EXHIBIT 99.1
SETTLEMENT AGREEMENT
This Settlement Agreement ("Agreement") dated July 25, 2000,
is made by and between these parties (the "Parties"):
(i) The County Parties: The "County Parties" are the County of
San Bernardino (the "County"), its County Administrative Officer
William Randolph ("Randolph"), and certain County-related
entities (the "County-Related Persons"), namely Inland Empire
Public Facilities Corporation, Inland Empire Solid Waste
Financing Authority, San Bernardino County Financing Authority,
and San Bernardino County Flood Control District. The County
Parties are represented by Gumport, Reitman & Montgomery and
County Counsel.
(ii) The Norcal Parties: The "Norcal Parties" are Norcal
Waste Systems, Inc. ("Norcal"), and Norcal/San Bernardino, Inc.
("Norcal/SB"). The Norcal Parties are represented by Howard,
Rice, Nemerovski, Canady, Falk & Rabkin, A Professional
Corporation.
I. RECITALS.
A. Norcal is a California corporation that is owned by its more
than 2000 employees through an ESOP. Norcal, with its
subsidiaries, provides solid waste management services throughout
California, including collection, transfer, disposal, landfill
management, recycling and other waste services. Norcal/SB is a
California corporation that is a wholly-owned subsidiary of
Norcal that has, together with Norcal, performed solid waste
management services for the County.
B. The County is a political subdivision of the State of
California. Harry M. Mays ("Mays") was the County Administrative
Officer from approximately 1986 to approximately spring 1994.
James J. Hlawek ("Hlawek") was Mays' successor as County
Administrative Officer and served in that position until August,
1998. Randolph is the current County Administrative Officer.
C. In 1989, Norcal entered into a contract, County Contract No.
89-848, with the County, pursuant to which Norcal operated
certain County landfills under the supervision of the County's
Solid Waste Management Department (now known as the Waste System
Division). Kenneth James Walsh ("Walsh") was an employee of
Norcal and its predecessor companies for more than 30 years, and
Walsh was General Manager of Norcal/SB from 1990 until August 27,
1999, when the Norcal Parties terminated Walsh's employment.
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D. In January 1995, Norcal entered into a consulting agreement
with Bio-Reclamation Technologies, Inc. ("Bio-Reclamation"), a
California corporation affiliated with Mays. Among the services
provided Norcal under the consulting agreement were services in
connection with developing and presenting to the County a
proposal for Norcal to provide solid waste services that
previously had been or could have been provided by the County.
In May 1996, Norcal entered into an amended consulting agreement
with Bio-Reclamation and Mays that extended, among other things,
to assisting Norcal to develop proposals concerning the provision
of solid waste services for certain other counties. Norcal
terminated this consulting agreement on September 3, 1999.
E. In September, 1995, Norcal and the County entered into a
contract (together with its amendments, the "1995 Contract"),
County Contract No. 95-834. Pursuant to the 1995 Contract,
Norcal, through Norcal/SB, managed the County's solid waste
system (the "Solid Waste System"). Under the 1995 Contract, the
services provided by Norcal included operation of all active
landfills owned by the County, and Norcal has primary
responsibility for implementing the County's strategic plan,
which addresses the County's long-term waste disposal needs.
Norcal's other responsibilities include closure and monitoring of
non-active landfills and identification, permitting and
construction of landfill expansions.
F. Operation and management of the Solid Waste System in
compliance with applicable environmental laws is of vital
importance to the functioning of the County.
G. During 1999, on behalf of the County, McGladrey & Pullen LLP
("McGladrey"), certified public accountants, conducted a
financial analysis of the performance by Norcal and Norcal/SB of
the 1995 Contract. McGladrey submitted its report of that
analysis to the County in or about September 1999. Norcal has
stated that McGladrey concluded, among other things, that the
Norcal Parties had saved the County approximately $5 million per
year, compared to the County's cost of operation.
H. In October, 1999, the United States Attorney for the Central
District of California announced criminal indictments of Hlawek,
Mays, Walsh, and four others who allegedly acted in concert with
one or more of them: (a) former County Treasurer/Tax Collector
Thomas F. O'Donnell ("O'Donnell"), (b) former County Investment
officer Sol Levin ("Levin"), (c) financial consultant Richard E.
Tisdale ("Tisdale"), and (d) management consultant Ronald R.
Canham ("Canham"). All seven defendants (collectively, the
"Criminal Defendants") thereafter pleaded guilty to federal
charges of bribery or conspiracy to commit bribery in connection
with County-related business.
I. The Norcal Parties deny that they authorized or knew of any
misconduct by any of the Criminal Defendants, and the Norcal
Parties further specifically deny that they authorized Mays or
Walsh to commit any misconduct. Norcal has stated that: (a) as
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soon as Norcal learned that Walsh was being investigated and
before Norcal had any knowledge that the investigation concerned
Norcal's relationship with the County, Norcal made voluntary
contact with the United States Attorney's office and offered
Norcal's full cooperation; (b) during 1999, Norcal also initiated
an internal investigation, which confirmed that no Norcal
personnel or consultants other than Walsh and Mays were involved
in or were aware of this illegal conduct, no Norcal funds were
used, and Walsh and Mays were acting purely for their own
personal gain; (c) no evidence of the conspiracy appeared in the
Norcal Parties' records; and (d) as a result of Norcal's
investigation, Norcal terminated Walsh's employment and
terminated the amended consulting agreement of Mays and Bio-
Reclamation.
J. The County conducted its own independent investigation of the
facts. It retained the law firm Gumport, Reitman & Montgomery
("County Outside Counsel") and the accounting firm of Arthur
Andersen LLP to conduct an investigation on the County's behalf.
Norcal cooperated with the County in connection with the County's
investigation, and Norcal provided the County with copies of all
documents it had provided the United States Attorney. Norcal's
cooperation was extremely valuable to the County.
K. The 1995 Contract originally was scheduled to terminate on
June 30, 2001. The 1995 Contract further provided that Norcal,
at its option, could extend the 1995 Contract for up to two
additional 15-year periods, assuming certain conditions were
satisfied. Following the indictments, the County demanded, and
Norcal agreed, to Amendment No. 5 to the 1995 Contract, effective
January 11, 2000. Under Amendment No. 5, Norcal agreed that the
term of its services under the 1995 Contract would run until the
County can complete a competitive procurement process through a
Request for Proposal, review submitted bids, and negotiate a
replacement contract, but in no event later than June 30, 2001.
L. On June 8, 2000, the County Parties filed the action
captioned County of San Bernardino, et al. v. Hlawek, et al.,
Case No. SCVSS 67808 in San Bernardino County Superior Court (the
"Action"). The complaint ("Complaint") in the Action named
Norcal and Norcal/SB as defendants together with 21 other
entities and individuals, including Mays and certain of his
affiliated companies, Hlawek and Walsh, as well as certain other
present or former County officials, including O'Donnell and
Levin. The Complaint asserts as to Norcal and Norcal/SB,
together with, in most claims, Walsh, Mays, Hlawek and Bio-
Reclamation, claims for breach of fiduciary duty and fraud;
alleged violations of California Government Code Sections 1090
and 1092, California Government Code Sections 87100, 87103 and
91003 (the Political Reform Act), California Business and
Professions Code Sections 17200 and 17203 (the Unfair Competition
Law); and California Government Code Sections 12650 et seq. (the
False Claims Act); and a claim for unjust enrichment and
constructive trust. Each of these claims is brought by the
County alone, with the exception of the Political Reform Act and
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Unfair Competition Law claims, which are also brought by
Randolph. The Complaint alleges, inter alia, a conspiracy to
influence and reward Hlawek in connection with procuring the 1995
Contract, obtaining solid waste management work connected to the
1995 Contract, and causing the County to buy out contracts (the
"Harich Contracts") between the County and Affiliates of Joseph
E. Harich. The Complaint alleges that money was paid to Hlawek
by Mays and/or Walsh out of proceeds of payments Norcal made to
Bio-Reclamation and kickbacks Walsh received from Daniel
Hernandez Trucking ("Hernandez"), a Norcal/SB subcontractor, and
that Mays had promised Hlawek one of four parcels of real
property that Mays expected to receive from Harich. The
Complaint seeks damages, restitution, disgorgement of profits,
civil penalties, punitive damages and injunctive and declaratory
relief. Following the County's investigation of these issues,
the County's Complaint does not allege that any of the Norcal
Parties' personnel or consultants other than Walsh and Mays were
involved in or aware of any illegal conduct.
M. The Norcal Parties deny that they have engaged in any
wrongdoing of any kind and, in particular, that they have any
liability in connection with the Action. The Norcal Parties
contend that they have meritorious claims against the County and
others as to whom the County has certain indemnification
obligations arising out of the facts alleged in the Action, as
well as other claims against the County under the 1995 Contract.
The Norcal Parties assert that, if the Action proceeded against
the Norcal Parties, then the Norcal Parties would bring these
claims. The County denies that it has engaged in any wrongdoing
of any kind and, in particular, that it has any liability in
connection with claims the Norcal Parties may bring against it or
others in the Action.
N. Counsel for the Parties have engaged in extensive discussions
concerning the issues. The settlement set forth in this
Agreement was reached after intensive, arm's-length negotiations
in which the Parties presented their respective views regarding
the claims, the defenses, and potential relief.
O. Subject to the terms and conditions of this Agreement, the
Parties wish to keep in effect the 1995 Contract.
P. By reason of the vast size and complexity of the Solid Waste
System, and the ongoing relationship between Norcal and the
County in operating that system until a new operator can be
found, it is essential to the Parties to resolve, to the extent
practicable, the pending disputes between the Norcal Parties, on
the one hand, and the County Parties, on the other. Each Party
recognizes the extensive expense and the complexity and length of
proceedings that would likely be involved in pursuing its claims
against the other Parties and defending the other Parties' claims
against it in the Action, and the management distraction such
litigation could entail. Each Party has also taken into account
the inherent vagaries of litigation and the potential
difficulties and delays in the Action. After extensive analysis
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of the issues, County Counsel and County Outside Counsel
recommend the Settlement to the County Parties, and counsel for
the Norcal Parties recommend the Settlement to the Norcal
Parties. Accordingly, while continuing to deny any liability in
connection with the claims by the other Parties in connection
with the Action, each of the Parties has determined that the
Settlement is in its best interests.
Q. In determining the consideration provided in the Settlement,
the Parties have taken into account compromises with respect to a
variety of factors, including, but not limited to: (i) the
County's vital need to maintain the vast and complex Solid Waste
System with a minimum of unnecessary uncertainty and disruption
and the need of all Parties to establish their rights and duties
under 1995 Contract, (ii) the expenses the County incurred in
connection with its factual investigation prior to filing the
Action, (iii) Norcal's assistance with the County's investigation
and the value of Norcal's continued assistance both in connection
with the operation and transition of the County's Solid Waste
System and with the County's litigation against non-settling
parties, (iv) the expenses the County will incur in connection
with the remainder of the Action, (v) the time demands that
pursuit of the Action will make on both the County and its
employees and the Norcal Parties and their employees, (vi) the
uncertainty and delay inherent in the prospects for any recovery
by the County against Norcal through litigation, (vii) the
possibility of a recovery by the Norcal Parties from their
potential claims against the County and the County's expense in
defending against those claims, (viii) the interests of the
citizens and taxpayers of the County, (ix) payments the County
made and value the County received in connection with the 1995
Contract, (x) payments in connection with the Harich Contracts,
(xi) the Norcal Parties' profits under the 1995 Contract, (xii)
the scope of any potential liability of the Parties in connection
with the claims against them, and (xiii) the amount the Norcal
Parties would have expended in defending against the County's
claims in the Action and in prosecuting their claims against the
County.
R. The settlement set forth in this Agreement is made to resolve
disputed claims and shall not be construed as an admission of
wrongdoing or liability by any Party.
II. DEFINITIONS.
The following terms used in this Agreement have the meanings
set forth below.
1 1995 The contract between Norcal and the County
Contract entered into in 1995 as County Contract No.
95-834 for, among other things, management
of the County's solid waste system,
including all amendments thereto.
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2 Agreement This settlement agreement between the County
Parties and the Norcal Parties, together
with its exhibits.
3 Action The Action captioned County of San
Bernardino, et al. v. Hlawek, et al., Case
No. SCVSS 67808, filed in San Bernardino
County Superior Court on June 8, 2000.
4 Affiliate Any Person that controls or has controlled,
is or has been controlled by, or is or was
under common control with a Person.
5 Claims Any and all claims (including, without
limitation, claims for attorneys' fees,
expert fees, costs, expenses, damages,
disgorgement, constructive trust or
restitution), rights, demands, actions,
causes of action, charges, grievances,
suits, debts, liens, contracts, liabilities,
agreements, obligations, damages, fees,
costs, expenses, compensation or losses of
any kind whatsoever, of every nature,
character and description, known or unknown,
discovered or undiscovered, suspected or
unsuspected, asserted or unasserted, that
are owned, held or could have been asserted
by a Person in its own name, in a
representative capacity, in trust or as a
trustee or beneficiary, or in any other
capacity, whether based on tort, contract,
statutory, or other theory of recovery,
whether based on state or federal law,
whether asserted or assertable in civil,
administrative, regulatory, disciplinary,
arbitration or other proceedings, and
whether for compensatory, punitive,
statutory, equitable or other form of
relief, that exist, existed or may exist.
6 County Persons who fall into one or more of the
Releasees following categories: (i) the County, the
County-Related Persons and Randolph; (ii)
any past or present Affiliate of the County,
the County-Related Persons or Randolph;
(iii) any past or present officers,
supervisors, directors, employees, agents,
members, shareholders, family members,
attorneys, accountants, administrators,
representatives, partners, principals,
managers, owners, parents, subsidiaries,
joint venturers, partnerships, consultants,
and/or independent contractors in or of any
of the Persons described or referred to in
(i) and/or (ii); and any predecessors,
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successors, successors in interest,
beneficiaries, executors, administrators,
personal representatives, heirs or assigns
of any of the Persons described or referred
to in (i), (ii), and/or (iii).
7 Criminal The actions United States v. Mays, Walsh and
Actions Hlawek, No. CR 99-1077-CAS, United States v.
Canham, No. CR-99-1078-SVW, and United
States v. O'Donnell, Levin and Tisdale, No.
CR-99-1079 DDP.
8 Criminal Walsh, Mays, Hlawek, Canham, O'Donnell,
Defendants Levin and Tisdale, who were defendants in
the Criminal Actions and entered plea
agreements therein.
9 Effective The first business day after this Agreement
Date has been signed by all Parties and their
counsel in the spaces provided at the end of
this Settlement Agreement and all fully
executed signature pages have been exchanged
by hand or facsimile transmission as
provided in Section III of this Agreement.
10 Norcal Persons who fall into one or more of the
Releasees following categories: (i) Norcal and
Norcal/SB; (ii) any past or present
Affiliate of Norcal or Norcal/SB; (iii) any
past or present officers, supervisors,
directors, employees, agents, members,
shareholders, family members, attorneys,
accountants, administrators,
representatives, partners, principals,
managers, owners, parents, subsidiaries,
joint venturers, partnerships, consultants,
and/or independent contractors in or of any
of the Persons described or referred to in
(i) and/or (ii); and any predecessors,
successors, successors in interest,
beneficiaries, executors, administrators,
personal representatives, heirs or assigns
of any of the Persons described or referred
to in (i), (ii), and/or (iii).
11 Parties and The parties to this Settlement Agreement,
Party namely, the County, the County-Related
Persons, Randolph, Norcal and Norcal/SB.
Each of those persons is a "Party."
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12 Person Any natural person, individual, corporation,
municipal corporation or other public
entity, limited liability company, limited
liability partnership, association,
partnership, joint venture or any other type
of legal entity.
13 Settlement The date that the Court in the Action enters
Order Date the order and/or judgment under Code of
Civil Procedure Section 664.6 as provided in
Section III.C of this Agreement, or as
otherwise provided in Section III.D of this
Agreement.
14 Termination The termination date of the 1995 Contract,
Date which is not later than June 30, 2001, as
provided in Amendment No. 5 to the 1995
Contract.
III. THE EFFECTIVE DATE AND THE SETTLEMENT ORDER DATE.
A. This Agreement has no force or effect until it is signed by
the Parties and their counsel in the spaces provided at the end
of this Agreement and the Parties and their counsel have
exchanged all fully executed signature pages by hand or facsimile
transmission at the addresses specified in Section XV.J of this
Agreement. The first business day after the Parties and their
counsel have exchanged all fully executed signature pages as
provided in Section XV.J is the "Effective Date."
B. On the Effective Date, the Norcal Parties shall be deemed to
have relinquished, for a period of five years after the
Termination Date, any right they may have to submit a proposal to
the County to continue to operate or manage the Solid Waste
System. Notwithstanding the foregoing, if the Norcal Parties'
rights under the 1995 Contract (as modified by this Agreement)
are assigned, with the County's consent pursuant to Sections 10.1
and 18.3 of the 1995 Contract, to a Person who is not an
Affiliate of Norcal and whose directors and top level officers do
not include past or present directors or top level officers of
Norcal, there will be no restriction by virtue of such assignment
on such assignee's submitting a proposal to operate or manage the
Solid Waste System. In requesting the County's consent to such
assignment pursuant to Sections 10.1 and 18.3 of the 1995
Contract, the Norcal Parties shall provide the County with, in
addition to any other information required for such consent under
the 1995 Contract: (a) the contract documents accomplishing the
proposed assignment; and (b) any financial statements and
statements of revenue and income relating to the 1995 Contract
that the Norcal Parties, or either of them, provide to the
proposed assignee.
C. No later than the second court day after the Effective Date,
the Parties shall file a joint motion under Code of Civil
Procedure Section 664.6 for entry by the Court in the Action of
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an order and/or judgment as to the Norcal Parties in
substantially the form of the Motion for Entry of Order and/or
Judgment attached as Exhibit A hereto, which will seek entry of
the [Proposed] Order and/or Judgment (the "Settlement Order")
substantially in the form of Exhibit B hereto, and which will be
based on a contemporaneously-filed Stipulation for Entry of Order
and/or Judgment substantially in the form of Exhibit C hereto.
The date of entry of the Settlement Order by the Court is the
"Settlement Order Date," except as provided in Section III.D of
this Agreement. To the extent reasonably practicable, the
Parties shall seek entry of the Settlement Order on shortened
time. The Parties shall bear their own fees and costs in seeking
the Settlement Order.
D. Time is of the essence of this Agreement. It is essential to
minimize any disruption to the County's Solid Waste System and to
ensure the orderly transition of that system to a new operator.
Accordingly, the Parties may at any time waive the requirement of
a Settlement Order. Such waiver may be made only by means of a
writing signed by counsel for all of the Parties and approved by
all of the Parties. In the event of such a waiver, all
references in this Agreement to the "Settlement Order Date" shall
mean "30 days after the Effective Date or such other date as the
Parties agree to in the waiver writing." In the event of such a
waiver, this Agreement will be binding and have its full force
and effect on the Settlement Order Date as determined in the
written waiver.
IV. SETTLEMENT PAYMENT AND CONTINGENT ADDITIONAL PAYMENT.
A. Settlement Payment by Norcal to the County.
1. No later than six business days following the Settlement
Order Date, Norcal shall pay $6,561,000 (Six Million, Five
Hundred And Sixty-One Thousand Dollars) to the County. Norcal
shall make that payment (the "Settlement Payment") by means of a
certified check made payable to the County. The Settlement
Payment shall be delivered by hand by Norcal to Randolph or such
County official as may be designated in writing by Randolph.
2. The Settlement Payment in Section IV.A.1 shall be allocated
and applied as follows:
(a) Ninety-five percent (95%) of the Settlement Payment shall be
allocated and applied by the County to the County's causes of
action in the Action against the Norcal Parties under Government
Code Section 1090 et seq., California Government Code Sections
87100, 87103 and 91003 (the Political Reform Act), and California
Business and Professions Code Sections 17200 and 17203 (the
Unfair Competition Law). None of this ninety-five percent
portion of the Settlement Payment shall be allocated or applied
to the County's causes of action for fraud, breach of fiduciary
duty, violation of California Government Code Sections 12650 et
seq. (the False Claims Act), and unjust enrichment and
constructive trust to recover damages allegedly suffered by the
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County in connection with: (i) the Harich Contracts, (ii)
reimbursement of Norcal for billings by its subcontractor
Hernandez Trucking, and (iii) bribes allegedly received by Hlawek
and allegedly paid by Mays, Walsh or Bio-Reclamation. This 95%
of the Settlement Payment is intended by the Parties as, and
constitutes, payment of restitution to the County in connection
with the causes of action specified in the first sentence of this
Section IV.A.2(a).
(b) Five percent (5%) of the Settlement Payment shall be
allocated and applied by the County to its causes of action in
the Action for damages against the Norcal Parties for fraud,
breach of fiduciary duty, violation of California Government Code
Sections 12650 et seq. (the False Claims Act), and unjust
enrichment and constructive trust, including but not limited to
damages allegedly suffered by the County in connection with: (i)
the Harich Contracts, (ii) reimbursement of Norcal for billings
by its subcontractor Hernandez Trucking, and (iii) bribes
allegedly received by Hlawek and allegedly paid by Mays, Walsh or
Bio-Reclamation. None of this five percent portion of the
Settlement Payment shall be allocated or applied to causes of
action of the County specified in the first sentence of Section
IV.A.2(a).
(c) Regardless of the validity or legal effect (whether for
purposes of Code of Civil Procedure Sections 877 or 877.6 or for
any other purpose) of the allocation and application formula set
forth in Sections IV.A.2(a) and (b): (i) under no circumstances
shall the County be obligated to return any settlement payments
to the Norcal Parties; and (ii) this Agreement does not require
the Norcal Parties to make settlement payments to the County in
addition to the Settlement Payment except as provided in Section
IV.B of this Agreement.
B. Contingent Additional Payment by Norcal Parties to the
County.
1. After the Settlement Order Date, the Norcal Parties shall be
obligated to pay to the County fifty percent (50%) of the "Net
Proceeds," as defined below, of any claims (the "Mays/Walsh
Claims") the Norcal Parties, or either of them, choose, in their
sole discretion, to assert and pursue against any of the
following persons: (i) Mays, (ii) Walsh, (iii) Bio-Reclamation
and (iv) any of their spouses, children, Affiliates, or co-
conspirators (collectively, the "Mays/Walsh Parties"), provided
that the Mays/Walsh Claims consist solely of claims that are
based on any act or omission committed by any of the Mays/Walsh
Parties in connection with or relating to the County, the 1995
Contract, the Harich Contracts, or Bio-Reclamation's consulting
agreements with Norcal.
2. "Net Proceeds" means any and all cash and other property
collected or recovered by the Norcal Parties or either of them,
through litigation, settlement, arbitration, or any other means,
from the Mays/Walsh Parties or any insurer of Norcal or of the
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Mays/Walsh Parties, on the Mays/Walsh Claims after subtraction of
both: (a) all reasonable attorneys' fees and expenses (including
expert witness fees, investigator fees, court costs, and copying
costs) incurred by the Norcal Parties in connection with their
affirmative claims against the Mays/Walsh Parties (as opposed to
those incurred in connection with the defense of claims by the
County) ("Claim Costs"), provided that Net Proceeds shall not be
reduced by any otherwise allowable Claim Costs incurred prior to
the Effective Date in excess of $200,000; and (b) any amounts
paid by the Norcal Parties to settle or satisfy any cross-claim
asserted against any of the Norcal Parties by any of the
Mays/Walsh Parties.
3. This Agreement does not obligate the Norcal Parties, or
either of them, to assert any claims against any of the
Mays/Walsh Parties, including but not limited to the Mays/Walsh
Claims. This Agreement does not give the County Parties any
right to prevent a settlement by the Norcal Parties with the
Mays/Walsh Parties, or any of them. The Norcal Parties' present
intention is to assert claims against one or more of the
Mays/Walsh Parties. Although it is the Norcal Parties' present
intention to assert such claims, the Parties recognize that any
number of considerations, including, but not limited to,
intervening circumstances or events, may lead the Norcal Parties
to choose not to do so. The Norcal Parties will have no
liability to the County under this Section IV.B if for any reason
the Norcal Parties decide not to assert or pursue claims against
any of the Mays/Walsh Parties. The preceding sentence does not
excuse the Norcal Parties from their obligation to pay 50% of Net
Proceeds of the Mays/Walsh Claims to the County pursuant to this
Section IV.B to the extent the Norcal Parties elect to proceed on
the Mays/Walsh Claims and such Net Proceeds are recovered by the
Norcal Parties.
4. Any Net Proceeds paid to the County shall be allocated
pursuant to the same allocation and application formula applied
to the Settlement Payment set out in Section IV.A.2 of this
Agreement.
V. ACKNOWLEDGEMENT OF COOPERATION OF NORCAL PARTIES.
The County Parties hereby acknowledge the extremely valuable
cooperation and voluntary assistance of the Norcal Parties in
helping the County (a) to conduct its investigation and (b) to
obtain a satisfactory settlement of the disputes resolved by this
Agreement. If requested to do so by the Norcal Parties, the
County shall acknowledge to any third parties the extremely
valuable cooperation and voluntary assistance of the Norcal
Parties.
VI. DISMISSAL WITH PREJUDICE OF CLAIMS AGAINST THE NORCAL
PARTIES.
A. No later than six business days following the Settlement
Order Date, the County Parties shall execute and deliver to the
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undersigned counsel for the Norcal Parties for filing with the
Court an executed dismissal with prejudice of the Action as to
the Norcal Parties, only, of each and every cause of action
asserted against the Norcal Parties in the Action (the
"Dismissal"). The Dismissal shall be in substantially the form
of the Request for Dismissal attached hereto as Exhibit D.
B. Each Party shall bear its own costs, attorneys' fees and
expert witness fees in connection with seeking and obtaining the
Dismissal.
C. The Norcal Parties shall not file the Dismissal until after
the Norcal Parties deliver the Settlement Payment to the County
as provided in this Agreement.
VII. GOOD FAITH SETTLEMENT DETERMINATION.
A. At any time after the Settlement Order Date, the Norcal
Parties shall have the right, in their sole discretion, to file a
motion (the "Section 877.6 Motion") in the Action for an order
(the "Section 877.6 Order"), in substantially the form of Exhibit
E to this Agreement, that determines that this Agreement was made
in good faith within the meaning of Code of Civil Procedure
Sections 877 and/or 877.6 and any other applicable standard and
holds that all claims for equitable comparative contribution, or
partial or comparative indemnity, based on comparative negligence
or comparative fault, however captioned or styled, by any
purported joint tortfeasor with the Norcal Parties, are barred
against all Norcal Releasees.
B. If the Norcal Parties file the Section 877.6 Motion, then the
County Parties shall reasonably cooperate with the Norcal Parties
in connection with such Motion, including without limitation:
(a) filing a joinder that states that the County Parties support
entry of the Section 877.6 Order, and (b) reasonably cooperating
in providing non-privileged testimony and documents reasonably
requested by the Norcal Parties in support of the Section 877.6
Motion.
C. The Norcal Parties, on the one hand, and the County Parties,
on the other, shall bear their own fees and costs in connection
with the Norcal Parties' Section 877.6 Motion, if any.
D. Even if a Section 877.6 Order is not entered for any reason,
including without limitation because the Norcal Parties determine
not to file a Section 877.6 Motion: (i) this Agreement will
remain binding, and (ii) the Norcal Parties shall not be entitled
to a return of the settlement payments required by Section IV of
this Agreement, nor shall the Norcal Parties be excused from
making the settlement payments required by Section IV of this
Agreement. All Parties acknowledge that this Agreement is a good
faith settlement of disputed claims based on, among other things,
the Parties' reasonable estimations of the Parties' proportionate
liability for any potential damages on the claims to which the
settlement payment(s) are apportioned, discounted based on such
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factors as the strength of the case, the present value of money
received in settlement compared with the value of a later
judgment, and risks and uncertainties surrounding the Parties'
liability and the outcome of litigation.
VIII. COOPERATION.
A. Cooperation of Norcal Parties with County Parties in the
Action and Litigation.
Following the Settlement Order Date, the Norcal Parties shall
reasonably cooperate in providing relevant, non-privileged
information, testimony and documents to the County Parties in
connection with the Action and without the need for service of a
subpoena by the County Parties.
B. Cooperation of County Parties with Norcal Parties in the
Action and Litigation.
Following the Settlement Order Date, if the Norcal Parties or
either of them assert and pursue claims against the Mays/Walsh
Parties or any of them, or the Mays/Walsh Parties or any of them
assert and pursue claims against the Norcal Parties or any of
them, the County Parties shall reasonably cooperate in providing
relevant, non-privileged information, testimony and documents to
the Norcal Parties in connection with any such claims and without
the need for service of a subpoena by the Norcal Parties.
C. Cooperation in Implementation of Settlement.
The Parties shall reasonably cooperate in taking all actions
to effectuate and implement this Agreement.
IX. RELEASES.
A. Releases by the Norcal Parties.
1. Except for rights and obligations expressly preserved by this
Agreement and subject to the limiting provisions contained in
subsections 2, 3 and 4 of this Section IX.A, as of the Settlement
Order Date, each of the Norcal Parties, on behalf of themselves
and, to the maximum extent permitted by law, each of their
predecessors, successors, assigns, attorneys, executors, trusts,
trustees, beneficiaries, and agents of any kind, hereby fully
releases and forever discharges any and all Claims against the
County Releasees that are based upon, arise out of or relate to:
(a) the County;
(b) the 1995 Contract; including, by way of example and not by
way of limitation, its negotiation, approval, validity and
implementation; performance under it; and any Claim that the 1995
Contract is void or voidable;
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(c) any act, failure to act, omission, misrepresentation, fact,
event, transaction or occurrence alleged or asserted in any of
the pleadings or other documents filed or served in connection
with the Action;
(d) the conspiracies and related acts admitted in the plea
agreements of the Criminal Defendants in the Criminal Actions;
and/or
(e) conduct or actions of or omissions by Mays, Walsh and/or
Hlawek, the Affiliates of any of them, and/or anyone acting in
concert with them, including but not limited to in connection
with the conspiracies admitted in the plea agreements of the
Criminal Defendants in the Criminal Actions.
2. Notwithstanding Section IX.A.1, the Claims released by the
Norcal Parties do not include Claims to enforce this Agreement.
3. Notwithstanding Section IX.A.1, the Claims released by the
Norcal Parties do not include:
(a) Claims based on acts occurring on or after the Settlement
Order Date or based on omissions connected with acts or events
occurring on or after the Settlement Date. including but not
limited to any such Claims to enforce the 1995 Contract arising
after the Settlement Order Date. Notwithstanding the preceding
sentence, this Section IX.A.3(a) does not permit and shall not be
construed to permit the Norcal Parties, or either of them, to
utilize the guilty pleas of any of the Criminal Defendants or the
conduct admitted in connection with those pleas, or an argument
that the 1995 Contract is void or voidable, as an event of
default or as a basis for a Claim for or as a defense to
enforcement of the 1995 Contract; and
(b) Claims to enforce the 1995 Contract to recover contract
damages or injunctive relief based on acts or omissions occurring
before the Settlement Order Date if and only if such Claims are
based on one or more of the following: (i) defective
construction work under the 1995 Contract; (ii) defective
environmental work under the 1995 Contract; (iii) bodily injuries
caused to individuals in the course of performing the 1995
Contract, (iv) physical damage to real or tangible personal
property caused in the course of performing the 1995 Contract
(including any failure to cause the removal of any mechanics' or
similar liens against County property), (v) violations of
facility operating permits for landfill operations or violations
of environmental, health and safety, wage and hour, or collective
bargaining laws, regulations or rules committed in the course of
performing the 1995 Contract; (vi) disputes concerning invoices
submitted by Norcal to the County prior to the Settlement Order
Date for services rendered in connection with the 1995 Contract,
any part of which remains unpaid, including but not limited to
disputes concerning billed amounts and unbilled retention
amounts; (vii) disputes concerning services rendered by the
Norcal Parties in connection with the 1995 Contract prior to the
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Settlement Order Date as to which invoices have not been
submitted by Norcal to the County prior to the Settlement Order
Date; or (viii) Claims of third parties against any of the Norcal
Parties based on acts or omissions occurring before the
Settlement Order Date that allegedly implicate indemnity
obligations of the County Parties under Section 6.2 of the 1995
Contract. Notwithstanding the preceding sentence, the Claims
preserved by this Section IX.A.3(b) do not include any Claim
based on fraud or bribery, the guilty pleas of any of the
Criminal Defendants or the conduct admitted in connection with
those pleas or any contention that the 1995 Contract is void or
voidable; nor shall any of the Claims preserved by this Section
IX.A.3(b) be subject to any defense based on fraud or bribery,
the guilty pleas of any of the Criminal Defendants or the conduct
admitted in connection with those pleas or any contention that
the 1995 Contract is void or voidable.
4. Notwithstanding Section IX.A.1, the Persons released in
Section IX.A.1 do not include: (i) any of the defendants in the
Action, (ii) the family members of any of the defendants in the
Action, (iii) the shareholders, officers and directors of any of
the defendants in the Action, or (iv) the Affiliates of any of
the defendants in the Action. By way of example, without
limitation, the Persons released in Section IX.A.1 do not
include: (a) Hlawek, members of his family, and any Affiliate of
any of them, (b) Mays, members of his family, and any Affiliate
of any of them, (c) Bio-Reclamation, its shareholders, officers,
and directors, (d) Business Consultants, Inc., its shareholders,
officers, and directors, (e) Ronald R. Canham, members of his
family, and any Affiliate of any of them, (f) Canham &
Associates, Inc., its shareholders, officers, and directors, (g)
Dionysus Properties, its owners, officers, and directors, (h)
Hinshaw & Culbertson and its partners, (i) James E. Iverson,
members of his family, and any Affiliate of any of them, (j) John
R. Larson, members of his family, and any Affiliate of any of
them, (k) Sol Levin, members of his family, and any Affiliate of
any of them, (l) William S. McCook, members of his family, and
any Affiliate of any of them, (m) Miller & Schroeder Financial,
Inc., its shareholders, officers, and directors, (n) Oakridge
Group Corporation, its shareholders, officers, and directors, (o)
Oakridge Corporation, its shareholders, officers, and directors,
(p) Thomas F. O'Donnell, members of his family, and any Affiliate
of any of them, (q) SHL Associates, Ltd., its shareholders,
officers, and directors, (r) Richard E. Tisdale, members of his
family and any Affiliate of any of them, (s) Kenneth James Walsh,
members of his family, and any Affiliate of any of them, (t)
Michael Welsh, members of his family, and any Affiliate of them,
or (u) Hernandez Trucking, Patricia Hernandez, Harich
Enterprises, Joseph Harich, and their Affiliates, shareholders,
officers, directors, and family members. The Persons mentioned
in this Section IX.A.4 as excluded from the release in Section
IX.A.1 do not include, and shall not be interpreted to include,
the County Parties, their board members, officers, salaried
employees, accountants or attorneys, or any of them (excluding
any Person specifically named as a defendant in the Complaint in
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the Action but not excluding any such Person who is a current
County official), each of which is released as a County Releasee.
The preceding sentence does not release Claims of the Norcal
Parties against any specifically named defendant in the Complaint
in the Action who asserts a Claim against any of the Norcal
Parties or their officers, directors or salaried employees that
is based on or related to any of the facts or events alleged in
the Complaint in the Action or any purported participation prior
to the Effective Date in any alleged misconduct of Hlawek, Mays,
Walsh or Bio-Reclamation.
B. Releases by the County Parties.
1. Except for rights and obligations expressly preserved by this
Agreement and subject to the limiting provisions contained in
subsections 2, 3 and 4 of this Section IX.B, as of the Settlement
Order Date, each of the County Parties, on behalf of themselves
and, to the maximum extent permitted by law, each of their
predecessors, successors, assigns, attorneys, executors, trusts,
trustees, beneficiaries, spouses, heirs, supervisors, and agents
of any kind, hereby fully releases and forever discharges any and
all Claims against the Norcal Releasees that are based upon,
arise out of or relate to:
(a) the Norcal Parties;
(b) the 1995 Contract; including, by way of example and not by
way of limitation, its negotiation, approval, validity and
implementation; performance under it; and any Claim that the 1995
Contract is void or voidable;
(c) any act, failure to act, omission, misrepresentation, fact,
event, transaction or occurrence alleged or asserted in any of
the pleadings or other documents filed or served in connection
with the Action;
(d) the conspiracies and related acts admitted in the plea
agreements of the Criminal Defendants in the Criminal Actions;
and/or
(e) conduct or actions of or omissions by Mays, Walsh and/or
Hlawek, the Affiliates of any of them, and/or anyone acting in
concert with them, including but not limited to in connection
with the conspiracies admitted in the plea agreements of the
Criminal Defendants in the Criminal Actions.
2. Notwithstanding Section IX.B.1, the Claims released by the
County Parties do not include Claims to enforce this Agreement.
3. Notwithstanding Section IX.B.1, the Claims released by the
County Parties do not include:
(a) Claims based on acts occurring on or after the Settlement
Order Date or based on omissions connected with acts or events
occurring on or after the Settlement Date, including but not
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limited to any such Claims to enforce the 1995 Contract arising
after the Settlement Order Date. Notwithstanding the preceding
sentence, this Section IX.B.3(a) does not permit and shall not be
construed to permit the County Parties, or any of them, to
utilize the guilty pleas of any of the Criminal Defendants or the
conduct admitted in connection with those pleas, or an argument
that the 1995 Contract is void or voidable, as an event of
default or as a basis for a Claim for or as a defense to
enforcement of the 1995 Contract; and
(b) Claims to enforce the 1995 Contract to recover contract
damages or injunctive relief based on acts or omissions occurring
before the Settlement Order Date if and only if such Claims are
based on one or more of the following: (i) defective
construction work under the 1995 Contract; (ii) defective
environmental work under the 1995 Contract; (iii) bodily injuries
caused to individuals in the course of performing the 1995
Contract, (iv) physical damage to real or tangible personal
property caused in the course of performing the 1995 Contract
(including any failure to cause the removal of any mechanics' or
similar liens against County property), (v) violations of
facility operating permits for landfill operations or violations
of environmental, health and safety, wage and hour, or collective
bargaining laws, regulations or rules committed in the course of
performing the 1995 Contract; (vi) disputes concerning invoices
submitted by Norcal to the County prior to the Settlement Order
Date for services rendered in connection with the 1995 Contract,
any part of which remains unpaid, including but not limited to
disputes concerning billed amounts and unbilled retention
amounts; (vii) disputes concerning services rendered by the
Norcal Parties in connection with the 1995 Contract prior to the
Settlement Order Date as to which invoices have not been
submitted by Norcal to the County prior to the Settlement Order
Date; or (viii) Claims of third parties against any of the County
Parties based on acts or omissions occurring before the
Settlement Order Date that allegedly implicate indemnity
obligations of the Norcal Parties under Section 6.1 of the 1995
Contract. Notwithstanding the preceding sentence, the Claims
preserved by this Section IX.B.3(b) do not include any Claim
based on fraud or bribery, the guilty pleas of any of the
Criminal Defendants or the conduct admitted in connection with
those pleas or any contention that the 1995 Contract is void or
voidable; nor shall any of the Claims preserved by this Section
IX.B.3(b) be subject to any defense based on fraud or bribery,
the guilty pleas of any of the Criminal Defendants or the conduct
admitted in connection with those pleas or any contention that
the 1995 Contract is void or voidable.
4. Notwithstanding Section IX.B.1, the Persons released in
Section IX.B.1 do not include: (a) Hlawek, members of his
family, and any Affiliate of any of them, (b) Mays, members of
his family, and any Affiliate of any of them, (c) Bio-
Reclamation, its shareholders, officers, and directors, (d)
Business Consultants, Inc., its shareholders, officers, and
directors, (e) Ronald R. Canham, members of his family, and any
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Affiliate of any of them, (f) Canham & Associates, Inc., its
shareholders, officers, and directors, (g) Dionysus Properties,
its owners, officers, and directors, (h) Hinshaw & Culbertson and
its partners, (i) James E. Iverson, members of his family, and
any Affiliate of any of them, (j) John R. Larson, members of his
family, and any Affiliate of any of them, (k) Sol Levin, members
of his family, and any Affiliate of any of them, (l) William S.
McCook, members of his family, and any Affiliate of any of them,
(m) Miller & Schroeder Financial, Inc., its shareholders,
officers, and directors, (n) Oakridge Group Corporation, its
shareholders, officers, and directors, (o) Oakridge Corporation,
its shareholders, officers, and directors, (p) Thomas F.
O'Donnell, members of his family, and any Affiliate of any of
them, (q) SHL Associates, Ltd., its shareholders, officers, and
directors, (r) Richard E. Tisdale, members of his family and any
Affiliate of any of them, (s) Kenneth James Walsh, members of his
family, and any Affiliate of any of them, (t) Michael Welsh,
members of his family, and any Affiliate of them, (u) Hernandez
Trucking, Patricia Hernandez, Harich Enterprises, Joseph Harich,
and their Affiliates, shareholders, officers, directors, and
family members; (v) any Person who was or is a County official or
salaried County employee, or (w) any Person who was or is an
underwriter retained by the County or securities broker or dealer
retained by the County. The Persons mentioned in this Section
IX.B.4 as excluded from the release in Section IX.B.1 do not
include, and shall not be interpreted to include, the Norcal
Parties, their board members, officers, salaried employees,
accountants or attorneys, or any of them (excluding any Person,
other than the Norcal Parties, specifically named as a defendant
in the Complaint in the Action), each of which is released as a
Norcal Releasee.
C. Discovery of Other Facts.
Each Party fully understands that facts relating to any
matter covered by this Agreement might be found hereafter to be
other than or different from the facts now believed by it to be
true. No representations are being made by any of the Parties,
except as specifically set forth in Section XIII hereof. Each
Party expressly accepts and assumes the risk of such possible
differences in fact and agrees that this Agreement will
nevertheless remain in effect. Each Party expressly waives any
rights, benefits and protections afforded by California Civil
Code Section 1542, which provides,
"[A] GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR,"
and any statutory, common law, or other doctrines of similar
force and effect of any jurisdiction, under state or federal law.
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D. Non-Signatory Released Parties.
Each Party agrees that those Norcal Releasees and County
Releasees against whom Claims are released in this Agreement
(collectively, the "Releasees") that are not signatories to this
Agreement are intended beneficiaries of the Agreement and the
releases contained herein and that this Agreement is made
expressly for their benefit and on their behalf and is
enforceable by each of them to protect their rights under this
Agreement as Releasees, and each Party intends this Agreement and
the releases to extend fully to those non-signing Releasees. The
Parties specifically acknowledge that non-Releasees are not
intended beneficiaries of the Agreement or the releases contained
herein, that this Agreement is not made for the benefit of or on
behalf of the non-Releasees and is not enforceable by any of such
non-Releasees, and that the Parties do not intend this Agreement
or the releases to extend to such non-Releasees.
E. Non-Signatory Parties' Released Claims.
In making the releases contained in this Agreement, it is
each Party's express intent to release the released Claims
(subject to the exceptions set forth in subsections 2, 3 and 4 of
Sections IX.A and IX.B of this Agreement) to the greatest extent
and in the broadest manner possible to afford the greatest
possible protection to the Releasees and to bind any Person who
has or could have brought any released Claim in any forum to the
extent that the releasing Party has the power to bind such
Person, bar such Person's right to bring any released Claim, or
represent such Person in a representative capacity, in trust, as
a trustee, or by virtue of the releasing Party's public position
or public responsibilities or by virtue of having brought claims
on behalf of the public or to enforce public rights.
X. COVENANTS NOT TO SUE.
A. Covenant Not To Sue By Norcal Parties.
As of the Settlement Order Date, each of the Norcal Parties
covenants, on behalf of itself and its predecessors, successors,
assigns, attorneys, and agents of any kind, not to file,
initiate, maintain or pursue against the County Releasees against
whom the Norcal Parties have released Claims in this Agreement,
or any of them, any Claim released in this Agreement. The
preceding sentence does not preclude the Norcal Parties from
asserting a claim against a Person (other than a County Releasee
against whom the Norcal Parties have released Claims in this
Agreement) who asserts a claim for indemnity or contribution
against any of the Norcal Parties.
B. Covenant Not To Sue by County Parties.
As of the Settlement Order Date, each of the County Parties
covenants, on behalf of itself and its predecessors, successors,
assigns, attorneys, and agents of any kind, not to file,
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initiate, maintain or pursue against the Norcal Releasees against
whom the County Parties have released Claims in this Agreement,
or any of them, any Claim released in this Agreement. The
preceding sentence does not preclude the County Parties from
asserting a claim against a Person (other than a Norcal Releasee
against whom the County Parties have released Claims in this
Agreement) who asserts a claim for indemnity or contribution
against any of the County Parties.
XI. COVENANTS RELATED TO CONTINUED SERVICES AND OBLIGATIONS UNDER
THE 1995 CONTRACT.
A. As set forth in Section III of this Agreement, on the
Effective Date, the Norcal Parties shall be deemed to have
relinquished, for a period of five years after the Termination
Date, any right they may have to submit a proposal to manage or
operate the County's Solid Waste System, or any portion thereof.
On the Effective Date, the County shall be obligated to require
any proposed new operator and manager who will replace the Norcal
Parties to interview all employees of the Norcal Parties who
apply for employment with such new operator or manager. In
addition, the County will also interview all qualified employees
of the Norcal Parties who apply for the new positions created by
the County's Waste System Division in connection with its taking
over any functions now performed by the Norcal Parties. The
County will consider applications by such employees in accordance
with applicable County rules and regulations. Nothing in this
Agreement is intended to or shall be deemed to provide these
employees any third party beneficiary rights in connection with
the provisions of this Section XI.A of this Agreement.
B. On the Settlement Order Date, the Norcal Parties shall be
obligated, through the Termination Date, and subject to the
express terms of this Agreement, to operate the County's Solid
Waste System in accordance with the 1995 Contract. The County
shall also comply with the 1995 Contract, subject to the express
terms of this Agreement, including but not limited to the
County's obligations to make payments for services rendered by
the Norcal Parties under the 1995 Contract prior to and after the
Effective Date subject to the terms of this Agreement. After the
Effective Date, the County will promptly process, in accordance
with all applicable provisions of the 1995 Contract, including
without limitation Section 18.3 of the 1995 Contract, any
outstanding invoices of the Norcal Parties for services rendered
under the 1995 Contract. The obligation to promptly process
shall not be construed as waiving any defenses the County may
have to payment of such invoices. The Parties shall make
reasonable, good faith efforts to minimize disputes arising from
the cessation of the role of the Norcal Parties as managers and
operators of the County's Solid Waste System. The preceding
sentence shall not be construed as obligating any of the Parties
to waive its rights under this Agreement or the 1995 Contract.
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C. The Parties' obligations under the 1995 Contract will survive
except as modified by this Agreement.
D. The Parties recognize that the County may request
transitional assistance from Norcal in replacing it as operator
and manager of the County's Solid Waste System. If such
transitional assistance requires the Norcal Parties, or either of
them, to perform work ("Additional Transitional Work") beyond the
scope of Basic Systems Operations as defined in the 1995
Contract, then Norcal shall so notify the County in writing
before undertaking any such Additional Transitional Work. Absent
a written agreement by the County to pay for Additional
Transitional Work, Norcal shall not be obligated to undertake
such work. If, however, Norcal does undertake any such work
without a written agreement, Norcal shall not be entitled to
additional compensation for such work; instead, Norcal shall be
compensated for such work it chooses to undertake as though it
was for Basic Systems Operations.
XII. PARTIES' DENIAL OF LIABILITY.
A. Denial Of Liability.
Each of the Norcal Parties vigorously contests each and every
claim alleged against it in the Action, and each of the County
Parties vigorously contests each and every claim the Norcal
Parties have contended they would bring against the County in the
Action. Each of the Parties continues to assert defenses to such
claims and expressly denies any wrongdoing or legal liability of
any kind on its part. There has been no determination by any
court, administrative agency or other tribunal as to any of the
factual allegations made by any of the Parties against any of the
Parties.
B. No Admission Of Liability.
The Parties enter into this Agreement without in any way
admitting or acknowledging any fault, liability or wrongdoing of
any kind. This Agreement, its terms and provisions, and any and
all of the negotiations or proceedings connected with it are not
and cannot be construed as or deemed to be evidence of an
admission or concession by the Parties, or any of them, of the
truth or validity of any of the allegations in the Action, or of
any liability, fault or wrongdoing of any kind. The Parties
understand and acknowledge that this Agreement constitutes a
compromise and settlement of disputed claims, and that no action
taken by the Parties, or any of them, either previously or in
connection with this Agreement, is or shall be deemed or
construed to be (a) an admission regarding any claims heretofore
made; or (b) an acknowledgement by the Parties of any fault or
liability whatsoever to any other Party or to any third party.
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C. Settlement Agreement And Related Proceedings Inadmissible.
This Agreement, its terms, exhibits, attachments and
provisions, and any and all of the negotiations or proceedings
connected with it shall not be offered as evidence or received in
evidence in any pending or future civil, criminal,
administrative, regulatory or disciplinary action, arbitration,
lawsuit, administrative proceeding, complaint or other legal
proceeding for any purpose whatsoever, including but not limited
to the purpose of establishing any fault, wrongdoing, omission,
liability or admission by any of the Parties. Notwithstanding
the preceding sentence: (i) this Agreement shall be admissible
in any action to support a motion, defense, claim, cross-claim or
counterclaim based on principles of res judicata, collateral
estoppel, release, good faith settlement, judgment bar or
reduction or any other theory of claim preclusion or issue
preclusion or similar defense, cross-claim or counterclaim, or in
any proceedings as may be necessary to consummate or enforce this
Agreement, and may be used as the basis for an injunction against
any action, suit or other proceedings that may be instituted,
prosecuted or attempted in breach of this Agreement; and (ii) the
Norcal Parties in their sole discretion may offer and use this
Agreement in connection with any investigation or prosecution by
any governmental entity of the Norcal Parties or any of their
subsidiaries, affiliates, officers, directors, or employees.
XIII. REPRESENTATIONS AND WARRANTIES.
A. The Norcal Parties represent and warrant to the County
Parties that:
1. The Norcal Parties are familiar with the terms of this
Agreement;
2. The Norcal Parties have been represented and advised in the
preparation, negotiation and execution of this Agreement by legal
counsel of the Norcal Parties' own choice;
3. The Norcal Parties understand the meaning and consequences of
this Agreement and its legal and binding effect, including,
without limitation, the meaning, consequences and effect of the
releases granted, including, but not limited to, releases waiving
the protections otherwise afforded by California Civil Code
Section 1542;
4. The Norcal Parties, their counsel and any Person executing
this Agreement on behalf of the Norcal Parties have full
authority to act on behalf of the Party for which they are
signing and to bind such Party to the terms and conditions of
this Agreement;
5. This Agreement is the product of joint negotiations and/or
drafting and accordingly, the Norcal Parties waive any and all of
the benefits of California Civil Code Section 1654 and agree not
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to assert said section or any similar concept in any proceeding
arising out of or relating to this Agreement;
6. With the assistance of legal counsel and such other advisors
as the Norcal Parties deemed prudent, the Norcal Parties have had
the opportunity to perform and have performed such investigation,
including but not limited to investigating the existence and
merits of their claims, as they deem necessary in order to enter
into this Agreement;
7. In entering into this Agreement, the Norcal Parties are
relying solely upon their own investigation and advisors, and not
on representations, omissions or assumptions, stated or unstated,
by the County Parties or their counsel (except as expressly
provided in Section XIII.B of this Agreement), and the Norcal
Parties expressly waive and disclaim any such reliance;
8. The Norcal Parties acknowledge that none of the Parties makes
any representation with respect to the consideration furnished
pursuant to this Agreement;
9. The Norcal Parties are the owners of the Claims they are
releasing in connection with this Agreement, and none of the
Claims that the Norcal Parties are releasing has been assigned or
transferred except in circumstances where the assignee also
executes this Agreement;
10. The Norcal Parties are aware that the law and/or the facts
relating to the Parties and/or their disputes, including, without
limitation, the matters asserted in the Action, may be different
from those the Norcal Parties now believe to be true, and the
Norcal Parties expressly assume this risk;
11. The Norcal Parties are satisfied with this Agreement and this
outcome of the Action as to the Parties, and the Norcal Parties
acknowledge that this is a fair and reasonable settlement in
connection with any injury caused by the County Parties, taking
into account, among other things, the compromise of disputed
claims and the risks and uncertainties surrounding the County
Parties' liability and the outcome of any litigation against
them;
12. The cumulative income before income taxes of Norcal/SB, from
the inception of the 1995 Contract through February, 2000, net of
all consulting fees paid by the Norcal Parties to Mays and Bio-
Reclamation, is less than $6.561 million;
13. The Norcal Parties are not insolvent or unable to pay their
debts as they fall due; Norcal's making the $6.561 million
Settlement Payment to the County will not render the Norcal
Parties, or either of them, insolvent or unable to pay their
debts as they fall due; and the Norcal Parties are receiving
reasonably equivalent value in return for the Settlement Payment;
14. As of the Settlement Order Date, the Norcal Parties' consent
to this Agreement and the making of the Settlement Payment
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pursuant to this Agreement will not violate any court order
against or restrictive covenants in lending agreements of the
Norcal Parties or either of them; and neither of the Norcal
Parties has filed, brought or made any civil, administrative,
regulatory or disciplinary actions, arbitrations, lawsuits,
complaints or other legal proceedings against any of the County
Parties as to, on or concerning any of the Claims released by the
Norcal Parties in this Agreement; and
15. The Norcal Parties are not aware of any Claims or threatened
Claims that meet all of the following conditions: (i) the Claim
or threat of the Claim (collectively, the "Third Party Claim")
was made prior to the Effective Date by a person who is not a
Party to this Agreement (the "Third Party"); (ii) the Third Party
Claim was communicated in writing by the Third Party to the
Norcal Parties, or either of them, prior to the Effective Date;
(iii) the Third Party Claim is a Claim on which the Norcal
Parties, or either of them, may or intend to seek indemnity from
the County pursuant to Section 6.2 of the 1995 Contract; and (iv)
the Norcal Parties have not notified the County, either orally or
in writing, of the Third Party Claim prior to the Effective Date.
B. The County Parties represent and warrant to the Norcal
Parties that:
1. The County Parties are familiar with the terms of this
Agreement;
2. The County Parties have been represented and advised in the
preparation, negotiation and execution of this Agreement by legal
counsel of the County Parties' own choice;
3. The County Parties understand the meaning and consequences of
this Agreement and its legal and binding effect, including,
without limitation, the meaning, consequences and effect of the
releases granted, including, but not limited to, releases waiving
the protections otherwise afforded by California Civil Code
Section 1542;
4. The County Parties, their counsel and any Person executing
this Agreement on behalf of the County Parties have full
authority to act on behalf of the Party for which they are
signing and to bind such Party to the terms and conditions of
this Agreement;
5. This Agreement is the product of joint negotiations and/or
drafting and accordingly, the County Parties waive any and all of
the benefits of California Civil Code Section 1654 and agree not
to assert said section or any similar concept in any proceeding
arising out of or relating to this Agreement;
6. With the assistance of legal counsel and such other advisors
as the County Parties deemed prudent, the County Parties have had
the opportunity to perform and have performed such investigation,
including but not limited to investigating the existence and
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merits of their claims, as they deem necessary in order to enter
into this Agreement;
7. In entering into this Agreement, the County Parties are
relying solely upon their own investigation and advisors, and not
on representations, omissions or assumptions, stated or unstated,
by the Norcal Parties or their counsel (except as expressly
provided in Section XIII.A of this Agreement), and the County
Parties expressly waive and disclaim any such reliance;
8. The County Parties acknowledge that none of the Parties makes
any representation with respect to the consideration furnished
pursuant to this Agreement;
9. The County Parties are the owners of the Claims they are
releasing in connection with this Agreement, and none of the
Claims that the County Parties are releasing has been assigned or
transferred except in circumstances where the assignee also
executes this Agreement;
10. The County Parties are aware that the law and/or the facts
relating to the Parties and/or their disputes, including, without
limitation, the matters asserted in the Action, may be different
from those the County Parties now believe to be true, and the
County Parties expressly assume this risk;
11. The County Parties are satisfied with this Agreement and this
outcome of the Action as to the Parties, and the County Parties
acknowledge that this is a fair and reasonable settlement in
connection with any injury caused by the Norcal Parties, taking
into account, among other things, the compromise of disputed
claims and the risks and uncertainties surrounding the Norcal
Parties' liability and the outcome of any litigation against them
(notwithstanding the foregoing, regardless of whether a Section
877.6 Order, as provided in Section VII of this Agreement, is
entered, this Agreement shall remain binding, and the Norcal
Parties shall not be entitled to a return of the settlement
payments required by Section IV of this Agreement, nor shall the
Norcal Parties be excused from making the settlement payments
required by Section IV of this Agreement);
12. As of the Settlement Order Date, the County Parties' consent
to this Agreement will not violate any court order against or
restrictive covenants in lending agreements of the County Parties
or any of them; and other than the Action, none of the County
Parties has filed, brought or made any civil, administrative,
regulatory or disciplinary actions, arbitrations, lawsuits,
complaints or other legal proceedings against either of the
Norcal Parties as to, on or concerning any of the Claims released
by the County Parties in this Agreement; and
13. The County Parties are not aware of any Claims or threatened
Claims that meet all of the following conditions: (i) the Claim
or threat of the Claim (collectively, the "Third Party Claim")
was made prior to the Effective Date by a person who is not a
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Party to this Agreement (the "Third Party"); (ii) the Third Party
Claim was communicated in writing by the Third Party to the
County Parties, or any of them, prior to the Effective Date;
(iii) the Third Party Claim is a Claim on which the County
Parties, or any of them, may or intend to seek indemnity from the
Norcal Parties pursuant to Section 6.1 of the 1995 Contract; and
(iv) the County Parties have not notified the Norcal Parties,
either orally or in writing, of the Third Party Claim prior to
the Effective Date.
XIV. CHOICE OF FORUM AND WAIVER OF JURY TRIAL.
A. The provisions of the first sentence of paragraph 18.13 of
the 1995 Contract shall govern any dispute arising out of this
Agreement or the 1995 Contract. THE PARTIES ACKNOWLEDGE THAT
THEY ARE AWARE THAT THE FIRST SENTENCE OF PARAGRAPH 18.13 OF THE
1995 CONTRACT INCLUDES A WAIVER OF THE RIGHT TO JURY TRIAL, AND
THE PARTIES HEREBY VOLUNTARILY CONSENT TO THAT WAIVER.
B. Notwithstanding Section XIV.A of this Agreement (and without
limiting the jury waiver contained therein), and pursuant to Code
of Civil Procedure Section 664.6, the Court in which the Action
proceeds, or any other court to which both Parties agree, shall
have continuing jurisdiction over the Parties for the purpose of
enforcing this Agreement, including without limitation
jurisdiction to resolve any controversy, dispute or Claim arising
out of or relating to the breach, construction, implementation,
and enforcement of this Agreement and any motion by the Norcal
Parties that the Court determine that the settlement was made in
good faith under the standards of Code of Civil Procedure
Sections 877 and 877.6.
XV. MISCELLANEOUS PROVISIONS.
A. Settlement Agreement Binding on Others.
The terms of this Agreement are and will be binding upon each
of the Parties and their agents, heirs, executors, assignees and
successors in interest, and all other persons claiming any
interest in the subject matter hereto through any of the Parties
hereto.
B. Gender, Number and Headings.
As used in this Agreement, the neuter gender will include the
masculine and feminine, and vice versa, as the context requires;
and the singular number will include the plural, and vice versa,
as the context requires. As used in this Agreement, headings are
for convenience of reference only and will not be used to modify,
interpret, limit, expand or construe the terms of this Agreement.
C. Entire Agreement.
This Agreement (together with its exhibits and the 1995
Contract as expressly modified by this Agreement) constitutes the
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complete and exclusive agreement of the Parties with respect to
the Action, this settlement and Agreement, and all subjects
mentioned in this Agreement. This Agreement supersedes all prior
or contemporaneous negotiations, promises, covenants, agreements
or representations of every nature whatsoever with respect to
such subject matter, all of which have been merged and integrated
into this Agreement. Parol evidence shall be inadmissible to
show agreement by the Parties to any term or condition contrary
to or in addition to the terms and conditions contained in this
Agreement.
D. Enforcement.
Notwithstanding any other provision of this Agreement, no
Party shall be precluded from enforcing any of its rights under
this Agreement.
E. Amendments.
This Agreement may be amended or modified only by a written
instrument signed by the Parties and their counsel.
F. Governing Law.
This Agreement will be subject to, governed by, and construed
and enforced pursuant to the laws of the State of California
without reference to conflict of laws rules.
G. No Reliance.
The Parties, and each of them, understand that this Agreement
is made without reliance upon any inducement, statement, promise,
or representation other than those contained within Section XIII
of this Agreement. This Settlement Agreement is executed
voluntarily, following an opportunity to consult with counsel of
the Parties' choosing, and without any duress or undue influence
on the part or on behalf of any of the Parties hereto.
H. Attorneys' Fees.
As between the County Parties and the Norcal Parties, each
Party shall bear all of its own attorneys' fees, expert witness
fees, costs and expenses in connection with the Action, this
Agreement and any related proceedings, including but not limited
to any motion for entry of judgment, any motion for a good faith
settlement order, and any criminal proceedings. Notwithstanding
the foregoing, in any dispute between the Parties concerning this
Agreement or breach of any of its terms, including, without
limitation, any dispute over the breach, construction,
implementation or enforcement of the Agreement, the prevailing
Party shall be entitled, in addition to provable damages, to its
reasonable attorneys' fees, expert witness fees, costs and
expenses.
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I. Exhibits.
All of the Exhibits to this Agreement are material and
integral parts hereof and are fully incorporated herein by this
reference.
J. Execution In Counterparts and Giving of Notice.
1. This Agreement may be executed in counterparts, each of
which will constitute an original, and all of which taken together
shall constitute one and the same document. Any Party may rely
on a faxed signature from the other Party, and any Party who
faxes to the other Party a signature page bearing the faxing
Party's signature does so with the understanding and intent that
such faxed signature is equivalent to delivery of an ink-original
signature.
2. Signature pages may be exchanged by facsimile transmission of
a copy or hand delivery of an original to the following addresses:
(a) To the Norcal Parties: Care of Robert E. Gooding, Jr., Esq.,
Howard, Rice, Nemerovski, Canady, Falk & Rabkin, A Professional
Corporation, 2020 Main Street, Suite 1000, Irvine, California 92614
(Facsimile: (949) 721-6910) with a copy to Michael J. Sangiacomo,
President, Norcal Waste Systems, Inc., 160 Pacific Ave., Suite 200,
San Francisco, CA 94111 (Facsimile: (415) 875-1124).
(b) To the County Parties: Care of Alan K. Marks, Esq.,
County Counsel, County of San Bernardino, 385 North Arrowhead Avenue,
4th Floor, San Bernardino, California 92415 (Facsimile: (909) 387-4069)
with a copy to Leonard L. Gumport, Esq., Gumport, Reitman & Montgomery,
550 South Hope Street, Suite 825, Los Angeles, California 90071-2627
(Facsimile: (213) 623-3302).
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APPROVED BY THE PARTIES:
DATED: July 25, 2000. COUNTY OF SAN BERNARDINO
By: /s/ Jon D. Mikels
_______________________________
Its: Chairman of the Board of
Supervisors
DATED: July 25, 2000. SIGNED AND CERTIFIED THAT A COPY OF THIS
DOCUMENT HAS BEEN DELIVERED TO THE
CHAIRMAN OF THE BOARD
EARLENE SPROAT, Clerk of the Board of
Supervisors
By: /s/ Earlene Sproat
_______________________________
DATED: July 25, 2000. INLAND EMPIRE PUBLIC FACILITIES
CORPORATION
By: /s/ Jon D. Mikels
_______________________________
Its: Chairman of the Board of
Supervisors
DATED: July 25, 2000. INLAND EMPIRE SOLID WASTE FINANCING
AUTHORITY
By: /s/ Jon D. Mikels
_______________________________
Its: Chairman of the Board of
Supervisors
DATED: July 25, 2000. SAN BERNARDINO COUNTY FINANCING
AUTHORITY
By: /s/ Jon D. Mikels
_______________________________
Its: Chairman of the Board of
Supervisors
DATED: July 25, 2000. SAN BERNARDINO COUNTY FLOOD CONTROL
DISTRICT
By: /s/ Jon D. Mikels
_______________________________
Its: Chairman of the Board of
Supervisors
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DATED: July 25, 2000. WILLIAM RANDOLPH
/s/ William Randolph
______________________________________
WILLIAM RANDOLPH
DATED: July 24, 2000. NORCAL WASTE SYSTEMS, INC.
By: /s/ Michael J. Sangiacomo
_______________________________
Its: President & Chief Executive
Officer
DATED: July 24, 2000. NORCAL/SAN BERNARDINO, INC.
By: /s/ Michael J. Sangiacomo
_______________________________
Its: President & Chief Executive
Officer
APPROVED AS TO FORM BY COUNSEL:
DATED: July 25, 2000. COUNTY COUNSEL
By: /s/ Alan K. Marks
____________________________________
ALAN K. MARKS
Attorneys for the COUNTY OF SAN
BERNARDINO, INLAND EMPIRE PUBLIC
FACILITIES CORPORATION, INLAND EMPIRE
SOLID WASTE FINANCING AUTHORITY, SAN
BERNARDINO COUNTY FINANCING AUTHORITY,
SAN BERNARDINO COUNTY FLOOD CONTROL
DISTRICT, and WILLIAM RANDOLPH
DATED: July 25, 2000. GUMPORT, REITMAN & MONTGOMERY
By: /s/ Leonard L. Gumport
____________________________________
LEONARD L. GUMPORT
Attorneys for the COUNTY OF SAN
BERNARDINO, INLAND EMPIRE PUBLIC
FACILITIES CORPORATION, INLAND EMPIRE
SOLID WASTE FINANCING AUTHORITY, SAN
BERNARDINO COUNTY FINANCING AUTHORITY,
SAN BERNARDINO COUNTY FLOOD CONTROL
DISTRICT, and WILLIAM RANDOLPH
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DATED: July 25, 2000. HOWARD, RICE, NEMEROVSKI, CANADY,
FALK AND RABKIN
A Professional Corporation
By: /s/ Barbara A. Winters
___________________________________
Attorneys for NORCAL WASTE SYSTEMS,
INC. and NORCAL SAN BERNARDINO, INC.
