or other DBCP remediation equipment has
been removed from a well which has previously been treated and
which subsequently requires treatment, the cost of such treatment
will be borne by Defendants to the same extent as it was when GAC
or other DBCP remediation equipment was originally installed, and
will not be counted twice against the well limits set forth in
Paragraph No. 30.
CPI ADJUSTMENT
29. This Agreement contains provisions for: (a) Defendants'
payment of specified sums for the installation of GAC, which are
expressed in 1999 dollars, and O&M, which are expressed in 1999
dollars; and (b) credits and offsets to Defendants, which are
expressed in 1999 dollars. All payments of capital costs and O&M
made by Defendants to Plaintiff and all credits and offsets to
which Defendants are entitled under this Agreement for the year
beginning January 1, 2000, and each year thereafter will be
adjusted according to the CPI. The CPI adjustment shall operate
as follows: The payments made, and credits and offsets applied,
for the year 2000 shall be adjusted to reflect inflation or
deflation pursuant to the CPI, except as limited by this
Paragraph, with each successive year's payments being similarly
adjusted according to the prior year's inflation or deflation
pursuant to the CPI.
a. For the purpose of calculating inflation or
deflation for capital costs, 1999 expressed dollars (as
established by the June 1999 figure for the CPI) are to be used
in this Agreement and are to be modified annually using the June
CPI for subsequent years.
b. For the purpose of calculating inflation or
deflation for O & M, 1999 expressed dollars (as established by
the June 1999 figure for the CPI) are to be used in this
Agreement and are to be modified annually using the June CPI for
subsequent years. The first CPI adjustment to O&M shall commence
with the January 10, 2001 payment using the June 2000 CPI.
LIMIT ON NUMBER OF WELLS FOR WHICH
DEFENDANTS MAY BE RESPONSIBLE
30. The number of wells for which Defendants will be
obligated to pay for the capital and O&M costs for GAC is limited
to fifty (50) wells.
TERMINATION OF OBLIGATIONS
31. All obligations on the part of Defendants under this
Agreement, including but not limited to payments of capital costs
and O&M to Plaintiff, end on September 1, 2039, provided that all
payments due as of that date have been paid.
RE-USE OF GAC VESSELS
32. As GAC vessels become available when they are taken out
of service on wells that no longer require DBCP remediation,
Defendants may choose to move those units to another well
requiring DBCP remediation. If Defendants pay for the
installation or reinstallation of surplus GAC vessels, Defendants
will receive a credit of $95,000 per vessel (adjusted by the CPI)
to be applied to Defendants' portion of the capital cost of GAC
on any well covered by this Agreement. Defendants will pay for
the cost of moving, installing, inspecting, repairing and
refilling these units, such activities to be performed by
Plaintiff to Plaintiff's standards.
33. If a GAC vessel is moved to another site, and the well
on which it had previously been installed once again Exceeds the
MCL, then Defendants shall pay the appropriate portion of capital
costs and O&M (either 90% or 100%) required to install or
reinstall and operate GAC on that well.
ALTERNATIVE TECHNOLOGY AND/OR REMEDIES
34. Defendants may propose that Plaintiff utilize a less
expensive wellhead treatment method approved by U.S. EPA or State
of Hawaii for the remediation of DBCP. Defendants agree to pay
the actual cost of designing, procuring, and installing all
appropriate equipment and modifications to existing equipment,
including capital and O&M costs under the conditions of this
Agreement, on any well on which such equipment is installed. If
any such less expensive wellhead treatment method is installed,
then in lieu of O&M payments for GAC, Defendants will reimburse
Plaintiff for the actual cost of O&M for the less expensive
wellhead treatment method pursuant to Paragraph 47.
35. After meeting and conferring, Plaintiff's or
Defendants' representatives may submit any disputed claim
concerning the reliability, practicability, or efficacy, or
actual cost, including capital and O&M costs, of employing any
less expensive well-head treatment to binding arbitration
pursuant to Paragraph 54 (Arbitration) of this Agreement.
Notwithstanding any other provision of this Agreement, Plaintiff
shall not be required to use any technology approved by the EPA,
but disapproved by the DOH.
36. Plaintiff may elect to implement alternative remedies
for DBCP. If Plaintiff elects to implement an alternative remedy,
Defendants will only be obligated to pay the lesser of either:
(a) 100% of the capital and O&M costs of the alternative remedy,
or (b) 90% of the capital and O&M costs for the appropriately
sized GAC facility, based on the capacity of the subject well(s),
as appropriate. Plaintiff and Defendants shall submit any
disputed claim concerning the actual cost, including capital and
O&M costs, of any alternative remedy for DBCP to binding
arbitration pursuant to Paragraph 54 (Arbitration) of this
Agreement.
37. If EPA or DOH directs Plaintiff that modifications or
additions to GAC (other than disinfection equipment) are required
to continue use of GAC solely for the removal of DBCP, and
Plaintiff and Defendants are unable to agree on the amount of the
reasonably necessary expense of such treatment that should be
borne by Defendants, Plaintiff and Defendants will submit
Plaintiff's claim for the reasonably necessary expense of such
treatment to binding arbitration pursuant to Paragraph 54
(Arbitration) of this Agreement.
38. The activities set forth in Paragraph Nos. 34 through
37 are subject to approval by both Plaintiff and Defendants; said
approval will not be unreasonably withheld.
LABORATORY ANALYSIS AND REPORTING
39. Plaintiff and Defendants each retain the right to
challenge any reported laboratory test result for DBCP and may
take the steps necessary, at their own cost, to verify the
result, including such steps as obtaining a confirming sample for
analysis or requesting that the laboratory confirm its
calculations or reanalyze the initial sample.
40. Plaintiff will provide Defendants' Representative with
a complete report of all DBCP test results from Plaintiff
production wells every six months throughout the duration of this
Agreement on the first business days of May and December of each
year. The report need only contain the DBCP results for the year
preceding the date of the report.
41. Defendants may, at their own expense, participate in
Plaintiff's regularly scheduled sampling, take split samples, and
make reasonable site inspections upon request; said requests will
not be unreasonably made by Defendants.
INDEMNITY
42. Plaintiff will retain its right, if any, to seek
indemnity from Defendants if it is sued by a third party for
personal injuries or property damage allegedly attributable to
DBCP. Plaintiff certifies that it is presently unaware of any
such claims.
LANAI AND MOLOKAI
43. Notwithstanding any other provision of this Agreement,
Plaintiff will retain its right, if any, to bring any future DBCP
claims, lawsuits, or actions, including but not limited to,
claims for compensatory and/or punitive damages, arising in whole
or in part from the past, present, continuing, or future presence
of DBCP on the Islands of Lanai and Molokai.
COSTS
44. All parties will bear their own costs and attorney's
fees incurred in the Action.
45. As to Plaintiff, Defendants will waive costs and
attorneys' fees for all dismissed Defendants.
PAYMENT OF ANY FUTURE OBLIGATIONS
Capital Costs
46. In addition to the conditions that must be met under
this Agreement before Defendants' obligations to pay future
capital costs arise under this Agreement, Plaintiff must submit
to Defendants' Representative and representatives for defendants
AMVAC, Occidental, and Maui Land and Pineapple Company (the names
and addresses of which will be provided and updated by
Defendants' Representatives) a copy of a Notice to Proceed to a
contractor to construct a GAC or alternative technology facility
to treat a well that Exceeds the MCL. Within 30 days of
Defendants' receipt of the Notice to Proceed, Defendants must pay
Plaintiff the amount owed under the terms of this Agreement. In
the event that Defendants fail to make timely payment, payment
will be made under Paragraph 48 of this Agreement (Letter of
Credit). Any disputed claims shall be submitted to arbitration
pursuant to Paragraph 54, provided that Plaintiff shall be
entitled to immediate payment pursuant to Paragraph 48,
regardless of whether the claim is disputed.
O&M
47. In addition to the conditions that must be met under
this Agreement before Defendants' obligations to pay future O&M
arise under this Agreement, Plaintiff must submit by December 1
of each year starting in 2000 a qualifying claim for O&M that
provides sufficient information to evaluate whether and to what
extent Plaintiff's well(s) qualify for O&M payment. This will
include, but not be limited to, DBCP test results and information
concerning whether the wells were In Operation and In Regular Use
during the preceding twelve months. Provided Plaintiff's O&M
claim is timely submitted, Defendants shall make payment in the
amount claimed by the following January 10. In the event
Defendants fail to make timely payment, payment will be made
under Paragraph 48 of this Agreement (Letter of Credit). Any
disputed claims shall be submitted to arbitration pursuant to
Paragraph 54, provided that Plaintiff shall be entitled to
immediate payment pursuant to Paragraph 48, regardless of whether
the claim is disputed. If Plaintiff fails to submit a timely
claim (i.e., by December 1), then Defendants' obligation to make
a timely payment (i.e., by January 10) shall be extended one day
for each day Plaintiff's claim is late.
LETTER OF CREDIT
48. To secure the obligations of Defendants under this
Agreement, and as a condition precedent to the obligations of
Plaintiff hereunder, Defendants shall, at their sole cost and
expense, furnish to Plaintiff, on or prior to October 1, 1999,
and thereafter maintain during the entire term of this Agreement,
continuing to a date thirty (30) days after the later of (i)
September 1, 2039 or (ii) satisfaction of all Defendants'
obligations to Plaintiff under this Agreement, an irrevocable
standby letter of credit ("Letter of Credit") in favor of
Plaintiff in form and substance reasonably satisfactory to
Plaintiff, issued or confirmed by a United States banking
institution having capital and surplus of not less than One
Billion United States Dollars (USD 1,000,000,000) and advised by
a banking institution with a banking office in Honolulu, Hawaii,
a. The Letter of Credit shall have a principal amount
of Twenty Million United States Dollars (USD 20,000,000), and
shall provide for payment to Plaintiff under this Agreement by a
draft at sight to which is attached Plaintiff's Signed Statement
(as defined in the Letter of Credit). The draft at sight and the
Signed Statement which shall be conclusive that there has
occurred an event of default under this Agreement and any
applicable cure period has lapsed. A draft at sight presented as
the result of an Event of Default related to claims under either
Paragraph 46 or 47 will be limited to the amount of the claim. A
draft at sight presented as the result of an Event of default
based on the failure of the Defendants to renew the Letter of
Credit may be presented for the full amount of the Letter of
Credit.
b. Should any Letter of Credit furnished by Defendants
hereunder expire prior to the term of this Agreement, Defendants
shall automatically provide Plaintiff with a replacement, in the
same tenor, no later than sixty (60) days prior to the expiration
of the then-current Letter of Credit. Failure to provide a
replacement for a Letter of Credit shall be an event of default
under this Agreement, and shall permit Plaintiff to draw on the
then-current Letter of Credit as provided above. Plaintiff's
realization of the amount payable under the Letter of Credit
shall not affect Plaintiff's right to elect any other remedy on
default available to Plaintiff under this Agreement, or under
applicable law.
c. Where Plaintiff draws on a Letter of Credit because
of the occurrence of an Event of Default based on the failure of
the Defendants to renew the Letter of Credit, the amount drawn on
the Letter of Credit shall first be applied to any then existing
claims for Capital Costs and/or O&M Costs under this Agreement
and thereafter the balance of the amount drawn shall be appplied
as credit against future claims under the Agreement or reconveyed
to the banking institution that issued the Letter of Credit upon
Defendants obtaining a new Letter of Credit.
d. The principal amount of the Letter of Credit may be
adjusted upon agreement of all the parties at the time of any
renewal or replacement of the Letter of Credit. In the absence
of such agreement, the principal amount of the Letter of Credit
shall remain Twenty Million United States Dollars (USD
20,000,000) so long as Defendants are required to maintain a
Letter of Credit under this Paragraph 48.
CREDITS
49. a. Upon Defendants' initial payment of $3,000,000
pursuant to Paragraph 16 of this Agreement, Defendants shall be
entitled to a one-time credit against the amount otherwise
payable for installation of permanent GAC facilities on the
Hamakuapoko Well Nos. 1 or 2 of $804,000, less the amount
described in Paragraph 32 (Re Use of GAC Vessels), if, at
Defendants' option, the vessels are used to treat any other well.
b. If any disputed claims under this Agreement are
resolved in favor of Defendants, any amount determined to have
been paid by Defendants in excess of the amount found to be due
shall be credited to Defendants to offset future obligations
under this Agreement.
c. Any credit or offset to which Defendants become
entitled shall be applied to reduce the next occurring obligation
of Defendants related to capital cost, and Defendants shall owe
no additional amounts for capital costs until all credits and
offsets to which Defendants are entitled have been applied and
exhausted. Except as provided in this paragraph, and
notwithstanding any other provision of this Agreement, Plaintiff
shall not be obligated to pay Defendants cash on any accumulated
credits or offsets. Except as otherwise set forth in this
paragraph, any credits remaining as of September 1, 2039, shall
be extinguished. Credits remaining as of September 1, 2039 that
are the result of a claim made by Plaintiff after September 1,
2038 and disputed by Defendants thereafter, where the dispute is
subsequently resolved in favor of Defendants, will be reimbursed
to Defendants within thirty (30) days of such resolution.
50. If Plaintiff receives a payment under this Agreement
for a GAC project that is not constructed, Defendants shall
receive a credit in the amount of such payment toward the capital
cost of the next GAC project that would otherwise trigger a
further payment by Defendants.
DESIGNATED CONTACTS
51. Defendants' Representative and Plaintiff's
Representatives are the parties' respective designated contacts
for all reports, correspondence, and notices concerning the
subject matter of this Agreement. If another representative is
substituted, Defendants or Plaintiff, as appropriate, must
provide written notice of same within ten (10) days.
GOOD FAITH EFFORT
52. Consistent with this Agreement, the parties agree to
make a good faith effort to mitigate both Defendants' obligations
under this Agreement and any adverse impact on Plaintiff's water
system.
ARBITRATION AGREEMENT
53. In the event of any dispute between Plaintiff and
Defendants arising out of or relating to this Agreement, the
parties agree to try in good faith to settle the dispute by
negotiation and/or mediation.
54. If the dispute cannot be resolved to the parties'
mutual satisfaction through negotiation and/or mediation within
thirty (30) days, Plaintiff and/or Defendants' Representative may
elect to seek arbitration, and the dispute shall be resolved
through binding arbitration. It is the intent of the parties that
the arbitration be structured in such a way as to minimize costs
and delay. The arbitration shall be conducted in accordance with
the Commercial Arbitration Rules of the American Arbitration
Association (the "AAA Rules") with the following stipulations:
a. The arbitration hearing shall be held before Hon.
Ret. Judge Weinstein at JAMS, San Francisco, or if he is not
available or declines to serve, a single arbitrator if the
parties agree upon a single arbitrator. If the parties cannot
agree upon a single arbitrator, then each shall select an
arbitrator, and those arbitrators shall select a third
arbitrator. If they are unable to agree upon a third arbitrator
within fifteen (15) days, the third arbitrator shall be selected
as provided in the AAA Rules.
b. Unless otherwise ordered, each party's presentation
at the arbitration hearing shall be limited to 14 hours, and the
hearing shall be completed within ten (10) business days.
c. The arbitration decision shall be rendered not later
than thirty (30) days after the final day of the hearing and
shall be judicially enforceable, nonappealable and binding.
d. Summaries of any expert testimony, along with
copies of all documents to be submitted as exhibits, shall be
exchanged at least ten (10) business days before arbitration
under procedures set up by the arbitrators.
e. Except as otherwise specified herein, there shall
be no discovery or dispositive motion practice except as may be
permitted by the arbitrators, who may authorize only such
discovery as is shown to be necessary to ensure a fair hearing.
No discovery or motions permitted by the arbitrators shall in any
way alter the time limits specified herein.
f. Arbitration costs, arbitrators' fees, and
attorneys' fees and costs shall be awarded to the prevailing
party, if any, by the arbitrators.
g. The arbitration shall occur in San Francisco,
California.
55. In the event of arbitration arising out of, or
related to, this Agreement, the prevailing party shall be
entitled to recover its costs, expenses, and reasonable
attorneys' fees, in addition to any other relief to which it may
be entitled.
RELEASE
NOW THEREFORE, in reliance on the recitals stated above and
for consideration, Plaintiff agrees as follows:
56. The foregoing recitals are true and correct and by
this reference incorporated herein.
57. Subject to the provisions of this Agreement, on
behalf of itself, its assigns, Board representatives, and past,
present or future agents, Plaintiff hereby releases Defendants,
individually and collectively, and their respective predecessors,
successors, assigns, present and potential indemnitees, insurers,
subsidiaries, affiliates, attorneys, and past or present
employees, directors, officers, agents, shareholders, and
representatives from any and all DBCP claims, demands, Action,
causes of action, obligations, liens, damages, and liabilities,
of any nature whatsoever, whether or not known, suspected or
claimed, present or future, relating to or arising out of any
act, cause, matter or thing stated, claimed, or alleged, or that
could have been stated, claimed, or alleged by Plaintiff in the
Action. Plaintiff understands and acknowledges that it is
releasing and waiving all past, present, continuing and future
claims it has or may have against Defendants for the presence of
DBCP, except as specifically set forth in this Agreement.
58. Plaintiff declares and warrants that no other person
or entity has had nor now has any interest in the claims,
demands, Action, causes of action, obligations, liens, damages,
and liabilities released in Paragraph No. 57, above; and that it
has not sold, assigned, transferred, conveyed, or otherwise
disposed of any DBCP claim, demand, action, cause of action,
obligation, lien, damage, or liability released in Paragraph No.
57, above.
59. Plaintiff declares that, prior to the execution of
this Agreement, it has apprised itself of sufficient data, either
through experts or other sources of its own selection, in order
that it might intelligently exercise its judgment in deciding on
the contents of this Agreement and in deciding whether to execute
it. Plaintiff further declares that its decision to enter into
this Agreement is not predicated on or influenced by any
declarations or representations of Defendants, or any of them, or
by Defendants' respective predecessors, successors, assigns,
subsidiaries, affiliates, insurers or attorneys or past or
present employees, officers, directors, agents, shareholders, or
representatives. Plaintiff declares that this Agreement is
executed voluntarily and with full knowledge of its significance.
60. The parties acknowledge that they have an understanding
of the facts underlying the Action and have negotiated in good
faith and that this Agreement represents a good faith settlement
with regard to the interests of all parties to the Agreement.
61. Plaintiff authorizes and directs its counsel to execute
appropriate Requests for Dismissal, with prejudice, of the entire
Action as to all Defendants, and to deliver the executed Requests
for Dismissal to Defendants' Representative. All parties
authorize and direct their respective counsel to execute whatever
documents are necessary to implement this Agreement.
62. This Agreement shall bind the parties and each successor
and assign of each party.
63. This document embodies the entire terms and conditions
of the Agreement between the parties, and supersedes any prior
documents signed by the parties in the course of resolving the
Action. All words, phrases, sentences, and paragraphs, including
the recitals hereto, are material to the execution of this
Agreement.
64. This Agreement shall be governed by, and interpreted and
construed in accordance with, the laws of the State of Hawaii.
65. Upon the occurrence of an uncontrollable circumstance,
the party affected shall be excused from any failure or delay in
performance under this Agreement. For purposes of this
Agreement, an "uncontrollable circumstance" includes, but is not
limited to, acts of God, fire, flood, civil unrest, earthquake,
declaration of a public emergency, injunction, and labor
disputes. However, the parties recognize that delays in
Defendants' performance under the terms of this Agreement could
uniquely subject Plaintiff to third parties' disputes.
Therefore, in the event Defendants' performance of any option or
obligation described in Paragraph 26 and its subparts is delayed
due to force majeure circumstances, Plaintiff may proceed with
the construction of wells, notwithstanding any right of
Defendants to construct replacement wells and select alternative
well sites. Defendants shall promptly reimburse Plaintiff for
the cost of well construction incurred under these circumstances.
66. In the event any of the terms, conditions or covenants
contained in this Agreement are held to be invalid, then any such
invalidity shall not affect any other terms, conditions or
covenants contained herein which shall remain in full force and
effect.
67. Plaintiff warrants that this Agreement has been approved
by Plaintiff's Board of Water Supply, and each of the signatories
to this Agreement warrants that he or she is fully authorized to
enter into the terms and conditions stated herein and to execute
this Agreement.
68. This Agreement will be effective whether or not executed
in multiple counterparts.
Dated: 8/31/99 BOARD OF WATER SUPPLY
OF THE COUNTY OF MAUI
By /S/ ROBERT K. TAKITANI
Its: CHAIRMAN
Approved as to form: MILLER, SHER & SAWYER
A Professional Corporation
(signatures continued)
Dated: Aug. 31, 1999 By: illegible
DUANE C. MILLER
VICTOR M. SHER
Attorneys for Plaintiff, Board of
Water Supply of the County of Maui
Dated: September 8, 1999 THE DOW CHEMICAL COMPANY
By /S/ THOMAS J. CRESSWELL
Its: Thomas J. Cresswell
Associate General Counsel
Approved as to form: FILICE, BROWN, EASSA & MCLEOD, LLP
Dated: 9/3/99 By /S/ NICHOLAS D. KAYHAN
Attorneys for Defendant
The Dow Chemical Company
Dated: 9/21/99 OCCIDENTAL CHEMICAL COMPANY
By illegible
Its: Senior Vice President & General Counsel
Dated: 9/16/99 OCCIDENTAL PETROLEUM CORPORATION
By /S/LAWRENCE D. STECKMEST
Its: Assistant General Counsel
Dated: 9/21/99 OCCIDENTAL CHEMICAL CORPORATION
By illegible
Its: Senior Vice President & General Counsel
Approved as to form: LANDELS, RIPLEY & DIAMOND, LLP
(signatures continued)
Dated: 9/13/99 By /S/ STEPHEN C. LEWIS
STEPHEN C. LEWIS
Attorneys for Defendants
Occidental Chemical Company,
Occidental Petroleum Corporation, and
Occidental Chemical Corporation
Dated: 30 Aug 1999 AMVAC CHEMICAL CORPORATION
By illegible
Its: Vice Chairman
Date: 30 Aug 1999 AMERICAN VANGUARD CORPORATION
By illegible
Its: Co- Chairman
Approved as to form: RUSH, MOORE, CRAVEN, SUTTON, MORRY & BEH
Dated: August 30, 1999 By /S/ RICHARD C. SUTTON, JR.
RICHARD C. SUTTON, JR.
Attorneys for Defendant
AMVAC Chemical Corp.
American Vanguard Corp.
Dated: Sept 1, 1999 BREWER ENVIRONMENTAL INDUSTRY, FKA
BREWER CHEMICAL COMPANY
By /S/ J. ALAN KUGLE
Its: Sec
Approved as to form: MANCINI, ROWLAND & WELCH
Dated: September 1, 1999 By /S/ PAUL R. MANCINI
PAUL R. MANCINI
Attorneys for Defendant
Brewer Environmental Industry, fka
Brewer Chemical Company
(signatures continued)
Dated: 9/2/99 SHELL OIL COMPANY
By /S/ BURT BALLANFANT
Its: Senior Litigation Counsel
Approved as to form: KOBAYASHI, SUGITA & GODA
By____________________________
DALE W. LEE
Attorneys for Defendant
Shell Oil Company
Dated: _____________ MAUI LAND & PINEAPPLE COMPANY AND
MAUI PINEAPPLE COMPANY, LTD.
By /S/ PAUL J. MEYER
Its: Executive Vice President/Finance
Approved as to form: TOM & PETRUS
Dated:________________ By_______________________________
STEPHEN M. TEVES
Attorneys for Third-Party
Defendants, Maui Land &
Pineapple Co. and Maui Pineapple
Co., Ltd.
STATE OF HAWAII)
) SS.
COUNTY OF MAUI )
On this 31st day of August, 1999, before me appeared ROBERT
K. TAKITANI, to me personally known, who, being by me duly sworn,
did say that is the Chairperson of the BOARD OF WATER SUPPLY
of the County of Maui, and that the seal affixed to the foregoing
instrument is the lawful seal of the BOARD OF WATER SUPPLY, and
that the said instrument was signed and sealed on behalf of the
said BOARD OF WATER SUPPLY, and the said ROBERT K. TAKITANI
acknowledged the said instrument to be the free act and deed of
said BOARD OF WATER SUPPLY.
IN WITNESS WHEREOF, I have hereunto set my hand and official
seal.
/S/ JERRY ANN WELLS
(Signature)
JERRY ANN WELLS
Notary Public, State of Hawaii
My commission expires: 4/19/2002.