Geokinetics Inc I p
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AGREEMENT
FOR PROFESSIONAL SERVICES
THIS AGREEMENT is made and entered into as of this 2nd day of September
2003, by and between the City of Rancho Palos Verdes, a municipal corporation,
hereinafter designated as "City", and Geokinetics, Inc., hereinafter designated
"Consultant."
RECITALS
A. City desires to utilize the services of one of Consultant's employees, Mr.
Glenn Tofani, to be a member of a panel of three experts that will provide City and V.H.
Properties Corporation ("Developer") with independent third-party review of certain
geological and/or geotechnical data that has been prepared in connection with the golf
course and single-family development commonly known as Ocean Trails (the "Ocean
Trails Project"). City and Developer have entered into an Agreement regarding this
process, which is attached hereto as Exhibit "A" and incorporated herein by this
reference.
B. Consultant represents that Mr. Tofani is qualified to perform such services
by virtue of his experience, training, education and expertise.
NOW, THEREFORE, in consideration of performance by the parties of the
mutual promises, covenants, and conditions herein contained, the parties hereto agree
as follows:
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Services.
1.1 Scope and Level of Services. Subject to the terms and conditions set forth in
this Agreement, Consultant has been requested to provide independent third-
party review of the geological and/or geotechnical data that has been
prepared in connection with the Ocean Trails Project and to resolve
disagreements between City's geological and geotechnical experts and the
experts that are performing work on behalf of Developer. Mr. Glenn Tofani is
the individual who is assigned by Consultant to be its representative in
connection with this Agreement and the work that Consultant will perform.
1.2 City Representative and Developer Representative. For the purposes of this
Agreement, the City Representative shall be the Director of Planning Building
and Code Enforcement, or such other person designated in writing by the
Director (the "City Representative"), and Developer's Representative shall be
Jeff Kaplinski, or such other person designated in writing by Developer (the
"Developer's Representative").
1.3 Time for Performance. Consultant shall commence the services under this
Agreement immediately upon receipt of a written request for such services
from the City Representative (a copy of which shall be provided by City to
Developer's Representative) and shall perform all services with reasonable
diligence.
1.4 Impartial Review. Consultant hereby acknowledges and agrees that
although City has retained Consultant, Consultant is charged with providing
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an impartial analysis of the geological and geotechnical data related to the
Ocean Trails Project and to resolve disagreements between City's geological
and geotechnical experts and the experts that are performing work on behalf
of Developer. Consultant further acknowledges and agrees that he shall not,
either individually or with other members of the panel, meet privately with
either the City, its geologists or its geotechnical engineers or Developer, its
geologists or its geotechnical engineers. Consultant and City further agree
that both City and Developer shall have equal input into Consultant's
performance under the Agreement, and that Consultant shall take joint
instructions from City and Developer. Nothing in this provision shall be
construed to prohibit members of the panel from meeting with one another
privately to discuss the geological and geotechnical data.
1.5 Third Party Beneficiary. Developer is a third party beneficiary of this
Agreement, and this Agreement shall not be amended, terminated or
otherwise modified without Developer's prior written consent, which shall not
be unreasonably withheld.
2. Term
This Agreement shall commence on September 2, 2003 (the "Effective Date"),
and shall continue in full force and effect until terminated by either of the parties hereto
in accordance with the provisions of Section 11 of this Agreement. The parties
anticipate that a significant amount of work will be required of Consultant and the other
members of the panel between the Effective Date and December 31, 2003.
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3. Compensation. City shall pay Consultant at the hourly rates that are
specified in Exhibit "B" to this Agreement, which is attached hereto and incorporated
herein by this reference, for all services provided under this Agreement. Consultant
hereby acknowledges and agrees that City shall pay Consultant's compensation under
this Agreement solely from funds that have been deposited with City by Developer and
are held in trust for this purpose. City shall not withhold applicable federal or state
payroll or other required taxes, or other authorized deductions from each payment made
to Consultant.
4. Method of Payment.
4.1 Invoices. Consultant shall submit to City, with a copy to Developer,
invoices for all services performed pursuant to this Agreement during the preceding
month. The invoices shall describe the services rendered during the period and shall
show the number of hours worked, and the services that were performed.
4.2 City and Developer shall review such invoices and shall notify
Consultant in writing, with a copy to City or Developer, as applicable, of any disputed
amounts. City shall pay all undisputed portions of the invoice within thirty (30) calendar
days after receipt of the invoice.
5. Standard of Performance. Consultant shall perform all services under
this Agreement in accordance with the standard of care generally exercised by like
professionals under similar circumstances.
6. Status as Independent Contractor. Consultant is, and shall at all times
remain as to City, a wholly independent contractor. Consultant shall have no power to
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incur any debt, obligation, or liability on behalf of City or otherwise act on behalf of City
as an agent. Neither City nor any of its agents shall have control over the conduct of
Consultant or any of Consultant's employees, except as set forth in this Agreement.
Consultant shall not, at any time, or in any manner, represent that he or any of his
agents or employees are in any manner the agents or employees of City. Consultant
agrees to pay all required taxes on payments City makes to Consultant for services
provided pursuant to this Agreement. Consultant shall fully comply with the workers'
compensation laws regarding Consultant and Consultant's employees. Consultant
agrees to indemnify and hold City harmless from any failure of Consultant to comply
with applicable workers' compensation laws.
7. Ownership of Work Product. All reports, documents or other material
developed or discovered by Consultant in the performance of this Agreement shall be
and remain the joint property of City and Developer without restriction or limitation upon
their use. Such material shall not be the subject of a copyright application by
Consultant.
8. Confidentiality. Consultant in the course of its duties may have access
to financial and statistical data of private entities. Consultant covenants that all data,
documents, discussion, or other information developed or received by Consultant or
provided for performance of this Agreement are deemed confidential and shall not be
disclosed by Consultant without prior written authorization by City and Developer. City
and Developer shall grant such authorization if disclosure is required by law. All data
provided by City shall be returned to City upon the termination of this Agreement, and
all data provided by Developer shall be returned to Developer upon the termination of
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this Agreement. Consultant's covenant under this section shall survive the termination
of this Agreement. Nothing herein shall be construed as preventing City from retaining
a copy of all documents or data that were provided by, and returned to Developer.
9. Conflict of Interest. Consultant and his employees, if any, will comply
with all conflict of interest statutes of the State of California applicable to Consultant's
services under this agreement, including, but not limited to, the Political Reform Act
(Government Code Sections 81000, et seq.) and Government Code Section 1090.
During the term of this Agreement, Consultant and his employees shall not perform
work for another person or entity for whom Consultant is not currently performing work
(including, without limitation, any person or entity that is affiliated with or related to
Developer) that would require Consultant or one of his employees to abstain from a
decision under this Agreement pursuant to a conflict of interest statute.
10. Cooperation. In the event any claim or action is brought against City or
Developer relating to Consultant's performance or services rendered under this
Agreement, Consultant shall render any reasonable assistance and cooperation that
City or Developer might require. The time required from Consultant to assist City shall
be remunerated by City in accordance with Section 3. If this Agreement is no longer in
effect, so that Consultant is not performing work for City, and Developer requests
Consultant's assistance, Developer and Consultant may enter into a separate
agreement regarding compensation for those services.
11. Termination. City shall have the right to terminate this Agreement for any
reason on fifteen (15) calendar day's written notice to Consultant. Consultant shall have
the right to terminate this Agreement for any reason on thirty (30) calendar day's written
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notice to City. Consultant shall be paid for services satisfactorily rendered to the last
working day the Agreement is in effect, and Consultant shall have no other claim
against City by reason of such termination.
12. Notices. Any notices, bills, invoices, or reports authorized or required by
this Agreement shall be in writing and shall be deemed received on (a) the day of
delivery, if delivered by hand or overnight courier service during Consultant's,
Developer's and City's regular business hours or by facsimile before Consultant's
regular business hours; or (b) on the third business day following deposit in the United
States mail, postage prepaid, to the addresses heretofore set forth in the Agreement, or
to such other addresses as the parties may, from time to time, designate in writing
pursuant to the provisions of this section.
If to City: City Manager
City of Rancho Palos Verdes
30940 Hawthorne Boulevard
Rancho Palos Verdes, California 90275
If to Consultant: Glenn Tofani
Geokinetics
15510 Rockfield Boulevard, Suite C3
Irvine, California 92619
With a copy to: Jeff Kaplinski
V.H. Properties Corporation
1 Ocean Trails Drive
Rancho Palos Verdes, California 90275
13. Non-Discrimination and Equal Employment Opportunity. In the
performance of this Agreement, Consultant shall not discriminate against any employee,
subcontractor, or applicant for employment because of race, color, creed, religion, sex,
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marital status, national origin, ancestry, age, physical or mental handicap, medical
condition, or sexual orientation.
14. Non-Assignability; Subcontracting. Consultant shall not assign or
subcontract all or any portion of this Agreement without the written permission of City
and Developer. Any attempted or purported assignment or sub-contracting by
Consultant shall be null, void and of no effect. However, this Section shall not prevent
Consultant from having other employees at Geokinetics perform certain work pursuant
to this Agreement under Mr. Tofani's supervision and direction.
15. Compliance with Laws. Consultant shall comply with all applicable
federal, state and local laws, ordinances, codes and regulations.
16. Non-Waiver of Terms, Rights and Remedies. Waiver by either party of
any one or more of the conditions of performance under this Agreement shall not be a
waiver of any other condition of performance under this Agreement. In no event shall
the making by City of any payment to Consultant constitute or be construed as a waiver
by City or Developer of any breach of covenant, or any default which may then exist on
the part of Consultant, and the making of any such payment by City shall in no way
impair or prejudice any right or remedy available to City or Developer with regard to
such breach or default. Consultant acknowledges that no waiver by City shall be
effective unless Developer agrees to such waiver in writing.
17. Attorney's Fees. In the event that either party to this Agreement shall
commence any legal action or proceeding to enforce or interpret the provisions of this
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Agreement, the prevailing party in such action or proceeding shall be entitled to recover
its costs of suit, including reasonable attorney's fees.
18. Insurance. During the term of this Agreement, Consultant shall maintain
in effect automobile insurance in accordance with the requirements of California State
law.
19. Entire Agreement. This Agreement, and any other documents
incorporated herein by specific reference, represents the entire and integrated
agreement between Consultant and City. This Agreement supersedes all prior oral or
written negotiations, representations or agreements. This Agreement may not be
amended, nor any provision or breach hereof waived, except in a writing signed by the
parties to this Agreement.
20. Section Headings. The section and subsection headings used herein are
for reference and convenience only and shall not be used in any manner in the
interpretation hereof.
IN WITNESS WHEREOF, the parties, through their respective authorized
representatives, have executed this Agreement as of the date first written above.
CITY OF R CHO ALOS V - IES
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By: t _ ! -
Mayor
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City Clerk
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GEOKINETICS
"CONSULTANT
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Exhibit " A"
Agreement Between City and Developer
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FIRST AMENDMENT TO AGREEMENT
FOR PROFESSIONAL SERVICES
THIS FIRST AMENDMENT TO AGREEMENT FOR PROFESSIONAL
ASERVICES is made and entered into as of this3dayof 2004, by and
between the City of Rancho Palos Verdes, a municipal corporation, hereinafter
designated as "City", and Geokinetics, Inc., hereinafter designated "Consultant."
RECITALS
A. City previously entered into an agreement with Consultant, dated
September 2, 2003 ("Agreement"), so that one of Consultant's employees, Mr. Glenn
Tofani, could serve as a member of a panel of three experts ("Panel"), which will provide
City and V.H. Properties Corporation ("Developer") with independent third-party review
of certain geological and/or geotechnical data that has been prepared in connection with
the golf course and single-family development commonly known as Ocean Trails (the
"Ocean Trails Project").
B. City and Developer have entered into a Second Agreement so that the
Panel's scope of work could be expanded to include other geologic issues affecting the
Ocean Trails Project.
C. City and Consultant wish to amend the Agreement to incorporate the
provisions of the Second Agreement between Developer and City into this Agreement.
NOW, THEREFORE, in consideration of performance by the parties of the
mutual promises, covenants, and conditions herein contained, the parties hereto agree
as follows:
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Section 1. Recital A of the Agreement is hereby amended to read as follows:
A. City desires to utilize the services of one of Consultant's
s Mr. Glenn Tofani, to be a member of a panel of three experts that will
employees,
provideV.H.Cityand VHProperties Corporation ("Developer") with independent third-party
p
review of certain geological and/or geotechnical data that has been prepared in
e 9 g
connection with theg olf course and single-family development commonly known as
Ocean Trails (the "Ocean Trails Project"). City and Developer have entered into an
Agreementregarding process,re ardin this which is attached hereto as Exhibit "A" and
incorporated herein bythis reference. City and Developer subsequently entered into a
p
SecondAgreementregarding re ardin this process, which is attached hereto as Exhibit "A-1"
and incorporated herein by this reference.
Section 2. Except as expressly amended by this First Amendment to
Agreement For Professional Services, all of the provisions of the Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties, through their respective authorized
representatives, have executed this Agreement as of the date first written above.
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CITY OF RANCHO 'ALOS VERDES
By: .
Mayor
ATTEST:
City Clerk
GEOKINETICS
"CONSULTANT" �
By:
By: I
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Exhibit " A-1"
Second Agreement Between City and Developer
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11111 (-Aft
SECOND AGREEMENT BETWEEN THE CITY OF
RANCHO PALOS VERDES AND V.H. PROPERTIES, CORPORATION
REGARDING GEOLOGIC ISSUES
THIS SECOND AGREEMENT BETWEEN THE CITY OF RANCHO
PALOS VERDES AND V.H. PROPERTIES, CORPORATION REGARDING
GEOLOGIC ISSUES ("Second Agreement") is made and entered this 16th day of July,
2004,by and between the City of Rancho Palos Verdes, a California municipal
corporation("City") and V.H. Properties, Corporation("Developer"). City and
Developer are sometimes referred to singularly herein as "Party" and collectively as the
"Parties."
RECITALS
A. Developer is the owner of that certain real property encompassed within
Tentative Tract Map No. 50666, a portion of which is proposed for single-family
residential development(the"Property"). The Property is part of a larger golf course and
residential project that is being constructed on the Property, which is owned by
Developer and is generally located at 1 Ocean Trails Drive,Rancho Palos Verdes,
California, commonly known as the Ocean Trails Project("Ocean Trails"or"the
Project"). Ocean Trails consists of a 258-acre site bounded by Palos Verdes Drive South
on the north, the Portuguese Bend Club on the west, the Pacific Ocean on the south and
Shoreline Park on the east.
B. City approved various applications for the Ocean Trails project to allow
the construction of a Residential Planned Development of 75 single family dwelling units
and the development of an 18-hole golf course with associated clubhouse and parking
facilities.
C. The Property encompasses three landslide areas. Because portions of the
Property that are being developed for residential purposes and for public parks and trails
may be affected by one or more landslides on the Property, the public safety, health and
welfare require that the geological and geotechnical conditions of the Property be
thoroughly analyzed and addressed before the entire eighteen-hole golf course can open
for public use.
D. City and Developer have each retained experts to analyze the geological
conditions that underlie the site and to make recommendations regarding the potential
development of the Property. However, given the inherent complexity of the geology on
the Property and the inherent subjectivity of the science of geology, the Parties'
respective experts have not always agreed on the geologic conditions on the Property.
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E. In the past, the Parties have found it useful to utilize a three-member panel
of independent experts to review the geological and geotechnical data for the Ocean
Trails Project to resolve any differences between the Parties' respective experts.
However, the former panel of experts did not provide the definitive guidance desired by
either City or Developer regarding the development of the residential lots in Tentative
Tract 50666. Accordingly, City and Developer formed a new three-member panel (the
"Panel")to resolve disputes regarding the geotechnical and geological issues affecting
the development of the residences on the Property.
F. City and Developer have selected three new geological/geotechnical
experts to comprise the Panel and entered into an Agreement to memorialize their
understanding with respect to certain work that is to be performed by the Panel regarding
the boundaries of Landslide A and its affect on future development of the Property("the
First Agreement").
G. City and Developer wish to enter into this Second Agreement so that the
Panel can resolve additional disputes between the City's geological and geotechnical
experts and the experts that are performing work on behalf of Developer, which
previously were determined by the City's geologist or geotechnical engineer, regarding
additional geotechnical and geological conditions affecting the Property. In particular,
disputes have arisen with respect to (1)whether the planned expansion of the Ocean
Trails Clubhouse(as identified in Revisions T and U to Conditional Use Permit 163)
meets the geological standard of a Factor of Safety of at least 1.5, and(2) whether the
current condition of the as-built golf course raises public safety issues that need to be
addressed.
NOW, THEREFORE, in consideration of the mutual promises, obligations and
covenants hereinafter set forth, the Parties hereto agree as follows:
Section 1. Incorporation of Recitals. Each and every recital set forth above is
hereby incorporated by this reference as though set forth in full and expressly made a part
of this Agreement.
Section 2. Selection of Panel Experts. City and Developer previously
selected three experts who are the members of the Panel pursuant to the provisions of the
First Agreement. They are Scott T. Kerwin, Eldon Gath, and Glenn Tofani.
Section 3. Impartial Review. The Parties hereby acknowledge and agree that
although City shall retain the three experts who will comprise the Panel, the Panel shall
be charged with providing an impartial analysis of certain geological and geotechnical
data related to the Property and to resolve disagreements between City's geological and
geotechnical experts and the experts that are performing work on behalf of Developer,
pursuant to a written Scope of Work that was prepared jointly by the Parties,which is
attached as Exhibit"A"hereto and incorporated herein by this reference.
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The Parties further acknowledge and agree that the Panel shall be instructed not to
meet, either individually or as a panel, privately with either the City, its geologists or its
geotechnical engineers or the Developer, its geologists or its geotechnical engineers. City
and Developer further agree that: (i) City and Developer shall limit their contact with the
Panel to times when both Parties are present; (ii) City and Developer shall have equal
input into the Panel's performance of its impartial review; and (iii) City and Developer
shall provide joint instructions to the Panel. However, nothing in this Section 3 shall be
construed to prevent the members of the Panel from meeting with one another privately
to discuss the geological and geotechnical data, nor shall this Section 3 prevent the Panel
from seeking additional input from the Parties, so long as such requested input shall be
either communicated to the City and the Developer in a meeting at which both parties are
present or in a writing, which is provided to both Parties simultaneously.
Section 4. Compensation for Panel. Upon execution of this Agreement,
Developer shall deposit with the City the sum of$15,000. City shall hold these funds in
a trust account established for the purpose of compensating the members of the Panel for
their services rendered pursuant to this Agreement. When the balance in the trust account
drops below $5,000, City shall notify Developer and request additional funds. Developer
shall deposit such additional funds with City within ten(10)business days of receipt of
the written request from the City. Notwithstanding the immediately preceding sentence,
Developer shall not be in default hereunder if it fails to deposit such additional funds with
City,but either party shall have the right to terminate this Agreement if Developer fails to
deposit such additional funds with City, all as more specifically set forth in Section 5
below. Nothing herein shall be construed to permit Developer to fail to reimburse City
for work that already has been performed by the Panel prior to the date of termination of
this Agreement.
Section 5. Termination. If Developer fails to deposit any additional funds
contemplated by Section 4 above or Section 8A below, then Developer shall not be
default hereunder,but either Developer or City shall have the right to terminate this
Agreement by providing at least thirty(30) days advance written notice to the other
Party. If Developer fails to provide documentation that has been requested by the Panel
within a reasonable period of time, as specified by the Panel, City shall have the right to
terminate this Agreement by providing at least thirty(30) days advance written notice to
the other Party,provided that such election shall be null and void if Developer provides
such documentation prior to the expiration of the thirty-day period. Additionally, if this
Agreement is terminated prior to the resolution of the geologic issues concerning the
Property, the members of the Panel shall be compensated for the work that has been
performed as provided in Section 4, and City again shall use its standard process of
having its geologists and geotechnical engineers review the reports and recommendations
of the Developer's experts as to those issues that had not been resolved by the Panel.
Developer further acknowledges that if this Agreement is terminated prior to the
resolution of all of the geologic issues concerning the Property, Developer shall not have
the right to rely on this Agreement as to those issues that had not been resolved by the
Panel, that the issue of the developability of particular areas of the Property may not have
been resolved to City's satisfaction, and that City shall not be bound by this Agreement
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as to those issues that had not been resolved by the Panel. In addition, Developer shall
not be entitled to the issuance of any permits from City for which: (1) the geological
analysis has not been completed to the Panel's satisfaction; or(2)work or improvements
required by the Panel have not been completed by or on behalf of the Developer; (3) and
as to any issue that had not been resolved by the Panel prior to the termination of this
Agreement, until the geological analysis or work has been completed through the City's
standard process to the satisfaction of the City's geologists and geotechnical engineers.
Section 5A. Termination Upon Transfer. If, prior to resolution by the Panel of
the issues in the Scope of Work, Developer sells or otherwise transfers the golf course or
substantially all of the residential property contained within Tentative Tract Map
No. 50666 to a person or entity that is not affiliated with or related to Developer, then
Developer shall have the right to terminate this Agreement as to any issue not yet
resolved by the Panel by providing at least thirty(30) days advance written notice to the
City.
Section 6. Scope of Panel's Review. The Panel shall provide an impartial
analysis of the geological and geotechnical data related to the Property and shall resolve
disagreements between City's geological and geotechnical experts and the experts that
are performing work on behalf of Developer, pursuant to the Scope of Work or other
written instructions or additional scope of work that are prepared jointly by the City and
the Developer.
In addition to the issues concerning whether the residential lots within Tract
50666 can be developed, which are governed by the First Agreement, the Panel shall
resolve the current disputes between the Parties' geologic and geotechnical experts
regarding the proposed expansion of the Clubhouse and regarding the review of the golf
course Clay Cap/As-Built Report. City and Developer hereby acknowledge and agree
not to restrict the areas that the Panel may explore to make such determinations and to
defer to the judgment of the Panel with respect to what additional geologic studies and
tests, if any, should be conducted and what additional changes or improvements, if any,
should be incorporated into the Project to address these issues and insure public safety.
The Panel also shall resolve any other area of dispute between the City's
geological and geotechnical experts and the experts that are performing work on behalf of
Developer, pursuant to any additional written scope of work or written instructions that
are prepared jointly by the Parties.
Section 7. Hold Harmless and Covenant not to Sue. The Parties hereby
acknowledge that the Panel is being retained to resolve differences between the
respective geological/ geotechnical experts retained by the Parties in order to allow
Developer to complete the development of the Project, and that the Panel is solely
providing impartial analysis and recommendations based on their combined professional
judgment and are not preparing geotechnical designs for any future structures on the
Property or insuring that the stability is sufficient to safely support such structures. The
Parties further acknowledge that the members of the Panel are not in any way interested
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in the development of the Property, either financially or otherwise, and would not provide
the advice contemplated by this Agreement absent assurances by the Parties that they will
not sue the Panel or its individual members based on the advice provided. Accordingly,
City and Developer hereby covenant and agree not to sue the Panel or any of its
individual members for any advice, opinions, conclusions or recommendations the Panel
makes with respect to the geological and geotechnical conditions underlying the Property
and the stability of the Property for development. Developer further agrees to indemnify,
defend and hold the Panel and each member thereof harmless from any claims, losses,
costs or damages that result from geological instability on the Property. The members of
the Panel are third party beneficiaries of this Agreement, and the provisions of this
Section 7 shall also run to the benefit of the members of the Panel as if made directly to
them. This Covenant shall survive the termination of this Agreement.
Section 8. Legislative and Quasi-Judicial Authority Maintained. City and
Developer hereby agree that this Agreement shall not affect the ability of the current City
Council or any future City Council to make legislative or quasi-judicial determinations
regarding the Project pursuant to the provisions of Federal or State law or the Rancho
Palos Verdes Municipal Code.
Section 8A. Covenant to be Bound. City and Developer covenant and agree
that any decisions rendered by the Panel regarding geologic or geotechnical issues that
are directed to the Panel pursuant to the Scope of Work, or any subsequent scope of
work, or joint instructions from the Parties, which otherwise would be made by the City's
geologic or geotechncial experts, shall be binding on both City and Developer, including,
but not limited to: (i) any decisions supporting, or disagreeing with, the recommendations
or conclusions of one Party's geologic or geotechnical experts; and (ii) any conclusions
or recommendations regarding geologic or geotechnical issues that are arrived at
independently by the Panel, including any recommendations regarding additional studies,
borings or analysis to be performed or improvements to be constructed, in response to the
Scope of Work or other scope of work or written instructions prepared jointly by the
Parties. The Parties further agree to take all steps reasonably necessary to diligently
pursue and implement the recommendations of the Panel. Notwithstanding the
foregoing, Developer shall not be in default hereunder if Developer elects not to incur
any additional cost or expense as a result of any such recommendations.
Section 8B. Binding on Successors. This Agreement shall inure to the benefit
of and bind the Parties to this Agreement and each of their respective heirs, assigns and
successors in interest.
Section 8C. Limitation of Authority. Nothing herein shall be construed to
grant the Panel any authority to obligate the City to incur any expense whatsoever; and
except as expressly provided herein, nothing herein shall be construed to grant the Panel
any authority to obligate the Developer to incur any expense whatsoever.
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Section 9. Further Assurance. Each Party hereto agrees to take such actions,
and to execute such certificates and other instruments, as may be necessary or appropriate
to give effect to and carry out the provisions of this Agreement.
Section 10. Integration and Amendment.
10.1. This Agreement, and any documents incorporated herein by specific
reference, represents the entire and integrated agreement between Developer and
City with respect to the Peer Review to be conducted, as identified in the Scope of
Work. This Agreement supersedes all prior negotiations, representations or
agreements, whether oral or written, which are related to the Peer Review of the
matters identified in the Scope of Work. However, this Agreement does not
supercede or amend the First Agreement between the Parties.
10.2 This Agreement may not be amended, modified, or expanded except by a
written instrument signed by each of the Parties hereto.
10.3 The City has entered into a separate agreement with each of the members
of the Panel. Those three agreements are attached hereto as Exhibits B ,C and D
and are incorporated herein by this reference, and shall not be amended without
Developer's prior written consent. This Agreement shall not be amended,
terminated or otherwise modified without thirty days advance written notice first
being provided to all of the members of the Panel.
Section 11. Assignment. Neither Party shall assign its interest in this
Agreement, or any portion of this Agreement, without the prior written consent of the
other Party, which consent shall not be unreasonably withheld. Notwithstanding the
foregoing, Developer shall have the right to assign this Agreement to any person or entity
to whom Developer sells the golf course or substantially all of the residential portions of
Tentative Tract Map No. 50666,provided that at least fifteen days prior to the effective
date of such assignment, Developer shall give written notice thereof to City, and
provided, further, that Developer shall deliver to City a copy of the proposed assignment
and assumption agreement for City's review and approval, which shall not be
unreasonably withheld, and Developer shall deliver a copy of the executed assignment
and assumption agreement, in the form approved by the City, prior to the effective date of
the assignment.
Section 12. Interpretation. This Agreement is deemed to have been prepared
by both of the Parties hereto, after consulting with legal counsel, and any uncertainty or
ambiguity herein shall not be interpreted against the drafter, but rather, if such ambiguity
or uncertainty exists, shall be interpreted according to the applicable rules of
interpretation of contracts under the substantive law of the State of California without
reference to choice of law rules.
Section 13. Governing Law. This Agreement shall be construed and enforced
in accordance with the substantive laws of the State of California without reference to
784710.4 6
0 0
choice of law rules. Each of the parties hereto agrees to submit to the jurisdiction of the
courts in the County of Los Angeles with respect to any action to enforce or interpret the
terms hereof.
Section 14. Notices. Any notice required or authorized to be given by this
Agreement shall, unless otherwise specified herein, be in writing, shall be served on the
receiving Party either by personal delivery or deposit in the United States mail with first-
class postage prepaid, and shall be addressed to the receiving party's specified contact
person and address listed below, unless written notice is provided of a change of address
as to either party. For the purposes of this Agreement, notices delivered in person shall
be deemed communicated as of the date of actual receipt; notices sent via regular mail
shall be deemed communicated as of three (3) days after deposit thereof in the United
States mail, addressed as shown on the addressee's registry or certificate of receipt.
All notices served pursuant to this Agreement shall be addressed as follows:
If to City: Les Evans, City Manager
City of Rancho Palos Verdes
30940 Hawthorne Boulevard
Rancho Palos Verdes, California 90275
With a copy to:
Carol W. Lynch, City Attorney
Richards, Watson & Gershon
355 South Grand Avenue, 40th Floor
Los Angeles, California 90071
If to Developer: V.H. Properties Corporation
1 Ocean Trails Drive
Rancho Palos Verdes, California 90275
Attn: Jeff Kaplinski
With a copy to:
Kenneth Wolfson, Esq.
Latham&Watkins
650 Town Center Drive, 20th Floor
Costa Mesa, California 92626-1925
Either City or Developer may change its mailing address at any time by giving written
notice of such change to the other party in the manner provided herein at least ten(10)
days prior to the date such change is effected.
Section 15. Relationship of the Parties. No joint venture, partnership,
employment, agency or similar arrangement is created between the parties by this Second
Agreement.
784710.4 7
,
, . •. 4
Section 16. Waiver. Neither the failure nor any delay by any person or entity in
exercising any right, power, or privilege under this Agreement or the documents referred
to in this Agreement will operate as a waiver of such right,power, or privilege, and no
single or partial exercise of any such right, power, or privilege will preclude any other or
further exercise of such right, power, or privilege or the exercise of any other right,
power, or privilege.
Section 17. Counterparts. This Second Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall constitute but one
and the same instrument.
IN WITNESS WHEREOF, Developer and City have executed this Agreement as
of the date first hereinabove written.
CITY OF ' s k CHO P; LOS VERDES
I
By: w •
Pe -r C. Gardiner, Mayor
ATTEST:
i , i / / 1
Jo urcell, City Clerk
V. H. PROPERTIES CORPORATION
yN me...4-e---------,--------
/QVC ST CC/t
Title: E V. DEV4-6 '1 Mt /71
Li
By: ii
Name: tv�'Abces
Title: e,; ate.- , ,t At,)Pt ca .,
784710.4 8
• •
EXHIBIT "A"
Peer Review Panel Scope of Work
Review of the Clay Cap/As-Built Grading Report
BACKGROUND:
The history of the requirement for a clay cap:
• Supplement to original EIR (March 1992): In the Geologic Investigation Report
(prepared by Leighton, April 22, 1991), which is in the appendix to the
Supplemental EIR, it states, "Mitigation Measures: The geotechnical hazard
created by mass movements can be mitigated by a number of methods
depending on site-specific geotechnical evaluation...Construction of the golf-
course was determined to be feasible provided that the mass balance of the
landslide was not adversely altered, buildings were constructed behind a design
setback line, infiltration of water was minimized, and ground water levels were
monitored. Similar mitigation measures may also be recommended for other
mass movements on the subject site, but site-specific investigation is necessary
for proper evaluation."
• Adopted Mitigation Measure #9 states: "All of the recommendations made by the
project geologist, except as modified by the City Geologist, shall be incorporated
into the design and construction of the project." Note that the "Monitoring
Milestone" for this mitigation measure indicates that implementation of this
measure shall occur: "Prior to issuance of Grading Permit and throughout the
grading process"(emphasis added).
• There are no specific adopted mitigation measures or conditions that were
imposed by the City Council that require the 3' Clay Cap.
• After Council approval of the project, and prior to issuance of Grading Permits for
development of the project, various detailed geologic reports were prepared by
the Developer and approved by the City Geologist. It is within these reports that
the detailed specifications of how the course was to be developed, including the
specifications of the clay cap, various water monitoring measures and other
geologic issues, were formulated.
• City Staff issued the Grading Permit in 1997. On the approved Grading Plans, a
note indicates, "I. Irrigated portions of the golf course are to receive a minimum 3
foot thick clay cap to control infiltration of surface water. The clay cap shall have
a permeability constant of 3x10(-7) cm/sec or less (hereinafter referred to as the
'Clay Cap)."
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POSITIONS OF EACH FIRM
Both Geological Firms (Converse Consultants and Cotton Shires Associates)
Agree that:
• The Clay Cap was specified on the Grading Plan to be installed under all
irrigated golf course areas as noted above.
• It is uncertain whether the Clay Cap underlies all of the irrigated portions of the
golf course.
• The As-Built Grading Report, prepared by the Developer's Geologist, needs to be
approved by the City Geologist prior to opening the 18-hole golf course. The
Clay Cap and Monitoring Program are components to the As-Built Grading
Report.
Cotton Shires Associates (CSA) believes that:
• Although the Clay Cap may have been compromised in various areas of the Golf
Course, this is not a significant risk to most of the Golf Course, but that there is a
higher risk in the areas of Holes 10 and 11, which are located in the vicinity of
Landslides A and B.
• There are monitoring methods that should be implemented to ensure that areas
of high risk (Holes 10 and 11) do not pose a risk to public safety.
• As envisioned when this project was first approved, safety for the public, golf
course and residential property is dependent upon a combination of project
design aspects which includes not only the Clay Cap, but also water monitoring
and ground movement monitoring.
• The following measures are intended to allow installation of monitoring wells at
appropriate depths, and that if an area does move, a warning will be provided via
both the use of the inclinometers and the monitoring wells.
1. Install 2 Inclinometers in the vicinity of Hole 10/Landslide B. The purpose is
to measure ground movement so as to warn the public, allow mitigative action
and to close this portion of the course if movement causes a risk to public
safety or improvements.
2. Repair Monitoring Well #1, which is also located near Landslide B. CSA
believes that MW1 is at the wrong depth and not suitable for monitoring
purposes. CSA is recommending a large diameter boring so that both CC
and CSA can verify the location of the bentonite layer so as to accurately
determine the elevation of the base of the well. The goal is to have an
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effective monitoring well. Once the bentonite layer is found, CC will have to
perform supplemental stability calculations to determine the risk to the sewer
line, protocol to address excessive or accelerating movement, and action
levels for the monitoring well.
3. Repair Monitoring Well #3, which is located behind former Landslide C. CSA
believes that it is also installed at the wrong depth; however everyone agrees
to the location of the bentonite layer in this area so there will be no boring
required - they only need to re-install the well at the proper elevation within
the hole.
4. Repair Monitoring Well #6, which is located near Hole #17. CSA believes this
well is also at the wrong depth. This will likely require a large diameter boring
to determine where the bentonite layer is and what the proper elevation of the
well should be - this is similar to MW#1 (see 2 above).
5. Prepare revised stability calculations for Monitoring Well #2, which is located
near green of hole #1 and tee of hole #2. CSA believes that the calculations
were done incorrectly and they just need to prepare revised calculations.
6. Submit as-built plans and any other data on Lakes #8 and #16, which have
been in existence since the project was built and were not affected by
Landslide C (the lake that was affected by Landslide C and is being re-built is
Lake #9). The information would be submitted to the City's Lake Consultant,
who has been reviewing the plans for Lake #9 and the waterfalls, to see if he
has any comments for improving the lakes. It is not CSA's intent to have
Ocean Trails re-build these lakes. However, there may be some minor
modifications that are needed to improve these lakes. Alternatively, the Lake
Consultant may say they are fine and nothing needs to be done. CSA is
simply recommending that the Lake Consultant review the data and provide
an opinion.
• If these measures are implemented, and nothing unexpected shows up in the
analysis/borings, then CSA will sign off on the golf course.
Converse Consultants (CC) believes that:
• The items requested by CSA are unnecessary. The project's current as-built clay
cap and monitoring wells and as-monitored conditions are safe for the public and
golf course.
• Converse believes that CSA's recommendations regarding monitoring wells and
slope inclinometers are unfounded and technically unwarranted. All monitoring
well locations and depth intervals were submitted to Cotton, Shires and
Associates Inc. (CSA) for review and approval prior to well installation.
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Monitoring well depths were adjusted per CSA requests. Interpreted depths and
elevations of the UBL and LBL layers were based on the best information and
data available at the time the wells were designed and installed in 1998 and
1999.
CSA now believes that Monitoring Well groups MW-1, MW-3 and MW-6 were
constructed to wrong depths for the UBL and LBL layers. No technical data has
been presented by CSA to indicate the monitoring well depths are wrong. CSA's
interpretation of the site's geologic structure has been inconsistent and does not
even acknowledge the existence of the LBL layer.
• The specific reasons why CSA's requested recommendations are unnecessary
are as follows (referenced according to numbered items above):
1. Converse Consultants (Converse) believes that it is unnecessary and a waste
of the developer's money to install 2 new inclinometers in Hole 10 above
Landslide "B". The effect of existing cracks is insignificant. The extension
cracks are limited in both area and spatial extent. The cracks have been
observed and remain unchanged since the 1971 Converse report. The area
above the extension crack is stable. There is no need for inclinometers in
Hole 10.
2. Converse believes that Monitoring Well Group MW-1 does not need repair.
As documented in the 11/27/02 Converse report, the well-screen bottoms are
only a couple feet above the interpretable UBL and LBL elevations.
Monitoring Well Group MW-1 is located in a stable area. As described in the
3/22/04 Converse report, the stability in the general area of MW-1 and
beyond is three-dimensional in nature. In Converse's opinion, CSA's
recommendation regarding MW-1 was based on inappropriate stability
analyses of a geologic cross-section that is inconsistent with available
geologic data.
3. Converse believes that no repair for Monitoring Well MW-3 is necessary,
however, this well group needs to have loose soils cleaned-out that fell in
during construction after completion of the Landslide "C" repair. MW-3 is
located in a very stable area with a factor of safety of more than 1.5. In
addition, Landslide "C" repair provides horizontal drains and backslope
subdrains beneath the general area of MW-3. Water accumulation is not a
concern even though the bottom of well casing of MW-3U is about 2 to 4 feet
below the interpreted UBL, since little or no accumulation of water above the
UBL is anticipated.
4. Converse believes no repair for MW-6 is necessary. Well screens of MW-6
were installed to the depth ranges requested by CSA. As shown in
Converse's 11/27/02 report, the bottom of MW-6U is about 1 foot above the
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interpreted UBL. This small depth differential is inconsequential as
demonstrated in Converse's 11/27/02 report, since MW-6 is located in a
stable area. As described in Converse's 11/27/02 report, the calculated factor
of safety for the case of 25' water accumulated on top of UBL is more than
1.4. We strongly reject CSA's recommendation of drilling a large diameter
boring for MW-6 and performing stability analysis. In Converse's opinion,
CSA's understanding of the site conditions in the Ocean Trails Golf Course
Area is questionable.
5. Monitoring Well MW-2 is located above Landslide "C" and is in a very stable
area after the Landslide "C" was repaired and buttressed. In our opinion,
there is no need to perform additional stability analysis. Converse's Landslide
"C" repair design report, and all the geologic evaluation reports for the Golf
Course Modifications (Converse's reports dated 2/17/03, 5/8/03 and 6/3/04)
have presented updated stability analyses for this general area. In our
opinion, CSA has presented no technical basis in making such a request.
6. Converse understands that Lake No. 8 and Lake No. 16 design plans were
reviewed and approved by the City of Rancho Palos Verdes and that Lake
No. 8 and Lake No. 16 have been constructed according to the plans.
Converse tested and approved both the clay cap and subgrade as it was
installed under Lake Nos. 8 and 16. In addition, Converse observed and
tested area drain pipe trenching and backfill when all the area drain pipes
were raised above the lake water levels of each lake. Converse agrees that
an as-built report of the area drain pipes that were raised should be
submitted. Lake Nos. 8 and 16 are in stable areas and we do not see any
need to have any additional review performed of the approved lake design
since the lakes have already been constructed.
• Doing more work will only lead to additional studies/issues/questions that CSA
will pose with no hope for resolution or project completion in sight.
SCOPE OF WORK:
Based upon this information, the dispute between CSA and CC is whether Ocean Trails
should be required to do the work outlined by CSA. This is what the Peer Panel needs
to evaluate, not whether the clay cap should be completed per the original
specifications. The City's Geologist already has indicated, in the December 21, 2001
letter, that the Developer does not have to meet that specification. Instead, the real
issue is: whether or not CSA is requesting too much of CC.
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Specific Questions/Issues to be Addressed by the Peer Panel:
1. Does the current condition of the as-built golf course raise public safety issues
that need to be addressed, as discussed in the letter from Cotton Shires
Associates dated April 8, 2004?
2. If yes, what additional information is necessary?
3. If no, then no further work or studies are necessary.
Schedule:
Day 1: Reports provided to Peer Panel (Ocean Trails to provide CC reports while
City provides CSA reports)
Week 3: Panel meeting/conference call to determine the need for consultant Q&A
meeting or preparation of written review questions.
Week 4: Finalize reviews.
Week 5: Meet with consultants or submit review questions for consultant response.
Week 7: Await response from consultants.
Week 8: Review consultant's responses. Panel meeting/call to finalize Panel
concurrence or rejection of consultant responses.
Week 9: Submit Panel response.
Peer Review Panel Scope of Work
Review of the Clubhouse Expansion
BACKGROUND:
• Conditional Use Permit No. 163, originally approved by the City Council in 1992,
includes the following condition of approval:
"C-1: The golf clubhouse shall be located west of the terminus of Street "A"(Paseo Del Mar
extension), in the area generally described as east of Forrestal Canyon, south of the single family
Lot Nos. 6, 7, and 8 located on Street "B", and north of Half Way Point Park, as shown on "Site
Plan for Conditional Use Permit Amended Map No. 2,"dated June 19, 1996, prepared by ESCO
Engineering Service Corporation, and dated as received by the City on August 2, 1996. No
portion of the golf course clubhouse shall be located in areas currently zoned Open Space
Hazard(OH). A minimum factor of safety of 1.5 shall be demonstrated for the clubhouse
784897-2 6
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Page 7 of 9
structure. If the developer is unable to provide for a minimum factor of safety of 1.5 using
mechanical methods, including but not limited to de-watering wells, or if the clubhouse location is
modified for any other reason, the developer shall submit an application for a revision to this
Conditional Use Permit, for review and approval by the Planning Commission and City Council
prior to recordation of any Final Map."
• The existing Clubhouse Building was reviewed and permitted on October 3,
1998. The first Temporary Certificate of Use and Occupancy was issued on
October 25, 1999, while the final Certificate of Use and Occupancy was issued
on April 30, 2001. Prior to issuance of Building Permits, a 1.5 Factor of Safety
was identified for the proposed Building. The Clubhouse Building was reviewed,
approved and permitted for grading and construction by the City.
• Since the Clubhouse Building was constructed, Landslide C failed (June 2, 1999)
and subsequent issues arose regarding Landslide A and the location of the
foundation setback line affecting Tract No. 50666. The Landslide "C" failure was
investigated by CC and CSA with 28 large diameter borings and 3 corehole
borings to provide subsurface information on the mechanism of failure, geologic
structure and determine how to repair it. The Landslide "C" failure was then
repaired by excavating and removing the UBL slip surface and constructing a
large geosynthetic reinforced compacted fill buttress to stabilize the upslope
areas.
• In November 2003, the City Council approved a request for an expansion to the
Clubhouse Building. When the Council originally approved the Clubhouse
Expansion in August 2003, and an amendment in November 2003, the Staff
Reports noted that the condition (C-1 above) requiring a 1.5 FOS would continue
to be enforced and would need to be satisfied prior to issuance of any building
permits for the proposed expansion.
• Converse Consultants submitted two reports addressing the Factor of Safety for
the Clubhouse Building Expansion. Cotton Shires Associates submitted one
review response to the two reports.
POSITIONS OF EACH FIRM
Converse Consultants (CC) believes that:
• Detailed subsurface information and stability analyses have been submitted to
show that there is a 1.5 factor of safety for the Clubhouse Expansion. Converse
Consultants (CC), submitted their first report addressing the FOS on February
26, 2004. The report, using a two dimensional stability Analysis" identified a FOS
of 1.45 along one of 3 cross-sections provided in the report, however, the report
indicated that overall there would be a FOS greater than 1.5 for the expansion
since the stability of the Clubhouse is three dimensional in nature. CC submitted
a second report on March 22, 2004, which included a more detailed three-
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Page 8 of 9
dimensional stability analysis indicating that the FOS was 2.61. Three
dimensional stability analyses were also performed using the CSA structural
contour model indicating a FOS of about 3.2.
• There is no justification for doing the additional sub-surface investigation
requested by CSA (see below). Extensive amounts of subsurface data has been
gathered to date and is more than sufficient in showing that there will be at least
a 1.5 FOS for the expansion. Converse has also indicated that they believe the
data that was used to support the original approved location of the Clubhouse,
with a FOS 1.5, should be more than sufficient, and that the expansion is
relatively minor given the size of the Clubhouse.
• Converse believes that no additional exploration is necessary. The geologic
model presented in the two reports for the proposed Clubhouse expansion were
based on the more up-to-date information generated from the large diameter
borings downhole logged for the Landslide "C" repair investigation as well as the
direct survey data of the exposed UBL in the deep slot cut excavations and in the
mouth of Forrestal Canyon. CSA has ignored this direct survey data of the UBL
in their structural model and analysis. Converse believes that CSA has
misinterpreted the geologic model for the Clubhouse expansion area.
• Converse has used the approved shear strength parameters that are the same
as those used for the Clubhouse. These strength values were approved by the
City and CSA at the time the original Clubhouse was approved. Converse does
not understand and does not agree with CSA's recommendation requiring
Converse to "revise calculations by using appropriate parameters".
Cotton Shires Associates (CSA) believes that:
• There is not sufficient sub-surface data to support the interpretations that CC has
provided in their recent reports for the Clubhouse expansion. Additionally,
although the geology previously presented by CC for the existing Clubhouse
Building indicated a 1.5 FOS, new data generated from the Landslide C repair
and review of Landslide A needs to be considered when analyzing the FOS for
the Clubhouse expansion. Further, the most recent geologic model presented by
CC differs from the previous model and sufficient subsurface data has not been
presented to support this model. CSA believes that there is a sufficient lack of
subsurface data regarding the depth and inclination of the upper bentonite layer
between the park and Forrestal canyon.
To resolve this issue, CSA is recommending that CC conduct 3 additional large
diameter borings to support CC's interpretations. One of the recommended
large diameter borings would be satisfied by the large diameter boring needed
to address issues pertaining to the Clay Cap/As-Built report. In addition, CSA
has recommended that once the additional subsurface data has been collected,
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Page 9 of 9
CC revise their calculations by using appropriate established strength
parameters, address the affects of existing retaining walls in the area on the
proposed structure's foundation design, and address issues related to the
installation of perimeter drains.
SCOPE OF WORK:
Based upon this information, the dispute between CSA and CC is whether Ocean Trails
should be required to do the additional exploratory work outlined by CSA.
Specific Questions/Issues to be Addressed by the Peer Panel:
1. With respect to the Clubhouse expansion identified in Conditional Use Permit No.
163 - Revision U, the Peer Review Panel shall determine whether Converse
Consultants has presented sufficient data, when considered with all other
presently known project data, to demonstrate to the accepted level of geological
certainty ordinarily required by professionals in this discipline, to establish that
the proposed Clubhouse expansion meets a 1.5 Factor of Safety?
a. If the answer is "yes" the City shall issue the building permits for the
Clubhouse expansion.
b. If the answer is "no" then answer question 2 below.
2. What additional information is necessary or,
what additional work is needed to be done to demonstrate a Factor of Safety of
1.5?
Schedule:
Day 1: Reports provided to Peer Panel (Ocean Trails to provide CC reports while
City provides CSA reports)
Week 3: Panel meeting/conference call to determine the need for consultant Q&A
meeting or preparation of written review questions.
Week 4: Finalize reviews.
Week 5: Meet with consultants or submit review questions for consultant response.
Week 7: Await response from consultants.
Week 8: Review consultant's responses. Panel meeting/call to finalize Panel
concurrence or rejection of consultant responses.
Week 9: Submit Panel response.
784897-2 9
fiba
I` C
AGREEMENT BETWEEN THE CITY OF
RANCHO PALOS VERDES AND V.H. PROPERTIES, CORPORATION
THIS AGREEMENT is made and entered this 2nd day of September 2003,by
and between the City of Rancho Palos Verdes, a California municipal corporation("City") and
V.H. Properties, Corporation("Developer"). City and Developer are sometimes referred to
singularly herein as "Party" and collectively as the "Parties."
RECITALS
A. Developer is the owner of that certain real property encompassed within Tentative
Tract Map No. 50666, a portion of which is proposed for single-family residential development
(the"Property"). The Property is part of a larger development,which is owned by Developer
and is generally located at 1 Ocean Trails Drive,Rancho Palos Verdes, California, commonly
known as the Ocean Trails Project("Ocean Trails"). Ocean Trails consists of a 258-acre site
bounded by Palos Verdes Drive South on the north, the Portuguese Bend Club on the west,the
Pacific Ocean on the south and Shoreline Park on the east.
B. City approved various applications for the Ocean Trails project to allow the
construction of a Residential Planned Development of 75 single family dwelling units and the
development of an 18-hole golf course with associated clubhouse and parking facilities.
C. The Property encompasses three landslide areas. Because portions of the Property
that are being developed for residential purposes may be affected by one or more landslides on
the Property, the public safety, health and welfare require that the geological and geotechnical
conditions of the Property be thoroughly analyzed and addressed before construction of the
proposed residences may proceed.
D. City and Developer have each retained experts to analyze the geological
conditions that underlie the site of the proposed residential units and to make recommendations
regarding the potential development of the Property. However, given the inherent complexity of
the geology on the Property and the inherent subjectivity of the science of geology, the Parties'
respective experts have not always agreed on the geologic conditions on the Property or the
actions that are necessary to achieve a factor of safety of at least 1.5 for the development of the
residential lots.
E. In the past, the Parties have found it useful to utilize a three-member panel of
independent experts to review the geological and geotechnical data for the Ocean Trails Project
in order to resolve any differences between the Parties' respective experts. However,the former
panel of experts did not provide the definitive guidance desired by either City or Developer
regarding the development of the residential lots in Tentative Tract 50666. Accordingly, City
and Developer desire to form a new three-member panel (the"Panel") to resolve any disputes
regarding the geotechnical and geological issues affecting the Property.
J r
410 •
F. City and Developer desire to cooperate to select three new
geological/geotechnical experts to comprise the Panel. City and Developer further desire to enter
into this Agreement to memorialize their understanding with respect to this subject matter and
their commitment to proceed with the review of the geotechnical and geological conditions of the
Property and to be bound by the recommendations and conclusions of the Panel.
NOW, THEREFORE, in consideration of the mutual promises, obligations and covenants
hereinafter set forth, the Parties hereto agree as follows:
Section 1. Incorporation of Recitals. Each and every recital set forth above is hereby
incorporated by this reference as though set forth in full and expressly made a part of this
Agreement.
Section 2. Selection of Panel Experts. City and Developer hereby agree that the
three experts who will be members of the Panel will be selected as follows: City and Developer
each shall provide a list of experts who are eligible for selection to the panel. Each Party shall
have the right to veto any expert included on the other party's list. Each Party shall select one
geologist from the other party's approved list to participate on the Panel. The two geologists
who have been selected to participate on the Panel are set forth on Exhibit A,which is attached
hereto and incorporated herein by this reference. These two geologists then shall select the third
expert from a list of geotechnical engineers who have been approved by both Parties pursuant to
the process set forth in this Section 2. The final list of individuals who will comprise the three-
member Panel are set forth on Exhibit B to this Agreement,which is attached hereto and
incorporated herein by this reference.
Section 3. Impartial Review. The Parties hereby acknowledge and agree that
although City shall retain the three experts who will comprise the Panel, the Panel shall be
charged with providing an impartial analysis of the geological and geotechnical data related to
the Property and to resolve disagreements between City's geological and geotechnical experts
and the experts that are performing work on behalf of Developer. The Parties further
acknowledge and agree that the Panel shall be instructed not to meet, either individually or as a
panel,privately with either the City, its geologists or its geotechnical engineers or the Developer,
its geologists or its geotechnical engineers. City and Developer further agree that: (i) City and
Developer shall limit their contact with the Panel to times when both Parties are present; (ii)
City and Developer shall have equal input into the Panel's performance of its impartial review;
and(iii) City and Developer shall provide joint instructions to the Panel. However, nothing in
this Section 3 shall be construed to prevent the members of the Panel from meeting with one
another privately to discuss the geological and geotechnical data,nor shall this Section 3 prevent
the Panel from seeking additional input from the Parties, so long as such requested input shall be
either communicated to the City and the Developer in a meeting at which both parties are present
or in writing, which is provided to both Parties simultaneously.
Section 4. Compensation for Panel. Upon execution of this Agreement, Developer
shall deposit with the City the sum of$25,000. City shall hold these funds in a trust account
established for the purpose of compensating the members of the Panel for their services rendered
746172-2 2
0 •
pursuant to this Agreement. When the balance in the trust account drops below $5,000, City
shall notify Developer and request additional funds. Developer shall deposit such additional
funds with City within ten(10)business days of receipt of the written request from the City.
Notwithstanding the immediately preceding sentence, Developer shall not be in default
hereunder if it fails to deposit such additional funds with City,but either party shall have the
right to terminate this Agreement if Developer fails to deposit such additional funds with City,
all as more specifically set forth in Section 5 below. Nothing herein shall be construed to permit
Developer to fail to reimburse City for work that already has been performed by the Panel.
Section 5. Termination. If Developer fails to deposit any additional funds
contemplated by Section 4 above or Section 8 below, then Developer shall not be default
hereunder,but either Developer or City shall have the right to terminate this Agreement by
providing at least thirty(30) days advance written notice to the other Party. Additionally, if
Developer sells or otherwise transfers substantially all of the residential property contained
within Tentative Tract Map No. 50666 to a person or entity that is not affiliated with or related to
Developer,then Developer shall have the right to terminate this Agreement by providing at least
thirty(30) days advance written notice to the City. If this Agreement is terminated prior to the
resolution of the geologic issues concerning the Property, the members of the Panel shall be
compensated for the work that has been performed as provided in Section 4, and City again shall
use its standard process of having its geologists and geotechnical engineers review the reports
and recommendations of the Developer's experts. Developer further acknowledges that if this
Agreement is terminated prior to the resolution of the geologic issues concerning the Property,
Developer shall not have the right to rely on this Agreement, that the issue of the developability
of the residential lots in Tract 50666 may not have been resolved to City's satisfaction, and that
City shall not be bound by this Agreement.
Section 6. Scope of Panel's Review. The focus of the Panel is to determine the
stability of the residential portions of Tract 50666 and whether those lots are impacted by the
geological and geotechnical conditions of Landslide A. However, City and Developer hereby
acknowledge and agree not to restrict the areas that the Panel may explore to make such
determination and to defer to the judgment of the Panel with respect to what additional geologic
studies and tests, if any, should be conducted and what additional changes or improvements, if
any, should be incorporated into the Project in order to permit such residential development.
Section 7. Hold Harmless and Covenant not to Sue. The Parties hereby acknowledge
that the Panel is being retained to resolve differences between the respective geological/
geotechnical experts retained by the Parties in order to allow Developer to complete the
development of the Project, and that the Panel is solely providing impartial analysis and
recommendations based on their combined professional judgment and are not preparing
geotechnical designs for any future residential structures on those lots or insuring that the
stability is sufficient to safely support such structures. The Parties further acknowledge that the
members of the Panel are not in any way interested in the development of the Property, either
financially or otherwise, and would not provide the advice contemplated by this Agreement
absent assurances by the Parties that they will not sue the Panel or its individual members based
on the advice provided. Accordingly, City and Developer hereby covenant and agree not to sue
the Panel or any of its individual members for any advice, opinions, conclusions or
746172-2 5
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recommendations the Panel makes with respect to the geological and geotechnical conditions
underlying the Property and the stability of the proposed residential sites. Developer further
agrees to indemnify, defend and hold the Panel and each member thereof harmless from any
claims, losses, costs or damages that results from geological instability on the Property. The
members of the Panel are third party beneficiaries of this Agreement, and the provisions of this
Section 7 shall also run to the benefit of the members of the Panel as if made directly to them.
This Covenant shall survive the termination of this Agreement.
Section 8. Covenant to be Bound. City and Developer hereby covenant and agree
that any decisions and recommendations rendered by the Panel shall be binding on both City and
Developer, including,but not limited to: (i) any decisions supporting, or disagreeing with, the
recommendations or conclusions of one Party's experts; and(ii) any conclusions or
recommendations arrived at independently by the Panel, including any recommendations
regarding additional studies,borings or analysis to be performed or improvements to be
constructed. The Parties further agree to take all steps reasonably necessary to diligently pursue
and implement the recommendations of the Panel. Notwithstanding the foregoing,Developer
shall not be in default hereunder if Developer elects not to incur any additional cost or expense
as a result of any such recommendations provided that, in such event, either Party shall have the
right to terminate this Agreement as more specifically provided in Section 5 above. This
Agreement shall inure to the benefit of and bind the Parties to this Agreement and each of their
respective heirs, assigns and successors in interest. Nothing herein shall be construed to grant
the Panel any authority to obligate the City to incur any expense whatsoever; and except as
expressly provided herein,nothing herein shall be construed to grant the Panel any authority to
obligate the Developer to incur any expense whatsoever.
Section 9. Further Assurance. Each Party hereto agrees to take such actions, and to
execute such certificates and other instruments, as may be necessary or appropriate to give effect
to and carry out the provisions of this Agreement.
Section 10. Integration and Amendment.
10.1 This Agreement, and any documents incorporated herein by
specific reference, represents the entire and integrated agreement
between Developer and City with respect to the subject matter
hereof. This Agreement supersedes all prior negotiations,
representations or agreements,whether oral or written.
10.2 This Agreement may not be amended,modified, or expanded
except by a written instrument signed by each of the Parties hereto.
10.3 The City has entered into an agreement with each of the members
of the Panel. Those three agreements are attached hereto as
Exhibits C, D, and E and are incorporated herein by this reference,
and shall not be amended without Developer's prior written
consent. This Agreement shall not be amended, terminated or
746172-2 4
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otherwise modified without thirty days advance written notice first
being provided to all of the members of the Panel.
Section 11. Assignment. Neither Party shall assign its interest in this Agreement, or
any portion of this Agreement,without the prior written consent of the other Party,which
consent shall not be unreasonably withheld. Notwithstanding the foregoing, Developer shall have
the right to assign this Agreement to any person or entity to whom Developer sells substantially
all of the residential portions of Tentative Tract Map No. 50666 provided that at least fifteen
days prior to the effective date of such assignment,Developer shall give written notice thereof to
City, and provided, further, that Developer shall deliver to City a copy of the proposed
assignment and assumption agreement for City's review and approval, which shall not be
unreasonably withheld, and Developer shall deliver a copy of the executed assignment and
assumption agreement, in the form approved by the City,prior to the effective date of the
assignment.
Section 12. Interpretation. This Agreement is deemed to have been prepared by both
of the Parties hereto, after consulting with legal counsel, and any uncertainty or ambiguity herein
shall not be interpreted against the drafter,but rather, if such ambiguity or uncertainty exists,
shall be interpreted according to the applicable rules of interpretation of contracts under the law
of the State of California.
Section 13. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of California.
Section 14. Notices. Any notice required or authorized to be given by this Agreement
shall, unless otherwise specified herein,be in writing, shall be served on the receiving Party
either by personal delivery or deposit in the United States mail with first-class postage prepaid,
and shall be addressed to the receiving party's specified contact person and address listed below,
unless written notice is provided of a change of address as to either party. For the purposes of
this Agreement,notices delivered in person shall be deemed communicated as of the date of
actual receipt; notices sent via regular mail shall be deemed communicated as of three (3) days
after deposit thereof in the United States mail, addressed as shown on the addressee's registry or
certificate of receipt.
All notices served pursuant to this Agreement shall be addressed as follows:
If to City: Les Evans, City Manager
City of Rancho Palos Verdes
30940 Hawthorne Boulevard
Rancho Palos Verdes, California 90275
With a copy to:
Carol W. Lynch, City Attorney
Richards, Watson& Gershon
355 South Grand Avenue, 40th Floor
Los Angeles, California 90071
746172-2 5
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If to Developer: V.H. Properties Corporation
1 Ocean Trails Drive
Rancho Palos Verdes, California 90275
Attn: Jeff Kaplinski
With a copy to:
Kenneth Wolfson, Esq.
Latham&Watkins
650 Town Center Drive, 20th Floor
Costa Mesa, California 92626-1925
Either City or Developer may change its mailing address at any time by giving written notice of
such change to the other party in the manner provided herein at least ten(10) days prior to the
date such change is effected.
IN WITNESS WHEREOF, Developer and City have executed this Agreement as of the
date first hereinabove written.
CITY OF RAN‘ 0 P.' LOS V rIES
By: ititiv A du
Douglas Stern, Mayor
ATTEST:
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0 V/,' ti, "c --e.-( L--
J Purcell, City Clerk
V. H. PROPERTIES CORPORATION
By:
Name: .l/f, pe4/F6-0/9/1i,/v/-
Title:
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By: ,
Name: M I� i/A,
Title: C- ./241/4v�-/2. M,4 &i.-4z..,
746172-2 6
Exhibit "B"
Geokinetic's Fee Schedule
for Services Performed Pursuant to this Agreement
R6876\0001\745760.3
12
2003 PROFESSIONAL FEE SCHEDULE
GEOTECHNICAL CONSULTING SERVICES
FEES FOR PROFESSIONAL,TECHNICAL AND SUPPORT STAFF
GeoKinetics Inc.charges our clients for professional,technical and support services for time directly related to a project.
Charges are not made for ordinary secretarial services,office management,accounting,maintenance or other activities
not directly related to a project. Current personnel classifications and rates are summarized below:
Personnel Classification Rate(per hour)
Principal Engineer $165.00
Principal Geologist 150.00
Senior Engineer or Geologist' 125.00
Project Engineer or Geologist' 105.00
Staff Engineer or Geologist' 90.00
Senior Technician' 75.00
Staff Technician' 60.00
Senior Technical Illustrator' 85.00
Technical Illustrator' 65.00
Project Coordinator' 55.00
Field Laborer' 45.00
(1) Overtime will be charged at 1.3 times the above listed rates for these personnel classifications. Overtime is
defined as time charged to a project in excess of 8 hours per day,time worked on weekends,holidays,or night
shifts.
Deposition and trial testimony by Glenn Tofani will be charged at the rate of$300.00 per hour.
PROJECT-RELATED EXPENSES
Expenses directly related to a project will be billed as follows:
Subcontractors (drilling, trenching, surveying, testing, etc.), and travel related expenses(hotels, meals,vehicle
rentals,air travel,etc.)and other project expenses(e.g.,aerial photographs,outside reprographics,equipment rental,
overnight shipping,project-related expendable supplies,etc.)will be charged at cost plus 15 percent.
Field equipment and expendables will be charged in accordance with GeoKinetics'Standard Field Equipment Cost
schedule.
Travel time to and from a project will be invoiced in accordance with the hourly rates listed above. Mileage for project
—related travel will be billed at$0.40 per mile.
-Continued on Reverse-
r r
1110
In-house photocopy/reproduction will be billed at$.08/page,for 1-100 pages,$.05/page for 101+pages. Black&
White Digital LaserJet 1200-dpi prints for 81/2"x l 1"and 11"x17"paper sizes will be billed at$.08/page,for 1-100
pages,$.05/page for 101+pages;and$0.20/page for 1-100 pages,$.15/page for 101+pages,respectively. Color,8
'/2"x 11" digital prints will be billed at$1.70/page for 2-5 pages, $1.50/page for 6-10 pages, $1.25/page for 11-49
pages,$1.05/page for 50-99 pages,and$.85/page for 101+pages. Color 11"x17"digital prints will be billed at$2.95/
page for 2-5 pages, $2.55/page for 6-10 pages, $2.15/page for 11-49 pages, $1.90/page for 50-99 pages, and
$1.70/page for 101+pages,respectively. Oversize,digital color 600-dpi prints will be billed at$12.00/ft2.
Photograph development and printing will be billed at$.40/photo.
CHANGES TO FEE SCHEDULE
This fee schedule applies to services rendered in the current year and/or until a new schedule is issued. GeoKinetics
Inc.reviews and revises its fee schedule periodically. Unless other arrangements have been made,charges for
services(including continuing projects initiated in the prior year)will be based on the most recently published fee
schedule.
INVOICES
Invoices will be issued monthly,or at other specified intervals for some projects,and will be payable upon receipt,unless
other arrangements have been previously agreed upon. Interest of 1 percent per month(but not exceeding the maximum
rate allowed by law)will be payable on accounts not paid within 60 days. Any attorney's fees or other costs incurred in
collecting delinquent accounts shall be paid by the client.
CONDITIONS
GeoKinetics Inc.warrants that its services are performed in accordance with generally accepted standards of care and
diligence normally practiced by recognized consulting firms performing services of a similar nature. No other warranty,
either express or implied,is included or intended in GeoKinetics Inc.'s proposals,contracts or reports.
GeoKinetics Inc.will not be liable for any loss,damage or liability to persons or property arising out of performance of
its services, other than for professional errors and omissions within the stated limits, coverage or conditions of its
insurance. For any damage resulting from any error, omission, or other professional negligence, our liability will be
limited to$25,000 or GeoKinetics Inc.'s total billing on the project in question,whichever is less. If higher limits are
required,arrangement should be made with GeoKinetics prior to the initiation of the project. The client should discuss
higher limits,and the charges involved,with GeoKinetics Inc.